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30 September 2020
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Rule change puts onus on solicitors to revise budgets now, warns ACL

The Association of Costs Lawyers (ACL) has warned solicitors that from tomorrow failing to update budgets will put their recovery of costs at new peril as a result of a significant change to the CPR.

A new rule 3.15A introduces a formal procedure to revise budgets in the event of significant developments in the litigation, whether upwards or downwards. It says this must be done “promptly”.

Parties will need to submit the new Precedent T first to the other parties for agreement, and then to the court with an explanation of the points of difference if they have not been agreed. Previously court approval was not required if the parties agreed the revisions.

ACL surveys conducted over several years have shown low, if rising, numbers of Costs Lawyers reporting that solicitors always stick to their budgets – 24% in the most recent survey, in late 2019. However, 21% said solicitors always exceeded what was budgeted, and a further 45% said they sometimes went over. Judges have frequently complained that they never receive applications to revise budgets.

The survey found that 27% of Costs Lawyers had seen more applications to revise budgets but 19% said they had still never seen one since the regime was introduced in 2013.

ACL chair Claire Green explains that a successful party that has gone over budget and wants to claim the extra sum from the paying party has to argue at detailed assessment that they had ‘good reason’ to do so. “But this new emphasis means that the court is unlikely to look favourably on a party that went over budget without trying to revise it.

“The rule committee is sending out a strong message with this change. Budgets are not rough estimates set in aspic at the time they were drawn up and only of limited use come the end of the litigation. Rather, they are living documents which parties are expected to keep up-to-date in the expectation that the sums in the approved budget are what they will receive in the event of success, however much they actually spent.”

Ms Green says the phrases “significant developments” and “promptly” are not defined in the new rule, and so a series of court rulings will likely be needed to bring some certainty to them.

“An earlier draft of the new rule said the application to revise should be made ‘without delay’, which indicates the way the rule committee was thinking. So we would urge solicitors to act conservatively at this stage and not take any risks.”

ENDS

For further information, please contact: Kerry Jack, Black Letter Communications

Tel: 020 3567 1208, kerry.jack@blackletterpr.co.uk

Notes to editors:

Association of Costs Lawyers

The Association of Costs Lawyers (ACL) is a membership body representing and promoting the status and interests of Cost Lawyers in England and Wales. Founded in 1977, the Association was granted authorised body status in 2007 and is a front-line regulator, able to authorise its members to undertake the reserved legal activities of litigation and advocacy. In recognition of this new-found status, ACL changed its name from the Association of Law Costs Draftsmen in 2011. Costs Lawyers are regulated by the Costs Lawyer Standards Board. www.costslawyer.co.uk

The term ‘costs draftsman’ denotes an unregulated and unqualified person operating in costs and those who instruct costs draftsmen have no recourse to either the Legal Ombudsman or the Costs Lawyer Standards Board.

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