Costs Management Flashcards
(22 cards)
What is the overriding objective relevant to costs?
That cases are dealt with “justly and at proportionate cost”.
When are costs considered proportionate?
Costs are proportionate if they bear a reasonable relationship to:
- The sums in issue in the proceedings
- The value of any non-monetary relief
- The complexity of the litigation
- Any additional work generated by the conduct of the paying party
- Any wider factors such as reputation or public importance
What are the limitations of relying on costs assessment alone to ensure proportionate costs?
- Limitation 1: The court lacks early information to make proportionate case management decisions.
- Limitation 2: Parties cannot predict how a court will assess whether costs are proportionate.
How does the costs management regime address these limitations?
- By requiring early costs budgets, enabling courts to give proportionate directions.
- By providing parties and the court with an early indication of what will be considered proportionate, reducing uncertainty during assessment.
When in the litigation process does costs management take place and in what types of cases?
At the case management stage, particularly in multi-track cases. Costs management is only relevant in multi-track litigation, not in small claims, fast track or intermediate track.
What types of claims are excluded from the default application of the costs management regime?
- Claims on the small claims, fast track, or intermediate track
- Claims commenced on or after 22 April 2014 where the stated value is £10 million or more
- Non-monetary or not-fully quantified claims stated as being worth £10 million or more
- Claims after 6 April 2016 brought by or on behalf of someone under 18
- Fixed costs or scale costs claims
Can the court override these exclusions?
Yes. The court may disapply the regime even where it normally applies or require compliance where it normally does not (e.g. if the claimant has a severely impaired life expectancy).
What is the distinction between party/party costs and solicitor/client costs?
Budgets relate to party/party costs — what may be recovered from the other side. Solicitor/client costs are governed by the retainer and may exceed what is included in the budget.
What form must be used for preparing costs budgets?
Precedent H (PD 3D para 4). If the claim is worth <£50,000 or costs ≤£25,000, only the first page is needed.
Can the court revise incurred costs in the budget?
No. The court cannot revise incurred costs (costs before the budget was prepared), and CPR 3.18(b) provides that the restriction on departing from budgeted costs applies only to estimated costs.
When must costs budgets be filed and exchanged?
- If stated claim value < £50,000: with directions questionnaires
- In all other cases: not later than 21 days before the first CMC
What is a budget discussion report and what form is used?
A report in Precedent R format, exchanged and filed at least 7 days before the first CMC, showing:
- Which figures are agreed/disputed
- A brief summary of reasons for dispute
What are the two main consequences of the court considering budgets and reports at the CMC?
- Case management decisions are made having regard to the budgets
- The court may make a costs management order (CMO)
What does a costs management order (CMO) include?
- Records agreed figures (which cannot be altered by the court)
- Approves budgeted costs (possibly revised) that are considered reasonable and proportionate
What is the effect of a costs management order on later assessment?
When assessing costs on the standard basis, the court will not depart from the last approved or agreed costs budget unless there is good reason
Can a party recover more than it actually spent, if the budget was higher?
No. The budget caps what can be recovered, but if actual costs are less than the budget, the recoverable amount is limited to what was incurred.
What happens if no costs management order is made?
If costs claimed on assessment differ by ≥20% from the filed budget, the receiving party must explain the difference. The court may reduce the sum recoverable if the paying party relied on the budget.
When and how can a costs budget be revised?
If there are significant developments, parties may revise their budgets using Precedent T and submit it for agreement and court approval. Revisions cannot be made to correct original mistakes.
What happens if a party fails to file a budget when required?
they are deemed to have filed a budget of only court fees. Unless the court otherwise orders, this will severely restrict cost recovery.
What is a CCMC and what does it involve?
A Costs and Case Management Conference (CCMC) is typically the first CMC in a multi-track case where both directions and cost budgets are considered.
What is the procedural timeline leading up to the CCMC?
- Not later than 21 days before: file/exchange budget
- Not less than 14 days before: disclosure report
- At least 7 days before: draft directions and budget discussion report
- Also before: any applications, case summary, and bundle
What are the two key outcomes of the CCMC?
- Case management directions
- Costs management order (CMO), fixing approved or agreed budgets
