From 1 October 2023, new rules came into force which fix the amount of costs recoverable in commercial litigation claims. This means that from that date, any claims issued at court will be subject to the new fixed costs regime.
The new costs regime will mean that where claims are made for debts or other monies due valued at between £10,000 and £100,000, the amount of costs recoverable from the opponent will be fixed by the court.
In practice, this means that before you begin proceedings to recover monies due to you in respect of commercial contracts, you will have some certainty as to the total amount of the legal costs you incur which you can expect to recover from your debtor if you win; and also the extent of your potential costs liability to your opponent, should your claim fail.
The amount of these recoverable costs depends upon the claim value, the complexity of the case and the stage the case has reached at the time the question of costs arises.
The costs rules apply equally to claimants and defendants, so all parties have certainty as to their potential costs liability in commercial claims.
What this means for you: claims valued at between £10,000 and £25,000
If your claim is for a sum of money between £10,000 and £25,000, we will provide you with an estimate of the costs we expect you will incur for our costs and disbursements in dealing with your case from commencement of the court proceedings until trial, and the amount of costs you will recover from your opponent.
In most defended debt cases, we will try to limit our costs to the amount of these fixed recoverable costs, so you do not incur more in costs than you are entitled to recover. However, depending on the nature of your case and the issues involved, that may not be possible.
As a general rule in defended debt cases, we will only charge more in costs in those cases where we believe that the nature of your case and the amount of work required justifies a higher fee or more experienced fee earner. That will include (but is not limited to) cases where:
- Additional work is required over and above that involved in the standard procedures to prepare your case for trial.
- Where your case involves a complex area of law, such as one requiring the advice and assistance of counsel at an early stage in the proceedings, or one which is factually complex involving a large amount of information of documentation.
- We make, or are instructed to oppose, an application for summary judgment on all or part of the claim.
- A claim for injunctive relief is involved.
In these instances, we will provide you with our costs estimate for the charges you will be liable to pay and explain the fixed costs you are likely to recover, before you incur the costs, enabling you to be fully informed as to the amount of costs you will have to pay and the sums you can expect to recover.
In other cases, which are not purely defended debts and which, for example, involve contract disputes, you are likely to incur costs above the amount of fixed recoverable costs. Again, we will provide you with an estimate before the costs are incurred and at regular intervals during your case.
The amount of fixed recoverable costs you recover will depend on:
- The ‘complexity’ band your case is allocated to, and
- The stage the proceedings reach before settlement or conclusion.
There are four complexity bands, and we will advise which of these your case falls into at the time the defence is filed.
There is a table of the fixed costs recoverable, depending on the stage the case reaches when the costs are decided. This enables us to advise you with certainty how much in costs you will recover.
What this means for you: claims between £25,001 and £100,000
Our costs in these cases are charged on an hourly rate basis. If the value of your claim falls within this bracket, your case will be allocated to the ‘Intermediate’ track, and to one of the four complexity bands.
The fixed recoverable costs you can expect to recover in these cases will be determined according to which complexity band your case falls into and the stage the case reached when the case settles or is otherwise concluded.
We are committed to providing you with a high-quality legal service and will allocate your case to a lawyer with the right level of expertise for your case. Each lawyer’s hourly rate is fixed according to their expertise, and you will be informed of the rate applicable to you at the outset.
As with lower value claims, there is a table of fixed costs recoverable depending on the stage the case reaches.
In all cases, we will provide you with a genuine and realistic estimate of the costs we expect to incur to reach each stage in your case, and also confirmation of the amount you will recover in fixed costs for each stage. This will enable you to properly budget for the case and have certainty on costs.
If you have any questions regarding the level of costs you will incur in proceedings, please contact the lawyer dealing with your case.
Complexity bands
The complexity of your case will determine the band, and the relevant band will outline a range of fixed recoverable costs. The bands are as follows:
Band one: Straightforward cases where there is only one issue, and which can be dealt with at a one day trial.
Band two: Any less complex claims where more than one issue is in dispute.
Band three: Any more complex claims where more than one issue is in dispute, but which is unsuitable for band 2.
Band four: Claims which are more complex and so unsuitable for bands 1 to 3.
Tables of fixed recoverable costs
A table setting out the fixed recoverable costs in all claims between £10,000 and £100,000 is reproduced below.
The fixed recoverable sums may also increase (or decrease) in certain circumstances. For example, a claimant who matches or beats its own part 36 settlement offer at trial may receive a 35% uplift on the fixed recoverable costs. Further, if there is unreasonable behaviour during litigation a 50% increase (or reduction) of fixed recoverable costs (depending on who the paying party is and who the unreasonably behaved party is) may be applied as a penalty. A 12.5% London weighting uplift also applies.
