Key takeaways
Intermediate track introduces complexity-based costs
New rules link case complexity to recoverable legal fees.
Disputes arise over banding classifications
Parties challenge assignments that impact litigation budgets.
Early strategy essential for cost management
Plan ahead to align case approach with assigned complexity band.
The Civil Procedure (Amendment No.2) Rules 2023 were introduced on 1st October 2023. The reforms include a new Fixed Recoverable Costs Regime (FRC) to all Fast Track cases up to £25,000 and to all civil claims up to £100,000, as well as the creation of a new ‘intermediate track’. This article concentrates on the features of the intermediate track and identifying the correct complexity band, particularly in relation to personal injury claims.
From when do the new Civil Procedure Rules apply?
The new reforms, including the intermediate track and fixed costs regime, apply to the following claims:
A personal injury claim, excluding disease claims, where the accident occurred on or after 1st October 2023.
A disease claim, in which the Letter of the Claim is sent to the Defendant on after 1st October 2023.
Any other claims, excluding personal injury and disease claims, where proceedings are issued on or after 1st October 2023.
What claims does the intermediate track apply to? (CPR 26.9)
The New Intermediate Track will be applicable to personal injury claims where:
The Claim is suitable for neither the small claims track nor the fast track.
The Claim includes a claim for monetary relief, the value of which is not more than £100,000.
The Court considers that the trial will not last longer than three days.
Oral expert evidence at trial is likely to be limited to two experts per party.
There are no additional factors, which would make the claim inappropriate for the intermediate track.
The Claim is brought by one Claimant against either one or two Defendants or is brought by two Claimants against one Defendant.
If a Claim is not suitable for the small claims or fast track, and does not satisfy all the above criteria, then the Claim will be allocated to the multi-track. Therefore, a claim could be valued between the Intermediate Track’s application of £25,000 and £100,000, but if, for example, the Claim is brought by one Claimant against three Defendants, the claim will then be allocated to the multi-track. The Court retains discretion to allocate a Claim to a track as it deems appropriate.
Exclusions from the intermediate track
The following Claims are excluded from the intermediate track, and will instead be allocated to the multi-track:
A mesothelioma or asbestos-related lung disease claim.
One which includes a claim for clinical negligence, unless the claim would normally be allocated to the intermediate track and there has been an admission of liability in full.
A claim for damages in relation to harm, abuse or neglect of or by children or vulnerable adults.
A claim in which the Court could order to be tried by jury.
A claim against the police including a claim for an intentional or reckless tort, or remedy in relation to a breach of the Human Rights Act 1998. However, this exclusion does not apply to a RTA claim, an employers’ liability claim or any other claim for an accidental fall on police premises.
A claim against a public authority for trespass to the person.
The complexity bands within the intermediate track (CPR 26.16)
Within the intermediate track there are four complexity bands that a claim can be assigned to. The parties to a Claim can agree on a complexity band, however the Court retains discretion and may direct that a case be assigned to a different band than agreed by parties where it deems appropriate.
The complexity band that is assigned to a claim will determine the level of fixed recoverable costs that the Claimant’s Solicitors can recover. Band 1 comprises the least complex claims, and band 4 includes the most complex claims. The more complex the claim is, the higher the fixed recoverable costs allowed, and therefore band 4 allows for the highest fixed costs recoverable.
The level of fixed costs (CPR 45.50 Table 14)
These are also dependent upon the stage the claim has reached. The Intermediate Track fixed costs are within table 14 and state that there are 16 different stages of a claim. Examples of the stages include from pre-issue up to and including the date of service of the defence (stage 1), from the date of service of the defence up to the earlier of the date set for CMC or the order giving directions under 28.2 (stage 3), and from the end of stage 6 up to the date of the trial (stage 8). To provide an example of the fixed recoverable costs in each complexity band, the fixed costs recoverable at stage 1 has been outlined in each of the complexity bands below for comparison.
Complexity band 1
This band includes any claim where there is only one issue in dispute, and the trial is not expected to last longer than one day, including:
Personal injury claims where only liability or only quantum is in dispute.
RTA related non PI claims, and.
Defended debt claims.
Example:
A Claim that has reached stage 1 within this complexity band is entitled to fixed recoverable costs of £1,652 + an amount equivalent to 3% of the damages plus VAT.
Complexity band 2
This band includes any claim where more than one issue is in dispute, including personal injury accident claims where liability and quantum are in dispute.
Example:
A Claim that has reached stage 1 within this complexity band is entitled to fixed recoverable costs of £5,162 + an amount equivalent to 6% of the damages plus VAT.
Complexity band 3
This band includes more complex claims, where more than one issue is in dispute, but which is unsuitable for assignment to complexity band 2, including noise induced hearing loss and other employer’s liability disease claims.
Example:
A Claim that has reached stage 1 within this complexity band is entitled to fixed recoverable costs of £6,607 + an amount equivalent to 6% of the damages plus VAT.
Complexity band 4
This band includes claims which would normally be allocated to the intermediate track, but which are unsuitable for assignment to complexity bands 1 to 3, including any personal injury claim where there are serious issues of fact or law.
Example:
A Claim that has reached stage 1 within this complexity band is entitled to fixed recoverable costs of £9,601 + an amount equivalent to 8% of the damages plus VAT.
Complexity bands – Re-assignment (CPR 26.18)
A court may on application or on its own initiative, reallocate a claim to a different track or reassign a claim to a different complexity band. Where a claim is allocated to the intermediate track and directions have been made, the court may only reallocate the claim where it decides that there are exceptional reasons to justify doing so.
Potential disputes arising from new rules
Following the introduction of the new Intermediate track and fixed recoverable costs, we are starting to see track allocation and complexity band disputes.
There is a clear difficulty in both parties agreeing which track and band a matter should be allocated to. For higher value claims, Claimants are more likely to argue that the value will exceed £100,000, as this would mean that the claim will instead be allocated to the multi-track, where costs are awarded on the standard basis. However, the Defendant is likely to argue that the value will be below £100,000, so that the costs would be limited to the new fixed recoverable costs under the Intermediate track.
In addition, Claimants are also likely to argue where possible that they will need three or more experts, as opposed to two, as this will cause the Claim to be allocated to the multi-track as opposed to the Intermediate track.
In relation to the different complexity bands for personal injury claims under the Intermediate track, the descriptions of complexity bands 2 and 3 for injury claims are arguably very similar, except for disease claims only falling under band 3. Further, the reference to band 4 including any personal injury claim where there are serious issues of fact or law means that it is likely that Claimant’s solicitors will always argue band 4, or band 3.
Therefore, there is a high likelihood of arguments arising between Claimant’s and Defendant’s in relation to the complexity of each claim; the Claimant is likely to argue that the Claim is more complex and so should be allocated to band 3 or 4, whereas the Defendant is likely to argue that band 2 is the correct allocation. In cases where a complexity band is not agreed on, the Court will have to exercise its discretion and direct the complexity band that a case should be assigned to.
In addition to the potential disputes that may arise as a result of the new intermediate track and extension of the fixed recoverable costs regime, it is also likely that as soon as a claim reaches a new stage within a complexity band, the Claimant’s representatives are more likely to seek settlement. This is due to the fact that the amount of fixed recoverable costs that the Claimant’s legal representatives can recover will be the same within a particular stage, regardless of the amount of work that has been done whilst the claim is within said stage.
Conclusion
Whilst the intention behind the new rules is to encourage early resolution and settlement of a claim, the changes are not simple, and there are likely to be difficulties in assigning claims to the correct track and complexity bands. These disputes will continue until further case law develops on this issue over time.
This article was co-authored by Hannah Downs.
