Precedent T Costs – What warrants an updated budget?
What is Precedent T?
A Budget Variation Notice, otherwise known as a Precedent T in costs, is a legal document that enables a party to amend its original and approved budgeted costs (Precedent H).
In October 2020 the Civil Procedure Amendment Rules were updated outlining the approach that should be taken when amending a costs budget. Precedent T outlines new costs information that has come to light during litigation proceedings and amends the previous budget in order for it to be later approved by the courts alongside a Bill of Costs. Precedent T should be prepared in line with the structure presented in the 122nd practice direction update.
As mentioned in the Civil Procedure Rules, CPR r3.15A (1) states, “A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.”
Our team of Costs Draftsmen at Greener Costs are highly experienced in the revision and variation of previously agreed Costs Budgets and can expertly assist our clients in the drafting of Precedent T to keep up with any significant developments in litigation. We can also offer our expert advice on what constitutes a significant development as many parties can become confused with what warrants a Precedent T in costs.
When is Precedent T needed?
If significant developments arise during litigation, then a Precedent T should be produced to update the previously approved budget. It is important to remember that a significant development is described as an event that could not have been foreseen at the start of proceedings. Once a Precedent T form has been completed and agreed, the form will be filed at court and the court may list a further Cost Management Hearing.
What is classed as a significant development?
Significant developments would be defined as an event during litigation which could not have been foreseen and which will also have later effects on the work completed.
The rules laid out by the Civil Procedure Rules Committee state the following regarding significant developments and Precedent T:
“CPR 3 PD 3E 7.6 “Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions. Such amended budgets shall be submitted to the other parties for agreement. In default of agreement, the amended budgets shall be submitted to the court, together with a note of (a) the changes made and the reasons for those changes and (b) the objections of any other party. The court may approve, vary or disapprove the revisions, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed.”
Such rules make it clear to parties that regardless of the direction in which costs shall be moved they should still revise the agreed budget to demonstrate the change from a significant development during proceedings. Parties should also aim to agree on the proposed variations before applying to the court.
There can be some confusion as to what warrants a significant development, and it remains a topic of contention to this day. However, we can look to past cases to understand what has and what hasn’t been approved by the courts as significant developments. One such case is that of Sharp v Blank & Ors  EWHC 3390 (ch).
The Sharp V Blank case with 58,800 claimants, provides multiple examples of what significant developments were approved by the court, including:
- The length of trial had been extended from 59 days to 107 days.
- The provision for 984 additional documents resulting from an application for specific disclosure.
- The need for a supplementary report from a Dr Unni in response to unexpected evidence from a Mr Torchio.
- The costs of an application for permission to serve Dr Unni’s supplemental report.
From the above examples it is clearly set out that for a development to be seen as significant it must be so in both scope and value regarding the case. Ultimately it comes back to if such events could have been predicted or foreseen at the start of proceedings when original costs budgets were agreed.
Consequences of failing to update the budget
It is important for parties to keep their costs budgets up to date as the process goes on and parties should aim to avoid working and changing a budget retrospectively. The receiving party would need to explain why they wish to discard of their most recent budget if they do not follow the guidelines regarding updating their budgets as and when developments come to light.
Providing an in-depth retrospective explanation as to why they did not follow the necessary guidelines regarding Precedent T will be a large task and delay things further.
Ultimately, it is important for parties to keep budgets up to date as and when significant developments appear during proceedings as the last approved or agreed budget is binding and sets out the starting position in which costs recovery is based.
How Greener Costs can assist
Our team of Costs Draftsmen and Costs Lawyers at Greener Costs can advise you on whether something is considered a ‘significant development’ within your proceedings and assist you in varying your costs budget to reflect the change in circumstances.
Our experienced team can assist on all legal cost cases and our clients can be assured that we use all of the tools at our disposable to ensure you recover the maximum amount of costs.
With our extensive knowledge and highly skilled team of Costs Draftsmen, we can provide law costing services to clients throughout England and Wales.
In addition to our drafting services at Greener Costs, we are actively doing everything we can to ensure our business benefits the environment. We are doing this though carbon offsetting of our staff, becoming completely paperless and carbon offsetting through each instruction.
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