Table 1: complexity bands for commercial claims between £10,000 - £25,001 (fast track)
| Complexity band 1 | Complexity band 2 | Complexity band 3 | Complexity band 4 |
| Defended debt claims | N/A | - Possession claims - Housing disrepair claims; and - other money claims | - Complex possession and housing disrepair claims - Property and building disputes - Professional negligence claims; and - any claim which would normally be allocated to the fast track, but is nonetheless complex |
Table 2: complexity bands for commercial claims between £25,001 and £100,000 (intermediate track)
| Complexity band 1 | Complexity band 2 | Complexity band 3 | Complexity band 4 |
- Any claim where: 1. only one issue is in dispute; and 2. the trial is not expected to last longer than one day. - Defended debt claims | Any less complex claim where more than one issue is in dispute. | Any more complex claim where more than one issue is in dispute, but which is unsuitable for assignment to complexity band 2. | Any claim which would normally be allocated to the intermediate track, but which is unsuitable for assignment to complexity bands 1 to 3. |
TABLE 1: Rule 45.8 – Pre-action and interim applications
(Fixed cost in fast track and intermediate track)
| A. A claim which would normally be or is assigned to complexity bands 1, 2 of 3 of table 12 [fast track] | £250 |
| B. A claim—(a) which would normally be or is assigned to complexity band 4 of table 12 [fast track]; or (b) to which table 14 [intermediate track] applies | £333 |
| C. An application for—(a) summary judgment under Part 24; (b) an interim payment under Part 25; or (c) an interim injunction under Part 25 | £750 |
TABLE 12: Rule 45.44 – Amount of fixed costs in the fast track
Stages A-C figures are the cumulative totals for costs incurred up to and including that stage
Stage D is a separate sum where the claim is disposed of at trial (final hearing)
| Complexity band 1 | Complexity band 2 | Complexity band 3 | Complexity band 4 | |
| A. If parties reach a settlement prior to the claimant issuing proceedings under part 7 | ||||
| (1) Where damages are not more than £5,000 | £Nil | The greater of £660 or £120 + an amount equivalent to 20% of the damages | £1,100 + an amount equivalent to 17.5% of the damages | In each case £2,600 + an amount equivalent to 15% of the damages + £510 per extra defendant |
| (2) Where damages are more than £5,000, but not more than £10,000 | £Nil | £1,300 + an amount equivalent to 15% of damages over £5,000 | £2,200 + an amount equivalent to 12.5% of damages over £5,000 | |
| (3) Where damages are more than £10,000 | £580 | £2,300 + an amount equivalent to 10% of damages over £10,000 | £3,000 + an amount equivalent to 10% of damages over £10,000 | |
| B. If proceedings are issued under part 7, but the case settles or is discontinued before trial | ||||
| (1) On or after the date that the court issues the claim, but before the date that the court allocates the claim under part 26 | £2,100 | £1,400 + an amount equivalent to 20% of the damages | £3,200 + an amount equivalent to 20% of the damages | £3,000 + an amount equivalent to 40% of the damages + £760 per extra defendant |
| (2) On or after the date that the court allocates the claim under part 26, but before the date that the court lists the claim for trial | £2,500 | £2,300 + an amount equivalent to 20% of the damages | £4,000 + an amount equivalent to 25% of the damages | £6,400 + an amount equivalent to 40% of the damages + £760 per extra defendant |
| (3) On or after the date that the court lists the claim for trial but before trial | £3,800 | £3,200 + an amount equivalent to 20% of the damages | £5,100 + an amount equivalent to 30% of the damages | £7,900 + an amount equivalent to 40% of the damages + £760 per extra defendant |
| C. If the claim is disposed of at trial | ||||
| £3,800 | £3,200 + an amount equivalent to 20% of the damages agreed or awarded | £5,100 + an amount equivalent to 30% of the damages agreed or awarded | £7,900 + an amount equivalent to 40% of the damages agreed or awarded + £760 per extra defendant | |
| D. Trial advocacy fees | ||||
| (1) Where the value of the claim is not more than £3,000 | £580 | £580 | £580 | £1,600 |
| (2) Where the value of the claim is more than £3,000, but not more than £10,000 | £820 | £820 | £820 | £1,600 |
| (2) Where the value of the claim is more than £3,000, but not more than £10,000 | £3,800 | £3,200 + an amount equivalent to 20% of the damages agreed or awarded | £5,100 + an amount equivalent to 30% of the damages agreed or awarded | £7,900 + an amount equivalent to 40% of the damages agreed or awarded + £760 per extra defendant |
| (3) Where the value of the claim is more than £10,000, but not more than £15,000 | £1,200 | £1,200 | £1,200 | £2,100 |
| (4) Where the value of the claim is more than £15,000 | £2,000 | £2,000 | £2,000 | £2,900 |
TABLE 13: Rule 45.46 – specialist legal advice (as proposed)
(An additional sum is available for fast track claims normally assigned to band 4. For advice or drafting of statement of case from a specialist legal representative/intended advocate where justified. Limit to one advice in writing or conference unless justified)
| A. Providing post-issue advice in writing or in conference | £1,000 |
| B. Drafting a statement of case | £500 |
TABLE 14: Rule 45.50 – amount of fixed costs in the intermediate track
Figures in stages S1, S3, S4, S5, S6 and S8 are the cumulative totals for costs incurred up to and including that stage
Figures in stages S2, S7 and S9 to S15 are separate sums for those steps if carried out.
