CPR 3.15A(1) imposes a duty on parties to revise their costs budgets in certain circumstances:
“A party (‘the revising party’) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.”
A significant development requiring an upwards revision might encompass:
- Additional expert evidence being required that was not envisaged when the original costs budgets were agreed/approved.
- A significant increase in the amount of disclosure beyond what was originally anticipated.
- An increase in the estimated length of the trial.
Although most practitioners should be alive to the need to revise their budget upwards if there has been a significant development, the corresponding duty to revise a budget downwards is often overlooked. Potential examples of a significant development requiring a downwards revision might include:
- Agreement reached between experts rendering it unnecessary for them to attend trial.
- An admission being made on liability/causation significantly reducing the issues between the parties.
- Discontinuance of a counter-claim.
CPR 3.15A(2) requires the revised budget to be produced promptly:
“Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5).”
The revised budget must be prepared using Precedent T.
Precedent T requires each party to, among other things, identify:
- The significant development they believe justifies a revision of their budget.
- An explanation for each particular phase (where the variation in any phase exceeds £10k).
- The amount of the variation, split between profit costs and disbursements.
Careful consideration needs to be given when drafting the Precedent T. Firstly, has a significant development been properly identified and explained? Secondly, is the proposed variation sufficient to take into account that significant development (whether upwards or downwards)? A significant development may persuade a court to allow a variation, but a court is very unlikely to allow a second bite of the cherry if errors are made when drafting the Precedent T.
GWS Costs has extensive experience drafting Precedent T budget variations.
For a free, no obligation discussion about how we can help, simply call us now on 020 3617 1904, email us at info@gws-costs.co.uk or complete a Free Online Enquiry and we will be happy to discuss.