1. This Practice Direction establishes pilot schemes to test new approaches to costs budgeting in certain Business and Property Courts (“BPC”) and certain Business and Property work in the County Court and applies to relevant claims issued on or after 6 April 2025 and before 6 April 2028.

2. The provisions of Section II of Part 3 (costs management) and Practice Direction 3D shall apply, save as modified by this Practice Direction. Rules 3.13 and 3.14 shall not apply.

3. In this Practice Direction—

(a) “relevant claim” means a Part 7 multi-track claim to which Section II of Part 3 and Practice Direction 3D applies and which is proceeding—

(i) in the BPC of England and Wales;

(ii) in the BPC in Manchester and the BPC in Leeds; or

(iii) as Business and Property work in the County Court at Manchester, Leeds, or Central London;

(b) “simplified costs budget” means Precedent Z annexed to this Practice Direction;

(c) “simplified budget discussion report” means Precedent RZ annexed to this Practice Direction;

(d) “the form for variation of a simplified costs budget” means Precedent TZ annexed to this Practice Direction.

4. 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.

5. 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.

6. Where the relevant claim has a value of £1 million or more—

(a) 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;

(b) 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—

(i) whether the court will manage the costs of any party using the simplified costs budget;

(ii) 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;

(iii) for the filing of a budget discussion report or a simplified budget discussion report; and

(iv) 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.

7. Where the claim has a value of less than £1 million—

(a) 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;

(b) 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.

8. Where the court makes a costs management order using a simplified costs budget, the 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.

9. Where the court does not make a costs management order—

(a) the provisions of paragraphs 3.2 to 3.7 of Practice Direction 44 shall apply as if reference in those paragraphs to a budget is reference to the simplified costs budget filed in accordance with paragraph 4 of this Practice Direction and any updated simplified costs budget;

(b) 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

(c) the court may order a party to file an updated simplified costs budget at any stage of the proceedings.

10. If a party has failed to comply with its obligations under this Practice Direction, including the failure to file a simplified costs budget or Precedent H, the court may impose sanctions which may include limiting the recovery of the costs to be incurred to the applicable court fees.

Precedent Cost Forms