The new cost management rules are perhaps one of the most concerning changes to the updated Civil Procedure Rules for solicitors, not least of all because of Precedent H; the most daunting and overly complex form a solicitor is likely to encounter during their career. However, the greater concern facing solicitors is section 2 of CPR Part 3 which deals with the implications of failing to file and serve a cost budget.
The starting point is CPR 3.12 which says the requirement to file and exchange a cost budget only applies in multi-track cases commenced after the 1st April 2013, with the exception of some cases in certain courts. Well, at least it only applies to multi-track cases. Even though costs budgets are only required in multi -track cases, it is likely many solicitors will want to pursue arguments of complexity etc to push certain cases (i.e. EL and PL cases that will fall into the portal and fixed costs regime) into the multi-track to be able to escape fixed costs and be paid for the actual time they spend working on the case. Costs budgets are therefore likely to become more of a reality for the smaller firms dealing with lower value PI claims if they want to sustain PI as their main source of work.
So what are the implications for failing to file a budget? CPR 3.14 deals with this issue:
“Unless the court otherwise orders, 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.”
Yes, that is correct, if you fail to file a budget when you are required to do so all you can recover is court fees. One might have expected the default position to have reverted to some sort of hybrid fixed cost regime but the fact that you are limited to recovering court fees is indicative of the rationale behind the implementation of the rules and provides an example of the court’s dedication to managing costs with an iron fist.
One of the saving graces of the rules on cost budgets can be found in CPR Practice Direction 3E which says where a party’s budgeted costs do not exceed £25,000 there is no obligation to complete more than the first page of Precedent H. This appears to be a rather straight forward process and can be completed with relative ease. This will be particularly relevant in those cases that are automatically multi-track such as claims on behalf of a minor where the Part 8 procedure must be used. It is nice to see that the rules permit the recovery of the costs involved in preparing a costs budget, even if it is subject to a limit. It is therefore advisable to instruct a costs draftsman to prepare your first cost budget and use the professionally drafted one as a precedent for future cases!
