When should a costs budget be filed? Deadlines, exemptions and sanctions

Unless the court orders otherwise, every party except a litigant in person must file and exchange a costs budget. Where the stated value of the claim on the claim form is less than £50,000, the budget must be filed with the directions questionnaire. In any other case, the deadline is no later than 21 days before the first case management conference.

The value that matters is the figure stated on the claim form, not the party’s private assessment of what the claim is worth. A claim pleaded at exactly £50,000 falls into the 21-day category, because the lower threshold applies only where the stated value is less than £50,000. Where the court has made its own direction about budgeting, that order prevails over the default timetable, so the sealed directions should always be checked first.

Filing the budget is not the end of the timetable. Under CPR 3.13(2), once a party files and exchanges a budget, every other represented party must file an agreed budget discussion report — Precedent R — no later than seven days before the first case management conference. The report records which phase figures are agreed and summarises the grounds of dispute for those that are not.

That seven-day deadline is regularly underestimated. Meaningful discussion takes time: figures need to be compared phase by phase, assumptions tested and proposals exchanged. Starting the conversation only after both budgets are served can leave too little time to agree anything, which wastes the opportunity the report is designed to create.

CPR 3.12 applies the costs management rules to all Part 7 multi-track cases, with defined exceptions. Budgeting is not required where the claim form states a value of £10 million or more, where a claim commenced on or after 6 April 2016 is made by or on behalf of a child, where the proceedings are subject to fixed costs or scale costs, or where the court otherwise orders. The court can also direct budgeting in proceedings outside the usual scope, and must normally do so if all parties consent to it.

The practice direction identifies further categories in which the court will usually disapply costs management, including certain claims involving a limited or severely impaired life expectancy. None of these exemptions should be assumed: the court retains discretion, and parties cannot simply agree between themselves to opt out. Where there is any doubt, the safe course is to prepare the budget or seek a direction.

CPR 3.14 is deliberately stark. Unless the court otherwise orders, a party that fails to file a budget despite being required to do so is treated as having filed a budget comprising only the applicable court fees. For a receiving party, that can reduce recoverable costs from a six-figure budget to a fraction of the true expenditure.

The sanction applies automatically; it does not need an application by the opponent. It can arise through a completely missed deadline, and parties have also fallen foul of it by filing the wrong document or filing in the wrong form. Diarising the date is not enough — someone must own the task of preparing, approving and actually filing the document.

A party caught by CPR 3.14 can apply for relief from sanctions under CPR 3.9. The court considers all the circumstances, including the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules and orders. The application should be made immediately once the default is discovered, supported by evidence explaining what happened and what has been done to put it right.

Relief is discretionary, not a formality. Applications made promptly, where the default was minor and the hearing timetable is unaffected, stand a better chance than applications made weeks later after the opponent has objected. The far cheaper option is never to need the application: check the route, the form and the deadline at the outset of every multi-track case.

The standard rules are not the whole picture. The simplified costs budgeting pilot under PD51ZG2 applies to qualifying non-QOCS Part 7 multi-track claims valued below £1 million issued in the Central London County Court or the Leeds and Bristol District Registries on or after 6 April 2025. It disapplies CPR 3.13 and 3.14 and substitutes its own forms and timetable.

Specialist courts and lists may also have their own budgeting practices. Before advising on a deadline, establish the court, the issue date, the track, the stated value and any case-specific order. Our Costs Lawyers check the applicable regime at the start of every budgeting instruction rather than assuming the default Precedent H timetable applies.