Fixed Recoverable Costs and Vulnerability

20 Oct 2023

The changes extending fixed recoverable costs (FRC) to most civil litigation claims with a value of up to £100,000 are now here and were implemented on 1 October 2023.  With this comes the new ‘intermediate track’ which lay between Fast Track and Multi Track cases valued at £100,000 and over.  This article is not intended to tell you about the four complexity bands within the intermediate track or the grids of costs within PD45, or about the new standard directions for this track, but to say a few words about how the costs arising from vulnerability are to be dealt with.

It has become more common for case summaries at CCMC / CMC stage to raise the potential vulnerability of the Claimant and for the Judge at CCMC hearings to be asked to make a declaration that the Claimant possesses vulnerabilities, as being relevant to the amount of costs budgeted for the claim.  Less common are points made about potential witnesses being vulnerable.

The overriding objectives relevant to vulnerability (PD 1A) require that cases are dealt with justly, that parties are on an equal footing and can participate fully in proceedings and that parties and witnesses can give their best evidence.  Parties are obliged to assist the court in achieving this overriding objective.

The practice direction tells us that a person should be considered vulnerable when a factor, whether personal, situational, permanent or temporary may adversely affect their participation in proceedings or the giving of evidence.  This covers a party or a witness and can cover age, immaturity, lack of understanding and communication or language difficulties.  Physical disability and mental health impairment, including learning difficulty is covered as is the impact of the case itself (for example reliving a traumatic event), their relationship with a party or witness or overall social, domestic or cultural circumstances.  Paragraph 5 of the practice direction provides factors to be considered that might adversely affect the ability of a party or witness to participate in proceedings and / or give evidence.

Paragraph 7 of the practice direction suggests that if a court decides a party / witness’ vulnerability is likely to diminish the evidence that can be given then the court can identify the nature of the vulnerability in any order and make provision to alleviate such in furtherance of the overriding objective.

CPR 45.10 now makes provision allowing for an increase in FRC where a party or witness is vulnerable and that vulnerability has required additional work to be undertaken.  However, to argue for such, the amount of additional work done (in cost terms) must be at least 20% greater than the amount of fixed recoverable costs.  Therefore, any claim for such enhanced costs beyond the FRC allowances will need to carefully detail the work done, the value of the work done and that this was 20% greater, at least, than the fixed amount allowable.

The method that the court should adopt in such an assessment of costs is to summarily assess the costs under the FRC scheme and then to consider the additional costs.  CPR 45.10 allows for the costs to be the subject of detailed assessment if need be.  I anticipate however that the expectation will be summary assessment of such additional costs.

It will therefore be necessary, early on, to assess and account for any vulnerabilities as so defined in PD 1A for both parties and witnesses, to ensure that this is captured in any case management orders and to ensure that a proper measure of the additional costs associated to these vulnerabilities is kept with a view to demonstrating the additional associated costs in percentage terms.  Be ready to have such costs assessed at the conclusion of any hearing on a summary basis and with good explanation underlying the additional costs incurred.

Article by Emma Zeb


Emma Zeb

Emma Zeb

Call: 1998


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