They’re still at…. This is Emma Fuller of DAC Beachcroft sharing their reporting on the behaviour of the credit hire industry following the changes to Fixed Recoverable Costs.
“Overview
It's 6 months since fixed recoverable costs (FRC) were introduced in the damage only arena; Dan Miller, associate, in our Vehicle Hire & Damage Team considers the behaviours experienced so far.
History
From 1 October 2023 fixed recoverable costs (FRC) were extended to claims up to £100,000. For credit hire this meant that FRC applies to all claims where proceedings are issued on or after 1 October 2023.
The intermediate track for cases valued at over £25,000, up to £100,000. The procedure for the intermediate track is a hybrid of those for the fast track and the multi-track, with more active case management by the courts but with directions still following a standard pattern.
Claimant solicitors/credit hire organisations CHO
We have seen some confusion from claimant solicitors around the rules; not only with the bands but also with allocation. The issues we are seeing are:
Requesting band 2 on damage only fast track claims, sighting complexity
“Reasonably” offering band 2 when they believe case should be band 3 in the fast track - again due to complexity however the case (again) is damage only
Claiming (as predicted) that the issues raised in a credit hire claim are sufficiently complex to justify a higher band
Asserting that asking for an extension of time to draft the defence means a damage only claim is too complex for band 1
Seeking standard basis costs after an admission (on a fixed recoverable costs case)
Specifically on the intermediate track, claiming that raising; need, enforceability, period, etc is more than one issue so the case should be assigned to Band 2
Currently, very few cases have been allocated/assigned so we wait to see what the court's appetite is in relation to the claimant solicitors' arguments above. However, there are some tentative positive signs in the few that have been allocated/assigned – we have obtained what we requested.
Courts
Some courts are also having an issue with the new rules:
We are being asked on applications to explain why we have sought standard basis costs for our wasted costs, when the issue date is before1st October 2023
Courts have allocated pre-1st October 2023 cases to the intermediate track
Being asked by the court to provide a witness statement to confirm why fixed costs at all are not appropriate
Due to the backlog of the courts we are waiting a long time for allocation/assignment
As a side note, again as we predicted - claimant solicitors that rushed to issue their claims before 1st October 2023 are now struggling to keep up with procedural aspects. We have seen an increase in requests for extensions for directions, missed directions and applications for relief from sanctions. This is resulting in cost sanctions against claimant solicitors, with over £7000.00 being ordered across three recent applications we have received.
What's next?
We continue to monitor the behaviours we are seeing and challenge the unreasonable. Over the next quarter we expect to see more results delivered by the courts in relation to the new rules which should hopefully stop some of the incorrect interpretations we are seeing. We will continue to feed these results back to you. The area of costs will be discussed more at our vehicle hire and damage conference in October.”