Introducing the new intermediate track and the extended fixed recoverable costs regime

What is the intermediate track?

The intermediate track is for claims:
• which are less complex (e.g. damages/money claims);
• which are valued at more than £25,000, but not more than £100,000;
• where the trial is estimated to last no longer than three days;
• where oral expert evidence is limited to two experts per party; and
• where the claim is brought by one claimant against no more than two defendants or brought by no more than two claimants against one defendant (subject to some exceptions).

The procedure for the intermediate track is a combination of those for the fast track and the multi-track, with more active case management by the courts but with directions still likely to follow a standard pattern. Within the intermediate track there will be a menu of options to keep disclosure within manageable limits and the length of witness and expert evidence will typically be limited.

What is the fixed costs regime (the “FRC”)?

The fast track and new intermediate track will be subject to the FRC regime, with limited exceptions. This effectively means that the only costs which will be recoverable from your opponent are the fixed costs set out in the new Practice Direction 45.

When a claim is allocated to fast or intermediate track the court must also assign it to one of four “complexity bands”.  The complexity bands are numbered 1 to 4 providing an ascending scale of allowable costs based on the complexity of the claim.  The assigned complexity band determines the level of fixed recoverable costs allowed.  Although parties may agree the complexity band, the court retains discretion to assign whatever band it sees appropriate.

What is the impact of the FRC regime?

There are very few ways to avoid or mitigate the impact of the FRC.  The rules are there to provide parties with certainty and proportionality, enabling parties to have better visibility in relation to what costs will be recoverable.

It is anticipated it will be extremely difficult to predict which track or band will be allocated to a matter.  No doubt, case law will begin to quickly develop on this issue, as it may become an area of contention and potential satellite litigation: with claimants pushing for higher complexity bands to secure greater fixed costs recovery and defendants the opposite.

It will apply to all new claims issued on or after 1 October 2023.

Comments

Our Disputes team is renowned for being honest at the outset of a claim, considering the cost, stress and inconvenience that being involved in a dispute will inevitably entail, and the potential wasted management time. We previously wrote about the benefits of resolving a dispute before even issuing a claim here. This approach is going to be critical to SMEs and individuals considering a claim up to £100,000 moving forwards.