Are you ready for the new Fixed Recoverable Costs regime?
The process of reclaiming your legal costs after successful litigation recently changed. But how will it affect you if you are about to bring a case? Let’s find out more.
If you are successful in court - whether you are the claimant or the defendant – you can claim back legal costs from the unsuccessful party. However, you will not necessarily be able to claim back the entire amount. In certain cases, the figure will be governed by the Fixed Recoverable Costs (FRC) regime. From October 1st 2023, the FRC regime changed, bringing more cases under its jurisdiction.
In this article, we will examine these changes and what they mean if you are considering starting legal proceedings, or are on the receiving end of a claim.
What is the FRC regime?
The FRC regime sets out the maximum amount a successful party can claim back from their opponent in legal costs after litigation. Before October 2023, the FRC regime only applied to personal injury claims which were low in value. The new regime covers most civil cases up to a maximum value of £100,000.
The new regime came into force on October 1st 2023. However, if a claim has been issued in the court before this date, the new FRC regime costs will not apply, even if your case has not been heard yet.
Unfortunately, there is no one-size-fits-all limit for the legal costs you can reclaim. The maximum amount you can recover from your opponent will depend on several factors relating to your dispute, including:
· Track – The court will assign your case a ‘track’ based on its value, which will affect the amount of costs you can recover. The new changes to the FRC Regime introduce a new “intermediate” track along with the existing small, fast and multi tracks.
· The nature of your case and its complexity – each case will be assigned a complexity band from 1-4, which will directly affect the costs that can be recovered.
· How far through the legal process you are when the case settles.
Why is the FRC regime changing?
The new FRC regime changes aim to make it simpler for parties to calculate their recoverable costs should they be successful in their case (or, on the other hand, how much they stand to lose if they are unsuccessful). It will help parties evaluate whether bringing a case is worth the risk.
However, some experts predict the changes will also encourage parties to settle out of court earlier, as costs are lower the earlier you settle. But others calculate that it may have the opposite effect, as it takes away the fear of the unknown. When you know the maximum amount you could be ordered to pay in costs, you can make a more informed decision on whether to bring a case.
Importantly, whilst the FRC acts as a cap on the legal fees you can recover from the unsuccessful party, potential litigants must be aware that if your legal fees exceed this figure, you will still be liable to your solicitor for any shortfall.
Talk to your solicitor today
If you are considering bringing a case against another party, or you think you are about to have a case brought against you, you may be affected by these changes to the FRC regime. The exact nature is complex and depends on several factors, as outlined earlier in the article.
To navigate this challenging situation, you should talk to your solicitor at the earliest opportunity. They will be able to explain to you, in plain language, the merits of your case, as well as how much you stand to win (or lose) should you press ahead.
Find out more from Couchman Hanson
At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We are highly professional, with ‘city’ level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.
Call 01428 774756 or visit couchmanhanson.co.uk.