Fixed Recoverable Costs (FRC) Interim Implementation Stocktake

The Civil Procedure Rule Committee (CPRC) recently invited feedback from users of the civil justice system in England and Wales, aimed at reviewing the effectiveness of the Fixed Recoverable Costs regime, since it was extended under the Civil Procedure (Amendment No. 2)

Rules 2023 on 1st October 2023.

The exercise began on 31st October 2025 and closed on 5th January 2026. This initial exercise will be followed by the Ministry of Justice’s Post Implementation Review which is due to commence later this year.

The Explanatory Memorandum to the Civil Procedure (Amendment No. 2) Rules 2023 stated, ‘The Rules will help to ensure that legal costs are more certain and proportionate across a wider range of civil claims, and will thereby enhance access to justice. With the certainty that FRC will provide, parties will be able to make more informed choices throughout the litigation process, which will also facilitate earlier resolution.’¹

So you may ask, to what extent have the intended aims been achieved through the new regime?

Certainty of costs and earlier resolution

Within the Association of Costs Lawyers’ response to the consultation they state, ‘A clear consensus emerged as a point of principle, namely, that the current rules still do not provide sufficient certainty and clarity when it comes to the amount of costs to be paid.’
This view is echoed within the Law Society’s response which states, Costs are unclear. Members report that costs remain unclear despite the introduction of FRCs, largely due to track and band decisions being made once significant work has already been conducted on cases.
Following the extension of the fixed recoverable costs regime, civil cases allocated to the Fast Track or the Intermediate Track are now also assigned to a Complexity Band in accordance with CPR 26.15 Table 1 or CPR 26.16 Table 2.

Those within the industry have raised concerns that the complexity band criteria in its current form does not provide the necessary level of certainty, particularly for cases which settle pre-issue or prior to allocation. As a result there has been a significant increase in costs-only proceedings, whereby parties are seeking judicial input through the fixed costs determination process, to determine which complexity band should apply. It’s arguable that the changes have therefore not had the desired effect of facilitating earlier resolution as intended.

Access to Justice

Whilst the Master of the Rolls, Sir Geoffrey Vos, announced an update to guideline hourly rates for solicitors with effect from Thursday 1st January 2026² (the third successive year in which the rates have been uplifted using the Service Produce Price Inflation (SPPI) index); fixed recoverable costs are not reviewed and uprated at similar intervals.

By way of example, fixed costs in relation to the Employers Liability and Public Liability Protocol have remained static since they were introduced under Rule 7 of The Civil Procedure (Amendment No.6) Rules 2013.³

Concerns have been raised that the new fixed recoverable costs regime has resulted in disproportionately low costs being awarded. This may lead to regulated firms and their funders considering whether it remains economically viable to continue offering certain services. There have been high profile examples of firms appointing administrators and closing in recent months, including PM Law Limited⁴ and AWH Solicitors.⁵

In addition, where there is a shortfall between incurred costs and the fixed recoverable costs awarded, deductions may be sought from a successful party’s damages. These issues raise fundamental concerns about access to justice.

The Intermediate Track

One of the main features of the Civil Procedure (Amendment No. 2) Rules 2023 was the creation of a new intermediate track and corresponding fixed recoverable costs for less complex claims valued at more than £25,000, but not more than £100,000.
One of the questions within the Stocktake was, Question 4: How well has the new intermediate track been operating? Has it had an impact on case progression?

The Intermediate Track is still very much in its infancy as evidenced by the limited number of claims which have been allocated to this Track as reported within the Ministry of Justice’s Civil Justice Quarterly statistics.

Whilst there has been a gradual increase in the percentage of claims allocated to the Intermediate Track in the past year, up from 0.93% in Quarter 3 of 2024 to 2.09% in Quarter 3 of 2025, the percentage remains low. Consequently it is too premature to assess the impact and draw any meaningful conclusions on the operation of the Intermediate Track given the limited number of cases allocated to date.

How we can help

As a member of the Association of Cost Lawyers and their Special Interest Group on Fixed Recoverable Costs we are party to industry specialism discussions within this niche area of law.
We can offer real-time case support; advice on costs related issues and negotiations; and deliver bespoke training sessions for organisations.

For more information, please contact John Hinton [email protected] or Victoria Full [email protected].

[1] The Civil Procedure (Amendment No. 2) Rules 2023

[2] Guideline hourly rates 2026 – Courts and Tribunals Judiciary

[3] The Civil Procedure (Amendment No.6) Rules 2013

[4] Law Gazette – Another accumulator firm goes under

[5] https://www.legalfutures.co.uk/latest-news/north-west-pi-firm-winds-down-after-funder-pulls-out