Judicial Review of extension of FRCs
In August 2023, APIL issued judicial review proceedings against the government challenging several elements of the new rules to extend FRC in personal injury cases.
There were four key grounds to the challenge:
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- The first was in relation to clinical negligence claims, in particular the failure to properly to consult on the new rules and a lack of clarity about when fixed costs might be applied. The rules indicated that clinical negligence cases valued between £25,000 and £100,000 should be moved to the new intermediate track if ‘both breach of duty and causation have been admitted.’ However it did not make clear at what stage of the case the admissions must be made. If they are not made until later in the proceedings, the legal representative will have had to undertake a significant amount of work on the case, only to then be advised that fixed costs are applied which do not cover the costs of the work undertaken.
- APIL also challenged the provisions in respect of vulnerable people, which will mean that solicitors will have to cover part of the additional costs incurred when representing vulnerable people. There was also a fear that a judge will only make a decision about a person’s vulnerability later in the case, after the additional costs will have been already incurred.
- A further challenge related to the unlawful exclusion from the new regime of FRC for costs in respect of representation at inquests and for restoring companies to the Companies Register.
- Finally APIL challenged an apparent reversal of Court of Appeal case law, without consultation, which allowed parties to contract out of fixed costs when a dispute in settlement agreement occurs, in favour of agreeing that costs will be subject to detailed assessment.
- The first was in relation to clinical negligence claims, in particular the failure to properly to consult on the new rules and a lack of clarity about when fixed costs might be applied. The rules indicated that clinical negligence cases valued between £25,000 and £100,000 should be moved to the new intermediate track if ‘both breach of duty and causation have been admitted.’ However it did not make clear at what stage of the case the admissions must be made. If they are not made until later in the proceedings, the legal representative will have had to undertake a significant amount of work on the case, only to then be advised that fixed costs are applied which do not cover the costs of the work undertaken.
APIL have now withdrawn their judicial review following a stay pending the outcome of a Ministry of Justice consultation. APIL announced that the “concessions” the ministry of Justice consultation contained were sufficient to put a stop to the proceedings.
As to the lack of clarity on when FRCs might be applied to clinical negligence cases, the amended rules made it clear that they would only be subject to FRCs in the new intermediate track if liability is admitted, in full, in the defendant’s formal response to the letter of claim.
As to the provisions in respect of vulnerable parties, amendments due to come into effect next month now result that costs will be available for dealing with inquests and for restoring companies to the Companies Register.
In relation to solicitors having to cover part of the extra costs of acting for vulnerable parties, despite these being recoverable, the government has committed to carrying out a formal consultation by no later than October 2026.
Finally, the government also confirmed that it was not its intention to reverse current case law, which allows parties to contract out of FRCs when there is a dispute in settlement agreements in favour of agreeing that costs will be subject to detailed assessment.
Commentary
Watch this space!