A new “Capped Cost Pilot Scheme” is heading our way intended to streamline Court procedure, make litigation cost effective and increase access to justice. But will it?

The Pilot is intended to last 2 years and run in specific Courts including Manchester’s Business and Property Courts. It will be available for cases up to a value of £250,000 subject to exceptions (for example, cases involving allegations of fraud or dishonesty). Crucially, it will be a voluntary scheme.          

The Pilot is intended to streamline the legal process. Pleadings will be limited in length. A shortened CMC will be listed 10 to 12 weeks from filing of the Acknowledgement of Service. Disclosure will not apply (save in exceptional circumstances) and witnesses and their statements will be restricted in number and length. Expert evidence will generally not be permitted.

The Pilot is intended to lower and give greater certainty in respect of recoverable costs. Cost budgeting will not apply and recoverable costs will be capped at £80,000 broken down into smaller caps for the various stages of litigation. Exceptions apply to this figure (including court fees, enforcement and wasted costs).

Initial views? We are sceptical. Cost fixing will be unattractive to parties engaged in cases which are technical in nature, where costs will remain high and where winning parties will leave with significant irrecoverable costs. The problem is that a case will cost the ‘going rate’ but the ability to recover costs will be capped i.e. there will be an impact on the financial viability of successful claims (or defences) and access to justice is likely to be impeded as a result of the disparity between parties with and without cash. The Pilot will at least test the legal appetite and flush out important areas for consideration – is there demand for fixed costs? Should these be the same for London and the regions? Could incentives be introduced to encourage participation in the Scheme? Time will tell.

If you would like to discuss cost capping or require assistance in relation to a legal dispute please contact Louise Goodwin or a member of Freeman Fisher’s litigation team on 0161 835 9090 or lgoodwin@freemanfisher.com.