Legal Cost Specialists

Precedent R Budget Discussion Reports

For cases where proceedings are issued on or after 6 April 2016 and cost budgets have been filed, parties must file an “agreed budget discussion report” no later than 7 days before the first case management conference (CPR 3.13(2)).

The budget discussion report must set out (PD 3E para.6A):

(a) those figures which are agreed for each phase;

(b) those figures which are not agreed for each phase; and

(c) a brief summary of the grounds of dispute.

The parties are encouraged to use the Precedent R Budget Discussion Report.

Precedent R leaves something to be desired.

Two of the columns are headed, respectively, “Claimed” and “Offered”.

The choice of the word “Claimed” is somewhat odd as nothing can be claimed in a budget in respect of incurred costs.  Incurred costs are there for reference purposes only because a court cannot approve costs incurred before the date of the budget (PD 3E para.7.4).  Future estimated costs are no more than that: an estimate.  There is no “claim” for those costs.  At best, the future estimated costs are the amounts a party is “claiming” should be allowed in a costs management order.  Perhaps I am being overly picky.

A weightier issue is the absence (so far as I can see) of any guidance as to what figure is meant to be included in either of the two columns.  Given a court cannot approve incurred costs, should the “Claimed” column not be limited to estimated future costs only?  As a court can only approve future costs, surely it is only in respect of those costs that an opponent can make an “offer” as part of the budget discussions.  If the “Claimed” and “Offered” columns included both incurred and estimated costs, a court would have no way of knowing to what extent an offer correlated to what the court could approve even if it accepted the “offered” amount as being appropriate.  For example, if the Witness Statements phase of the budget includes £1,000 for incurred costs and £1,000 for estimated costs that gives a total of £2,000 for the phase.  If Precedent R is meant to show the total (here £2,000) and the opponent “offers” £1,500, how much of that £1,500 relates to incurred costs (that cannot be approved) or future estimated costs that can be approved?

Precedent R is not mandatory and so it is probably worth adapting to make expressly clear it only covers future estimated costs, even if the total costs for each phase will need to be referred to at any costs management hearing.

4 thoughts on “Precedent R Budget Discussion Reports”

  1. Charle Wheatcroft

    My initial thought when completing the first one of these forms (other than “I see the office cat was left to the drafting”) was that only estimated costs are meant to be addressed.

    It is a discussion report after all and there is no discussion surrounding the incurred costs other than the usual argument that the pre-action phase includes costs that belong in other phases.

    Dear Lord, please rid us of this budgeting nonsense!

  2. Aren’t you trying to fix a problem that doest exist here?

    It is very well established that courts only approve figures for each phase of the litigation, which includes incurred and estimated costs.

    the “claimed” figure is therefore the total set out per phase. the “offered figure” should do the same – it is easy enough to work out what is offered for future costs by finding the difference between the figure “claimed” and the figure offered.

    It isn’t difficult.

  3. Chris, I’m not sure I agree with your comment that: “It is very well established that courts only approve figures for each phase of the litigation, which includes incurred and estimated costs”.

    That is expressly contrary to the wording of PD 3E para.7.4: “As part of the costs management process the court may not approve costs incurred before the date of any budget”.

  4. It seems to me it would make more sense for all pre-budget costs to simply be marked as such in precedent H(rather than phased) and for all future costs to be judged and set (by phase) against the proposed work to be done/proportionality.

    It is extremely unhelpful that precedent R requires only estimated costs (which I can see is correct), but precedent H doesn’t even sub-total estimated costs by phase. This is not easy for a judge to follow. Presumably they are giving little regard to precedent H now and just using precedent R where filed.

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