);

Question: What transitional provisions govern the inflation increases for fixed costs?

Answer: The Fixed Recoverable Costs (FRC) figures are increased from 6th April 2024 to allow for inflation. The increases are based on the Services Producer Price Index for the period between January 2023 and October 2023.

Previously, CPR 45.1(8) provided:

“A reference in any rule to an amount in a table in Practice Direction 45 is a reference to the amount applicable to a claim on the date that proceedings are issued, regardless of any subsequent amendment.”

This appears to mean that the amount of the FRC are determined by the relevant figures in Practice Direction 45 as at the date proceedings are issued and regardless of any subsequent increase.

The latest update to the CPR amends CPR 45.1(8) and inserts a new CPR 45.1(9) from 6th April 2024. The new rules now read (with the amendments in bold):

“(8) Subject to paragraph (9), a reference in any rule to an amount in a table in Practice Direction 45 is a reference to the amount applicable to a claim on the date that proceedings are issued, regardless of any subsequent amendment.

(9) In respect of any amendment made to Table 12, Table 14 or Table 15 which comes into force on 6th April 2024, the amounts in those Tables as so amended are also applicable to any order for costs made after that date in a claim issued before that date.”

This is clumsily worded. CPR 45.1(9) appears to contradict CPR 45.1(8). If, by virtue of CPR 45.1(9), the updated amounts are recoverable regardless of when proceedings were issued, then CPR 45.1(8) is redundant. It is not the date proceedings are issued that determines the amount of the FRC but when the costs order is made.

It seems that the retention of CPR 45.1(8) is simply to preserve the old FRC where the order for costs was made pre-6th April 2024.

It appears that the combination of the two sections is intended to mean:

  • Where an order for costs is made before 6th April 2024, the FRC will be those in place at the time.
  • Where an order for costs is made after 6th April 2024, the FRC will be those in the amended Tables.