The fixed recoverable costs regime expanded beyond low value personal injury five months ago. Whilst there are some differences, the new Part 45 regime does have similarities.
There is still a place for standard costs and one needs to consider whether this applies to both Part 45 regimes. This post touches upon these. As per previous posts, don’t forget that the older Part 45 regime applies to personal injury cases where the cause of action was before 1st October 2023.
This post only covers cases subject to the fixed recoverable cost regime and not those where fixed recoverable costs do not apply.
Matters after the conclusion of the claim
A claim that settles usually concludes, the damages are paid and so are the costs. However, there can be disputes or failures that lead to applications being made. In those circumstances, the cost of such applications should be dealt with on a standard basis.
This follows both Sharp v Leeds City Council [2017] EWCA Civ 33 and Parsa v DS Smith & Another [2019] Costs L.R. 331. The Court of Appeal confirmed that a PAD application is subject to the fixed costs regime since the claim started when the CNF was submitted to the Defendant.. The latter was an appeal heard by Carr J (the now Lady Chief Justice) who followed Sharp in finding that once the main actioned had settled, the fixed recoverable cost regime came to an end.
I could not find any indication in the new CPR 45 to suggest that costs incurred after the main action are subject to anything other than standard costs. I’ve not had to deal with any new Part 45 cases but no doubt they will come through the woodwork shortly.
Appeals
Even if an appeal is regarding a case management decision, rather than an appeal of a final decision, and takes place before the conclusion of the claim then standard costs will apply (Wickes Building Supplies Limited v Blair [No 2] [2020] EWCA Civ 17).
Whilst the Court has the power to restrict costs, standard costs apply and not fixed costs.
Exceptional circumstances
Previously, under Part 45.29J, parties could apply to the court for costs to be assessed over fixed recoverable costs when there were exceptional circumstances. They were most certainly exceptional circumstances. Ferri v Gill [2019] EWHC 952 (QB) reminds us of the very high bar a party has to meet in order to get more than fixed costs.
I recall a case which I was litigating and the Defendant applied to strike out the claim. The application was longwinded and eventually the District Judge (who is now a Circuit Judge) refused the application. We sought our costs on an indemnity basis because it was an application whcih required far more work than the average application and Counsel’s fee far exceeded that of CPR 45.29H. The Judge decided it did not trigger 45.29J. However, because there were particular features of the dispute that warranted counsel, CPR 45.29I(2)(h) was triggered, and therefore, counsel’s fee was recovered in addition to the £300 under CPR 45.29H.
There is also a penalty if the costs are assessed and do not exceed 20% of what would have been awarded under the fixed costs regime. CPR 45.9 is the new Part 45 equivalent, and no doubt will be treated in the same way as the pre-1st October 2023 Part 45.29J.
Part 36 consequences (Pre-1st October 2023 only)
Following Broadhurst v Tan [2016] EWCA Civ 94 Part 36, consequences were dealt with on a standard basis as per CPR 36.17(4). However, changes to the new Part 45 means that any cases dealt with under the new regime will no longer have costs from the expiration of the relevant period of a Part 36 offer assessed on an indemnity basis.
Instead, the Claimant will now have a 35% uplift on costs as per the new CPR 36.24(5). The uplift applies only to the difference in fixed costs between the relevant period and the Judgment.
Discussion
The purpose of fixed recoverable costs was to give certainty and to some extent it does. Whilst I do not feel that a 35% uplift will be a sufficient deterrent for parties to proceed to trial (especially for Defendant insurers who have deep pockets), it will allow parties to more accurately quantify the costs risk of proceeding to trial.
It’s essential to have standard costs available when appropriate circumstances arise. But if the threshold for triggering them is too high, they may become a mythical boogyman that we use to scare fee earners into conducting litigation appropriately.
Information
AJH Advocacy Limited, a Limited Company which is regulated by the Bar Standards Boards (entity number 190758), ceases trading on the 12th January 2026.
From the 12th January 2026 and onwards, Alec Hancock will practice as a Barrister at Magdalen Chambers in Exeter. For instructions on matters on or after 12th January 2026, please contact Magdalen Chambers via clerks@magdalenchambers.co.uk or by telephone on 01392 285 200.