The 64th update to the CPR that came into force from 1st April 2013 brought with it the requirement for Budgets to be filed and served in all Multi Track claims (save for those in the Commercial/Admiralty Courts) issued on or after 1st April 2013 and in all other claims where so ordered by the Court.
CPR 3.12-18 details the Court's powers relating to costs management in order for the Court to manage the steps to be taken by the parties involved in the litigation and also to manage the costs to be incurred by the parties. This is done to make sure that the costs still to be incurred are reasonable and proportionate before the work has been done and these costs incurred.
Each party has to file and serve Budgets set out in the form of Precedent H by the date specified in the Directions Questionnaire or, if no date is specified, seven days before the first CMC.
During the CMC, the Court will consider the Budgets filed by the parties and make a Costs Management Order, in which it will record the extent to which the budgets are agreed by the parties and the revision/approval of those parts not agreed.
Now for the important part: If a party fails to file a Budget despite being required to do so, he will have been deemed to have filed a Budget compromising of Court fees only.
It will be no good waiting until the end of the claim and hoping that the other side will forget about it or assuming that your Costs Draftsman will be able to obtain relief; this will not come so easily any more. If you do not file your Budget within the deadline, you must apply for relief immediately and hope that the Court is in a forgiving mood.
Once you have your authority to proceed to Detailed Assessment, be it either by way Part 36 agreement, Court Order by consent or Judgment, you will be able to serve your Bill of Costs in the usual way. However, when the Court comes to assessing the Bill of Costs, it will not depart from the Budget without good reason.
So if you think you are close to exceeding any specific phase of your Budget, or anything happens that will probably lead to costs being incurred over and above the approved Budget, you need to apply to Court immediately.
What we can do to help
- One of our team will work with you to draft (and, if necessary, revise/amend) your Budget for you within 14 days of instruction and return your file to you with a copy of the Budget for filing and service.
- We will raise an interim invoice at the time, but we will defer payment of our fees until the claim has concluded and you have been paid your costs.
- If we are instructed to draft your Bill of Costs at the conclusion of the claim having already drafted the Budget, we will subsume any fees for drafting the Budget into the fee charged for drafting the Bill of Costs, so there is no duplicated charging.
- Our fees will also be limited to no more than what you can recover inter partes for the Budget drafting process, so the exercise at worst is costs neutral. If our fees are less than the sum recovered from the Defendant, you keep the difference.
- We can assist in responding to the other side if they object to the sums stated in the Budget.
- We can also provide you with a training seminar (free to existing clients) on how to ensure compliance and maximise recovery at Detailed Assessment
- You can be confident that our experience in dealing with high value claims for over a decade means that the incurred costs will be accurate and the estimated costs to be incurred based on a detailed analysis of previous claims will be appropriate in the circumstances.
What you need to do
- Provide us with the instructions at least 14 days before the Budget is due to be filed.
- Plan the futures steps required to bring the claim to a successful conclusion.
- Review the file on a regular basis and keep an eye on the costs claimed in the Budget; has anything happened to suggest that any phases in the Budget may be exceeded?