Fixed recoverable costs

Fixed recoverable costs (FRCs) already applied in most low-value personal injury cases, but from 1 October 2023 were extended to cover most civil cases valued up to £100,000.

03 Nov 2023

4 minute read

FRCs set the amount of legal costs that the winning party can claim back from the losing party in civil litigation.

They give certainty in advance about the maximum amount that the losing party will have to pay.

However, FRCs mean that the amount that can be reclaimed may not cover the actual costs of the case, which can be hard to predict.

The FRC extension

From 1 October 2023, the following changes were made:

FRCs were extended to all civil cases in the fast track (cases valued up to £25,000 in damages that will last no longer than a day, except for exceptions such as housing)
a new intermediate track was introduced for simple cases valued between £25,000 and £100,000 in damages
a new process and FRCs are available for noise-induced hearing loss claims

Our view

We did not support the extension of FRCs in civil litigation under the proposals, either across the existing fast track or to intermediate cases.

We welcomed the MoJ’s announcement that FRCs for all housing cases would be deferred until 2028, but we urge the government to consider scrapping the implementation altogether.

We lobbied ministers for this, alongside other stakeholders including the Housing Law Practitioners Associations (HLPA).

We considered that the proposals posed a substantial risk to access to justice.

We were also concerned the proposed extension of FRCs was based on out-of-date data, as the justice system had changed dramatically since the consultation began in 2019.

What this has meant for solicitors

These changes are affecting practitioners working on civil litigation cases worth up to £100,000.

The amount of costs that can be recovered are set at a fixed figure, which may be affecting which cases solicitors can take on, or the funding agreement they have with their clients.

The Civil Procedure Rule Committee (CPRC) published draft rules that are now in force, including how much practitioners can recover for civil litigation.

Read the CPRC rules.

FRCs interim implementation stocktake

The CPRC and Ministry of Justice (MoJ) committed to reviewing the extension of FRCs.

They have now conducted an evidence gathering stocktake to assess how the FRCs extension is working in practice (the Stocktake).

They will follow this exercise with the MoJ's full post implementation review in 2026.

Our view

We consulted with members to inform our response to the Stocktake.

In it, we said that the extension of FRCs has not provided the costs certainty it promised and raised concerns about the regime having a negative impact on access to justice.

We also said:

it is too soon to know the full impact because the extension was introduced just over two years ago and only a few cases have used all elements of the regime,
we welcome a full and thorough consultation to examine the impact of the FRC extension
The government can make changes to the regime, which will go towards ensuring access to justice is not impacted by FRCs.

We have highlighted areas where data and evidence should be sought, including:

the current regime appearing to unfairly penalise the successful party
the impact on early settlement of cases, and
costs remaining unclear for parties

Our principles for FRCs

Our long-established position is that we are not opposed to the principle of FRCs provided that:

they only apply to ‘low value’ and non-complex claims where the issues are straightforward
the costs are fixed at a reasonable rate to allow for the work to be carried out effectively by properly regulated professionals, such as solicitors
there is scope for complex or unusual cases to be exempt
there is strong empirical evidence and research to justify the rates and thresholds that are set
the rates and thresholds are reviewed and adjusted regularly to take account of changing processes and developments in technology
court procedures and rules are properly aligned with FRCs’ introduction
appropriate and efficient IT is introduced in the court system to support the fair and effective delivery of any new fixed costs regime

Our overriding concern is that the current FRC regime poses a substantial risk to access to justice. It should be a priority to ensure that access to justice is not impacted by FRCs.

What we’re doing

January 2026 – we responded to the CPRC and MoJ’s FRCs interim implementation stocktake.

February 2023 – we, along with other stakeholders, successfully pushed for FRCs to be deferred on housing cases.

June 2022 – we responded to the Civil Justice Council’s consultation on civil costs reforms We argued that FRCs should be set at a reasonable and proportionate rate with regular uplifts to account for inflation and raised concerns for FRCs in housing cases.

June 2019 – we responded to the MoJ’s consultation on extending FRCs in civil cases. We argued that the proposals do not meet our conditions, and that the government should give court reforms time to bed in before considering extending FRCs.

March 2019 – the MoJ issued its consultation on extending FRCs in civil cases. We urged the government to set costs at a reasonable rate for the legal work done.

July 2017 – the Jackson review of civil litigation costs was published, recommending that FRCs should apply to all claims valued up to £25,000. We welcomed the scaling back of the original plans. We engaged with members to review the new proposals.

January 2017 – we responded to the call for evidence for the review of FRCs. We argued that fixing costs for all claims up to £250,000 would risk making many cases economically unviable, undermining the principle of access to justice for all.

November 2016 – the government and senior judiciary announced their support for extending FRCs, and Sir Rupert Jackson was commissioned to develop proposals. We raised concerns about the government’s plans.

I want to know more

Webinar: Fixed recoverable costs regime (recorded June 2023)

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