Litigation risk in 2026: costs, procedures, and greater transparency

Following on from our previous article on AI and global disruption, we delve into our recent research delivered alongside The Lawyer to outline what these trends mean in practice for businesses managing litigation risk.

Costs 

The Civil Procedure Rule Committee (CPRC) and the Ministry of Justice have recently undertaken a combined exercise to take stock of how the extension of the Fixed Recoverable Costs regime (FRCs) introduced in October 2023 has worked in practice. 

Following this initial stocktake, which came to an end on 5 January 2026, a full-implementation review will take place towards the end of 2026 within which the following will be considered as just a few examples: the operation of the complexity bands in the fast and intermediate tracks and how cases are being allocated, exceptions from the FRCs, and whether it may be necessary to uprate for inflation prior to October 2026. 

In addition, the Government has expressed its intention to review FRCs in light of the scrutiny the regime faces. 

The Law Society of England and Wales have expressed concerns that since the FRC regime was extended to most civil cases up to £100,000 in October 2023, its impact on access to justice has been negative and it has unjustly penalised the successful party, whom could now bear the difference between legal costs incurred and the amount of FRCs awarded. 

There is also concern regarding the extent to which the FRC rules serve its purpose of simplifying the determination of costs in the court process. 

We will await the outcome of the government’s review to see the impact and potential changes to the FRC regime. 

Some of the changes recommended by the Civil Justice Council (CJC) in their Costs Working Group Report in 2023 are yet to be addressed. Of particular interest is the CJC’s recommendation that Counsels fees be brought within Guideline Hourly Rates and a maximum hourly rate for complex commercial cases be introduced. If implemented, this change will help manage client’s fees. 

There is expected to be a consultation in 2026 which will be followed by a final report on costs towards the end of 2026. We will await to see if there will be any significant changes to costs in the courts. 

Damages claims pilot 

Additionally, the Damages Claims Pilot (a 24/7 online system used for starting and managing damages-only civil claims in the county court) is scheduled to come to an end on 1 October 2026 which may reshape aspects of commercial litigation. The end of the pilot may result in a less streamlined digital service for practitioners in damages claims if the pilot does not become permanent. 

Public domain documents pilot – PD 51ZH 

We can expect to see a more transparent approach to litigation in the Commercial Courts in 2026 following the new PD 51ZH pilot which has been introduced to enable any person including non-parties to access copies of documents identified as ‘Public Domain Documents’ in case. These are documents that the pilot has identified as documents which are likely to enable the public to understand the proceedings and includes written submissions, witness statements and affidavits, expert reports and ‘any other document which is critical to the understanding of the hearing ordered by the judge at the hearing to be a Public Domain Document’. 

The pilot has been introduced from 1 January 2026 and will run for a period of two years until 31 December 2027. 

In short, the increased transparency certainly has potential benefits for parties in litigation as it will be helpful to see how other litigated cases are being dealt with in the Commercial Court. 

Our previous article explains the Pilot in more detail.

Civil procedure rule changes 

In July 2025, the CPRC opened up a consultation on the proposed draft amendments to CPR 6 and Practice Direction 6A. We can therefore expect to see some further discussion of these rules based on the consensus of the responses. If the rules are amended, service by electronic means may become the default position. 

Mazur 

Last year saw a significant shake up for litigation lawyers after the case of Mazur held that, in accordance with the Legal Services Act 2007, non-qualified individuals are not authorised “conduct litigation.” 

The result of the Mazur judgment has resulted in law firms restructuring work allocation, pricing and the delivery of litigation services.

The judgment has been appealed, with the appeal hearing held at the end of February 2026 and the resulting Court of Appeal judgment is likely to be a seismic discussion point for those in the legal profession. 

Regardless of the outcome, we can expect to see a significant increase in costs disputes owing to rearranging of fee structures and work allocation, which may well have been for nothing if the judgment of overturned.  

Get more insight

Completed in collaboration with The Lawyer, our new report surveyed 81 businesses to identify the priorities defining the year ahead for in‑house legal teams. 

We look at the general appetite for litigation – and what may prevent it – as well as how GCs are handling alternative funding, the rise of AI, and geopolitical influences. As in-house teams face increasing pressure to manage risk, control costs, and limit exposure, we also explore the vital role external dispute resolution experts can play.

Read it now: The Leading Litigator Report | Irwin Mitchell