cost management regime Flashcards
By default the cost management regime applies to all cases except which?
small claims track, fast track and intermediate track
claims commenced after 22 april 2014 of over 10mil
claims commenced after 22 april 2014 for monetary claim which is not quantified or non monetary claim worth over 10mil
claims commenced after 6 April 2016 made by or on behalf of a parson under 18
claims subject to fixed costs or scale costs
But court has discretion to disapply these
What is the overview of the cost management regime?
Budgets:
- parties prepare budgets with estimates of future costs
- these are filed and exchanged usually 21 days before first CMC
Budget discussion report:
- record extent to which the parties have agreed budgets
- filed and exchanged 7 days before the first cmc
At CMC:
- budgets and budget discussion reports are considered by the court
Either a direction order or a cost management order is made in light of estimated costs
When to file a budget?
If the stated value of the claim is less than 50k then the budget is filed with the parties directions questionnaire
in any other case, 21 days before the first CMC
What is a budget?
estimate of the reasonable and proportionate costs which a party intends to incur in the proceedings
What must the statement of truth be at the end of the budget?
This budget is a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation
How is the budget different form solicitors fees?
solicitors fees are governed by a retainer which does not need to bear any relation to recoverable costs
a solicitor may therefore be charging more that is in the budget for each stage of litigation
What is the prescribed format for a budget?
Precedent H
Requires practitioners to set out any assumptions on which the budget is based on and any contingencies
It must be signed with a statement of truth
Only need to use the first page if the claim is less than 50k or if the budgeted costs do not exceed 25k
incurred costs pre budget are included on Precedent H but cannot be altered by the court
What is the purpose of the budget discussion reports?
Once parties have filed and exchanged costs budgets they are required to discuss budgets with each other to agree the costs figures where possible
Parties must file and exchange Precedent R budget discussion reports no later than 7 days before the first CMC
The discussion report will indicate:
- the figures which are agreed and not agreed for each phase of the litigation and
- a brief summary of the grounds of dispute
Discussion report enables the court to focus on those parts of the costs budget where there is disagreement between the parties
What happens at the cost management conference after the budget discussion report is completed?
There are two main outcomes
- Case management decisions:
- made in regard to any available budgets
- applies at any stage of litigation - Cost management orders
- can be made at any time
- court will consider if the budgeted costs fall within the range of reasonable and proportionate costs and then
the order will record the extent to which the costs budgets are agreed between the parties (agreed figures cannot be changed by the court) or
where the figures are not agree, record the courts approval of a costs budget after making appropriate revisions
The order indicates the costs that are reasonable and proportionate
- Assessment if there is no costs management order
When can a court depart form a budget?
Where a cost management order has been made, when assessing costs on a standard basis the court will have regard to the party’s last approved or agreed cost budget and will not depart from it unless satisfied that there is good reason to do so
Departing from the costs budget means allowing the costs in excess of those in the approved budget or the costs management order to be recovered
What is the fundamental principal of recovery of costs in terms of budgets?
The party cannot recover a greater sum for costs from an opponent than it has in fact incurred, even if the budget provides for a greater sum than has been incurred
The budget effectively becomes a cap on what can be recovered
What happens if no costs management order has been made?
Position is less strict
If there is a difference of 20% or more between the costs claimed by receiving party on detailed assessment and the costs shown in the budget filed by that party, the receiving party must provide a statement of the reasons for the difference with the bill of costs
court may reduce the recoverable sum if the paying party reasonably relied on the budget
What happens if the budget is amended due to significant developments in litigation
An amended budget should be submitted to the other parties for agreement if possible - using precedent T
Amended budget needs to be submitted to court for consideration
This is only for addressing significant developments- not for correcting mistakes which is generally not allowed
What happens if there is a failure to file a budget?
This will be treated as having filed a cost budget comprising only of the applicable court fees only unless the court otherwise orders
Usually costs are a lot higher than just court fees
