Reforms to Fast Track Proceedings

Reforms to Fast Track Proceedings 

Your questions answered

The Government has recently responded to a consultation that is set to affect most business disputes in the civil courts. It is likely that these reforms to fast track proceedings will soon be implemented although no date has been set for the new regime yet. 

What are the main changes?

At present, there are three tracks for court proceedings. The small claims track for claims under £10,000, the fast track for claims between £10,000 and £25,000, and the multitrack for claims over £25,000. The upper limit for the fast track is now set to be raised to £100,000.  Within this category, there will be further divisions of cases, each with different levels of recoverable costs.

How will costs recovery be affected?

Costs recovery is a key issue in any court proceedings and can affect whether it is sensible to bring a claim. The reforms will give limits to the amount of costs that each party can recover from the other side if they win their case and is therefore likely to mean that more cases, particularly those at the lower end of the fast track limit, will not be cost-effective to pursue. 

Are there any advantages to this new regime?

The new regime will draw the parties’ attention to the question of cost-effectiveness of bringing proceedings at a much earlier stage and will certainly be good news for defendants.

Will costs recovery be lower?

Yes, that is likely. 

Will legal costs be reduced as a result?

No. Solicitor and Counsel’s costs will remain the same, but the parties will be limited as to the amount of legal costs they can recover from the other side if they win their case. 

How will this affect litigation generally?

It is likely that businesses will be more reluctant to commence litigation given the reduced ability to recover costs. 

Will all claimants be affected in the same way?

The reforms may benefit larger claimants who can still afford to pursue claims and risk losing out on costs. Claims nearer the upper limit will certainly be more cost effective than those at the lower end.  

When will the changes be implemented?

That is currently unknown. 

Will my claim be brought under the new or existing regime?

That is not yet known either. It may be that the new regime will apply to all new claims but equally, the moment the right to sue occurs could be the relevant date in terms of whether the existing or new regime will apply.

Should I bring my claim now rather than wait for the new regime?

Not necessarily. We anticipate being warned before the new regime is implemented so there will be time to benefit from the existing regime if you are advised to proceed with your claim. However, we suggest you speak to your solicitor as soon as possible for advice on your particular circumstances.

Will Part 36 still work in the same way under the new regime?

Probably not. Currently, there is an additional costs risk where a party does not do better at trial than an offer made to it under the Part 36 regime. Instead, under the new regime there is likely to be an uplift on the fixed costs mentioned above, although there may be some exceptions for particularly complex or document-heavy cases.

Should I be taking any action now?

If you have a potential claim of between £10,000 and £100,000, you should take advice now as the changes may impact your ability to recover costs in the event you win your case. 

We would also suggest ensuring that your terms of business include a specific provision to recover all legal costs in successful litigation rather than relying on the fixed costs regime. 

For further information and advice as to your particular circumstances, please contact Lisa Rivers or any member of the litigation team.