Costs management orders
CPR 3.13 states:
“Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets as required by the rules or as the court otherwise directs. Each party must do so by the date specified in the notice served under rule 26.3(1) or, if no such date is specified, seven days before the first case management conference.”
The new Directions Questionnaire states (at Section H) “I confirm Precedent H is attached” and “If your claim is likely to be allocated to the Multi-Track Precedent H must be filed in accordance with CPR 3.13”.
The notice being sent out with these Questionnaires states: “Each questionnaire has different and specific questions the judge requires answering in relation to the type of claim therefore the correct form must be used”.
I have heard it being suggested that the Directions Questionnaire is therefore wrong as Precedent H does not need to be attached to it; rather, if no date is expressly specified, it does not need to be filed or exchanged until seven days before the first case management conference.
It is possible the Questionnaire contains an error but I can also see the possibility that the Court is making an express order in the Questionnaire requiring parties to file and exchange at the same time as completing the Questionnaire.
In any event, I have recently been instructed in a couple of cases where the parties had exchanged budgets at the same time as completing the Directions Questionnaire. I was asked to prepare challenges to the other side’s budgets.
PD 3E para.2.3 states:
“If the budgets or parts of the budgets are agreed between all parties, the court will record the extent of such agreement. In so far as the budgets are not agreed, the court will review them and, after making any appropriate revisions, record its approval of those budgets. The court’s approval will relate only to the total figures for each phase of the proceedings, although in the course of its review the court may have regard to the constituent elements of each total figure. When reviewing budgets, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.”
It is not clear how it is envisaged the court usually establishes the agreement, or otherwise, of the parties. Is this before or at the first CMC?
In any event, in both these cases, proceeding in different courts, rather than list the matters for CMCs the courts have simply approved the directions sought without commenting on the budgets and appear to have no intention of making costs management orders. The courts are not obliged to make costs management orders but it was anticipated this would be the norm. In the first case the other side’s costs budget had been put in at £80,000 net of any success fee or VAT (meaning the full value of a costs claim might be £140,000+). In the second case the budget totalled £186,000 net of any success fee or VAT (meaning a potential costs claim of £335,000+).
If courts are not bothering to make costs management orders is cases of this size (and £2million cases are exempt in the Chancery Division, Technology and Construction Court, and Mercantile Court) where can we expect them to be made?
What are other reader’s experiences?