12th October, 2023

The Intermediate Track - a guide for personal injury lawyers

As we have now passed 1st October 2023, the new provisions of the CPR are now in force, which contain changes to both the fast track and make new provisions for an intermediate track, siting between the fast-track and the multi-track.  The rules are contained in the Civil Procedure (Amendment No.2) Rules 2023 (hereafter “the amendment rules”) 

The primary focus of this article is the new intermediate track, although there are also some parallel changes to the fast track, particularly in relation to the creation of four complexity bands, which practitioners need to be aware of.

This article is aimed at personal injury practitioners, although the changes cover a broader spectrum of civil cases.

The first piece of advice is not to panic, as for the most part your introduction to the new regime is likely to be gradual and you may not actually encounter the new rules for a considerable period of time, because it only applies to (a) accidents which include a claim for personal injury (other than a disease claim) which occurs after 01 October 2023, or (b) in disease cases, where the letter of claim was sent after 01 October 2023 (see section 2(2) of the amendment rules).

It is likely therefore that most practitioners are going to have an existing caseload which, when issued, continues within the existing rules, until the end of September 2026, with a slow transition to the new procedural rules.

What are the criteria for the intermediate track?

The intermediate track is designed to cover lower value cases which under the existing rules would have been allocated to the multitrack: i.e. over £25,000 but limited to £100,000. There are however other relevant criteria which will determine track (see CPR 26.9(7)):

  • The trial will not last longer than 3 days if “managed proportionately”. 
  • The parties are not likely to call more than 2 experts each to give oral evidence.
  • There are no additional factors which make the claim inappropriate for the intermediate track.
  • The claim is brought by a single claimant against either one of two defendants, or
  • The claim is brought by two claimants against a single defendant (i.e. a maximum of 3 parties).

It is therefore possible to imagine circumstances where for example three claimants in a vehicle are injured in a road traffic accident, where if issued together, despite being worth less than £100,000, the case might still be allocated to the multi-track. The position would be the same where there are more than two defendants, for example, in an employer’s liability claim, involving sub-contractors/main contractors on a building site, or where in an RTA liability dispute, a claimant passenger issues against both the insurers, as well as two defendant drivers.

There are some cases which are automatically allocated to the multi-track – including (CPR 26.9(10):

  • mesothelioma or other asbestos lung disease cases
  • clinical negligence claims where breach of duty and causation are in dispute
  • There is a claim for damages in relation to harm, abuse, or negligent of or by children or vulnerable adults,
  • The claim is one which could be tried by jury,
  • There is a claim against the police for an intention or reckless tort or relief/remedy is sought in relation to a breach of the Human Rights Act.

There does remain a judicial discretion as to whether to allocate any specific case to the intermediate track as opposed to the multi-track, but how often this provision will be exercised in practice remains to be seen.  

Directions

One of the key differences between cases assigned to the multi-track under the old rules and those assigned to the intermediate track, is that there is no need for costs budgeting and hence a CCMC, given the new fixed recoverable costs (FRC) regime.

However, that does not mean that a CMC will not be required to provide case management directions. CPR 28.12 states that the court shall fix a CMC and may fix a PTR. The parties “must endeavour” to agree appropriate directions and submit them to the court 7 days in advance of the CMC. If the court approves the directions, or issues its own directions, the CMC will be vacated.  

PD28 (2.2) states that the court will hold a “hearing to give directions whenever it appears necessary or desirable to do so” but adds that when this happened because of the default of a party or their legal representative, it will usually impose a sanction – there is no guidance on what that sanction might be, but presumably it will relate to costs.

PD28(3.6) states that in order to obtain the court’s approval for agreed directions, (to enable any hearing to be vacated) the timetable for directions must have calendar dates (amongst other things) for directions, up to and including the trial window – so please avoid filing draft directions which state witness statement to be exchanged in 16 weeks etc. How this provision will work in practice, will in large part depend upon how long it takes between directions questionnaires being filed and the directions being approved by the court.   

CPR 28.14(2) states that oral expert evidence is limited to one witness per party, save where oral evidence of a second expert is both reasonably required and is proportionate.  

A couple of other important points to note: CPR 28.14(3) limits the total length of all of the permitted witness statements and summaries of a party to 30 pages and that any expert reports shall not exceed 20 pages, excluding any necessary photographs, plans and academic/technical articles which are attached to the report.  

