The defendant costs specialists

Date to file costs budgets

By on Jul 19, 2016 | 3 comments

When costs budgeting was first introduced there was a fair amount of uncertainty as to when the budgets should be filed and exchanged (a problem caused by the apparent conflict in wording between the rules and the contents of the directions questionnaire).

The latest version of the rules (coming into force on 6 April 2016 and applying to cases where proceedings are issued after 6 April 2016) provides:

“CPR 3.13(1)

Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets—

(a) where the stated value of the claim on the claim form is less than £50,000, with their directions questionnaires; or

(b) in any other case, not later than 21 days before the first case management conference.”

It is difficult to see the logic behind the different dates for when the budgets should be filed and exchanged.  To do so with the directions questionnaire, for lower value claims, is inevitably a costs front-loading step.  It is likely to be a more disproportionate additional cost for these lower value claims than it would be for higher value ones.  It is also more likely to be an additional wasted cost as lower value claims are, on average, more likely to settle at an early stage in proceedings and often well before a CMC (when a costs management order might actually be made).

The latter problem is compounded by the fact that the courts continue to struggle to list matters for CMCs at an early stage.  The consequence of this is that by the time the matter does reach a CMC the earlier costs budgets will often be out-of-date and largely redundant (with the work therefore either being wasted or having to be repeated with up-to-date budgets).

It is unfortunate that the rules have been drafted in such a way as to generate a largely unnecessary and unhelpful front-loading of costs.  Unless you are a costs lawyer or law costs draftsman I suppose.

    3 Comments

  1. Be interesting to see if anyone manages to get caught out by this…

    Money for Nothing

    19th July 2016

  2. One further problem is that the “unless the court otherwise orders” provision is still there. The CCMCC are still sending out the Notice of Allocation which contains a provision that budgets are to be filed with the DQ regardless of the value. Does anyone want to chance that this is not an “Order”?

    J-P

    20th July 2016

  3. DQs exchanged January this year. Budgets done then. MT Allocation confirmed on paper and case listed for a CCMC hearing.3 weeks before the CCMC in June, CSol serves a new budget limited to 1 page changing all the amounts, and maintains he will have this managed under the new rules, as his “costs lawyer has advised me this is correct”.He says precedent R discussions are not needed however, but doesn’t say why that part of the new rules he ignores. He declines to answer why then he has failed to comply with CPR 3.13(1)(a) with his new budget, and disagrees there are transitional provisions in the rules, all on the advice of his cost lawyer.

    Directions are agreed, but not costs, obviously

    Guess who paid the wasted costs of the CCMC, after their Counsel abandoned the new budget part way into the hearing?

    This is the only one which went to a hearing so far, but only one of dozens I’ve seen where people misunderstand or ignore all the rule changes – they aren’t that hard to find or understand. Perhaps you cost lawyers might want to have another expensive 1 day lecture course on it and add the title “budget smuggler” or something to your title?

    cost draftsman

    20th July 2016

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  1. COSTS BUDGETS: NEW RULES | Kerry Underwood - […] Gibbs, in his excellent Legal Costs Blog states in his post on 19 July 2016 – Date to File…

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