| Stage | Complexity band 1 | Complexity band 2 | Complexity band 3 | Complexity band 4 |
| S1 From pre-issue up to and including the date of service of the defence | £1,600 + an amount equivalent to 3% of the damages | £5,000 + an amount equivalent to 6% of the damages | £6,400 + an amount equivalent to 6% of the damages | £9,300 + an amount equivalent to 8% of the damages |
| S2 Specialist legal representative providing post-issue advice in writing or in conference or drafting a statement of case | £2,000 | £2,000 | (a) £2,300; or (b) £3,500 if counsel is also instructed to draft a defence to a counterclaim | (a) £2,300; or (b) £3,500 if counsel is also instructed to draft a defence to a counterclaim |
| S3 From the date of service of the defence up to the earlier of the date set for CMC or the order giving directions under 28.2 | £4,000+ an amount equivalent to 10% of the damages | £7,700 + an amount equivalent to 12% of the damages | £9,100 + an amount equivalent to 12% of the damages | £13,000 + an amount equivalent to 14% of the damages |
| S4 From the end of stage 3 up to and including the date set by the court for inspection of documents | £4,600 + an amount equivalent to 12% of the damages | £9,400 + an amount equivalent to 14% of the damages | £11,000 + an amount equivalent to 14% of the damages | £16,000 + an amount equivalent to 16% of the damages |
| S5 From the end of stage 4 up to and including the later of the dates set by the court for service of witness statements or expert reports | £5,200 + an amount equivalent to 12% of the damages | £11,000 + an amount equivalent to 16% of the damages | £12,000 + an amount equivalent to 16% of the damages | £20,000 + an amount equivalent to 18% of the damages |
| S6 From the end of stage 5 up to and including the date set for the pre-trial review or up to 14 days before the trial date, whichever is earlier | £5,900 + an amount equivalent to 15% of the damages | £15,000 + an amount equivalent to 16% of the damages | £16,000 + an amount equivalent to 16% of the damages | £24,000 + an amount equivalent to 18% of the damages |
| S7 Specialist legal representative advising in writing or in conference following the filing of a defence | £1,400 | £1,700 | £2,300 | £2,900 |
| S8 From the end of stage 6 up to the date of the trial | £6,600 + an amount equivalent to 15% of the damages, less £580 if that party did not prepare the trial bundle | £17,000 + an amount equivalent to 20% of the damages, less £870 if that party did not prepare the trial bundle | £19,000 + an amount equivalent to 20% of the damages, less £1,120 if that party did not prepare the trial bundle | £29,000 + an amount equivalent to 22% of the damages, less £1,400 if that party did not prepare the trial bundle |
| S9 Attendance of a legal representative (other than the trial advocate) at trial per day, less an amount equivalent to 50% per day where, on any day, the trial lasts no more than half a day | £580 | £870 | £1,200 | £1,400 |
| S10 Advocacy fee: day 1 | £3,200 | £3,500 | £4,000 | £5,800 |
| S11 Advocacy fees for subsequent days, less an amount equivalent to 50% per day where, on any subsequent day, the trial lasts no more than half a day | £1,400 | £1,700 | £2,000 | £2,900 |
| S12 Handing down of a reserved judgment and consequential matters, where dealt with separately from the trial | £580 | £580 | £580 | £580 |
| S13 Alternative dispute resolution: additional fee payable once only where a mediation or joint settlement meeting takes place | £1,200 | £1,200 | £1,200 | £1,200 |
| S14 Alternative dispute resolution: additional fee payable once only for specialist legal representative attendance at a mediation or joint settlement meeting covered by S13 | £1,400 | £1,700 | £2,000 | £2,300 |
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