Costs management - budgets and costs management orders (Costs management and budgeting - Costs)- FS

Question 1

What is the purpose of a Cost Management Budget in litigation?

Answer 1

To control legal costs by requiring both parties to agree on estimated and incurred costs for different stages of litigation using a Precedent H form.

Question 2

What is the Precedent H form?

Answer 2

A form used to outline cost budgets, breaking down incurred and estimated costs for litigation stages such as pre-action, disclosure, witness statements, trial prep, and more.

Question 2

What happens if a party fails to file a cost budget (Precedent H)?

Answer 2

The party is deemed to have filed a budget that only includes court fees, meaning they cannot recover any other costs if they win the case.

Question 3

What are the professional consequences for a solicitor who fails to file a cost budget on time?

Answer 3

The solicitor’s client cannot recover costs (other than court fees), and the solicitor may face a claim in negligence if the failure causes loss.

Question 4

What must be filed with the Directions Questionnaire?

Answer 4

The cost budget (Precedent H form) must be filed and exchanged at the same time as the Directions Questionnaire.

Question 5

List: Timeline of the Cost Budgeting Process

Answer 5

1. File Directions Questionnaire and cost budgets (Precedent H)
2. Review and raise objections to the other side’s budget
3. Collaborate and discuss discrepancies
4. File agreed Budget Discussion Report

• Within 7 days of the case management conference
• Or within 21 days if the claim is over £50,000

5. Attend the Case Management Conference
6. Court issues a Cost Management Order fixing budgets
7. Parties refile and reserve budgets as per the Order

Question 6

What is a Budget Discussion Report?

Answer 6

A joint document filed by both parties showing points of agreement/disagreement on each other’s cost budgets, required before the Case Management Conference.

Question 7

What is a Cost Management Order?

Answer 7

A court order made during the Case Management Conference that approves and fixes the parties’ cost budgets unless later varied.

Question 8

Why was cost budgeting introduced into litigation?

Answer 8

To bring greater cost certainty and prevent legal costs from becoming excessive by agreeing budgets early in the litigation process.