The major extension of Fixed Recoverable Costs has left two areas where the recoverable costs are capped rather than fixed:
- For non-personal injury cases suitable for the Intermediate Track which settle “from pre-issue up to and including the date of service of the defence” (CPR 45.50(3)).
- Cases where the receiving party is a litigant in person (CPR 45.4).
This might be thought rather odd.
By virtue of the very fact that they have settled by the date of service of the defence, the non-personal injury cases that fall within the first category are going to be those claims which are normally the most straightforward. They would therefore seem to be those which are most suitable for Fixed Recoverable Costs. The decision to cap, rather than fix, such costs was possibly taken in light of the concern that, given the variable amount of work that may have been undertaken at the point of settlement, a fixed figure would represent too much of an overpayment in some cases or too much of an underpayment in others. Surely there are two answers to that concern. Firstly, additional fixed fee stages could have been introduced to reduce the size of any potential overpayment/underpayment at the point of settlement. Secondly, is this not the very nature of any fixed costs regime? The fixed costs will represent an overpayment in some cases and an underpayment in others.
As it is, some of the most straightforward of claims will therefore potentially be subject to detailed assessment with all the additional cost and delay that go with that (although these would inevitably be subject to provisional assessment in the first instance). On the other hand, far more complex claims that proceed all the way to trial will be subject to fixed costs.
In relation to litigants in person, the existing rules (CPR 46.5) will continue to apply whereby the amount of costs to be allowed for any item of work claimed will be (a) where the litigant can prove financial loss, the amount that the litigant can prove to have been lost for time reasonably spent on doing the work or (b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at £19 per hour. This is subject to the total of those costs not exceeding two-thirds of the fixed recoverable costs which would have been allowed if the litigant in person had been legally represented.
Anyone who has any experience of dealing with the assessment of a litigant in person’s costs will know the difficulties that arise:
- Most litigants in person will have failed to keep proper time records (at least in the way that a solicitor would) and will often have no idea that any time records were required until the conclusion of the case.
- There is then the inherent difficulty of trying to work out what is a reasonable amount of time to allow for a litigant in person with no legal qualifications (or secretarial/administrative assistant) on any given task.
- Trying to prove financial loss is often a complex task.
Nevertheless, detailed assessment (only subject to the two-thirds cap) is preserved for such cases. It would have been infinitely easier to simply specify a fixed recoverable cost (whether at two-thirds or some other proportion) of the normal fixed recoverable cost.
It is almost as though the rules committee went out of their way to preserve work for costs professionals and judges.
