PRACTICE DIRECTION 3D - COSTS MANAGEMENT

This Practice Direction supplements Part 3

Contents of this Practice Direction

Title	Number
Production of costs budget	Para. 1
Documents to be lodged for costs budgeting purposes	Para. 3
Budget format	Para. 4
Assumptions	Para. 10
Budget discussion reports	Para. 11
Costs management orders	Para. 12
Oppressive behaviour	Para. 13
Annexes

A. Production of Costs Budgets

1. 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.

2. An order for the provision of costs budgets with a view to a costs management order being made may be particularly appropriate in the following cases—

(a) unfair prejudice petitions under section 994 of the Companies Act 2006;

(b) disqualification proceedings pursuant to the Company Directors Disqualification Act 1986;

(d) claims pursuant to the Inheritance (Provision for Family and Dependants) Act 1975;

(e) any Part 8 or other claims or applications involving a substantial dispute of fact and/or likely to require oral evidence and/or extensive disclosure; and

(f) personal injury and clinical negligence cases where the value of the claim is £10 million or more.

B. Documents to be lodged for costs budgeting purposes

3. (a)Save in exceptional circumstances or where the court orders otherwise, the parties are not expected to lodge any documents other than Precedent H and the budget discussion report. Both are annexed, to this practice direction. If the Excel format precedent on the MOJ website is used, the calculation on page one will calculate the totals automatically and the phase totals are linked to this page also.

(b) Precedent T, also annexed to this practice direction, is to be used in the event of variation of a budget pursuant to rule 3.15A.

C. Budget format

4. (a) Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction. It must be in landscape format with an easily legible typeface.

(b) In cases where a party’s total costs (incurred and estimated) do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H.

(The wording for a statement of truth verifying a budget is set out in Practice Direction 22.)

5. In deciding the reasonable and proportionate costs of each phase of the budget the court will have regard to the factors set out at Civil Procedure Rules 44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard.

6. The table below identifies where within the budget form the various items of work, in so far as they are required by the circumstances of your case, should be included. The time estimated may have to be justified on the budget hearing along with the grade of fee earner doing the work.

7. Allowance must be made in each phase for advising the client, taking instructions and corresponding with the other party/parties and the court in respect of matters falling within that phase.

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.

9. The 'contingent cost' sections of this form should be used for anticipated costs which do not fall within the main categories set out in this form. Examples might be the trial of preliminary issues, applications to amend, applications for disclosure against third parties or (in libel cases) applications re meaning. Costs which are disputed (such as the need for a particular expert) should be set out in the appropriate phase of the budget and if necessary marked as disputed. Only costs which are more likely than not to be incurred should be included.

(Variation of an approved or agreed budget is dealt with in rule 3.15A.)

D. Assumptions

10. (a) The assumptions that are reflected in the table below are not to be repeated. Include only those assumptions that significantly impact on the level of costs claimed such as the duration of the proceedings, the number of experts and witnesses or the number of interim applications envisaged. Brief details only are required in the box beneath each phase. Additional documents should only be prepared in exceptional circumstance and, where they are disregarded by the court, the cost of preparation may be disallowed.

(b) Written assumptions are not normally required by the Court in cases where the parties are only required to lodge the first page.

Phase	Includes	Does NOT include
Pre-action	Pre-Action Protocol correspondence Investigating the merits of the claim and advising client Settlement discussions, advising on settlement and Part 36 offers All other steps taken and advice given pre action	Any work already incurred in relation to any other phase of the budget
Issue/statements of case	Preparation of Claim Form Issue and service of proceedings Preparation of Particulars of Claim, Defence, Reply, including taking instructions, instructing counsel and any necessary investigation Considering opposing statements of case and advising client Part 18 requests (request and answer) Any conferences with counsel primarily relating to statements of case Updating schedules and counter schedules of loss Amendments to statements of case
CMC	Completion of DQs Arranging a CMC Reviewing opponent’s budget Correspondence with opponent to agree directions and budgets, where possible Preparation for, and attendance at, the CMC Finalising the order Any further CMC that is built into the proposed directions order	Preparation of costs budget for first CMC
Disclosure	Obtaining documents from client and advising on disclosure obligations Reviewing documents for disclosure, preparing disclosure report or questionnaire response and list Inspection Reviewing opponent’s list and documents, undertaking any appropriate investigations Correspondence between parties about the scope of disclosure and queries arising Consulting counsel, so far as appropriate, in relation to disclosure	Applications for specific disclosure Applications and requests for non-party disclosure
Witness Statements	Identifying witnesses Obtaining statements Preparing witness summaries Consulting counsel, so far as appropriate, about witness statements Reviewing opponent’s statements and undertaking any appropriate investigations Applications for witness summaries	Arranging for witnesses to attend trial (include in trial preparation)
Expert Reports	Identifying and engaging suitable expert(s) Reviewing draft and approving report(s) Dealing with follow-up questions of experts Considering opposing experts’ reports Any conferences with counsel primarily relating to expert evidence Meetings of experts (preparing agenda etc.)	Obtaining permission to adduce expert evidence (include in CMC or a separate application) Arranging for experts to attend trial (include in trial preparation)
PTR	Bundle Preparing and agreeing chronology, case summary and dramatis personae (if ordered and not already prepared earlier in case) Completing and filing pre-trial checklists Correspondence with opponent to agree directions Preparation for and attendance at the PTR	Assembling and/or copying the bundle (this is not fee earners’ work)
Trial Preparation	Trial bundles Witness summonses, and arranging for witnesses to attend trial Any final factual investigations Supplemental disclosure and statements (if required) Counsel’s brief fee Agreeing brief fee Any pre-trial conferences and advice from counsel Pre-trial liaison with witnesses	Assembling and/or copying the trial bundle (this is not fee earners’ work) Counsel’s refreshers
Trial	Solicitors’ attendance at trial All conferences and other activity outside court hours during the trial Attendance on witnesses during the trial Counsel’s trial refreshers Dealing with draft judgment and related applications	Preparation for trial Counsel’s brief fee for trial (include in trial preparation)
ADR/Settlement	Any conferences and advice from counsel in relation to settlement Work directed to settlement negotiations and meetings between the parties and any other ADR (including mediation), to include Part 36 and other offers and advising the client Approval of settlement if needed Drafting settlement agreement or Tomlin order Advice to the client on settlement (excluding advice included in the pre action phase)

E. Budget discussion reports

11. 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

The parties are encouraged to use the Precedent R Budget Discussion Report annexed to this practice direction.

F. Costs management orders

12. When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.

G. Oppressive behaviour

13. Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.

Annexes

Annex A Precedent H (xls file - opens in new window)

Guidance Notes for Precedent H (PDF - opens in new window)

Annex B: Precedent R

Annex C: Precedent T