Fixed recoverable costs (FRC) interim implementation stocktake – Law Society response

Overview of the stocktake

The stocktake aimed to:

• identify any emerging issues with the FRC regime
• cover a wide range of FRC topics to better understand the impact of the extension
• gather responses to identify, triage and address any issues which have arisen as a consequence of the wide-ranging changes to the FRC regime

It will be followed by the MoJ’s full post-implementation review later in 2026.

Our view

Our position has consistently been that we do not oppose FRCs in principle, as long as they meet the conditions we have previously outlined.

Our key views in the stocktake response are:

• the stocktake itself was rushed and it’s too early to properly assess the impact of the expansion of the FRC regime, given that changes only took place in 2023
• the consultation should be next year, or as late as possible this year, and should be open long enough to allow for detailed responses
• the current regime poses significant risks to access to justice
• there are a number of changes that could be made to the regime to improve it
• the government must gather further evidence to understand the full impact of the extension of FRCs
• we do not think that the FRC regime should be expanded to include any other areas of law, and
• we think consideration should be given to permanently excluding housing from the regime

Our recommendations

Our recommendations for immediate changes to the regime include:

• easier reallocation from the intermediate track
• more judicial guidance and training for decision-making in relation to bands
• further guidance on vulnerability rules and considering making earlier decisions on vulnerability
• changes to vulnerability rules. This includes further guidance, earlier decisions which are regularly reviewed and revisiting the 20% threshold so that all additional costs are recoverable
• uprating FRCs in line with an appropriate evidence-based index

Our recommendations for areas the MoJ and CPRC could gather further evidence about include:

• costs remaining unclear despite FRCs being introduced
• anomalies between the fast and intermediate track resulting in fast-track cases being awarded higher costs than intermediate-track cases
• how decisions are being made in the Damages Claims Portal
• disproportionately low costs that do not encourage early settlement, and
• successful parties being penalised through paying their lawyers’ costs where FRCs do not cover these

Next steps

The stocktake is part of a wider post-implementation review.

We plan to respond in detail to the full post-implementation review.

We will continue to engage our members to gather information about how the FRC extension is working in practice and advocate on their behalf.

We will liaise with the MoJ and the CPRC and put forward recommendations to improve access to justice under the FRC regime.