Sri Lanka's government is pursuing wide-ranging reforms including judicial changes, alternative dispute resolution mechanisms, and infrastructure investment to address systemic delays and boost economic development.

Sri Lanka's cabinet has approved constitutional and legislative measures aimed at easing pressure on the country's overwhelmed judicial system, which faces a backlog of 1.2 million pending cases. The Twenty-Second Amendment to the Constitution Bill and the Judicature (Amendment) Bill propose raising the retirement age of all judges by two years. Cabinet Spokesman Nalinda Jayatissa dismissed suggestions the move benefits specific individuals, stating the reforms target case processing efficiency and reducing court delays.

Parallel to judicial reforms, the government is expanding alternative dispute resolution mechanisms. Twenty corporate entities have signed a pledge to adopt commercial mediation as their primary method for resolving business disputes, following the June 2026 enactment of the Mediation in Civil and Commercial Disputes Act. According to international data presented at the pledge ceremony, commercial mediations achieve settlement rates between 65 and 70 percent, often concluding within a single day. The initiative aims to lower litigation costs and protect corporate value while positioning Sri Lanka as an attractive investment destination.

On the economic front, the cabinet approved a 200 million dollar policy-based loan from the Asian Development Bank to support trade, investment, and industrial development. Additionally, the government released a comprehensive Motor Vehicle Industry Report—the first in six years—examining opportunities and challenges as Sri Lanka reopens its automotive sector following a prolonged import suspension. The report covers industry trends, technological developments, and regulatory changes shaping the sector's future.

The government is simultaneously working to strengthen court infrastructure, with plans to increase High Court judges from 94 to 120 of the approved 110 positions. Officials are also recruiting additional magistrates and support staff to address structural bottlenecks. The combined initiatives reflect an effort to modernize Sri Lanka's legal and economic systems while tackling longstanding institutional backlogs.