When a claim is issued at court, it is assigned to a 'track'. Depending on the track, a claimant can be limited in significant ways – it may be limited to the amount of legal costs it can recover if successful and/or can only rely on limited evidence to prove its claim. Previously, there were three tracks depending on the value or complexity of the claim: small claims track, fast track and multi-track.
What is the intermediate track?
On 1 October 2023, The Civil Procedure (Amendment No.2) Rules 2023 came into force, and the new intermediate track was introduced. The intermediate track is for claims valued at £25,000 - £100,000 in damages and are less complex than those allocated to the multi-track but more complex than those allocated to the fast track.
Fixed recoverable costs (FRC) apply to the intermediate track, meaning the costs you can recover from your opponent for various stages of the proceedings are capped to those set out in the new Practice Direction 45. Therefore, if you issue a claim after 1 October 2023, you should assess whether bringing a claim is worthwhile (as, if you win, it is likely that you will recover a lower amount of costs than before).
What kind of cases will this affect?
The intermediate track will cover a wide range of property claims, including claims for monetary relief (such as claims for commercial rent arrears, terminal dilapidations claims and boundary disputes) and claims for non-monetary relief where the judge decides that it is in the interests of justice to allocate such claims to this track.
It is important to note that claims for possession, disrepair and unlawful eviction in respect of residential properties are excluded from the FRC regime (unless the claim in respect of the residential property arises from a boundary dispute).
What are the key changes?
To be allocated to the intermediate track, claims will be tried within three days, each party will have at most two expert witnesses, with strict page limits for expert reports and witness statements.
Once a claim is allocated to the intermediate track, it will be assigned to one of four complexity bands as summarised below:
- Band 1: for debt matters and simple claims with only one issue in dispute; a trial is anticipated to take one day or less;
- Band 2/3: for claims where there is more than one issue in dispute; less complex claims will be allocated to band two, and more complex claims will be allocated to band three; and
- Band 4: for most complex claims where serious issues of fact/law are to be considered; a trial is anticipated to take three days.
The fixed costs applicable to each track will depend upon the stage of the claim and the complexity band that the claim has been allocated. Claims which are assigned a higher complexity band and/or are closer towards trial will generally have greater cost recovery, whereas claims which are assigned a lower complexity band and/or are further from trial will generally have smaller cost recovery.
So if I win my case, I won't get my legal costs back?
If you win, you will likely be able to recover some (but not all) of your legal costs from your opponent, however, this depends upon the amount of legal costs incurred. The amount of costs that you can recover from your opponent for various stages of the proceedings are capped at fixed levels set out in the new rules. This includes capped amounts that can be recovered in respect of barristers' fees.
What should I be doing differently?
- Consider methods of Alternate Dispute Resolution (ADR)
In certain cases, ADR, such as arbitration or mediation, can be a more appropriate option than issuing a claim. ADR is also advantageous because it does not have a fixed cost regime (i.e. if an arbitrator makes an award in your favour, your ability to recover your legal costs is not as fixed as if your claim is allocated to the intermediate track). - Help your lawyers minimise time and cost
If you decide to use litigation to resolve your dispute, helping your lawyers minimise the time incurred on your matter will reduce your legal costs (and make them more likely to fall within the bands set out in the new Practice Direction 45). We recommend providing your lawyers with a clear summary of all the facts (along with all relevant documentation) upon instruction so they have all the information they need to start working on your claim.
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