Litigation briefing: Fixed recoverable costs stocktake and consultation

Two years following the extension of fixed recoverable costs (FRC) beyond the personal injury sphere of civil litigation in England and Wales, and following discussions with the Civil Procedure Rule Committee (CPRC), the MoJ has just published the long awaited ‘stocktake’ of the FRC. 

FRC stocktake

A decision in 2024 to postpone the FRC stocktake was made due to concerns about whether enough cases had come through the courts. Now there’s been more time for the reforms to bed in, the CPRC, with the help of the MoJ, have begun seeking the sector’s input on what’s working well and what’s not going quite as smoothly.

The FRC Interim Implementation Stocktake is seeking particular observations and evidence from anyone who’s been involved in affected claims on a number of issues:

• How well, generally, the extension of FRC has been working (including on things like case progression both within and outside the various claims portals)
• Operation of complexity bands in the fast and intermediate tracks (including whether they enable proportionate costs awards and/or create satellite litigation)
• Operation of Part 36 (particularly interpretation issues)
• Exemptions from FRC, specifically housing disrepair claims (which are currently exempt)
• Whether FRC should apply in different types of claims (including more widely to clinical negligence claims which are already partially captured)
• Whether FRC operate effectively on preliminary issues, group actions, counterclaims, claims for non-monetary relief and noise-induced hearing loss claims
• Operation and effectiveness of the ‘exceptional circumstances’ and ‘unreasonable behaviour’ tests
• Impact of inflation on the figures of FRC costs (particularly whether more frequent review is needed)
• Recovery of disbursements and whether the 20 page limit for expert reports is working in practice
• Vulnerability in the context of the FRC regime
• Operation of the fixed costs determination procedure

This is a non-exhaustive list and if affected parties have any other observations or evidence on the FRC, they’re encouraged to provide it.

The consultation opened on 31 October and is running until 5 January 2026. Those wishing to submit responses should consider the required materials here and send their response to [email protected] stating ‘Fixed Recoverable Costs (FRC) Interim Implementation Stocktake’ in the subject line.

Our experience

Given the stocktake, it is also as opportune a moment as any for us to reflect on our own thoughts and what might be worth raising. As with all new or expanded regimes there have certainly been new issues for civil litigators to get to grips with.

There have, of course, also been some grey areas and teething problems that have needed ironing out (and which continue to do so). To take just a few examples:

Scope of transitional provisions: Asmat Bi v Tesco Underwriting Limited [2024] and Bek v Simsek [2025]

There was initial disagreement as to whether the new FRC rules applied where settlement of the substantive claim occurred prior to issue of proceedings. Two similar cases, Asmat Bi v Tesco Underwriting Ltd [2024] and Bek v Simsek [2025], have highlighted this and affirmed the position. Whilst only decisions at first instance, in both cases, costs proceedings were bought after the FRC regime came into effect in claims settled before the expanded FRC came into effect. It was ultimately decided by the court that the new regime would apply to such proceedings.

In Asmat v Bi, it was noted that the parties had not ‘contracted out’ of the FRC regime, and whilst the judge was unable to place any weight on the CPRC minutes, the judge’s reasoning appeared to align with the CRPC’s intentions.

In Bek v Simsek (affirming the position in Asmat v Bi), the judge found that in the case of a pre issue settlement, the right to costs crystallises not at the point of Part 36 acceptance, but when the Part 8 costs order is made. The court also rejected the idea that Part 8 proceedings were distinct from the substantive claim, noting that the practice direction refers to costs-only proceedings as a ‘claim’ and that no distinction is made between Part 7 and Part 8 claims.

There will, of course, be an ever-decreasing amount of such transitional claims left but there’s likely to be at least some still out there (and the clarification about when entitlements crystalise is an important development nonetheless).

Widening the application: pre allocation settlements

We have ourselves seen the new arguments that arise from the potentially limited recovery in the intermediate track (relative to the multi-track) and with uncertainty surrounding the new operation of Part 36.

In one particular instance, damages sought exceeded the upper limit of the intermediate track by a considerable margin (the claim exceeded £200,000 at its highest) but settled for less than £100,000. Thanks to proactive management of these aspects of the FRC regime we, with specialist input from on the costs position from Mills & Reeve’s  senior costs manager, Ged Courtney, were able to successfully argue:

1. This matter was in fact within the scope of the FRC regime
2. Worded settlement offers to ensure there could be no suggestion that the parties had contracted out of the regime

As a consequence, our client obtained a successful outcome on costs, with the claimant accepting an offer for FRC, leading to a saving of over £80,000 on a claim for around £115,000 (circa 70%).

Given those sorts of developments, we expect the consultation to garner a lot of interest from the sector (not least as the costs of litigation directly relate to parties’ abilities to bring and defend claims).

Consultation and costs training

Given this consultation is likely to be a key steering point for the FRC regime, we welcome contact from clients and contacts interested in responding to the consultation; whether that be views to be factored into our own response or requesting support with a response of your own.

If you’re interested in either of those options, please contact the authors at the top of this article.

Equally, if you’re interested in improving your team’s knowledge of legal costs, Mills & Reeve can provide training run by our senior costs manager, Ged Courtney.

This can be catered to specific needs, focusing on the application of FRC more generally, to specific topics such as the application and effect of Part 36 offers and strategy to ensure that the most beneficial costs outcomes are achieved.

We’re also happy to offer advice/accept instructions in relation to all costs related matters, whether that be as part of a wider claim or discreetly (including FRC and costs disputes). If you need any assistance in relation to such matters don’t hesitate to get in touch with Ged Courtney.