brown gavel and open book on a wooden table of the law in the courtroomThe government is planning to introduce fixed costs into more civil court cases to prevent the risk of people facing ‘ruinous costs’ if they lose.

It is consulting on a plan to introduce fixed recoverable costs to more ‘fast track’ cases involving claims of up to £25,000 and for many cases involving claims of up to £100,000.  The proposals were originally set out by Lord Justice Jackson in a report published in July 2017.

Fixed recoverable costs set out the amount that can be claimed from a losing party in litigation.  The proposals aim to set these costs at a level which is proportionate to the amount claimed.  “If the costs are too high, people cannot afford lawyers. If the costs are too low, there will not be any lawyers doing the work,” pointed out Lord Justice Jackson.

Fixed recoverable costs are not new and are already in use in some claims worth up to £25,000.

The government says that controlling legal costs in advance will take away people’s fear of incurring huge costs if they take a claim to court. “Ensuring that every citizen has recourse to civil litigation, where appropriate, is part of a just society,” said David Gauke, Lord Chancellor and Secretary of State for Justice.

James Dalton director of general insurance policy at the Association of British Insurers told Insurance Post that fixed recoverable costs are an important part of making the system work well for claimants.  “Given their successful use in many personal injury cases, where they provide cost certainty and speed up negotiations, we’re pleased to see plans being made to extend the approach to other areas of civil litigation.”

James Burgoyne, Director – Claims & Technical, Brunel Professions says the move could also help to keep the costs of insurance premiums under control.  “Insurers will know the costs of defending an action at the outset and will be able to set their reserves more accurately,” he said.

The consultation paper ‘Extending Fixed Recoverable Costs in Civil Cases’ has been published on the Ministry of Justice website.  Reports on the consultation have been published by DWF, The Association of Costs Lawyers, and Law Society Gazette.

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