Costs in 2025 - What to look out for

As the Christmas break approaches and another year draws to a close it's a good time to take a pause and have a look at what some of next year's biggest costs developments might be.  

 

It goes without saying this list is not exhaustive, it's definitely subjective and includes a modicum of speculation.  

 

As ever if you subscribe to our free newsletter or via our social media channels then you will at least be in the know! 

 

Here's our five costs developments (plus some honourable mentions) to look out for in 2025: 

 

 

Not only are Guideline Rates increasing in line with SPPI from 1 January 2025 (the exact increases at the time of writing have not yet been confirmed) but 2025 could bring us a host of developments on hourly rates. 

 

We know that work is on-going to introduce Guideline Rates for Counsel for the very first time, whilst the Civil Justice Council recommended that a new band for complex, high value, commercial work, whether in London or elsewhere be introduced.  

 

In addition, we know the costs sub-committee are tasked with looking at the test to be applied when considering a departure from the Guideline Hourly Rates. This is an issue routinely coming up time and time again after the Court of Appeal decision in Samsung Electronics Co. Ltd & Ors v LG Display Co. Ltd & Anor, you can read about that case here. 

 

 

 

The most significant reforms to Costs Budgeting since its formal inception in 2013 will be coming in 2025. A new streamlined budgeting pilot scheme is set to start in April 2025 and run to October 2028. Details remain scant at this point but we know that this will see different variations of budgeting for different categories of claims with a value of up to £1million. It'll also see the introduction of a new Costs Budget, the Precedent Z and a new Budget Discussion Report, the Precedent Zr.  

 

This will, for applicable cases, alter the way budgeting & costs management is done, though the court's intention is to make the overall process more efficient and quicker which I'm sure will be welcomed by most! 

 

Expect fuller details on this early 2025 given the suggested April 2025 implementation.  

 

 

 

Likely to be one of the most contentious costs issues in 2025. The questions centre around whether a receiving party is required to a. provide expert fee notes (in addition to any MRO fee notes) and b. whether a breakdown of the agency work is to be required. Binding case law on the point remains elusive but the issue is becoming increasingly fraught.  

 

There is realistic scope that 2025 will finally see a case head to a Higher Court which will (hopefully) provide sorely needed binding guidance. In addition, the CPRC have intimated that they may look at the issue as part of their fixed costs stock-take (though arguments around breakdown in fixed costs matters play out differently to non-fixed costs matters).  

 

Whatever happens challenges will continue in 2025 unless and until there is either binding case law or clarification from the CPRC.  

 

 

 

October 2023 saw the most significant costs reforms in 10 years, expanding fixed costs to more claims than ever before. 2025 will see a stock-take of the reforms introduced over a year ago and will assess how the reforms are working and any changes that may need to be made. The big point is that this review will include Portal costs and there's a strong indication that Portal costs will finally be reviewed, having been left out of the inflationary increases to the new Fast & Intermediate Track FRC. We also understand that there will be a fixed costs consultation in 2025 as part of the review process. 

 

In addition, with the expanded FRC regime now in play for over 12 months expect to start seeing decisions and case law on allocation (of track) and assignment (of complexity band). The introduction in October 2024 of the Fixed Costs Determination process will also likely see an increase in costs challenges. We are regularly dealing with such challenges already. Learn more about our Fixed Costs retainer service here.  

 

 

 

So much uncertainty reigns over what will happen with the sub £25,000 fixed costs regime for Clinical Negligence claims. The government has not yet publicly stated its intentions though the general consensus is that something will be coming, as opposed to nothing. If introduced the proposals for the scheme are set to see any Clinical Negligence claim which settles for £25,000 or less prospectively subject to fixed costs. It is set to remove allowances for Counsel's involvement pre-action (save for approval) and will see a new Protocol brought in.  

 

At this stage it's all based on proposals and nothing is set in stone. April 2025 implementation is extremely unlikely given the timescales now involved but an October 2025 implementation remains possible. One to keep an eye on. You can read more about the proposals here.  

 

 

 

 

 

As you can see 2025 stands to be another busy year in costs. There are some significant reforms on the horizon and plenty of uncertainty remains. The year will no doubt throw up unexpected developments as well. 

 

We will as always be diligently monitoring all happenings and will continue to share updates across the year.  

 

All that's left to say is that from everyone here at Carter Burnett we wish you a very Merry Christmas and a Happy New Year.