A new test to determine if someone is fit to stand trial should be introduced to replace the "out of date" current rules, the Law Commission has said.
The independent body said the present law was "misunderstood and inconsistently applied" and a new test would ask whether the defendant could participate effectively in court.
Assessments in which at least two doctors advise a trial judge could be "time-consuming" and lead to long delays in cases, the report said.
Its recommendations come after a court ruled last month that Labour peer Greville Janner was unfit to stand trial for an alleged string of sex offences against boys dating back 50 years, due to "deteriorating and irreversible" dementia.
The commission's report suggested the current test "sets the threshold for unfitness too high", meaning some with serious mental conditions could be wrongly found fit to plead, while there was a "disproportionate" focus on a defendant's intellectual ability.
Professor David Ormerod QC, law commissioner for criminal law and procedure, said: "It is in the interests of justice that defendants who can play a meaningful and effective part in their trial should have the opportunity for a full trial.
"The current rules for defining 'unfitness' were formulated in 1836 and how the courts deal with vulnerable defendants who are unfit fails to achieve just outcomes.
"Our reforms would modernise the law to bring unfitness to plead into line with current psychiatric thinking, making it more effective, accessible and fair for vulnerable defendants and victims, and providing greater protection for the public.
"It is extraordinary that the unfitness to plead procedure is not currently available in the magistrates and youth courts, where some of the most vulnerable defendants in the criminal justice system can be found. Extending our reforms throughout the courts system would ensure that young people are no longer treated less fairly than adults."
The report recommended defendants be given a statutory right to help from a mediator and training for judges and lawyers.
Procedures for considering the allegations following an 'unfit to plead' ruling should be "fairer".
Once a defendant has been ruled unfit to plead, a "trial of the facts" takes place in which a jury decides whether the accused committed the crime, but no conviction or punishment is meted out.
But the commission recommended that judges have the power not to hold such a trial if it was in the interests of justice.
Before Lord Janner's death last month, a trial of the facts had been scheduled for April to examine charges related to 22 sexual offences dating back to the 1960s against nine alleged victims, mostly under 16 at the time.
Lawyers will discuss the next steps at the Old Bailey this week.