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Other provisions amended include an updated Statement of Truth with revised forms.
Here, we are looking at the budgeting changes.
Why are the amendments being made?
The amendments are to rationalise the current structure of the rules on variations to cost budgets. The changes have reduced the existing structure which involved three sources of rules (CPR Rules, a PD and a lengthy Guidance Note [currently at Annex B to PD 3E]) into two documents, a set of rules and a PD which is intended only to include practice guidance.
What are the amendments?
PD3E has been amended wholesale, and the separate guidance note has been removed. The amendment to the CPR add a new CPR 3.15A and to amend other rules relating. The new CPR 3.15A says:
“Revision and variation of costs budgets on account of significant developments (“variation costs”)
3.15A.—(1) A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.
(2) Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5).
(3) The revising party must—
(a) serve particulars of the variation proposed on every other party, using the form prescribed by Practice Direction 3E;
(b) confine the particulars to the additional costs occasioned by the significant development; and
(c) certify, in the form prescribed by Practice Direction 3E, that the additional costs are not included in any previous budgeted costs or variation.
(4) The revising party must submit the particulars of variation promptly to the court, together with the last approved or agreed budget, and with an explanation of the points of difference if they have not been agreed.
(5) The court may approve, vary or disallow the proposed variations, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed, or may list a further costs management hearing.
(6) Where the court makes an order for variation, it may vary the budget for costs related to that variation which have been incurred prior to the order for variation but after the costs management order.”
There is a change to CPR 3.13, regarding the filing and exchange of budgets and budget discussion reports, and a change to CPR 3.15, regarding costs management orders, and the other main amendment is to CPR 3.17, the court to have regard to budgets to take account of costs.
Some of these provisions are not completely new, and are moved from within the previous PD 3E to the rules (so the new CPR 3.15(5) was at PD 3E paragraph 7.2). The provisions at CPR 3.15A will not be completely new to us either, as they are based on 7.6 of the previous PD 3E, but it is noteworthy that the provision is changing from “Each party shall revise its budget…” to “Each party must revise its budget…”
Other amendments worthy of note include;
The new PD3E provides, at paragraph 8; “The time spent in preparing the budget and associated material must not be claimed in the draft budget under any phase. The maximum figures permitted under rule 3.15(5) should be inserted once the costs budget has been approved by the court.”
What is the new Precedent T?
The new 3.15A(3), above, assists with how the form is intended to be used and what costs should be included. There is a handy Excel version of this available here.
The form allows the varying party to set out justifications for the increased costs sought, with provision for the non-varying party to make a counter offer and provide comments upon the variation. The new Statement of Truth appears, so certifying that the costs and disbursements of any variation sought are not included in any previously budgeted costs or variation (including any contingency).
What does all this mean?
Parties should be keeping a close eye on their budgets and any variation in the case costs from those anticipated in any event, and hopefully the amendments will make it easier to deal with the variation of budgets where such a need arises.
There is a lot to take in with the new rules, particularly given the wholesale amendment of PD3E. If you have any concerns regarding whether your case is going to plan with reference to an existing budget, whether there has been a significant development occur and a need to amend the budget, how to go about dealing with the amendments (or any received), and any budgeting issues then the team at A&M Bacon are here to help.
Where can I find the new rules?
The CPR has now been updated to reflect the amendments. The amendments can also be found here:
For a summary of other amendments, see here.
Need assistance? Let’s have a chat!