Revised Practice Direction 3E Para 7.4 Takes Effect, Pleasing Costs Lawyers

This week, as part of the 109th update to the Civil Procedure Rules, amended procedural guidance on costs budgeting and case management entered into force.

We previewed the forthcoming change a fortnight ago (here), in BC Disease News.

The new Practice Direction 3E para 7.4, drafted by the Master of the Rolls under powers delegated to him by the Lord Chief Justice, reads:


This seemingly minor adjustment in wording has the profound effect of definitively classifying costs incurred ‘up to and including’ the date of the 1st (costs and) case management conference (C)CMC as ‘incurred’ costs, leaving costs incurred beyond that date as ‘budgeted’ costs.

Further, it clarifies the position for Costs Judges at detailed assessment, who, having acknowledged the existence of a costs management order (CMO), can only depart from ‘budgeted costs’ on the basis that there is ‘good reason’ to do so, while ‘incurred costs’ remain subject to the standard detailed assessment process.