PRACTICE DIRECTION 3D – COSTS MANAGEMENT This Practice Direction supplements Section II of CPR Part 3
See also Part 3, Practice Direction 3A, Practice Direction 3B, Practice Direction 3C Practice Direction 3E, Practice Direction 3F, Practice Direction 3G
| Title | Number |
|---|---|
| A. Production of Costs Budgets | Para.1 |
| B. Budget format | Para.3 |
| C. Budget discussion reports | Para.4 |
| D. Costs management orders | Para.10 |
| E. Budget discussion report | Para.11 |
| F. Costs management orders | Para.12 |
| G. Oppressive behaviour | Para.13 |
A. Production of Costs Budgets
1
In cases where the Claimant has a limited or severely impaired life expectation (5 years or less remaining) the court will ordinarily disapply cost management under Section II of Part 3.
2
An order for the provision of costs budgets with a view to a costs management order being made may be particularly appropriate in the following cases—
(a)unfair prejudice petitions under section 994 of the Companies Act 2006;
(b)disqualification proceedings pursuant to the Company Directors Disqualification Act 1986;
(c)applications under the Trusts of Land and Appointment of Trustees Act 1996;
(d)claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975;
(e)any Part 8 or other claims or applications involving a substantial dispute of fact and/or likely to require oral evidence and/or extensive disclosure; and
(f)personal injury and clinical negligence cases where the value of the claim is £10 million or more.
B. Documents to be lodged for costs budgeting purposes
3
(a)Save in exceptional circumstances or where the court orders otherwise, the parties are not expected to lodge any documents other than Precedent H and the budget discussion report. Both are annexed, to this practice direction. If the Excel format precedent on the MOJ website is used, the calculation on page one will calculate the totals automatically and the phase totals are linked to this page also.
(b)Precedent T, also annexed to this practice direction, is to be used in the event of variation of a budget pursuant to rule 3.15A.
C. Budget format
4
(a)Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction. It must be in landscape format with an easily legible typeface.
(b)In cases where a party’s total costs (incurred and estimated) do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H.
(The wording for a statement of truth verifying a budget is set out in Practice Direction 22.)
5
In deciding the reasonable and proportionate costs of each phase of the budget the court will have regard to the factors set out at Civil Procedure Rules 44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard.
6
The table below identifies where within the budget form the various items of work, in so far as they are required by the circumstances of your case, should be included. The time estimated may have to be justified on the budget hearing along with the grade of fee earner doing the work.
7
Allowance must be made in each phase for advising the client, taking instructions and corresponding with the other party/parties and the court in respect of matters falling within that phase.
8
The time spent in preparing the budget and associated material must not be claimed in the draft budget under any phase. The maximum figures permitted under rule 3.15(5) should be inserted once the costs budget has been approved by the court.
9
The 'contingent cost' sections of this form should be used for anticipated costs which do not fall within the main categories set out in this form. Examples might be the trial of preliminary issues, applications to amend, applications for disclosure against third parties or (in libel cases) applications re meaning. Costs which are disputed (such as the need for a particular expert) should be set out in the appropriate phase of the budget and if necessary marked as disputed. Only costs which are more likely than not to be incurred should be included.
(Variation of an approved or agreed budget is dealt with in rule 3.15A.)
D. Assumptions
10
(a)The assumptions that are reflected in the table below are not to be repeated. Include only those assumptions that significantly impact on the level of costs claimed such as the duration of the proceedings, the number of experts and witnesses or the number of interim applications envisaged. Brief details only are required in the box beneath each phase. Additional documents should only be prepared in exceptional circumstance and, where they are disregarded by the court, the cost of preparation may be disallowed.
(b)Written assumptions are not normally required by the Court in cases where the parties are only required to lodge the first page.
| Phase | Includes | Does NOT include |
|---|---|---|
| Pre-action |
|
|
| Issue/statements of case |
|
|
| CMC |
|
|
| Disclosure |
|
|
| Witness Statements |
|
|
| Expert Reports |
|
|
| PTR |
|
|
| Trial Preparation |
|
|
| Trial |
|
|
| ADR/Settlement |
|
E. Budget discussion reports
11
The budget discussion report required by rule 3.13(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.
The parties are encouraged to use the Precedent R Budget Discussion Report annexed to this practice direction.
F. Costs management orders
12
When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.
G. Oppressive behaviour
13
Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.