From 1st October 2023, sweeping changes to the recovery of legal costs in England and Wales will be introduced across a wide variety of civil claims up to a value of £100,000.
Whilst some lower-value personal injury claims have been under these restrictions for some time; these changes will now catch a much wider range of matters, including dispute resolution, debt recovery, professional negligence, and even some medical negligence cases.
At the moment, in any case not already progressing through the court system under fixed costs, the receiving party will be entitled to their “reasonable” legal costs, which would either be agreed between the parties or determined by the court. These changes will fix the amount that the receiving party will be liable to pay in costs.
With this change also comes the introduction of the ‘intermediate track’ at court, a fourth type of pathway a case can work through the court process. Cases allocated to this track, along with the newly extended ’fast track’, will then (if the case ever reaches so far), be allocated to one of four complexity bands, which determines the legal costs a receiving party is entitled to receive.
The courts have historically allocated cases to three different routes: small claims track, multi-track, and fast track. The track of your case is generally determined by the case value. These changes will bring in a fourth track – the ‘intermediate track’.
These changes could present a problem for clients and solicitors alike, because every case is different (when looking at the complexity, where the disputes will lie, the conduct of the parties etc.). Broadly speaking, however, from a costs perspective, they will be treated as if they are.
When the costs the receiving party will be entitled to varies wildly across the four complexity bands (and sometimes it’s never possible to know exactly how complicated a case will be or become), some firms may be reluctant to assist clients where that case may be allocated to a lower complexity band. In simple terms, it may not be economically viable to assist.
Worse still, most cases reach some sort of resolution before a case is ‘allocated’, so there may be remote arguments entirely outside of the court over which track and complexity band the case hypothetically would have been allocated to.
Whilst it is hoped that these changes will provide more certainty for the parties to know what their liabilities may be, all of the variants to that and these extra complexities may well change the way that parties conduct their cases. Crucially, these changes may ultimately impact on people’s access to justice.