Precedent H Costs Budgets – Frequently Asked Questions
What is a Precedent H Costs Budget?
A Precedent H is commonly referred to as a Costs Budget, a legal costs document that is drafted and filed at the start of proceedings which outlines the predicted costs to be incurred and how much the receiving party will expect to recover.
Cost Budgets also typically outline where time and effort should be directed during the course of proceedings. The drafting of a cost budget can be seen as a type of project management of costs throughout the process of litigation.
When is a Costs Budget needed?
Precedent H Costs Budgets are required for all multi track cases, though if the case is below £50,000 in value, then only the front page of the budget will be required.
Practice Direction 3E (PD 3E) provides guidance on budgeted costs, including how to draft and exchange the budget.
The guidance states that a Precedent H must be filed alongside the Directions Questionnaire if the claim value is under £50,000. If the claim is pleaded over £50,000, it should be filed 21 days before the first Case Management Conference (CMC).
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.
What should be included within a Precedent H Costs Budget?
Costs Budgets should include your base costs incurred up to and including the present 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.
What are the deadlines for filing a Costs Budget?
Precedent H must be filed before the deadline or else the penalties can be severe for the party, reducing the chance to recover legal fees from the other side.
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 recommended that the Precedent H is filed with the Directions Questionnaire regardless to avoid the likelihood of any defaults arising.
What happens if you fail to file a Precedent H Costs Budget?
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.
Can a Precedent H be amended/updated?
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. 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.
Can you dispute a Costs 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).
It is common for costs budgets to be agreed between the parties but if they fail to agree then the court may have to step in with a costs management order. It is important to remember that the court will expect a genuine attempt by both parties to resolve their issues before they are otherwise ordered to step in.
How can Greener Costs assist?
Here at Greener Costs, our team of Costs Lawyers and Costs Draftsman possess many years of experience specialising in the laws surrounding legal costs services and negotiations and are able to assist clients from a range of background on a variety of cases, whether you are the paying party or receiving party. We pride ourselves on our strong solicitor client relationships, ensuring our clients are receiving the highest standard of service from us.
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