In a recent speech, Lord Justice Jackson, the Judge tasked with reviewing costs in civil claims, has recommended that fixed costs should be implemented for all claims worth up to £250,000.
Currently, fixed costs are only recoverable for personal injury claims worth up to £25,000. However, Lord Justice Jackson recommended that this should be extended to cover all civil claims up to the value of £250,000. He went as far as suggesting the bands he believes claims should be divided into and the amount in fixed costs that he proposes should be recoverable for each of those bands; up to £18,750 for claims up to £50,000; £30,000 for claims up to £100,000; £47,500 for claims up to £175,000 and £70,250 for claims up to £250,000.
Whilst this may be good news for Defendants who wish to have greater certainty of their potential liability for a Claimant’s costs, it will without doubt cause an issue for many Claimants who wish to bring a claim for less than £250,000, which is only worth pursuing, or indeed can only be pursued, if the costs which they can recover in the litigation are not capped at the rates suggested. Indeed, it may even encourage Defendants to fight a claim to trial in cases where they would otherwise have agreed to settle, as their potential liability in costs will be much less. It may also mean that Claimants settle for a lesser sum rather than fight on as they will ultimately not recover all the additional costs of continuing to fight.
The Law Society has reacted with caution and said “While we support the principle of fixed costs for lower value and less complex cases…the application of fixed costs for highly complex cases is likely to be totally inappropriate and would raise significant questions about the ability of many people to access justice.”
Lord Justice Jackson said in his speech that he envisages that the implementation of fixed costs could be completed during the course of 2016 if the political will is there. Whilst this may seem like a tight time scale given that there will need to be consultation on the measures being suggested, the moral of the story is that if you are considering bringing a claim for £250,000 or less you should seek our advice and issue proceedings sooner rather than later.
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