Matthew Maxwell-Scott, executive director of ACSO, said:
"It is good news that ministers have pushed back the extension of the new FRC regime by six months to October 2023.
"Existing FRC have been subject to inflationary pressures for a number of years, eating away at margins and heightening the risk that firms exit the market altogether. A recent report found that 300 commercial solicitors have stopped doing business in the past 18 months, and 25 per cent of personal injury firms have stopped taking on volume work. The net effect is a further impairment to access to justice.
"ACSO has called for a root-and-branch review of all FRC to standardise uplifts for inflation, including regular review. In civil litigation, costs, rates, fees, damages guidelines, claims tracks and discount rates all interplay with one another, but at the moment they are reviewed and adjusted in silos, at different intervals and often adjusted using different metrics - or simply not at all. This is no way to manage the justice system.
"We hope that this welcome delay will allow more time for the Ministry of Justice and Rule Committee to agree a sensible regime that is future proofed, giving certainty and stability to law firms wishing to continue to work in this market. It is also essential that our members see the detail of the proposals as soon as possible, and have the opportunity to comment on them."