The FRC do not provide for a separate advocacy fee for attendance at CMC or hearing to allocate the claim to a specific complexity band (see below). This hearing is likely to be of significant importance to the parties (particularly the claimant), given the larger FRC in the higher complexity bands. For example,  a case which settles at S5 (exchange of witness/expert evidence) in Complexity band 2, the FRC is £11,000 + 16% of the damages, as opposed to Complexity band 4, at £20,000 + 18% damages.  

It is not clear whether a CMC will (a) count as an interim application in accordance with CPR 45.8 (£333); (b) whether this fee is supposed to be included in the S3 FRC costs (see below) and hence no addition fee is recoverable, or whether (c) the court might award this as a separate disbursement recoverable under CPR 45.60 – although it will no doubt be argued that such a disbursement cannot be recoverable as it is already provided for within the FRC provisions (see below). There will no doubt be financial pressure to agree directions/complexity band so as to avoid a hearing. 

Complexity Bands

Once assigned to the intermediate track, the case will be placed in one of four complexity bands, which will determine the fixed costs which are recoverable. The parties will be required to state on the directions questionnaire, either the agreed complexity band, or where there is a dispute, the complexity band considered appropriate by the party. The table is at CPR 26.16 (Table 2):

 

Complexity Band

Criteria

One

  • Single issue in dispute
  • Trial not expected to last more than a single day
  • PI claim where liability/quantum in dispute
  • Non- PI RTA

Two

  • Any less complex case where more than one issue in dispute
  • Includes PI claims where liability and quantum in dispute

Three

  • More complex claims
  • More than one issue in dispute but not suitable assignment to complexity band 2
  • Includes noise induced hearing loss claims
  • EL disease claims

Four

  • Any claim unsuitable for Band 1-3
  • PI claims where there are serious issues of fact and law

As well as four complexity bands, there are now a number of stages set out in Table 14 (CPR 45.50 (PD45)) which will determine, when the case settles, the appropriate level of fixed recoverable costs within each complexity band. The stages are:

 

Stage

Description

1

Pre-issue up to the date of the service of the defence

3

Service of the defence up to date for CMC/directions order

4

End of stage 3 to disclosure – the date being that of inspection

5

From the end stage 4 to the later of dates set for exchange of witness statements or expert reports

6

End of stage 5 to date set for PTR or 14 days before the trial (whichever is earliest)  

8

End of stage 6 to trial

CPR 45.50(2)(c) makes it clear that the costs recoverable in the above stages are cumulative totals for costs incurred up to and including that stage. 

Unlike the fast track, there is no provision for specified pre-issue costs in S1 in the intermediate track, which covers all costs up to and including the service of the defence.  

The importance of the allocation to the appropriate complexity band, in terms of the levels of FRC cannot be underestimated, as the following examples demonstrate.

In a case which settles at stage 1, in complexity band 1, the FRC are £1600 + 3% of the damages. In contrast, in complexity band 4, this figure rises to £9300 + 8% of the damages.

A case which settles at stage 6, (after exchange of expert/witness evidence). In complexity band 1, the FRC is £5900 + 15% of the damages, rising to £15,000 + 16% (Complexity band 2), £16,000 +16% damages (Complexity Band 3) and £24,000 + 18% (Complexity Band 4).

If the case concludes at trial, the FRC are £6600 + 15% of the damages (Complexity band 1), rising to £29,000 + 22% of the damages (Complexity Band 4.) Each of these figures is subject to a deduction where the receiving party did not prepare the trial bundle.

It will be interesting to see if the FRC regime results in a significant changes in the way cases are currently litigated. For example, there is a clear incentive for claimant firms to issue proceedings to take advantage of the higher FRC recoverable between S1 and S3 (for example, at Complexity level 1 £1600 + 3% damages (S1) and £4000 + 10% (S3), and at Complexity band 4 £9300 + 8% (S1) to £13,000 + 14% (S3)). Defendant insurers will presumably therefore be mindful of this and keen to make offers at an earlier stage if they have the evidence available to accurately value the claim and the risks associated with it.     

The new rules do allow for a case to reassigned to a different complexity band, but this is only where there are “exceptional reasons to justify doing so” once the case has been allocated to the intermediate track and directions have been given. The court may only reassign to a different complexity band, where there has been a change in circumstances since the original assignment to a particular complexity band, and  where the court determines that the change in circumstances justifies the reassignment (CPR 26.18(3)).   

