Fixed Recoverable Costs Review Required for Stagnant Costs

Calls for a Fixed Recoverable Costs Review

?The Association of Consumer Support Organisations (ACSO) have stated that an immediate fixed recoverable costs review is in need for some services, namely personal injury and RTA cases. ACSO have stated that, in order to keep in line with inflation, an RTA which settles for more than ￡10,000, fixed costs should now be set at ￡1,020; however, they are still set at the original 2013 rate of ￡800 + VAT.

Similarly, the fixed rate for a medical report in an RTA valued above ￡10,000 is set at the 2014 rate of ￡180 + VAT; if costs were to increase in line with inflation, they would amount to ￡225 for the same report in 2022; however, we are still using the same 2014 rates.

Maxwell Scott, Director at ACSO stated the following on the matter;

“There is an elephant in the room when it comes to inflation and the FRC regime. While PI costs have remained static for almost a decade, elsewhere ministers have committed to a review of the discount rate every five years…The freezing of rates for so long means dramatic real-terms cuts for claimants, their representatives and for medical experts and there has been no explanation for this.”

ACSO have further highlighted the fact that guideline hourly rates were increased last year due to inflation; however, the same has not been applied to fixed costs and the small claims track limit has been extended in some cases, affording even lower levels of legal costs recovery to lower value claims.

It is clear that a fixed recoverable costs review is required now more than ever with the cost of living crisis and growing inflation.

We are likely to start seeing more firms struggling and exiting the personal injury markets. More solicitors will begin leaving the profession as profits fall and it no longer appears to be a viable and profitable industry.

To find out more, read the full article on our website.

How can ARC Costs Help?

ARC Costs are a team of independent?Costs Draftsmen?and?Costs Lawyers?who regularly assist you in the recovery/contention of costs. Whether you are the Paying Party or the Receiving Party, we hold vast experience in dealing with costs matters on both sides. We can assist in?fixed recoverable costs?cases and cases where costs are awarded on the standard basis. Should you require our assistance or have any further queries regarding costs, please contact us on?01204 397 302?or [email protected]. Alternatively, please complete our online enquiry form, and we will contact you to discuss your query or speak to our staff using the live chat function.