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Proposed capped costs scheme – improving access to justice and controlling costs of litigation

11 June 2018

A voluntary scheme for civil litigation cases to be made subject to capped costs is being proposed. The scheme has been approved by the Civil Procedure Rule Committee and the next stage is for a launch date to be confirmed for a 2 year ‘pilot’ trial period.

Parties engaged in business and property cases with a value up to £250,000 may choose to use the scheme when introduced. The Courts proposing to pilot the scheme are:

a) the Circuit Commercial Courts (formerly known as the ‘Mercantile Court’) in London, Leeds and Manchester;

b) the Technology and Construction Courts in Leeds and Manchester; and

c) the Chancery Division in Leeds and Manchester.

The scheme will provide for an overall maximum figure of £80,000 in costs to be recoverable from an opponent. The £80,000 figure is broken down by reference to a series of litigation stages with a corresponding total cap for costs for each stage. For example parties will not be able to recover more than £7,000 for preparing particulars of claim, £8,000 for witness statements and £10,000 for work engaged in settlement or mediation.

In order for costs to be limited to £80,000, the scheme provides for a stream-lined process from the outset of proceedings through to determination at trial. For example statements of case are required to be concise, disclosure limited to key documents, shorter witness statements and a trial date is fixed quicker than is typical for most other cases. The proposed rules are similar to those found in the pilot ‘flexible’ and ‘shorter trial’ schemes – operating in the Rolls Building Courts until the end of the pilot in September 2018.

In litigation the costs of pursuing a case through to trial can be unpredictable and sometimes vastly excessive or disproportionate to the value of the claim. This can be an obstacle and deters parties from bringing a claim even if the claim is meritorious with good prospects of success. Therefore, we welcome proposals aimed at providing parties with some control and certainty as to their recoverable costs. Although, clearly not every type of case will be suitable for use under this scheme – for example complex, cross-border or high value litigation. We will continue to closely monitor progress and the announcement of a launch date for the pilot in the future.

Should you wish to discuss a dispute, please do not hesitate to contact one of our personal or business disputes team on 01483 543210