The costs on reallocation of either track or complexity band are dealt with at CPR 45.14. The FRC are those which are applicable to the track to which the claim is reallocated, as if the claim had been assigned to that complexity band at the outset.  An application for reallocation/reconsideration of the complexity band, is treated as an interim application for FRC purposes, in accordance with Table 1. 

Specialist Advice/Advocacy/ADR

In many of the cases on the intermediate track, specialist written advice/or a conference or drafting will have been undertaken by Counsel/specialist in house advocates and the FRC rules provide for this:

 

Stage

Description

Amount

2

Post issue advice in writing or conference

Drafting statement of case

 

Complexity Band 1 & 2: £2000

Complexity Band 3-4: £2300 – rising to £3500 if a defence to counterclaim is drafted

 

7

Advice in writing or in conference post defence

Complexity band 1: £1400

Complexity band 2: £1700

Complexity Band 3: £2300

Complexity Band 4: £2900

9

Attendance by legal rep – other than advocate 

Complexity band 1: £580

Complexity band 2: £870

Complexity Band 3: £1200

Complexity Band 4: £1400

10

Brief fees for advocacy Day 1

Complexity band 1: £3200

Complexity band 2: £3500

Complexity Band 3: £4000

Complexity Band 4: £5800

11

Refresher fees

Complexity band 1: £1400

Complexity band 2: £1700

Complexity Band 3: £2000

Complexity Band 4: £2900

 

These figures are reduced by 50% if the case last no more than half a day

12

Handing down reserved judgement & consequential matters, where dealt with separately from the trial 

£580 for all complexity bands

13

ADR FRC – mediation or JSM

£1200 for all complexity bands

14

Counsel attendance at mediation/JSM

Complexity band 1: £1400

Complexity band 2: £1700

Complexity Band 3: £2000

Complexity Band 4: £2300

15

Separate approval hearing for Child

Complexity band 1: £1200

Complexity band 2: £1400

Complexity Band 3: £1700

Complexity Band 4: £2000

The S2 costs provisions are likely to be prove controversial in relation to timing. The rules provide for the recovery of post-issue advice and a conference. However, what if the conference takes place pre-issue in order to gather the required information to draft the statement of case and to advise on the merits of issuing proceedings? 

CPR 45.50(4) states that the S2, S7 and S14 additional costs are only allowed where:

(a)    Legal advice is obtained from a, or a statement of case is drafted by,

(b)   A specialist legal representative in respect of a matter withing their specialist expertise; or

(c)    The intended trial advocate,

(d)   The use of that person to provide the advice or draft the statement of case is justified. 

It should be noted there are separate FRC in respect of noise induced hearing loss cases at table 15 (CPR 45.53).

There is also provision for a London (inner and outer London) weighting for cases (CPR 45.3(1)) of 12.5%

Pre-action and interim applications

CPR 45.8 sets out the FRC for pre-action and interim applications (Table 1). This sets the fee at £333 for any claim to which Table 14 applies (i.e. the intermediate track). The FRC of a summary judgment are £750 as well as for an interim payment. The court fee is of course recoverable in addition.

Split trial

How do the fixed costs apply where there are separate trials on liability and quantum, or for example a trial of a preliminary issue, such as limitation?

CPR 45.51 provides that in these circumstances, the party is entitled to the applicable FRC in Table 14 that the proceedings have reached at the date that the preliminary issue is concluded, in addition to the S8/S9 trial costs and if applicable, the specialist advocate costs at S2,S7, S9, S12, S13 and S14.

Thereafter, the party is entitled to additional fixed costs, in accordance with Table 14 within which the claim concludes, less the amount is S3, plus any further trial costs (S8/9) and additional costs under S9, S12-14. 

The caveat is that only one set of fees can be recovered by one party in respect of JSM/mediation under S13 and S14. 

Claims for amounts exceeding FRC

CPR 45.9 makes provision for the court to consider a claim for an amount of costs (excluding disbursements) which is greater than the proscribed FRC, where there are exceptional circumstances making it appropriate to do so. 

CPR 45.10 provides that the court may consider a claim for an amount exceeding FRC where a party / witness is vulnerable and that vulnerability has required additional work to be undertaken and by reason of the additional work alone, the claim is for an amount which is at least 20% greater than the amount of the FRC.

However, no doubt in order to discourage routine or unmeritorious claims, CPR45.11 provides that where the costs are assessed as being less than 20% greater than the amount of FRC, the court shall make an order for the party who made the claim to be paid the lesser of (a) the FRC and (b) the assessed costs.

