Civil Procedure and Dispute Resolution Update: What's Changed for Litigators

Two developments have reshaped civil litigation practice in England and Wales more than anything else in the past two years: the sweeping extension of the Fixed Recoverable Costs (FRC) regime under CPR Part 45, and the Court of Appeal's ruling in Churchill v Merthyr Tydfil County Borough Council confirming that courts can order parties into Alternative Dispute Resolution (ADR). Together with the amendments to the Civil Procedure Rules that followed, these changes have altered how litigators budget cases, advise clients on settlement strategy, and manage the risk of adverse costs orders. This update sets out what has actually changed, what remains uncertain, and what litigators need to be doing differently now.

Fixed Recoverable Costs: the October 2023 expansion

From 1 October 2023, the FRC regime under CPR Part 45 was extended far beyond its previous personal injury heartland. It now applies to most civil claims valued up to £100,000, issued on or after that date, regardless of case type — with limited carve-outs for claims such as mesothelioma, certain clinical negligence matters, and cases involving child protection or intentional torts by the police.

The reform created a new intermediate track sitting between the fast track and the multi-track:

• Fast track (unchanged in scope): claims up to £25,000, triable in one day or less, with limited expert evidence — a maximum of two expert fields and one expert per party per field.
• Intermediate track (new): claims up to £100,000, triable in no more than three days, with a maximum of two expert witnesses per side and restrictions on the number of parties (broadly, one claimant against one or two defendants, or two claimants against one defendant).

Both tracks use four ascending complexity bands, with the applicable band — set at allocation — determining the fixed costs recoverable at each stage of the claim, from pre-action conduct through to trial. Recoverable costs are set out in tables in Practice Direction 45, and the court's discretion to award costs above the fixed amount is now confined to "exceptional circumstances," a term the rules deliberately leave undefined and which is already generating satellite litigation.

What this means for costs budgeting

For litigators, the practical effect is that traditional costs budgeting under CPR Part 3 becomes largely irrelevant for the great bulk of claims that now fall within fast or intermediate track FRC. Instead, the critical decisions happen far earlier in the case lifecycle:

• Track allocation is now a costs decision, not just a case-management one. Getting a claim allocated to the correct track — and the correct complexity band — has a direct and largely fixed financial consequence for both sides, so allocation hearings and directions questionnaires deserve more attention than they may previously have received.
• Pre-action conduct costs more, relatively speaking. Because post-issue recoverable costs are capped, the proportion of total recoverable costs attributable to the pre-action stage is higher than under the old regime, sharpening the importance of a well-run pre-action process.
• Client care letters and fee estimates need updating. Firms still quoting hourly-rate estimates for claims that will in fact be subject to FRC risk giving clients a misleading picture of likely recovery (and exposure) on costs.

Churchill v Merthyr Tydfil: the end of the Halsey "compulsion" bar

In Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, the Court of Appeal was asked to revisit a long-standing feature of English civil procedure: the rule, drawn from Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, that the courts could encourage but not compel parties to engage in ADR, on the basis that compulsion would violate the right of access to the courts under Article 6 of the European Convention on Human Rights.

The Court of Appeal, with the Law Society and the Civil Mediation Council intervening, held that the relevant passage in Halsey was obiter and not binding, and that the court does have the power to stay proceedings for, or order parties to engage in, ADR — including a form of internal complaints procedure in that case — provided the order does not impair the claimant's right to a fair trial and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost. Whether to exercise that power is a matter of judicial discretion, assessed against the circumstances of the individual case.

The judgment did not go so far as to mandate ADR in every case, and it declined to lay down a fixed checklist for when a stay or order should be made. But it removed the legal obstacle that had, for nearly two decades, been cited as a reason why courts could not compel mediation or other ADR — and it opened the door to the CPR amendments that followed.

The CPR amendments implementing Churchill (from 1 October 2024)

The Civil Procedure Rule Committee subsequently amended the CPR to embed the Churchill principle directly into the rules, with the changes taking effect from 1 October 2024. The key amendments include:

• CPR 1.1 (the overriding objective): amended so that dealing with a case justly and at proportionate cost expressly includes, so far as practicable, "promoting or using alternative dispute resolution."
• CPR 1.4 and CPR 3.1 (case management duties and powers): amended to confirm that the court's active case management duties, and its general case management powers, extend to ordering parties to engage in ADR, not merely encouraging them to consider it.
• CPR Parts 28 and 29 (fast/intermediate and multi-track directions): amended so that, when giving directions, the court must consider whether to order or encourage the parties to engage in ADR at that stage of the case.
• CPR 44 (costs): amended so that, in assessing a party's conduct for costs purposes, the court may take into account whether a party failed to comply with an order for ADR, or unreasonably failed to engage in ADR when the court encouraged it to do so.

