Nick McDonnell, Director at Kain Knight
By Nick McDonnell, costs lawyer and director at Kain Knight
Exactly one year after implementation of the extended fixed recoverable costs (FRC) regime, 1 October 2024 will see the introduction of the rules and practice directions that set out the procedure, and the associated fixed recoverable costs, for seeking judicial determination of FRC disputes.
The procedure (called ‘fixed costs determination’ or ‘FCD’) and associated costs can be found in:
The Civil Procedure (Amendment No. 3) Rules 2024
171st Update – Practice Directions Amendments
THE FCD PROCEDURE
Stage 1 – On-the-papers determination
1. Party issues an application (either by rule 23 in existing proceedings or by part 8 costs-only proceedings where no proceedings already exist) inviting the court to determine the FRC issue.
2. Receiving party files and serves a new form called a Precedent U, together with evidence in support of the claim for costs.
3. The claim for costs may include sums exceeding FRCs pursuant to rule 45.9 (“exceptional circumstances”), rule 45.10 (“vulnerability”) and/or rule 45.13 (“unreasonable behaviour”).
4. The paying party files and serves evidence in response to the claim for costs within 21 days.
5. The court determines the fixed recoverable costs ‘on the papers.’
Stage 2 – Oral hearing
6. Where a party wishes to challenge the ‘on the papers’ determination it can request a hearing within 21 days.
The costs of the FCD procedure
7. The costs of stage 1 are fixed at £500 plus VAT and disbursements.
8. The costs of stage 2 are fixed (and treated as an application under rule 45 PD table 1) at either £250 (for fast-track, complexity bands 1,2 or 3 cases) or £333 (fast-track, complexity band 4, or intermediate track cases).
9. Part 36 will not apply.
10. The costs of stage 2 will only be awarded to the party that requested the hearing if “they achieve an adjustment in their own favour that is at least 20% of the sum determined” on the papers.
11. Where a claim for costs is made which seeks sums exceeding FRCs pursuant to rules 45.9, 45.10 and/or 45.13, the court may order a detailed assessment “in conjunction with” FCD (which suggests both a FCD procedure and the detailed assessment procedure can simultaneously exist (along with the relevant costs that might apply to each procedure).
