Fixed Costs Pilot Scheme for Construction Disputes

12 May, 2017

In March 2017, as part of a wider drive to control the costs of litigation, proposals for a fixed costs pilot scheme were unveiled.   The pilot scheme will run in the Mercantile Court in London (which typically handles commercial and business disputes but is distinct from the TCC) and, importantly for readers of this blog, the TCC in Manchester.  Key features of the proposed pilot scheme are:

 

  • The scheme will not be imposed but will require consent of all parties.
  • Once a case is opted into the scheme it cannot be removed from the scheme.
  • In order to work within a fixed costs regime, cases in the scheme will impose limits on the length of statements of case and of witness statements and the cases will be the subject of more rigorous and controlled case management.  This includes controlling the number of witnesses, the length of trial and the conduct of trial.
  • The trade off for agreeing to work within the scheme is twofold.  First there is certainty of exposure to costs (this of course means a successful party may have to bear more of their own costs than they otherwise would).  Second, the pilot scheme envisages cases on the scheme being fast tracked, so determinations will be swifter than for those cases outside of the scheme.

 

The details of the scheme are of course awaited but it seems to be most appropriate for cases where the roadmap to trial is well defined (meaning the costs are predictable).  It may not lend itself to all but the most straightforward of construction disputes.  The intention in March was for the Rules Committee regulating civil litigation to have approved the pilot scheme by Summer this year, and for it to have been implemented shortly thereafter.  Whether the since-announced General election will place these plans on hold remains to be seen, but if that is the case it is assumed it will only delay the implementation of the pilot scheme rather than discard it.  Costs certainty is the clear direction of travel for civil litigation generally and has been for some time, so the implementation of a pilot scheme such as this one is part of a much wider long term effort on the part of the Rules Committee to introduce fixed and capped costs into the majority of civil litigation disputes, an so is something for all of those involved in any dispute resolution process to be alive to.