Litigators should note that these are amendments to existing rules already familiar from costs-sanction case law, not an entirely new stand-alone regime — and that the court's discretion on whether to compel ADR in a given case, and on what form of ADR is appropriate, remains broad and fact-specific following Churchill.

Practical implications for ADR strategy

• Document your ADR position early and in writing. With unreasonable refusal to engage in ADR now an express costs consideration under CPR 44, litigators should record — from the pre-action stage onward — a clear, defensible rationale whenever a client declines to mediate or otherwise engage, rather than relying on a bare refusal.
• Expect ADR to surface at every case management stage. Because CPR 28 and 29 direct the court to consider ADR when giving directions, litigators should be ready to address the point at allocation, at case management conferences, and again before trial, not just once at the outset.
• "ADR" is broader than mediation. The Court of Appeal in Churchill treated an internal complaints process as a form of ADR capable of being ordered; litigators advising on ADR strategy should consider the full range of options — mediation, early neutral evaluation, expert determination and structured settlement discussions — rather than assuming a court-ordered process must mean formal mediation.
• Advise clients that refusal now carries a sharper edge. Pre-Churchill costs case law already penalised unreasonable refusal to mediate; post-amendment, that risk sits alongside the possibility of a direct order to engage, making early, considered advice on ADR strategy a core part of case management from day one.

Disclosure: the Business and Property Courts regime

For litigators practising in the Business and Property Courts, the disclosure regime introduced as a pilot scheme in 2019 was made a permanent part of the CPR as Practice Direction 57AD, replacing the earlier Practice Direction 51U. The regime retains its structural features — Initial Disclosure, an Extended Disclosure application using Models A to E, and the List of Issues for Disclosure — and continues to place a premium on early, structured engagement between the parties on the scope of disclosure, rather than the default "standard disclosure" approach used elsewhere in the CPR. Litigators handling commercial disputes should treat the disclosure review document and Model selection as a strategic exercise undertaken well before the first case management conference, since the costs and time implications of getting the scope wrong can be significant.

Bringing it together: what litigators should do now

The combined effect of the FRC expansion and the Churchill-driven ADR amendments is to push the significant strategic and cost decisions in civil litigation earlier in the life of a case. A litigator who treats track allocation, pre-action conduct, and the client's ADR position as afterthoughts is now taking on real costs risk. Firms should consider:

• Reviewing standard client care and costs-estimate letters to reflect FRC where a claim is likely to fall within scope.
• Building an ADR decision point into case management checklists and file review templates, with a requirement to record reasons for any refusal to engage.
• Training fee earners on the intermediate track's evidential and procedural limits, which differ materially from multi-track practice.
• Keeping disclosure scoping discussions under PD 57AD firmly on the agenda for Business and Property Courts matters, rather than leaving them to the case management conference.

None of this removes professional judgment from litigation strategy — but it does mean that judgment now has to be exercised, and evidenced, earlier and more consistently than before. Regularly refreshing procedural knowledge through structured Continuing Professional Development remains one of the most efficient ways for litigation teams to stay ahead of rule changes like these; for related skills, litigators may also find it useful to revisit their approach to negotiation skills for lawyers, which sit at the heart of any effective ADR strategy, and to consider how these procedural shifts interact with Part 36 offers and costs recovery in a fixed-costs environment.

Frequently asked questions

Does Fixed Recoverable Costs apply to every civil claim now?

No. The extended FRC regime applies to most civil claims valued up to £100,000 issued on or after 1 October 2023, but it excludes certain categories such as mesothelioma claims, some clinical negligence matters, and cases involving child protection or intentional torts by the police. Litigators should check whether a claim falls within an excluded category before assuming FRC applies.

Can a court now force my client to mediate?

Following Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 and the subsequent CPR amendments, courts have the power to order parties to engage in ADR, including mediation, provided the order does not impair the right to a fair trial and is proportionate. It is a discretionary power exercised on the facts of each case, not an automatic requirement to mediate in every dispute.

What happens if my client refuses to engage in ADR?

Under the amended CPR 44, a court assessing costs may take into account whether a party failed to comply with an order to engage in ADR, or unreasonably failed to engage in ADR when the court encouraged it. This can affect the costs order made at the end of the case, so any refusal should be reasoned and documented at the time it is made.

Is the Disclosure Pilot Scheme still a pilot?

No. The disclosure regime for the Business and Property Courts, originally introduced in 2019 as a pilot, is now a permanent part of the CPR as Practice Direction 57AD. The core structure — Initial Disclosure, Extended Disclosure Models A to E, and the List of Issues for Disclosure — remains in place.

Civil procedure continues to move quickly, and the FRC and ADR reforms covered here are unlikely to be the last word on either topic. Litigators who want to keep their procedural knowledge current — and their costs risk under control — can explore Learnsignal's CPD courses for legal professionals to stay on top of these and future changes.