The regime, in place from 1 October, applies to most civil claims valued up to £100,000, with exceptions such as clinical negligence claims below £25,000, mesothelioma claims, abuse cases, claims against the police involving an intentional or reckless tort, and relief or remedy in relation to the Human Rights Act. Housing cases are exempt for two years.
Judges will have discretion to exclude complex cases valued under £100,000.
Changes to Part 36 offers aimed at encouraging parties to settle at an earlier stage have also come into force.
However, Law Society President Lubna Shuja said: ‘There are too many unanswered questions around how the regime will work in practice.
‘The government’s intention with these reforms has been to provide certainty for litigation costs, but the lack of clarity emerging from the reforms will surely lead to years of satellite litigation. At the very least, the government needs to provide further guidance in support of the rules.
‘FRCs are not the same as fixed incurred costs. To set FRCs at levels that do not accurately reflect the broad spectrum of civil litigation, increases the risk of recoverable costs for some cases not being sufficient in relation to the actual costs incurred.’
Michael Young, legal director in professional negligence at Lime Solicitors, urged solicitors to make sure they give clear and prompt advice to clients on the changes to avoid becoming liable for professional negligence.
Young said: ‘It is vital to be ready, as failing to advise with the changes in mind could leave the profession facing a professional negligence time bomb.
‘If solicitors fail to advise their clients on these new changes, they could find themselves liable when claimants end up recovering less costs than they, entirely justifiably, believe they are entitled to.’
He also expressed concern the new regulations ‘would in theory reward a claimant for pushing through to court proceedings instead of exploring a pre-action settlement in greater depth.
‘This outcome would not serve the interests of either claimants or defendants’.
