Will the extension of Fixed Recoverable Costs have any real impact on the CN sector?

2nd October 2023
Ian CohenIan Cohen

Medical Negligence Solicitor and Management Consultant

The Cohen Consultancy

Back in 2017 when Sir Rupert outlined the types of cases that should be excluded from the extension of the Fixed Recoverable Costs regime, it was expressly stated that Clinical Negligence cases would be among them.

The initial consultation outlined proposals to exclude certain types of cases that wouldn’t fit the criteria for Intermediate Track allocation, but it was the Government’s intention to broaden the scope of cases covered by FRC in due course and in an incremental way.

The Ministry of Justice confirmed in September 2021 that Clinical Negligence cases would not be included in FRC, and the Clinical Negligence market breathed a sigh of relief. However, that relief was short-lived.

Out of the blue

When the draft rules appeared in April this year, it became clear that, to the total shock of Clinical Negligence practitioners, a limited category of Clinical Negligence cases were in fact to be caught by the extension. Clinical Negligence cases valued between £25,000 and £100,000, where both breach of duty & causation is admitted, would be included in FRC and allocated to the new Intermediate Track.

Neither the Rules nor the Practice Direction provided any clarity in relation to this proposed extension, and many practitioners feared that Defendants would “game” the process by denying a case during the pre-action protocol, only to make admissions of breach and causation once the Defence was served, thus causing the case to be caught by FRC, irrespective as to what costs had been incurred in the pre-action process.

My view was that it was unlikely that the Defendants would adopt such an approach, not least as it would expose them to an allegation of unreasonable behaviour, which in turn could result in cost consequences of a 50% uplift in the amount of FRC they would have to pay if their conduct was found to be having “no reasonable explanation”.

Further consultations

In July, the MoJ announced another consultation on the proposed extension of FRC, reiterating that the implementation date would remain 1st October. This consultation once again raised various questions with a number directly relating to CN cases, namely:

  • Whether to make it explicit in CPR 26.9(10)(b) that for a Clinical Negligence claim to be subject to FRC, that admissions of breach of duty and causation must be made in the Letter of Response. And:
  • Would Fixed Recoverable costs in Clinical Negligence only apply to Intermediate Track claims where both breach of duty and causation is admitted. This would mean Fast Track (sub £25,000) Clinical Negligence claims would NOT be subject to Fixed Recoverable Costs.

This consultation closed on the 8th September, with no indication as to when the MoJ Response will be published. What appears most likely – in the absence of any Injunction being applied for by APIL, which may yet still happen – is that FRC will come in as planned on the 1st October, but that we will have to wait for a good few months to fully understand the impact on Clinical Negligence cases.

Assessing the impact on Clinical Negligence cases

My view has always been that FRC will have limited impact on Clinical Negligence cases, as it is very rare to have a case where breach and duty have been admitted pre-proceedings (assuming that’s what the Response to the latest consultation will confirm), and for the Claimant lawyer to then decide that its necessary issue Court Proceedings.

If such an approach is taken without realistically trying to resolve the case through one of the many ADR mechanisms, then to some degree any impact of FRC on such cases, will be because of the Claimants actions, as well as the scheme itself.

The new Part 36 landscape should also help focus minds pre-proceedings. The 35% uplift to a claimant who matches or beats its own offer at trial from the stage in which the relevant period (minimum 21 days) expired onwards.

We are, on any interpretation, in a wholly avoidable and crazy position. Claimant lawyers find themselves in a situation where it is almost impossible to advise a client if their case will or will not be caught by FRC, and if it is, what the impact on them will be. To be in such a situation so close to the implementation is simply unacceptable, especially when you consider that the Government has had years to get this right.

All of this before we even start to consider the Response issued by the Department of Health & Social Care on the 15th September, in relation to the consultation on Lower Damages CN FRC claims (sub £25,000) with an implementation date of April 2024. At least the consultation issued on the same day with regards to the recoverability of Disbursements and ATE premiums appears to be a step in the right direction i.e. both being recoverable.

So, what can you do?

First of all, don’t panic!! Those of us who have been around for a while have seen challenges like this before, and we have always found a way to make the system work so that our clients are able to secure access to justice while keeping our departments financially viable.

Yes, we will need to do things differently. Yes, we may not recover the same level of costs, and yes, we may not be able to provide a Rolls Royce service. But as long as you are prepared, as long as you manage your clients accordingly, I do believe there is a way forward.

You should look at what support there is within the marketplace to help you navigate these changes. The FRC Connect is one such excellent resource, and there are others.

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