Costs Management and Budgeting – Rule & Practice Direction Update
New rules and practice directions affecting costs management and budgeting come into force on 6April 2016.
THE RULE CHANGES
Claims by, or on behalf of, a child
Rule 3.12(1) is to be amended and removes the need for costs budgeting where claims are made “by or on behalf of” a child. The amended rule will state:
‘This Section and Practice Direction 3E apply to all Part 7 multi-track cases, except-
(c) where in proceedings commenced on or after 6th April 2016 a claim is made by or on behalf of a person under the age of 18 (a child) (and on a child reaching majority this exception will continue to apply unless the court otherwise orders); or
(d) where the proceeding are the subject of fixed costs or scale costs; or
(e) the court otherwise orders.’
Filing and exchanging costs budgets
Rule 3.13 is to be amended stipulating when costs budgets are to be filed and exchanged. Note that the date varies depending on the value of the claim and the value of the costs budget.
Rule 3.13 will read:
‘(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.
(2) In the event that a party files and exchanges a budget under paragraph (1), all other parties, not being litigants in person, must file an agreed budget discussion report no later than 7 days before the first case management conference’ (emphasis added)
See below concerning the budget discussion report (Precedent R).
THE PRACTICE DIRECTION CHANGES
Amendments to the Practice Direction (3E):
There will be new paragraph 2(b) which will state:
‘In cases where the Claimant has a limited or severely impaired life expectation (5 years or less remaining) the court will ordinarily disapply cost management under Section II of Part 3.’
There will be new paragraph 6(b) which will state:
‘Parties must follow the Precedent H Guidance Note in all respects.’
Paragraph 6(c) will state:
‘In cases where a party’s budgeted costs do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H.’
This PD seeks to extend the need to only file and exchange the front page of the costs budget in claims under £50,000.
The new paragraph 6A will state:
The budget discussion report required by rule 3.13(2) must set out—
‘(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 annexed to this Practice Direction”.
The new paragraph 7.10 will state:
‘The making of a costs management order under rule 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.’
The new guidance notes on Precedent H
There have also been amendments to the Guidance Notes to Precedent H. They will now state:
‘Save in exceptional circumstances, the parties are not expected to lodge any documents other than Precedent H and the budget discussion report. Both are available in Excel format on the MOJ website with PD 3E. If the Excel format precedent on the MOJ website is used, the calculation on page one will calculate the totals automatically and the phase totals are linked to this page also.’
By Nick McDonnell - Director and Costs Lawyer
The amended rules can be found here.
The amended practice direction can be found here.
The emended Guidance notes can be found here.
Precedent R can be found here.