You would think that everyone involved in litigation would know that new rules as to cost budgeting came into force on the 6th April 2016. However, judging from some of the blank (and worried) looks I have seen recently when this has been mentioned, this may not be the case. Since the cases where the new rules will now be coming through the system (they apply to proceedings issued after the 6th April 2016) this is an appropriate time to issue a short reminder.
(Litigators should be very wary. The fact that there can be a considerable time gap between the court making an order and the order being sent out has meant, on some occasions, that the parties have had very little notice of the date of the first case management conference, yet the costs budget still has to be filed 21 days before the hearing.)
1. NEW DATES FOR FILING OF COSTS BUDGETS
Note the dates for filing costs budgets:
“3.13.—(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.”.
The sanction for breach of the requirement to file a costs budget remains the same. Failure to file the budget in time means that the party in default has its costs budget limited to court fees (unless relief from sanction is obtained).
2. NEW REQUIREMENTS WHERE THE CLAIM IS VALUED BETWEEN £25,000 AND £50,000
There are changes to Practice Direction 3 – E Costs Management.
“(b) Parties must follow the Precedent H Guidance Note in all respects.
(c) 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.”.
The first of these requirements is as important as the second. The Precedent H Guidance Note must be followed “in all respects”.
3. THE BUDGET DISCUSSION REPORT
There is a requirement to file a “budget discussion report”. This must be filed no later than 7 days before the first case management conference.