CPR 45.12 states that if the provisions in CPR 45.9 or 45.10 are not met the court may make an award for the FRC and any permitted disbursements only and may decide to make no order as to costs on the costs only proceedings /detailed assessment, or to order some or all of the costs to be paid by the party making the claim.      

Disbursements

As you will no doubt be aware, there are limits on the recoverability of disbursements in fast track which are set out in CPR 45.58 and 45.59. However, there is no such restriction on the intermediate track. CPR 45.60 states that the court may allow any disbursement which has reasonably been incurred, other than a disbursement covering work for which costs are already allowed in the FRC provisions in Section VII.

It should be noted that in the fast track there is now provision for the express recoverability of translation fees.

Multiple claimants

Many of you will be familiar with the existing rules in the fast track, where by if there are multiple claimants included in the same set of proceedings, FRC can be recovered in respect of each of the claimants.

The FRC for intermediate track (CPR 45.5) sets out that where FRC are payable in favour of two or more claimants, each claimant is entitled to the costs of their own claims in accordance with the rules (CPR 45.5(1).

However, this is subject to CPR 45.5(3) and (4) which provides that, where:

(a) A legal representative with conduct of the litigation acts for more than one claimant in the proceedings,

(b) Each of those claimants has a separate claim against the defendant,

(c) An order for costs in made in favour of two or more of those claimants, and

(d) The court has ordered that paragraph (4) shall apply.

In these circumstances:

(a) The claimants shall only be entitled to one set of fixed costs, CPR 45.5(4)(a) and

(b) A further amount equal to 25% of the allowable costs is to be added for each additional claimant in whose favour the order for costs in made.

(c) The “allowable costs” are the costs payable to the claimant with the highest value claim (as agreed or awarded), or the applicable costs payable to whichever one of the claimants the legal representative chooses (CPR 45.5(6)). This includes the relevant advocacy fee, if appliable.

What happens where one or more claimants are entitled to an addition sum under CPR 36.24(5) (Part 36 consequences - see below) or CPR 45.13(2) (unreasonable behaviour – see below)?

The answer is contained in CPR 45.5(8), although this is not an easy read! 

The percentage increases must in these circumstances be calculating the relevant percentage to such proportion of the amount under paragraph (4)(b) (i.e. using the FRC) as reflects the proportion which each claimant so entitled bears to the total number of claimants.  

It should be noted that the power of the court is discretionary and there is no guidance on when or how the judge should determine whether to exercise the power, in effect reducing the claimant’s costs.

The obvious tactic for a claimant solicitor in these circumstances is to pay separate issue fees and not to combine multiple claimants into a single set of proceedings and hence recover separate costs – in essence 100% FRC for each claimant. It is not clear presently, what a defendant insurer could do, under the new rules, to prevent recovery of the FRC for each claimant. It is possible that this issue could be the subject of future satellite litigation.     

Counterclaims

CPR 45.7 provides that in respect of a counterclaim the rules in CPR 45 for the most part apply as if the counterclaim was a claim. This could result in two sets of FRCs being calculated where a party is successful in both defending a claim and in respect of a counterclaim.

However, there are exceptions to this. CPR 45.7(2) stipulates that the costs of the counterclaim will not be recoverable where the only remedy sought by the counterclaim is a defence to the claim. Where the counterclaim is in respect of a claim which falls under the RTA protocol, and the counterclaim does not include a claim for personal injuries, any order for costs will be limited to a sum equivalent to one half of the applicable Tyle A and Type B costs in Table 10 (CPR 45.7(3)).  

These provisions should also be seen in light of the decision in Ho v Adelekun [2021] UKSC 43 and the subsequent amendments to CPR 44.14 (from 06 April 2023) altering the QOWCS provisions, to allow the offsetting of the defendant’s costs in personal injury claims (up to the aggregate amount of damages and costs awarded to a claimant) even where there has been a settlement by way of acceptance of a Part 36 Offer or Tomlin order.

Defendant’s Costs

Provisions in respect of defendant’s costs are set out in CPR 45.6. The defendant (subject to QOWCS) is also entitled to the relevant FRC and disbursements.

If the claim is discontinued, a reference in Table 14 to the stage that the claim settled shall be treated as a reference to the stage where the claim is discontinued (CPR45.6(2)(a)).

