New Precedent H Guidance Notes Redefine Costs Budgeting ‘Phases’

In edition 290 of BC Disease News (here), we informed our readers that, from 1 October 2019, ‘incurred costs’ are deemed to consist of costs incurred ‘up to and including’ the date of the 1st (costs and) case management conference (C)CMC, while costs incurred after the that date are to be classified as ‘budgeted costs’.

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This significant amendment was encapsulated in the Civil Procedure Rule Committee’s (CPRC) 109th update to the Civil Procedure Rules.

Contemporaneously, we failed to remark on another procedural change (supplementary to the 109th update and also effective from 1 October 2019), which had not been as extensively reported as the revised Practice Direction (PD) 3E para 7.4, but is nevertheless highly relevant to the matter of managing costs in proceedings.

Gordon Exall, in his blog: Civil Litigation Brief, recently commented that the broadly overlooked amendment ‘could benefit from wider publication’, judging by the unawareness of a case management judge and opposition counsel at a recently attended CCMC.[i]

Guidance Notes on Precedent H state that, for several months now, it has been necessary to record counsel’s brief fees (as well as ‘agreeing brief fee’ and ‘any pre-trial conferences and advice from counsel’) in the ‘Trial Preparation’ phase of cost budgets, as opposed to the later ‘Trial’ phase, which incorporates ‘counsel’s trial refreshers’.

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Paragraph 4 of the Guidance Notes expressly stipulates:

‘This table [above] identifies where within the budget form the various items of work, in so far as they are required by the circumstances of your case, should be included’.

This is because, pursuant to PD 3E para 7.10, ‘The making of a costs management order under rule 3.15 concerns the totals allowed for each phase of the budget’, as opposed to the budget as a whole.

Owing to the fact that Costs Judges at detailed assessment, having acknowledged the existence of a costs management order (CMO), can only depart from ‘budgeted costs’ where there is ‘good reason’ to do so, making sure that each phase is an accurate reflection of costs incurred is vital. Imprecisions may exaggerate costs and this has the potential to obfuscate costs recovery.

 

[i] Gordon Exall, ‘CIVIL PROCEDURE BACK TO BASICS 75: COSTS BUDGETING: COUNSEL’S BRIEF FEE NOW PART OF THE TRIAL PREPARATION PHASE’ (16 December 2019 Civil Litigation Brief) <https://www.civillitigationbrief.com/2019/12/16/civil-procedure-back-to-basics-75-costs-budgeting-counsels-brief-fee-now-part-of-the-trial-preparation-phase/> accessed 7 February 2020.