Precedent R: Costs Budget Negotiations 

What is a Precedent R?

The precedent R is also known as a costs budget discussion report, which both parties are required, under 3.13 of the Civil Procedure Rules, to file and exchange after their costs budgets have been filed and exchanged in line with PD 3E.

The Precedent R budget discussion report is an important part of the costs management and budgeting process. It is prepared as a tool to negotiate the other side’s costs budget, setting out which phases of the budget can be agreed, and which cannot. Each party should also provide reasons for any disputes in relation to the level of future costs claimed within the budget.

The Precedent R allows the parties to engage in negotiations and discussions pursuant to the overriding objective to set agreed costs that are reasonable and proportionate.

When should a Precedent R be filed/exchanged?

The Costs Budget Discussion Reports Precedent R must be filed seven days prior to any Costs Case Management Conference (CCMC).

We recommend that you instruct an experienced legal costs expert to complete this document in order to put your best submissions forward before any CCMC.

There are no given sanctions within the CPR for failing to comply with the rules. However, if no Precedent R is filed, it is likely that the other side’s Costs Budget will be assumed to remain uncontested, and the Costs Judge may allow budgeted costs in full.

 

What happens following the exchange of the Precedent R?

When Budget Discussion Reports have been filed and exchanged, the parties can attempt to agree budgets through negotiations without the need for input from the Court.

Cost Budget Discussion Reports should not be agreed simply for the convenience of vacating a CCMC. If you do not beat an offer for your budget at a CCMC, there will be no costs consequences. This is why you should proceed to a CCMC if you consider the other side’s offer to be unreasonable.

In some cases, a Court approved Budget can provide substantially better recovery than any Budget agreed during negotiations between parties.

It is important to note that when budgets have been agreed, the date of agreement/CCMC will form the date for which there will be a transition between incurred and anticipated costs in your final Bill of Costs.

 As stated above, incurred costs will have less protection attached to them than those costs that fall within the anticipated section of the Bill.

What cannot be contested within a budget?

It is important to note that costs incurred are reserved to be considered on assessment of costs; and therefore, cannot be contested within the budget. These costs do not receive the same special protection as approved budgeted costs.

The Court can review the level of of incurred costs and will record on the Court Order whether they believe the costs to be disproportionate or excessive. This is likely to impact costs awarded in any detailed assessment that takes place.

How can Greener Costs Assist?

Greener Costs are a team of expert law costs draftsmen with many years of experience in the field. We can assist by drafting your costs budget as well as your Precedent R. We can also engage 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, whether you are the paying party or the receiving party.

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.

For a free, no obligation discussion, get in touch using the form at the bottom of the page, or contact info@greenercosts.co.uk.

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