Costs Budget: The Importance of Getting Your Precedent H Right
What is a Costs Budget?
A Precedent H cost budget is one of the first costing documents drafted on any multi-track legal case. A cost budget preparation outlines what the receiving party expects to recover at the end of the case, though this can be difficult to pinpoint at the start of the case.
Precedent H drafting can be seen as a type of project management for the case ahead, highlighting where time and effort perhaps should be directed throughout the litigation. Cost budgets are needed for all multi-track cases, though only the first page of Precedent H is required to be completed for cases with a value below £50,000.
Civil Procedure Rules (CPR) Practice Direction 3E (CPR PD 3E) deals with Precedent H guidance notes on how to successfully draft a cost budget, providing information on what to include and how to format it following updates in October 2019 and October 2020.
How to prepare and file the Precedent H correctly
A costs budget must be filed on multi-track cases with a Directions Questionnaire if the claim value falls under £50,000, or 21 days before the first Case Management Conference (CCMC) if the claim is estimated to go over that amount. It is generally recommended to still file for the Precedent H with Directions Questionnaire regardless to avoid any unnecessary penalties further down the line, such as being awarded court fees only and then having to apply for relief from sanctions.
Costs Budgets detail your base costs incurred to date, plus estimated future costs to be incurred for the remainder of your case including the dates of your trial. VAT and additional liabilities (any success fee or ATE premium) are excluded from the Budget figures.
Your future anticipated costs should only include costs that are reasonably foreseeable and must be catered for within draft directions and the Directions Questionnaire. The Budget cannot account for every possible eventuality.
Preparing the Budget and Costs Management process do not form part of the central figures but can be found on the bottom of the front page of the cost budget as the respective 1% and 2 % figures.
All incurred/anticipated costs are to be phased within the Issues/Statements of Case, Case Management Conference, Disclosure, Witness Statements, Expert Reports, Pre-Trial Review, Trial Preparation phase, Trial and ADR/Settlement Discussions.
Costs Budget, the importance of getting your Precedent H right
There are several reasons as to why it is important to get your Precedent H right, one of which are the deadlines you must meet when preparing and filing your Costs Budget. Precedent H must be filed before the set deadline or else the penalties can be severe for the party, reducing their recoverable costs.
Costs Budgets must be filed alongside the Directions Questionnaire if the value of the claim is less than £50,000. If the claim value exceeds £50,000, the Costs Budget must be filed 21 days before the first Costs and Case Management Conference (CCMC).
It is also recommended that the Precedent H is filed with the Directions Questionnaire regardless to avoid the likelihood of any defaults arising.
It is also important to get your Precedent H right as if you fail to file a Costs budget, then your party will be limited to recovering court fees only from the other party. You may be able to apply for relief from sanctions if you have realized you missed the deadline to file, though this must be done as soon as possible after realising.
Parties can change and amend a Precedent H to ensure it correlates with a Bill of Costs later down the line, however the amended budget must still be agreed by the other party.
When seeking to amend an approved costs budget a party must file a Precedent T. If a CCMC has not yet been held then the updated costs budget can be discussed instead. However, if the Costs and Case Management conference has already been held then a party must apply to the court for a costs management order unless otherwise agreed by the opposing party to accept the revised budget.
When budgets are filed and exchanged, each party will be given the opportunity to raise disputes to anything listed within the costs budget through use of a costs budget discussion report (Precedent R).
How we can help
When drafting a Costs Budget, the importance of getting your Precedent H right is of great significance to avoid delays and sanctions. Our team of Costs Draftsmen are experts at dealing with costs, working to the highest standards to ensure our clients can reduce their incurred costs or claim back the maximum amount of costs they are able.
At Greener Costs we can assist on a range of matters surrounding legal costs, from Costs Budgets and Bills of Costs to Detailed Assessments and Points of Dispute.
To find out how we can help with your Costs Budget and the importance of getting your Preccedent H right then please get in touch today to find out more. Contact us on 01204 263047, email@example.com or use the online form on our website below.
We're here to support your business
Contacting us is free. It's our goal to put you at ease and offer expert advice on Bill of Costs, Costs Budgets and Costs Drafting
4 Bark Street East, Bolton, BL1 2BQ