If the claim form fails to specify the amount likely to recovered, the claim is valued for these purposes, if allocated to the intermediate track at £100,000 (CPR45.6(3)(c)). 

There is a clear incentive for claimants to be realistic as to the valuations of their claims in case there in an enforceable costs order against them.

Unreasonable behaviour

One of the frustrations of the existing regime is that where one of the parties has acted wholly unreasonably, but court has little or no discretion to depart from the FRC provisions. CPR 45.13 now provides that, where the court considers that a party has behaved unreasonably, the other party may apply for (a) their costs to be reduced by an amount equivalent to 50% of the FRC which would be payable, or (b) for the costs order made against an unreasonable party to be increased by an amount equivalent to 50% of the FRC which would otherwise be payable.

The FRC does not include VAT, disbursements or any additional sums pursuant to CPR 36.17 or 36.24.

CPR 45.13(3) defines “unreasonable behaviour” as “conduct for which there is no reasonable explanation”.  

Part 36 Offers

Many or you will be familiar with the decision in Broadhurst v Tan [2016] EWCA Civ 94, which provided that the fixed costs regime was displaced where a claimant was successful at trial in equalling or beating their own Part 36 offer in a fast track case, allowing the recovery of indemnity costs on a hourly rate basis, from the expiry of the time for acceptance of that offer.

The new rules (CPR 36.24(4) and (5)) provides that where the court makes an order pursuant to CPR 36.17(4)(b) (costs consequent following judgement – recovery of costs on an indemnity basis) that the additional costs are an amount equivalent to 35% of the difference between the fixed costs for:

(a)    The stage applicable when the relevant period expires (the Part 36 offer),

(b)   The stage applicable at the date of judgement, to which the claimant is entitled to under the FRC (Table 14).        

Conclusion

It is still early days and there are numerous areas of uncertainty which will have to be resolved in due course. It might be argued that the changes will lead to a higher settlement rate to avoid uncertainty. Conversely, the opposite might be true – knowing the potential costs liability may lead to more cases being litigated to trial.   

Defendant insurers will welcome the changes, providing a greater degree of certainty and limiting costs exposure. They will argue that it will force claimant lawyers to become more efficient and focused on progressing claims within the same fixed fee confines which they are often forced to operate.  

Claimant firms on the other hand will see the changes as having a significant impact on their existing business models and ability to pursue cases effectively on behalf of their clients. Smaller claimant firms may argue that the level of fees recoverable in some cases is simply not compatible with the work which is required to be undertaken – just because a case is placed in a lower complexity band, does not mean that significant work is not required to progress the case to trial or settlement, which may have implications for whether it is viable for claimant solicitors to take on the case. There are therefore likely to be concerns about access to the justice in some circumstances.   

There is going to be significant uncertainty as to which complexity band any intermediate track case might fall into, (given the very broad and rather vague guidance) and no doubt a lack of consistency in approach between individual judges and courts. This is likely to prove a contentious issue between parties as well, given the potential costs consequences. This will make it extremely difficult, at least to being with, until there is a body of case law, to predict the likely level of costs recovery.

Is liability being in dispute a single issue, making it suitable for complexity band one, or if there are numerous disputes of fact, with both liability and contributory negligence being in dispute, does this make the case suitable for complexity band 2 or 3? These are the sorts of issues which will have to be decided at CMCs, with claimants likely to add issues in dispute and defendant’s being keen to make any concessions possible, to simplify cases and make then more suitable for lower complexity bands.   

One of the key questions is going to be the extent to which the FRC regime will be index linked, particularly given the current rate of inflation? It is understood that the FRC will be uprated in April 2024 (the current figures having been fixed in January 2023 updated from the Jackson report in 2017, using the Services Producer Price Index (SPPI)) and that the MOJ policy is that the FRC figures will be reviewed generally every 3 years. 

From a barrister’s perspective, the experience with advocacy fees in the fast track RTA/EL/PL portal regime (set in 2013) does not provide much comfort for practitioners.

Equally, what happens when cases are vacated at short notice by the court due to the lack of a judge, or when a case settles shortly before the day of the trial (as opposed to the day of the trial) – and a skeleton argument may have been prepared, lots of work undertaken, but arguably no brief fee is recoverable.

How these issues will be resolved in the future will be watched with interest by practitioners, whether claimant or defendant, as greater clarification is provided over time.

James Hurd
9 St John Street
12 October 2023



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