Costs Management

Question 1

Which Cases are Excluded from the Cost Management Regime?

Answer 1

• Claims for Minors.
• Claims subject to Fixed Costs.
• Claims valued at £10m or more.
• Claims excluded by Judicial Discretion.
• Claims in the Small, Fast, and Intermediate Track.

Judicial Discretion cuts both ways — an excluded Case can be forced into the Costs Management Regime.

Question 2

What are the Key Features of the Costs Management Regime?

Answer 2

Costs Budgets (Precedent H):

• Each Party must prepare and file a Costs Budget, outlining their estimated costs for each phase of the Litigation.
  • This includes prospective and contingent Costs.
• Costs Budgets must include a Statement of Truth signed by a Solicitor to affirm its fairness and accuracy.
• The Budget serves as the starting point for assessing Recovery of Costs.

Budget Discussion (Precedent R) and Disclosue Reports:

• Once Budgets are filed, the Parties must regularly try to agree on Costs Estimates, and outline their results in a Budget Discussion Report.
• The Parties must also file a Disclosure Report.

Costs Management Conference:

• At the First Conference, the Court reviews the above documents and makes Case and Costs Management Orders.

Costs Management Orders :

• These Orders are made to record agreed Costs, resolve disputed Costs, and approve Budgets if they are considered reasonable and proportionate.
• Once made, Parties cannot recover Costs beyond those agreed or approved, unless there is a good reason for doing so.
• If no Orders on Budgets are made, and a Party claims Costs 20% (or more) over-budget, it must explain the difference.

Question 3

When must the Costs Budget be Filed?

Answer 3

Claims Under £50,000:

• Filed with the Directions Questionnaire.

All Other Claims:

• At least 21 days before the First Conference.

Question 4

When must the Budget Discussion Report be Filed?

Answer 4

At least 7 days before the First Conference.

Question 5

When must the Disclosure Report be Filed?

Answer 5

At least 14 days before the First Conference.

Question 6

Can Costs Budgets be revised?

Answer 6

Yes, using Precedent T, but only if there have been significant developments that warrant a revision.

Question 7

What is the Consequence of failing to File a Costs Budget?

Answer 7

The Party’s Recovery of Costs will be limited to Court Fees.