The introduction of the fixed recoverable costs (FRC) regime in October 2023 marked a significant shift in how legal costs are controlled in civil litigation. While the regime is designed to promote certainty and proportionality, it does not apply universally. There are important exceptions to fixed recoverable costs which practitioners and parties in civil litigation must understand.

Below, Greener Costs outlines when the FRC regime applies, and more importantly, when it does not.

When Fixed Recoverable Costs Apply

The fixed recoverable costs regime applies to a broad range of claims issued under the Civil Procedure Rules, particularly those allocated to the lower tracks. Whether the regime applies depends on the nature, value, and complexity of the claim.

Key features include:

• Applies to claims allocated to the fast track and intermediate track
• Covers most claims valued up to £100,000 (depending on case type)
• Costs are determined by complexity band and procedural stage
• The amount of fixed costs recoverable is prescribed by rules, rather than assessed
• Typically limits recovery for the winning party, regardless of actual legal spend

While this framework creates predictability, it also introduces rigidity, which is why exceptions play a crucial role.

Key Exceptions to Fixed Recoverable Costs

There are several scenarios where the FRC regime will not apply, either automatically or by judicial discretion.

• Claims allocated to the multi-track
  High-value or complex claims fall outside the FRC regime entirely and are subject to detailed or standard basis assessment.
• Cases involving exceptional complexity
  Even where a claim would ordinarily fall within the intermediate track, it may be excluded if the court considers the issues too complex for fixed costs to apply.
• Specific claim types excluded by rules
  Certain categories, including some personal injury claims and cases involving multiple experts per party, may fall outside the regime depending on their structure.
• Claims including non-monetary relief
  Where a claim includes substantial non-financial remedies (e.g. injunctions), the court may determine that fixed costs are inappropriate.
• Parties’ conduct justifying departure
  In rare cases, unreasonable behaviour may justify a departure from fixed costs, particularly where it would be unjust to apply the standard framework.

These exceptions ensure that the regime does not produce unfair outcomes in cases that require greater flexibility.

Judicial Discretion and Departure from the Regime

Although the FRC regime is designed to be prescriptive, the court retains a degree of discretion in its application.

• The court may reallocate a claim to the multi-track, removing it from the FRC regime
• Allocation decisions are influenced by complexity, evidence, and trial length
• The presence of multiple issues or parties may justify removal from fixed costs
• In some cases, the court will consider whether the claim “includes a claim” element that falls outside standard FRC scope

Importantly, the regime is not intended to override fairness. Where strict application would lead to a disproportionate result, the court retains the ability to intervene.

Contact Greener Costs Today

While the fixed recoverable costs regime provides clarity and control over legal costs, it is not absolute. Understanding the exceptions to fixed recoverable costs is essential for accurately assessing litigation risk and recovery.

For parties in civil litigation, early consideration of allocation, complexity banding, and potential exceptions can have a significant impact on strategy and outcomes.

Greener Costs provides specialist support on all aspects of costs management, including advising on the applicability of the FRC regime, identifying potential exceptions, and ensuring the best possible recovery of legal costs.

Whether you are pursuing or defending a claim, expert guidance can help you navigate the evolving costs landscape with confidence.

Contact us via our enquiry form below, or by emailing info@greenercosts.co.uk and a member of our team will get back to you at the earliest opportunity.

Frequently Asked Questions

What are exceptions to fixed recoverable costs?

Exceptions to fixed recoverable costs are situations where the standard fixed costs regime under the Civil Procedure Rules does not apply. In these cases, the court may allow costs to be assessed in the usual way, particularly where a claim is too complex or falls outside the scope of the regime.

When do fixed recoverable costs not apply?

Fixed recoverable costs do not apply where a claim is allocated to the multi-track, involves exceptional complexity, includes non-monetary relief, or falls within specific excluded categories such as certain personal injury claims.

Can a case be removed from the fixed recoverable costs regime?

Yes. A case can be removed from the fixed recoverable costs regime if the court allocates or reallocates it to the multi-track, usually due to complexity, the number of issues, or the volume of evidence involved.

Do fixed recoverable costs apply to all personal injury claims?

No. While many personal injury claims fall within the fixed recoverable costs regime, exceptions can apply depending on factors such as the number of experts per party, the value of the claim, and its overall complexity.

Can the court depart from fixed recoverable costs?

The court has limited discretion to depart from fixed recoverable costs where it would be unjust to apply them. However, such departures are uncommon and typically require exceptional circumstances.

How are fixed recoverable costs calculated?

Fixed recoverable costs are calculated by reference to the claim’s value, the procedural stage reached, and the assigned complexity band. The Civil Procedure Rules set out the exact amounts recoverable at each stage, meaning costs are predetermined rather than assessed in detail.