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What is the Fixed Recoverable Costs regime?
Contrary to popular belief, the ‘winner’ of a case cannot simply claim back all their legal costs. Instead, the Fixed Recoverable Costs (FRC) regime sets out specific amounts of legal costs that the winning party can claim back. The set amounts are calculated based on the type of case you have and depend on various factors, including:
- To which track the case is allocated (more on this below)
- The complexity of the case
- When the case settles
There are exceptions to the FRC cap, most notably where decided upon by the court and for certain areas, such as some claims for clinical negligence.
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How has the Fixed Recoverable Costs regime changed?
The FRC now covers almost all claims worth up to £100,000, except where a judge deems there is an exception, or if the claim falls under certain categories. As the FRC broadly covers claims based on their values, most business debts, property disputes and professional negligence claims now fall under its guidance.
It also introduces a new ‘intermediate track’, outside of the existing tracks, for claims worth between £25,000 to £100,000. Previously all claims worth over £25,000 were assigned to the ‘multi-track’.
Finally, the FRC also introduces new complexity bands applicable for fast track and intermediate track claims. These complexity bands help to categorise claim types and assist legal professionals and the parties involved in a claim to understand where the FRC applies.
The FRC will not apply to claims worth over £100,000.
Why has the Fixed Recoverable Costs regime been extended?
The intention behind the FRC extension is to enable people to better predict legal costs for all parties involved in a case. This could incentivise earlier settlements and decrease the need for people to go to court.
What happens to claims issued before 1 October 2023?
If your claim was issued (i.e. a court has accepted your case) before 1 October 2023, the new Fixed Recoverable Costs regime won’t apply.
For claims issued on or after 1 October 2023, the new Fixed Recoverable Costs regime will apply.
What are ‘tracks’ and how do they affect my recoverable costs?
Cases are categorised into different ‘tracks’ based on their value, and these are determined by the court.
This table can help you to understand the track allocations, and whether the fixed costs regime applies:
| Track | Claim value | FRC applicable before 1 October 2023? | FRC applicable after 1 October 2023? |
|---|---|---|---|
| Small claims track | Up to £10,000 | Mainly personal injury claims only | Yes and to more claim types, but exceptions still apply |
| Fast track | Between £10,000 and £25,000 | Mainly personal injury claims only | Yes and to more claim types, but exceptions still apply |
| Intermediate track | Between £25,000 and £100,000 | Not applicable as this is a new track | Yes, but exceptions apply |
| Multi-track | Over £100,000 | No | No |
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Complexity bands within the tracks.
If your case is allocated to the fast track or intermediate track, they’ll be sorted into complexity bands which will affect your cap amount.
The complexity bands are worked out using information about your case, such as:
- Nature of the claim
- Amount in dispute
- Legal complexity
- Number of parties
- Expected duration
If you’d like to read more details about the complexity bands and the cap amounts, further information is available on justice.gov.
What happens if my legal fees are higher than the FRC cap?
With the new FRC extension, if your legal fees are more than the amount set in the cap, then you’ll be responsible for paying the remaining amount.
What should I consider if going forward with a legal case?
The best thing you can do when considering opening a legal case is to book a consultation with a solicitor to discuss the feasibility and estimated costs. They will be able to give you guidance on what track your case may fall into and how much legal fees you’ll be able to recover.
However, it’s always important to remember that the court has the ultimate say in your track and complexity and therefore the amount that can be recovered. This should be factored in when considering the costs of the case.
Your solicitors may be able to maximise the amount of costs you can recover, or even obtain an exemption from the Fixed Recoverable Costs in certain circumstances. Each case will have its own hidden obstacles and nuances?
If you’d like to find out more about pursuing a legal case and the costs of doing so, you can book an initial consultation with one of our solicitors by either calling 0203 007 5500 or sending an email to [email protected].
How can Britton and Time Solicitors help?
We know how stressful and costly litigation can be. That’s why our initial consultations with our litigation solicitors offer you:
- Unlimited time to go through the details of your case and ask any questions you may have
- An overview of your legal standpoint and your available options
- A precise time and fee estimate for your case
To arrange your initial consultation with one of our solicitors, simply call us on 020 3007 5500.
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