Fixed Recoverable Costs (FRC) Exemptions – CPR 45.1 and CPR 26 Explained

Do you know what the exemptions to fixed recoverable costs are?

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The introduction of the expanded Fixed Recoverable Costs (FRC) regime to civil litigation on 1 October 2023 marked a significant shift in the landscape of legal costs management. This guide explores the background of the reform and focuses on the key exemptions under CPR 45.1 and CPR 26.

Background to Fixed Recoverable Costs in Civil Litigation

The journey of fixed recoverable costs began with the Jackson reforms, led by Lord Justice Jackson, whose review of civil litigation costs aimed to promote access to justice at proportionate cost.

• First stage (1 April 2013): CPR 45 fixed costs applied to personal injury claims valued up to £25,000.
  This included:
  • Road Traffic Accident (RTA) claims
  • Employer’s Liability (EL) claims
  • Public Liability (PL) claims
• Expansion (1 October 2023): Scope broadened to all civil litigation cases valued up to £100,000.

• Applies beyond personal injury to a wide range of case types.
• Introduced the Intermediate Track for claims generally valued between £25,000 and £100,000, bridging the gap between the Fast Track and Multi-Track.

Exemptions Under CPR 45.1(4)

While the expanded regime captured many previously “free” cases, CPR 45.1(4) outlines specific exclusions.
Any claim or counterclaim involving residential property disputes related to:

• Possession proceedings
• Housing disrepair
• Unlawful eviction

These cases, even if eligible for the Fast or Intermediate Track, are exempt from fixed costs.
Costs in such matters are recoverable on an hourly rate / inter partes basis.

Exemptions Under CPR 26.9(10)

Beyond CPR 45.1, CPR 26 on case management identifies matters that must be allocated to the Multi-Track, making them exempt from the fixed costs regime.
These include:

• Mesothelioma or asbestos lung disease claims
• Clinical negligence disputes where breach of duty or causation is in dispute
• Allegations of harm, abuse, or neglect
• Jury trials
• Claims against the police involving intentional or reckless torts or breaches of the Human Rights Act 1998
  (Excludes negligent driving RTAs, employer’s liability disputes, or accidental falls on police premises)

Conclusion – Impact on Solicitors and Access to Justice

The expanded FRC regime aims to streamline and limit costs, but it can result in solicitors receiving lower recoverable fees for complex, time-consuming cases.
This may:

• Deter solicitors from taking on certain matters
• Limit access to justice for clients
• Increase the need for meticulous case management and cost prediction

Adapting to these changes is essential for legal practitioners navigating the evolving civil litigation landscape.

For more information on CPR 45.1 and CPR 26 exemptions, contact Karl Robson here.

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