Legal Cost Specialists

Fixed fee increase – Why settle now?

A previous post examined the increases to the Fixed Recoverable Costs (FRC) figures which will come into force from 6th April 2024.

Although the relevant transitional provisions are clearly confusing, the intention appear to be:

  • Where an order for costs is made before 6th April 2024, the FRC will be those in place at the time.
  • Where an order for costs is made after 6th April 2024, the FRC will be those in the amended Tables.

This will create clear disincentives to settle many claims/costs claims prior to 6th April 2024.

Say you have a non-personal injury claim that settles pre-issue and before 6th April 2024. Such a claim might have been ongoing for several years. It is clear from the transitional provisions relating to the introduction of FRC (at least as interpreted by the Civil Procedure Rules Committee) that the claim will be subject to FRC. If costs are agreed before 6th April 2024, then the current FRC will clearly apply. However, if the costs have not been agreed prior to 6th April 2024, any costs-only proceedings would be issued post-6th April 2024 with the corresponding costs order made post-6th April 2024. As such, the new CPR 45.1(9) states the increased FRC will apply. Indeed, even where costs-only proceedings have been issued pre-6th April 2024, if the costs order is not made before 6th April 2024, the case will attract the increased FRC. (Although we are technically talking about capped, rather than “fixed”, costs for such cases.)

Why would any receiving party agree costs before 6th April 2024? They can simply wait a few weeks and benefit from the increase.

Alternatively, say you have an issued case (personal injury or other) where the defendant has made a “Calderbank” offer. The claimant can accept the offer and then wait until after 6th April 2024 before agreeing a Consent/Tomlin Order. They will then benefit from the increased FRC as the order for costs will have been after 6th April 2024.

Where there is a Part 36 offer made in the 21 day run up to 6th April 2024, it will inevitably be accepted after 6th April 2024 so as to trigger an entitlement to the increased FRC.

I suspect the Civil Procedure Rules Committee completely overlooked all this when drafting these particular transitional provisions.

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