Financial Forecasting in Litigation: Fixed Costs in the Intermediate Track
In October 2023, a significant reform was implemented in the civil justice system concerning cost recovery.
This reform introduced new rules regarding fixed recoverable costs, including the establishment of the ‘Intermediate Track’.
This track is aimed at improving case-handling efficiency and providing greater cost predictability in commercial litigation.
The Judge initially assesses the claim based on complexity, the monetary value, and remedies sought to determine the appropriate track for the case, thereby influencing the recovery of costs.
About the Intermediate Track
The Intermediate Track was designed to handle cases that do not fit into the Small Claims Track or the Fast Track.
It offers a middle ground, which is beneficial for handling cases of moderate complexity.
The application of fixed recoverable costs in this track means that the costs a party can recover are predetermined and vary according to the assigned complexity band and the stage of litigation reached.
Generally, more complex cases or those closer to trial allow for higher cost recovery.
Criteria for the Intermediate Track
For a case to qualify for the Intermediate Track, several criteria must be met:
- The claim must involve monetary relief of at least £25,000 but not exceeding £100,000.
- The trial should not exceed three days.
- Expert evidence should be restricted to two experts per party.
- No more than three parties can be involved in the proceedings.
This track is suitable for straightforward liability cases that require moderate discovery and where parties are amenable to alternative dispute resolution.
The court may also allocate cases to this track if deemed in the interests of justice.
Fixed Recoverable Costs Explained
Under the Intermediate Track, fixed recoverable costs provide a predefined framework for the costs that the successful party can recover.
This adjustment aims to offer predictability and limit the financial risks associated with litigation.
The costs depend on the complexity of the case and the litigation stage, which encourages parties to settle disputes early to avoid excessive legal costs that exceed the recoverable amount.
Considerations
While the introduction of the Intermediate Track and its fixed costs regime offers several advantages – such as predictability and cost control – it is essential for parties to assess the complexity of their cases accurately.
This ensures that cases are appropriately categorised and the correct recoverable costs are applied.
Both businesses and individuals engaged in litigation need to evaluate the commercial practicality of their legal actions under this system.
Conclusion
The Intermediate Track supports efficient case management and motivates parties to settle disputes promptly, ultimately reducing legal expenses and the strain on court resources.
As this track becomes more integrated into the legal system, its effectiveness in streamlining case management and cost control will become clearer.
Those involved in litigation should be mindful of the specifics of their cases to maximise the benefits offered by the Intermediate Track.
For tailored advice, feel free to contact our experts.
They will be happy to discuss your specific commercial property law query.
Email Michael Cullen (mpc@bennett-griffin.co.uk) or Bethany Lee (brl@bennett-griffin.co.uk).
Alternatively, you can call them on 01903 229929 or 01903 706986 respectively.