Precedent T: Budget Variation Notice

 

What is a Precedent T?

A Precedent T, also known as a Budget Variation Notice, is a document which allows a party to make revisions and variations to its previous budgeted costs. It sets out information that was not included in any previous budgeted document. It should be prepared in line with the structure presented in the 122nd CPR update.

The main aim of the Precedent T, which was implemented in 2020, was to streamline the approach to varying a costs budget, which lacked consistency before this point. 

When is a Precedent T needed?

 

A Precedent T should be produced subsequent to a significant development in a case. So, what constitutes a significant development?

Significant developments could be defined as an event during the litigation which will have later effects of the work completed. Moreover, the development highlighted should be one that could not have been foreseen.

Some examples of what could constitute a significant development include:

Change in the scope of the litigation:

This could be due to additional issues brought by amendments to the claims or defences that were not previously anticipated.

Change in the factual or expert evidence required:

If new evidence emerges that necessitates additional expert testimony or substantial changes in the evidence previously considered, this could qualify as a significant development.

Shifts in the procedural requirements:

This might occur if there are new court orders or directions that necessitate additional work, such as a change in the trial timetable or additional hearings.

Substantial changes in the case’s value or complexity:

If there are changes that alter the monetary value at stake or the complexity of the case in a way that would significantly affect the resource allocation and costs.

Changes in parties:

If new parties join or leave the litigation, this can significantly impact the costs and management of the case.

CPR 3.15A highlights that it should be prepared “if significant developments in the litigation warrant such revisions.” 

Once a Precedent T form has been completed and agreed, the form will be filed at court. Then, the court may list a further Cost Management Hearing.

 

Implementation of Precedent T in 2020

Back in 2020, discussions took place around the practices used for updating Costs Budgets (Precedent H), following a meeting of the Civil Procedure Rule Committee (CPRC).

It was noted that at the time of discussion, the method of updating Budgets was inconsistent, regardless of the judgement given in the case of Sharp v Blank & Ors [2017] EWHC 3390 (Ch).

This case set out the correct process that should be followed. However, due to the lack of precedent set by the higher courts, inconsistencies still occurred. Due to this, it was decided that they should create a formal update in the Civil Procedure Rules.

The new Civil Procedure Amendment No 3 Rules 2020 came into force on the 1st October 2020. The rules require an application to be prepared to amend the Budgets, using the Precedent T. This application now gives both parties the opportunity to explain their rationale as to why they are seeking to approve, vary or disallow the proposed variations.

When varying a Costs Management Order, a party should follow the structure set out in PD 3E. The variation particulars for this variation share similarities with the Precedent R (Budget Discussion Report).

What are the consequences of failing to update the Budget after a significant development?

 

During the budgeting process, it is vital that parties remain focused in their approach and consider their Costs Budgets/ Costs Management Orders at the time, rather than working retrospectively.

If all of the necessary steps are not taken, the receiving party needs explain why they wish to depart from their most recent budget. They must provide an in-depth retrospective explanation, under the legal principle of ‘good reason’. This can often be a large task and would delay the litigation as it will take time. Furthermore, the receiving party may be placed in a complex position if the court hears that an application to amend the Budget via the Precedent T procedure was not produced at the time.  

It is vital to keep the budget updated because the last approved or agreed budget binds the court and sets out the starting position in which costs recovery is based. The employment of a costs expert would be helpful in this matter as they would be able to aid in the navigation of the updated Civil Procedure Rules.

How can Greener Costs assist?

 

The expert team at Greener Costs can assist in many costs budgeting services. We can prepare the initial Costs Budget via the implementation of our extensive knowledge in the budgeting process. If you experience any change in circumstances or significant developments, we can produce amended, comprehensive budgets via the Precedent T procedure.

For any further information please contact us via tom@greenercosts.co.uk or using the contact form below.

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