Fixed Costs changes and their impact

At Douglas Scott Legal Recruitment, we have a specialist Costs Recruiter and expert in all things Costs related, Aaron Dyson. He has informed us of an interesting change to legal Costs law that came into force at the end of last year. 

Fixed Recoverable Costs (FRCs) have been a fixture of low-value personal injury cases for some time and are a way to set the amount that people can claim back from a losing party in civil litigation. However, from October 2023, these fixed costs have been extended and now cover most cases up to £100,000 in value. While claimants have some benefits, such as knowing the costs of losing the case from the outset, there might be some issues for law firms that could significantly impact the landscape of costs law. 

Some law firms might now be more hesitant to run these cases due to having to fix fees so far in advance. If fees are fixed in advance, it means that if costs rise, they won’t get a return on work they’ve carried out. Some firms will also find that their profits might not be as high from these cases if fees are fixed in advance, making them reluctant to take on these cases. Some firms might feel that these cases are no longer profitable and cannot justify taking them on, especially if they can’t make the money back from the claimant. In the worst-case scenario, firms might be forced to make savings and make lawyers redundant. 

Not everyone was happy with these changes – the Law Society published a scathing report on them, believing that they did not support the changes and would lead to difficulties securing justice if firms didn’t feel it was economically viable to take these cases. They also raise issues around more difficult cases being taken on and issues surrounding the data used to make the judgement by the government. 

Firms are trying to curb costs in the wake of the pandemic and the current economic climate, and these changes may cause more problems for law firms. It remains to be seen what effect these will have on people, and we will keep an eye on these changes as they develop.