Costs Budgets and Precedent H

Costs management under CPR Part 3 is intended to help the court manage both the steps in the litigation and the costs of taking them. Precedent H separates incurred costs from estimated future costs across recognised phases such as disclosure, witness statements, expert reports, trial preparation and trial. The narrative assumptions explain what the figures include and, just as importantly, what they do not.

An approved budget is not a promise that every pound will be recovered. It is a control against which future costs may later be considered, subject to the applicable rules and the circumstances at assessment. A sound budget therefore needs to be realistic, evidenced and consistent with the case management directions being sought.

We begin with the pleadings, directions, procedural history, funding information and the legal team’s proposed approach. Time records and incurred costs are checked before future work is estimated by phase. We then develop assumptions that allow another reader to understand the work behind each figure without turning the document into a witness statement.

When reviewing an opponent’s budget, we look beyond the total. The relationship between phases, grades of fee earner, expert involvement and counsel input can reveal duplication or an assumption that does not match the proposed directions. The objective is a focused position that can be explained at the CCMC and used constructively in the Precedent R.

Before the costs and case management conference, the parties normally exchange budget discussion reports identifying agreed and disputed figures. Productive negotiation can narrow the issues and preserve hearing time. We help identify the points that matter commercially, prepare the figures needed for discussion and give the conducting solicitor a clear explanation of the remaining areas of disagreement.

At the hearing, the court considers the recoverable future costs by phase rather than conducting a detailed assessment in advance. The case management directions and budget are closely connected: a change to disclosure, expert evidence or trial length can change what is reasonably required. Preparation should keep those two strands aligned.

Litigation changes. A development may justify a revision where it is significant and could not reasonably have been reflected in the original budget. The correct response is not simply to record overspend after it happens. The development, its effect by phase and the additional or reduced work should be identified promptly, with the procedural requirements checked for the particular case.

We help teams separate genuine developments from ordinary evolution within an existing assumption. Where a revision is appropriate, we prepare or review the relevant material and ensure that the explanation connects the changed circumstances to the figures sought.

Budgeting deadlines and court orders require careful diary management. The consequences of non-compliance can be serious, and a case-specific deadline should always be checked against the sealed order and current rules. We can work to an urgent timetable, but early instruction gives more opportunity to test the evidence and assumptions.

After a costs management order, sensible file management helps preserve the connection between work done and the approved phases. At the end of the case, that record assists when a Bill of Costs is prepared and when differences between budgeted and claimed costs need to be explained.