Costs Management Notes

Costs Management, CPR 3.12-18 [and PD3E, paras 1-7 interwoven]

3.12, Application of this section, and the purpose of Costs Management

• (1) this Section, and PD3E, apply to all Part 7 multi-track cases, EXCEPT:

  • (a) where the claim is commenced on or after 22^nd April 2014 and amount of money claimed as stated on claim is 10million or more; or

  • (b) where claim is commenced on/after 22^nd April 2014, and is for a monetary claim which is not quantified, or not fully, OR is for a non-monetary claim, and in any such case the claim form contains a statement that the claim is valued at 10million or more; or

  • (c) where in proceedings commenced on/after 6^th April 2016, a claim is made by or on behalf of a person under age of 18 (a child), (and on a child reaching majority this exception will continue to apply unless court orders otherwise);

  • (d) where the proceedings are the subject of fixed costs or scale costs; or

  • (e) the court orders otherwise.

• (1A), discretion to also apply this section in other cases: this section and PD3E will apply to any other proceedings (including applications) where the court so orders.

• (2) the PURPOSE of costs management = that the court should manage both the steps to be taken and the costs to be incurred by the parties to any proceedings so as to further the overriding objective.

PD3E, para 1-5 – Production of Costs Budgets (with a view to a costs management order being made)

• Effect of 3.12 and 3.13 [PD3E, para 1]: requires the parties in most Part 7 multi-track claims with a value of less than 10 million (where claimant is not a child) to file and exchange costs budget.

• In OTHER cases, the court has a discretion to make an order requiring file & exchange to costs budgets.

  • This power may be exercised on application, or on court’s own initiative.

  • In all cases, court will have regard to the need for litigation to be conducted justly & at proportionate cost, in accordance with the OO.

• (b) in cases where Claimant has a limited or severely impaired life expectation (5 years or less) the court will ordinarily disapply cost management under Section II, Part 3.

• Where costs budgets are filed and exchange court can consider making a costs management order (see below).

• At an early stage in litigation, parties should consider and discuss (where practicable), whether to apply for an order for the provision of costs budgets, with a view to a costs management order being made.

• If all parties consent to application for an order for provision of costs budget the court will make such an order (other than in exceptional cases).

• An order for the provision of costs budgets, with a view to a costs management order being made, may be particular appropriate in the following cases:

1. Unfair prejudice petitions under s994 Companies Act 2006

2. Disqualification proceedings pursuant to Company Directions Disqualification Act 1986

3. Applications under the Trusts of Land and Appointment of Trustees Act 1996

4. Claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975

5. Any part 8 claims or other applications involving a substantial dispute of fact and/or likely to require oral evidence and/or extensive disclosure; and

6. PI and clinical negligence cases where value of claim is 10m+.

3.13, Filing and exchanging (1) budgets and (2) budget discussion reports

• (Where this section applies, i.e. Part 7 multi-track cases where value less than 10million and C is not a child OR any other cases where court so orders)

• (1) Budgets:

  • Unless court orders otherwise, all parties EXCEPT litigants in person, MUST file and exchange budgets:

    • (a) where the stated value of the claim on the claim form is less than 50,000 with their directions questionnaire;

    • (b) in any other case (i.e. claim is 50k or more) not later than 21 days before the first CMC.

  • PD3E, Para 6 Format of Costs Budget

    • Unless court orders otherwise, a budget must be in the form of Precedent H annexed to this PD.

    • Must be in landscape format; easily legible typeface.

    • A budget must be dated and verified by a statement of truth signed by a senior legal rep of the party [[Part 22 re wording of statement of truth]].

    • Parties must follow the Precedent H Guidance Notes.

    • In substantial cases, court may direct that budgets be limited initially to part only of the proceedings and subsequently extended to cover the whole proceedings.

    • In cases where (i) a party’s budgeted costs do not exceed 25,000 OR (ii) the value of the claim as stated in claim form is less than 50,000 the parties must only use the first page of Precedent H.

  • NB (PD3E, 7.8): a litigant in person, although not required to prepare a budget, will be provided with a copy of the budget of any other party

• (2) Agreed Budget Discussion Report:

  • Where a party files and exchanges a budget under (1), all other parties (except litigants in person) MUST: file an agreed budget discussion report no later than 7 days before the first CMC..

  • PD3E, para 6A, Content of Budget Discussion Reports, Budget discussion report required by r3.13(2) MUST set out:

    • (a) those figures which are agreed for each phase

    • (b) those figures which are not agreed for each phase; and

    • (c) a brief summary of the grounds of dispute.

    • Parties are encouraged to use the Precedent R Budget discussion Report, annexed to this PD.

3.14, Failure to FILE a budget

• Unless court orders otherwise, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.

3.15, Costs Management Orders (CMO)

• (1) in addition to exercising its other powers, the court may manage the costs to be incurred (the ‘budgeted costs’) by any party in proceedings.

• (2) The court may at any time make a “costs management order”:

  • Where costs budgets have been filed & exchanged the court WILL make a costs management order UNLESS satisfied that the litigation can be conducted justly and at proportionate cost and in accordance with the OO...

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