Precedent H Cost Budget – The Greener Way to Plan your Costs
What is a Precedent H Cost Budget?
A Precedent H cost budget is the starting point for costs recovery within any multi-track legal matter. This document determines what the recoverable costs for the receiving party will be from the outset of the case. It also determines where you should focus your txime and efforts throughout the course of litigation.
The drafting of a Precedent H cost budget can be seen as a type of project management of costs throughout the process of litigation. They are required for all multi track cases; however, if the value of the case is below £50,000, the front sheet of the budget will only be required.
Preparing and filing a cost budget
Practice Direction 3E (PD 3E) provides guidance on how a cost budget should be filed and exchanged. 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).
We would recommend that you always file your costs budget alongside the Directions Questionnaire as you may otherwise risk being awarded Court fees only and would likely have to apply for relief from sanctions.
A Cost Budget should always include details of your base costs incurred to date, as well as any future costs which you believe will be incurred for the duration of the case, up to and including the Trial.
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 in the process of litigation.
You should not include VAT and any additional costs, such as a success fee or LEI premium within the Budget figures.
You should also exclude the costs of preparing the budget and the Costs Management process from the central figures. However, they will be included in the respective 1% and 2% figures at the bottom right of the front sheet of the Budget.
Costs incurred for any interim applications (for example for direction variations) can also be sought separately from any Budget at the end of the case.
If you do not file a budget, or if you file late, the Court will place sanctions and it is likely that you will be limited to recovering your Court fees only. An application for relief from sanctions can be made in this scenario however; this must be done as a matter of urgency upon realisation of any default, or in the event any party raises an issue.
Disputing a Precedent H
When filing a Precedent H, 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). Parties will often engage in discussions on costs before the Costs and Case Management Conference (CCMC).
It is common for costs budgets to be agreed between the parties; however, in some cases, costs cannot be agreed and a costs management order at Court will be required.
The Court expects a genuine attempt to be made to engage in negotiations on agreed budgets before they are otherwise ordered to step in.
How can Greener Costs assist?
Greener Costs are a team of expert law costs draftsmen with many years of experience in the field of legal costs. We can assist by drafting your Precedent H Cost Budget, and by engaging in negotiations with the other party to reach an agreement as to costs. We can assist from the outset of a case by assisting in the drafting of retainers, right through to the settlement of a case by drafting bills of costs, points of dispute and points of reply.
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.
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