THE COSTS OF COSTS BUDGETING CANNOT BE ASSESSED UNTIL THE END OF THE CASE – A QUICK REMINDER: THE PRACTICAL CONSEQUENCES

January 9, 2018 · by · in Costs, Costs budgeting, Rule Changes

The early part of the year may be a good time to remind people that it is now not possible to put the 1% and 2% figures in the costs budget at the end of the budgeting process.

CHANGE IN THE RULES LAST YEAR

This is because rule changes introduced last month have changed how the 1% and 2% costs of budgeting are calculated.

  • Previously they were based on 1% and 2% of the budget.
  • Now they are based on 1% and 2% of the costs figure as eventually agreed or assessed.

I am still working out exactly how this would be incorporated into a court order for budgeting. Presumably by the words  “The budget is £x  plus the costs of budgeting, to be calculated on assessment or agreement of costs” (This is not a precedent, but a suggestion. The costs of budgeting is something that could easily be overlooked when agreeing costs, in particular).

THE NEW RULE: PRACTICE DIRECTION 3E- COSTS MANAGEMENT

“7.2 Save in exceptional circumstances—

(a) the recoverable costs of initially completing Precedent H shall not exceed the higher of £1,000 or 1% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted costs (agreed or approved); and

(b) all other recoverable costs of the budgeting and costs management process shall not exceed 2% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted (agreed or approved) costs.

COMPARE THIS TO THE OLD RULE

“7.2 Save in exceptional circumstances—

(a) the recoverable costs of initially completing Precedent H shall not exceed the higher of £1,000 or 1% or the approved or agreed budget

(b) all other recoverable costs of the budgeting and costs management process shall not exceed 2% of the approved or agreed budget.”

 

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