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a year on: the Capped Costs Pilot Scheme

13 January 2020

What?

On 14 January 2019 a Capped Costs Pilot Scheme was introduced in the Leeds and Manchester Business and Property Courts, and has been set to run for two years.

The scheme was voluntary for High Court cases valued up to £250,000. In addition to capped costs at each stage of the litigation, there was an overall cap of £80,000 (excluding VAT, court fees, wasted costs, and costs of enforcement).

Why?

The pilot aimed to improve access to the Business and Property Courts by keeping legal costs proportionate. In addition, the scheme aimed to provide certainty as to a party’s exposure to legal costs. Theoretically, the pilot should enable parties to obtain a resolution to their dispute within a year.

Impact?

In the first nine months of the pilot, not a single case was volunteered to the scheme. However, in the first year of the Shorter Trials Pilot Scheme, only four cases were volunteered. Since the conclusion of that Pilot, the scheme has been widely adopted.

Given the potential of the Capped Costs Pilot Scheme to increase certainty as to legal costs, it would be worth clients considering the option in appropriate cases.

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