CPR Part 3 is being tidied up. There have been further amendments to CPR Part 3 and Practice Direction 3E, which will come into force on 6 April 2016.
Change of timings
Amendments are to be made regarding when the costs budget must be filed. For lower value claims the budget must be filed with the directions questionnaire, for other claims it must be filed 21 days before the case management conference.
CPR 3.13 (1) Unless the court otherwise orders, 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 questionnaires; or
(b) in any other case, not later than 21 days before the first case management conference.
The circumstances when only the front page is filed, has changed
Para 6 (c) of PD 3E – The costs management rules are amended to provide that only the first page of Precedent H is to be exchanged and filed in cases where the value of the claim is under £50,000 or the costs are less than £25,000.
The Precedent H guidance notes MUST now be followed
The guidance notes were just that, however it was good practice to follow them, this created cohesion and consistency between parties’ budgets, which resulted in more efficiency when approving budgets. This is no longer optional, the guidance notes are now a requirement and must be followed.
Para 6 (b) of PD 3E – Parties must follow the Precedent H Guidance Note in all respects.
Parties MUST negotiate
The rules previously required parties to negotiate, para 7.3 of PD 3E suggested that budgets should be negotiated “if budgets are agreed between all parties, the court will record the extent of such agreement”. Negotiations have become a recognised practice and have been welcomed by the courts. However, the position is to change, the rules are to be amended to provide that parties must file an agreed discussion report. Negotiating the budget is advisable in any event, please see my previous discussions regarding this negotiate, negotiate, negotiate.
CPR 3.13 (2) – In the event that a party files and exchanges a budget under paragraph (1), all other parties, not being litigants in person, must file an agreed budget discussion report no later than 7 days before the first case management conference.”.
Para 6 (a) of PD 3E – 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 the Practice Direction (yet to be annexed to the CPR).
The debate over fixing the hourly rate is over
Practice Direction 3E is to be amended regarding the hourly rates, it is confirmed that they will not be set in the budget and puts an end to this much debated area.
Para 7.10 of PD 3E – The making of a costs management order under rule 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.
The exemption regarding children’s cases has now been formalised
CPR 3.12(1)(c) has formalised the exemption regarding children – where in proceedings commenced on or after 6th April 2016 a claim is made by or on behalf of a person under the age of 18 (a child) (and on a child reaching majority this exception will continue to apply unless the court otherwise orders).
The court can decide – further potential exemptions
Para 3 (b) of PD 3E – 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.
CPR 47.6 – Amendments are also made to provide that costs claimed in each phase of the proceedings, are made available to the court when assessing costs at the end of a case.
Sue Fox is the Head of Costs Budgeting in the Costs and Litigation Funding department at Clarion Solicitors. You can contact her at firstname.lastname@example.org and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.