Costs News

17 December 2015
go back

CPRC agrees significant changes to budgeting regime

The CPR are to be amended so as to require that costs budgets for claims worth more than £50,000 must be filed 21 days before the case management conference, the Civil Procedure Rule Committee (CPRC) has decided.

For lower-value cases, the budgets should be filed with the directions questionnaire, it added, as part of a series of changes to the rules being introduced following the recommendations of the budgeting sub-committee chaired by Mr Justice Coulson.

The majority of the sub-committee had favoured the 21-day rule, but the newly published minutes of the CPRC’s meeting in November said it decided on a compromise to reflect the views of those who thought budgets should be filed at an earlier stage.

The CPRC also agreed that assumptions should be included in the short form of Precedent H provided that their inclusion did not increase the complexity and length of the form.

The minutes of the meeting said: “It was reported that, having considered the matter further, the sub-committee did not think it appropriate that a judge approving a costs budget should also be required to identify what assumptions the judge accepted. While acknowledging that the information would be useful for the costs judge at detailed assessment stage, the sub-committee felt it would place an unduly heavy burden on the case management judge. The full committee agreed with this view.”

The sub-committee’s report to the CPRC expanded on this. It said: “Take the point about assumptions as an example. In some cases, parties on both sides can have a whole arrayof assumptions which they say their budget costs are based on. Other than length of trial and number of experts, most of these assumptions are genuinely irrelevant to a proper costs budgeting exercise. It is for the court to fix an appropriate budget; it is not for the court to say whether particular assumptions are reasonable or otherwise.

“Furthermore, we are trying to get the parties to agree each other’s budgets much more often than they do now. If they agree the figures, no-one can say what assumptions are incorporated into those agreed figures. A party will agree £x for the other side’s trial phase; but that does not mean that that party agrees with the other side’s assumption that the closing submissions will be in writing. However, he may be prepared to trade that off because his own figures assume that a junior is required, and those figures have been agreed by the other side.

“For these reasons, we concluded that it would not be appropriate to make the budget discussion form more complicated and that it would be counterproductive to the whole costs management regime to require this sort of level of detail as part of the judge’s ruling.

“We recognise that, on a detailed assessment, this will not make life easy for the costs judge. But, at present, we have concluded that it is the least worst option.”

Under a new rule 3.13(2), in the event that a party files and exchanges a budget, all other parties will have to file an agreed budget discussion report no later than seven days before the first case management conference. The amended practice direction says this report must set out those figures which are agreed and not agreed for each phase, and a brief summary of the grounds of dispute.

Other changes include a new paragraph in the PD that aims to put to bed the debate over the role of hourly rates in the budgeting process. It says: “The making of a costs management order under part 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget."

Meanwhile, the CPRC has backtracked on a previous decision to remove the rules and practice directions on cost capping, with the minutes recording: “The Chancery Division had subsequently flagged up that the rules were still relevant and used in pension and trust fund cases, where they proved a useful tool for capping costs in cases with a finite amount of money. The majority of such cases were agreed without the need for a cost capping order, but with the knowledge that the court had the power to make such an order.”

It is not yet confirmed when the new rules will come into force.

Comments

There are no comments. Why not be the first?

Add your comment

 
go back