Lord Justice Jackson published his supplemental report on the civil litigation fixed costs regime this week. This follows his original report published in January 2010.
Jackson LJ previously suggested that fixed costs should apply to all claims up to £250,000 in a ‘one-size-fits-all’ proposal. Instead, he has taken a softer approach, recommending a number of proposals dependent upon the value and type of claims brought.
In his report, Jackson LJ recommends:
If the proposals for an intermediate track are accepted and, after a review in four years, they are working satisfactorily, Jackson LJ suggests that the scope of the intermediate track (and the range of fixed rate costs) might be expanded to monetary claims above £100,000 and/or claims for non-monetary relief.
Where contracts contain express provisions governing costs in the event of litigation (such as mortgages, loans, guarantees or leases), the current position will not be affected. The court will therefore continue to enforce the contractual right, and be unable to exclude or override it, subject to its equitable power to disallow unreasonable expenses.
While the Federation of Small Businesses argued there should be a fixed costs regime in place for commercial cases up to £250,000, to create better access to justice for SMEs, Jackson LJ has, at this stage, recommended only a voluntary two year pilot of a ‘capped costs’ regime for business and property cases up to £250,000.
This Capped Costs Pilot will also have streamlined procedures and will cap recoverable costs at £80,000. If the Capped Costs Pilot is successful, Jackson LJ suggests the regime could be rolled out more widely for use in appropriate cases, under a ‘Capped Costs List’ and may well be extended to cases up to £500,000.