Costs Budgeting: A Factsheet for Claimants

This article is designed to explain to Claimant’s costs budgeting in clear terms.

Will your case need a Costs Budget?

Costs budgets only need to be prepared where court proceedings have been started and where the case is likely to be a multi-track case which has been issued on or after 1st April 2013, unless the court orders otherwise. That means if your case has been allocated to the smalls claims track, or fast track or if your case was issued before 1st April 2013 your case will not need a budget, however the court is free to make an order that budgets are prepared.

Multi-track is the usual track for all cases valued at £25,000 or more or where there is a particular complexity.

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 What is Costs Budgeting?

Costs budgeting was introduced on 1st April 2013 as part of a number of changes made to the Civil Procedure Rules by the government. The aim of costs budgets is to manage the costs incurred throughout the litigation process.  The budget will be filed in court form ‘Precedent H’.

Both the Claimant and Defendant must file a budget at court. The deadline for filing and exchange of costs budgets will be stated in the notice of proposed allocation which is sent to the parties after a Defence is filed. If no date is specified by the court, the deadline will be 7 days before the first Case Management Conference (CMC).

The parties should attempt to agree the budget in full or partially. If there is no agreement, the court can change the budgets. The parties will have a chance to address the court in relation to the non-agreed items at the first CMC.

What is included in the Costs Budget?

The budget must include all costs and disbursements already incurred on your case. Costs are your solicitor’s professional charges for the work undertaken on your case. Disbursements are the expenses charged by a third party which will be incurred in order to see your claim to conclusion such as court fees, expert fees or travelling expenses

The budget must also include all further costs and disbursements which we estimate will be incurred in order to get your case to conclusion at trial.

Both the incurred and estimated work will need to be split up into the following ‘phases’ of work which the Court considers to be the core stages of every case:

  • Pre-Action Costs
  • Issue/Statement of Case
  • CMC (Case Management Conference)
  • Disclosure
  • Witness Statements
  • Pre-Trial Review
  • Trial Preparation
  • Trial
  • Settlement/ADR (Alternative Dispute Resolution)
  • Expert Reports

For each phase we will need to set out what assumptions we have made when budgeting the costs and disbursements. In other words, what work have we assumed we will need to do in order to get your case to conclusion? For example: we have assumed that we will need to instruct one medical expert, that the Defendant will also instruct an expert, that there will be 3 witness’ for the Claimant and 2 for the Defendant and that the trial will last 2 days.

We also need to budget for any contingency costs. These can be best described as costs ‘just in case’ something happens such as needing further medical evidence. These are the costs which we cannot assume will be incurred at the time of preparing the budget but those which may crop up in your case.

Who will prepare your Costs Budget?

Express Solicitors has a dedicated costs team who will prepare the budget with the assistance of your file handler. You will be sent a copy of the budget. A member of the costs team will write to you to explain the budget and an appointment will be made to advise and discuss the budget and you instructions will be sought. You will have the opportunity to ask our costs experts any questions in relation to the costs budget.

Each budget will be prepared on a case by case basis, however it is important to remember that not everything included in your budget will turn out to be necessary in your case. For example, we will always budget to trial even when we think that your case will settle without the need for a trial.

The budget must be verified by a statement of truth, your solicitor can sign this on your behalf but your instructions must be sought.

Importance of filing a costs budget

It is imperative that a budget be filed. If a budget is not filed when required then the court will be deem the party to have filed a budget consisting of court fees, unless the court orders otherwise. This means that if you win your case, the Defendant would not be liable for any costs or disbursements incurred after the filing of the budget except for any court fees.

Can we increase the budget if we need to?

cost 2Once a budget is approved by the court you recoverable costs will be restricted to the budget unless you can persuade the court that there is a good reason to depart from it. It is therefore important that we prepare accurate cost budgets and keep under the budget under review throughout the case.

If the costs have or are likely to exceed those set out in the budget, it is imperative that we make an application to revise the budget and set out to the court the reason for the increase. An example where a court may approve a revised budget would be where the Claimant’s injuries have taken a turn for the worse, meaning that much more work would be required which was not previously expected.