New Precedent R (Budget Discussion Report Form)
The new Precedent R came into force on 25th April 2019.
The new discussion report form has additional sections to be completed, with parties required to complete 8 columns rather than 3 columns as in the previous version:
- Incurred costs are now included.
- "Budgeted costs claimed" is now broken down into 3 columns; total budgeted costs for the phase, total time costs and total disbursements.
- "Budgeted costs offered" is now broken down into 3 columns; total budgeted costs for the phase, total time costs and total disbursements.
- Two columns have been included to allow the Judge to record comments and the amounts allowed for time costs and disbursements.
Comments on the Changes
One of the most notable changes is the inclusion of an incurred costs column. One explanation for the inclusion of this new column is that it addresses the question of whether incurred costs are to be included within the Precedent R, which has previously caused some confusion between practitioners.
The inclusion of Time Cost and Disbursement columns seemingly compels parties into making offers on constituent elements. The inclusion of these new columns runs the risk of encouraging the court and parties to focus on these elements and could potentially contradict paragraph 7.3 of PD3E, which confirms that the approval of the budget by the court relates to the “total figures for budgeted costs of each phase”. Parties will need to ensure that they are clear on what they are offering, unless they want to be restricted to the breakdown they have provided.
One significant benefit of the new Precedent R is that the Judge now has the opportunity to record comments on the amounts allowed, which is not routinely done. With the Judge’s comments being recorded it may afford parties more scope to find a good reason to depart from the approved budget at a later juncture.
Overall, the inclusion of the incurred costs and additional elements appears to be unnecessary and at odds with paragraph 7.3 of PD3E;
“court’s approval will relate only to the total figures for budgeted costs of each phase of the proceedings”
That being said, paragraph 7.3 of PD3E goes on to confirm that;
“in the course of its review the court may have regard to the constituent elements of each total figure”
So long as the court only has “regard” to these constituent elements during its review of the total figures and does not fixate on them, the Precedent R will be in keeping with the Practice Direction.
The additional columns and detail required make the Precedent R more time consuming to complete and may in fact move the process closer to a mini detailed assessment against the intention of the rules committee. Add to that the potential for errors as a result of those with a lack of Excel knowledge completing the document, the importance of the costs budgeting process in litigation and the increasing amount of time being required for the process, it is important that practitioners utilise a professional that can complete the document correctly and efficiently.
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BA (Hons), GDip
Friday 26th April 2019