Precedent H Guidance

How to Prepare a Costs Budget


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Precedent H guidance notes are available below to provide direction on the creation of a costs budget and should be read alongside Practice Direction 3E. 

The notes provide recommendations on the format which should be used for filing a Precedent H, when the budget should be filed, and what should be filed alongside the Costs Budget. The notes also provide information on what to include, as well as what not to include, in each phase of your costs budget in table form.


Costs Budget Preparation – The Basics

The guidance notes recommend that only the first page of Precedent H should be filled in if the value of the costs claimed are less than £25,000.

In Multi-Track cases, you must file a Costs budget with the Directions Questionnaire if the claim value is under £50,000, or 21 days before the first Case Management Conference (CCMC), if the claim is pleaded over £50,000. We recommend to many of our clients that it is best to file a Precedent H with the Directions Questionnaire to avoid the risks of being awarded Court fees only and having to apply for relief from sanctions.

A Cost Budget details your base costs incurred to date, and future costs to be incurred for the totality of the case up to and including Trial. VAT and additional liabilities (any success fee or ATE premium) are excluded from the Budget figures.

Costs of preparing the Budget and the Costs Management process do not form part of the central figures but can be located in the bottom right of the front sheet of the Budget as the respective 1% and 2% figures.

The costs of any interim applications that take place (for example for slight variation in directions) can also be sought separately from any Budget at the conclusion of the case.

All incurred/anticipated costs are to be phased within the Issues/Statements of Case, Case Management Conference, Disclosure, Witness Statements, Expert Reports, Pre-Trial Review, Trial Preparation, Trial and ADR/Settlement Discussions.  Guidance on what to include in each can be found here.  If any of the anticipated costs do not fall within any of the specified phases, but are likely to be incurred in line with the set directions, then they should be placed in a contingent phase.


New Precedent H Guidance

Following the update to PD 3E, the Precedent H guidance notes on costs budgeting have also been updated. The update to PD 3E came into force on 1st October 2019 and now define incurred and budgeted costs as:

“Incurred costs are all costs incurred up to and including the date of the first costs management order, unless otherwise ordered.”

  1. Budgeted costs are all costs to be incurred after the date of the first costs management order.”

Another important amendment to the Guidance notes is that fees for a trial brief will now be placed in the “Trial Preparation” phase instead of the “Trial” phase. This amendment is of importance to costs draftsmen as there may be sanctions by the Court if the brief fee is placed in the wrong phase.


How Can We Assist?

If you would like to find out more about best practice in preparing your Cost Budget, please feel free to view the section on our website for further guidance or have a look at our frequently asked questions to find out more, including making amendments to a costs budget and finding a good reason to depart from a costs budget.

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