The consultation considered six issues:

1. whether costs on assessment should be fixed;
2. whether there should be fixed costs for Part 8 (costs only) claims;
3. the recoverability of, separately, (a) inquest costs and (b) restoration proceedings, and how this should be dealt with in the CPR;
4. the issue of providing for the recoverability of advocates’ preparation in the CPR, in cases which (a) are settled late or (b) are vacated;
5. whether the fixed trial advocacy fees now in Practice Direction (PD) 45 of the CPR should be further uprated for inflation, and by how much; and
6. whether to make explicit in CPR 26.9(10)(b) in respect of clinical negligence claims, that an early admission of liability must be made in the pre-action protocol letter of response.

A total of 74 responses were received to the consultation just short of a third being focused solely on clinical negligence claims within the extended FRC regime.

Noting that it has "carefully considered the points raised by respondents, including with the Civil Procedure Rule Committee (CPRC) and its costs sub-committee", the Government has set out it's response to the above points and announced that:

1. The extended FRC regime will be amended to fix the costs of assessment of FRC cases. This will be known as "Fixed Costs Determination".
2. The costs of Part 8 (costs only) claims will be fixed. The required rule change for this and (i) above are under consideration and it is said that implementation in October 2024 is hoped for.
3. As far as inquest costs and restoration proceedings are concerned:
   1. The costs of inquest proceedings should be recoverable to the extent that they are outside the FRC and necessary amendments to Part 45 will be made.
   2. The FRC regime will be extended making the costs of restoring a company to the register recoverable in fast track and intermediate track cases.
4. The FRC regime will be extended to provide for recoverability of fixed trial advocacy fees where cases are settled late or vacated by the court shortly before trial. The CPR will be amended to allow recover of:
   1. In the fast track, 100% of the advocacy fee where a claim is settled on the day of trial or the day before, and 75% where a claim is settled or vacated not more than two days before the trial date.
   2. In the intermediate track the figures will be 100% where a claim is settled on the day of trial or the day before, and 75% where a claim is settled or vacated not more than five days before the trial date.
5. There will be no movement on the issue of further inflationary increases or the use of a different inflationary index to calculate advocacy fees from the position set out in the consultation. There will, however, be an additional SPPI uprating of certain trial advocacy fees.
6. The rules on clinical negligence claims subject to FRC should provide explicitly that an early admission of liability should be made in the pre-action protocol letter of response for such a claim to be allocated to the intermediate rather than the multi-track.

In addition to the response to the six specific points raised in the consultation, it is noted that other issues relating to the FRC have been considered and that changes will be introduced by the Civil Procedure (Amendment) Rules 2024. These changes include providing clarity as to what is, and what is not, included in the 20 page limit for expert reports.

The response notes that most of the rules that it covers will come into force in April 2024 with the provisions relating to FCD likely to come into force in October 2024 along with other potential rule changes which remain to be considered and agreed by the Civil Procedure Rules Committee.

The Government states that it will review the extended FRC regime in October 2026 and that the review will include consideration of the tables of costs. It is not, however, minded to propose any changes to the rules beyond those in the consultation response but will keep the new FRC regime and its operation under review.

What does this mean in practice?

The changes outlined in the consultation provide clarity in a number of areas. The fixing and simplifying of the process to resolve costs disputes arising from the extended FRC regime is to be welcomed although there might be a spike in such disputes before these changes are made. It is apparent that these proposed changes will have the effect of increasing in some cases the amount of costs that a receiving party will be able to recover from a paying party under the extended FRC regime.

The extended regime is still in its early days but the commitment to the concept of fixed recoverable cost is as firm as ever and we see expansion rather than contraction of the regime the more likely future. The Association of Personal Injury Lawyers (APIL) issued proceedings for a Judicial Review in relation to the extended FRC regime and agreed to a stay pending the publication of this response. It is anticipated that APIL will now respond to the publication and whether there will be any further progress for the Judicial Review will emerge over the next few weeks.

In any event, we have not seen the last change in the fixed recoverable costs regime and, in addition to the question of its future expansion, it is inevitable that there will be some tweaking at the edges as the current regime embeds itself into normal practice.

To discuss any of the issues arising, get in touch with our Costs Team.