New Practice Directions – PD51ZG1 and PD51ZG2 – detailing the long-awaited Costs Budget “light” Pilot Schemes will take effect from the 6 April 2025.
There will be simplified costs budget (Precedent Z), budget discussion report (Precedent ZR) and Precedent T (Precedent ZT) forms, but these are yet to be published.
The Pilot Schemes will be applicable to certain Part 7 multi-track claims issued in a 3-year period between 1 April 2025 and 31 March 2028 inclusive.
The provisions of Section II of Part 3 (costs management) and Practice Direction 3D will still apply, save for modifications made by the new Practice Directions.
CPR 3.13 (procedure for filing and exchanging budgets and budget discussion report) and CPR 3.14 (failure to file a budget) will however be disapplied for claims that are captured by these Pilot Schemes.
Pilot Scheme PD51ZG1
Will apply to cases in the Leeds, Manchester and Rolls Building Business & Property Courts (and to Business and Property work in the Leeds, Manchester and Central London County Courts).
Unless the court orders otherwise, all parties except litigants in person shall file and serve a simplified costs budget by no later than 21 days before the first case management conference.
Where the relevant claim contains either no statement of value or seeks only non-monetary relief or the parties are unable to agree whether the claim value is £1 million or more, unless the court orders otherwise the claim shall be treated as if it had a value of £1 million or more.
Where the relevant claim has a value of £1 million or more:
-the court shall not manage the costs of the parties unless satisfied that the litigation can only be conducted justly and at proportionate cost if a costs management order is made;
-where a costs management order is to be made, the court may give case management directions at the first case management conference and shall give directions in respect of costs management which may include:
-whether the court will manage the costs of any party using the simplified costs budget;
-whether the court considers it necessary for any party to file and serve a costs budget using Precedent H or an updated simplified costs budget;
-for the filing of a budget discussion report or a simplified budget discussion report; and
-the listing of a costs management conference or a costs and case management conference as appropriate. Unless the court orders otherwise, any such hearing shall be listed to be heard within 35 days of the first case management conference.
Where the claim has a value of less than £1 million:
-where that party has been served with a simplified costs budget, each represented party must, and each litigant in person may, file and serve a simplified costs budget report no later than 7 days before the first case management conference;
-at the first case management conference, the court will give case management directions and, unless satisfied in accordance with rule 3.15(2) that a costs management order is not required, make a costs management order by reference to the simplified costs budget.
Pilot Scheme PD51ZG2
Will apply to cases with a value of less than £1 million, to which neither PD51ZG1 nor rule 44.13 (QOCS) applies, which are proceeding in the County Court at Central London or at the Leeds or Bristol District Registries.
Unless the court orders otherwise, all parties except litigants in person shall file and serve a simplified costs budget by no later than 21 days before the first case management conference.
Where that party has been served with a simplified costs budget each represented party must, and each litigant in person may, file and serve a simplified budget discussion report no later than 7 days before the first case management conference.
At the first case management conference the court will give case management directions and unless satisfied in accordance with rule 3.15(2), that a costs management order is not required, make a costs management order by reference to a simplified costs budget.
Procedure relevant to both Pilot Schemes
Where the court makes a costs management order using a simplified costs budget:
-provisions of rule 3.15 (Costs Management Orders), rule 3.15A (Revision and Variation of budgets), rule 3.16 (Costs Management Conferences), rule 3.17 (Having regard to budgets), and rule 3.18 (Assessing costs on the standard basis), shall apply with necessary modification such that references to a “budget” in those provisions shall include a simplified costs budget and references to Precedent T shall include Precedent TZ.
Where the court does not make a costs management order:
-the provisions of paragraphs 3.2 to 3.7 of Practice Direction 44 (when budgets are filed, but there is no CMO) shall apply as if reference in those paragraphs to a budget is reference to the simplified costs budget and any updated simplified costs budget;
-unless the court orders otherwise, each party shall file and serve an updated simplified costs budget no later than 28 days before— (i) the start of the trial; (ii) the start of any trial window; or (iii) 7 days before any pre-trial review, whichever is the earlier; and
-the court may order a party to file an updated simplified costs budget at any stage of the proceedings.
Failure to comply with the Pilot Schemes:
-the court may impose sanctions which may include limiting the recovery of the costs to be incurred to the applicable court fees.
Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.