Legal Cost Specialists

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?

9 thoughts on “Costs management orders”

  1. I have been dealing with this issue for two months as to timing.

    I know that Birmingham requires them with the DQ but I believe that other centres such as manchester say 7-days before

    The DQ says it should be enclosed with the DQ. The order says you have to file a DQ by X date

    In terms of the “seven days before the first case management conference” I am conscious that if you look at the notes in the whitebook that this suggests that this could be intended for cases, eg minors / capacity, which are automatically listed to multi and so DQ’s are never sent

    Which approach is correct? no idea but all my budgets are going with the DQ

  2. The default date is 7 days – it doesn’t come into play where the date is specified, as in those orders. All it is, and I have heard confirmation of this, is that these courts have their acts in gear and the DCJ has directed their staff correctly to best assist the Judges

    as for your courts not bothering with the budgets, that’s simply wrong. They are obliged to, and the court should be advised of the fact. They may not like it, but they are as much a part of this as we are

  3. I would have to agree that the budget should always go with the DQ, which is what we are doing, always better to be safe than sorry.

    With regards to the CMO’s i have received only one from a large number of budgets submitted!

    I must say the DJ did do a very thorough job at the CMC although he was a little astonished that the allocated 30 mins wasn’t sufficient and the CMC over ran by 1hr!!!

    Why the need for budgets then?

  4. I have also been hearing that many courts are not making CMO’s. They are not obliged to of course but the senior judiciary’s view is as you stated Simon – this was expected (supposed) to be the norm. Maybe someone should let them know what is happening in practise?

    The initial budget still needs to be prepared whether a CMO is made or not (I agree that, absent specific directions this should be filed with the DQ) – and of course the 20% rule applies where a CMO isn’t made.

    I’d be interested to hear whether anyone has made an application to vary an initial budget (where there is no CMO) to avoid any problems at DA. I suspect it is too early for this issue to have arisen?

  5. Has anyone seen orders where the court ask for a breakdown of the pre aciton costs and issued costs and also a document comparing both parties costs phase by phase.

    I have seen around three from different courts including Brighton and Crewe

  6. You are supposed to costs past costs into phases

    There shouldnt be an order for its as its part of the Budgeting process

    I have a 4 hour costs CMC coming up – gonna be fun!!

  7. The incurred costs were costed into phases.

    the court is looking for assistance by requiring a breakdown of the issue and pre action phase costs.

  8. So basically a list of what has already been done?

    If so have to say that I have been doing that – take the view that teh court cannot set a budget unless it knows what has already occurred

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