The introduction of the fixed recoverable costs (FRC) regime in October 2023 marked one of the most significant changes to civil litigation costs in recent years. One year on, the key question for practitioners is: how are courts applying FRC one year on?

As costs professionals, it is increasingly important that courts are beginning to provide clearer guidance on how the regime is being applied in practice.

Early indications suggest that while the courts are generally applying the regime as intended, there are still areas of interpretation emerging around allocation, proportionality, and the role of complexity bands.

This article explores how courts are applying fixed recoverable costs one year after implementation, and what this means for litigants and practitioners.

 

Overview of the Fixed Recoverable Costs Regime

The fixed recoverable costs regime applies primarily to claims allocated to the fast track and intermediate track under the Civil Procedure Rules. It was introduced to bring greater certainty and proportionality to legal costs in lower and mid-value civil claims.

Under the regime, recoverable costs are no longer subject to detailed assessment in most cases. Instead, they are determined by a fixed table, often linked to complexity bands and the procedural stage the case has reached.

The aim is to reduce costs disputes, improve predictability, and encourage early settlement.

 

How are Courts Applying FRC One Year On?

One year on from implementation, courts are broadly applying the fixed recoverable costs framework consistently, particularly in straightforward fast-track matters.

However, a number of key trends have emerged.

1.     Strict Approach to Allocation

Courts are placing a significant emphasis on correct track allocation at the outset of proceedings. Whether a case is assigned to the fast track or intermediate track often determines whether fixed costs will apply and at what level.

Judges are increasingly scrutinising whether claims have been appropriately allocated, particularly where parties seek to argue that a case should fall outside the fixed regime.

2.     Greater Focus on Complexity Bands

The use of complexity bands has become central to how fixed recoverable costs are applied in practice.

Courts are carefully assessing:

• The number of issues in dispute
• The volume of evidence required
• The length and complexity of trial
• Whether expert evidence is necessary

This assessment directly impacts the level of recoverable costs under the regime.

3.     Limited Departure from the FRC Structure

In most cases, courts have shown limited willingness to depart from the fixed recoverable costs structure. Where parties seek to argue for exceptions, they must demonstrate strong justification.

This reinforces the principle that the regime is intended to provide certainty, even where outcomes may feel rigid in some cases.

 

Application In Different Types of Proceedings

The impact of fixed recoverable costs is being felt differently across various areas of litigation.

Civil claims

In general civil litigation, courts are applying the regime strictly within the fast track and intermediate track. This has led to greater predictability in costs recovery but also reduced flexibility in complex but lower-value claims.

Financial Remedies Court

In the financial remedies court, the interaction with fixed recoverable costs is more nuanced. While many family proceedings remain outside the regime, certain procedural cost elements and hybrid claims may still engage aspects of FRC principles.

Practitioners are therefore increasingly seeking legal advice at an early stage to assess whether elements of the regime may apply.

Family Court Proceedings

More core family court proceedings remain outside the fixed recoverable costs framework. However, the broader policy direction towards cost certainty in civil litigation is influencing how costs arguments are being approached in family matters.

 

Key Challenges for the Court and FRC, One Year On

Despite its intended clarity, several challenges have emerged in the first year of operation.

1. Uncertainty in Borderline Case

Difficulties remain in cases that sit between the fast track and intermediate track. These borderline claims often arise.

2. Complexity Band Disputes

Disagreements over complexity bands are becoming a key area of satellite litigation. Parties often take differing views on the appropriate band, particularly where expert evidence is involved.

3. Interaction with Pre-Existing Case Law

Courts are still working through how older costs principles interact with the new regime. This is particularly relevant in cases where conduct or proportionality arguments might previously have justified a more flexible approach.

 

Practical Impact for Litigants

For parties involved in litigation, the introduction of fixed recoverable costs continues to have important practical implications.

• Costs certainty is improved in many cases
• Early assessment of track allocation is critical
• Strategic litigation decisions are increasingly front-loaded
• Disputes over costs assessment are reduced but not eliminated

Litigants are therefore increasingly relying on early legal advice to understand how their claim is likely to be treated under the regime.

 

In Summary

One year on from implementation, the courts are largely applying the fixed recoverable costs regime in line with its intended purpose. However, important areas of interpretation continue to develop, particularly around allocation, complexity bands, and borderline cases.

While the regime has improved certainty in many respects, it has also introduced new strategic considerations for litigants and practitioners.

As case law continues to develop, further clarity is expected around how strictly courts will apply the framework in more complex or borderline disputes.

 

How Greener Costs Can Help

Understanding how the courts are applying fixed recoverable costs one year on is essential for effective litigation strategy.

At Greener Costs, we provide specialist support on all aspects of costs litigation, including:

• Advising on intermediate track and fast track allocation
• Assessing likely complexity bands
• Providing strategic guidance on fixed recoverable costs exposure
• Supporting clients with early-stage costs risk analysis

We help ensure that parties are fully informed before taking key litigation decisions.

If you require expert advice on costs strategy of the FRC regime, contact Greener Costs today via our enquiry form below, or let us know a brief summary of your case info@greenercosts.co.uk.

 

FAQ: Fixed Recoverable Costs One Year On

How are courts applying fixed recoverable costs one year on?

Courts are generally applying the regime consistently, with a strong focus on correct track allocation and complexity band assessment.

Are courts departing from the fixed recoverable costs regime?

In most cases, courts are not departing from the regime unless there is a strong justification, as the framework is intended to provide certainty.

What role do complexity bands play in FRC cases?

Complexity bands determine the level of recoverable costs within the fast track and intermediate track, based on the complexity of the case.

Has the FRC regime changed how cases are allocated?

Yes, courts are scrutinising allocation more closely to ensure claims are correctly placed within the fast track or intermediate track.

Does fixed recoverable costs apply in family court cases?

Most family court proceedings remain outside the regime, although related costs principles may still be relevant in some financial remedies matters.