THE NEW COSTS MANAGEMENT PRACTICE DIRECTION: COMING INTO FORCE 1st OCTOBER 2020: READ IT HERE

The new Costs Management Practice Direction comes into force on the 1st October 2020.   It is set out in full below.

 

SOME POINTS OF INTEREST

  • The specific exclusion of cases where the claimant has a limited life expectancy (which has always been in place, it is para 2(b) of the existing Practice Direction).
  • Section G on “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”

 

PRACTICE DIRECTION 3E – COSTS MANAGEMENT

This Practice Direction supplements Part 3

CONTENTS OF THIS PRACTICE DIRECTION

Title Paragraph number
A. Production of costs budgets Para. 1
B. Documents to be lodged for costs budgeting purposes Para. 3
C. Budget format Para. 4
D. Assumptions Para. 10
E. Budget discussion reports Para. 11
F. Costs management orders Para. 12
G. Oppressive behaviour Para. 13

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;
(c) applications under the Trusts of Land and Appointment of Trustees Act
1996;
(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.
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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 budgeted costs 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 interlocutory 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.

TABLE

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
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• 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 third
party disclosure

Witness Statements

• Identifying witnesses
• Obtaining statements
• Preparing witness summaries
• Consulting counsel, so far as appropriate,
about witness statements
• Arranging for
witnesses to attend
trial (include in trial
preparation)
• Reviewing opponent’s statements and
undertaking any appropriate investigations
• Applications for witness summaries

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
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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
(c) a brief summary of the grounds of dispute.
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.
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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