Precedent Q and Incurred Costs
How to Use to Your Benefit During Costs Negotiations
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What is a Precedent Q?
Precedent Q was introduced in the 81st update to CPR 47.6 which came into force on 1st October 2015.
It is a document which provides summary information regarding the incurred costs in a case before a Costs Management Order is made, and actual expenditure as against the costs which are anticipated/budgeted to be incurred following the Costs Management Order. A Precedent Q also shows the differences in the incurred costs and budgeted costs after the Costs Management Order. The document is used to compare the costs claimed within a Bill of Costs with the Costs Budget or Precedent H.
If commencing detailed assessment proceedings in a case commencing on, or after 1st October 2015, and a Costs Management Order was made in that case, then the receiving party must submit a breakdown of the costs claimed for each phase of the proceedings as per the update to the Civil Procedure Rules. This breakdown is provided by way of a Precedent Q.
A Precedent Q is found as standard as part of the new electronic format Bill of Costs.
The Benefits and Drawbacks of Using a Precedent Q
The paying party may benefit from the requirement of this document in a number of ways. The main benefit to the paying party is that it will be an easier task for them to compare a Bill of Costs to a Costs Budget, served by the receiving party. A Precedent Q served with the Bill of Costs will allow the paying party to clearly identify overspend claimed for each phase in the Bill of Costs. An overspend on a Costs Budget cannot be recovered on a Bill of Costs which is being assessed on the standard basis, unless there is a good reason to depart from a Costs Budget, as per CPR 3.18(b). For further information on what a good reason to depart from a Costs Budget may be, see our recent article on the same.
Conversely however, the Precedent Q will also show phases in which anticipated costs are under a phase limit, and as such these costs should be allowed as claimed.
For the avoidance of doubt, incurred costs should remain to be scrutinised under the full detailed assessment process however, budgeted (anticipated) costs should be allowed as claimed so long as they remain within the phase limit previously permitted in the Costs Management Order.
A Costs Management Order will provide a figure for estimated costs per phase, and only comments on the reasonableness of the incurred costs can be contained within the order, rather than any changing of the figures.
At a CCMC, a Judge may set a phase limit to include both incurred and anticipated costs. In such cases, anticipated costs will simply be the limit allowed per phase, less incurred costs as previously recorded. It is important at the time of the making of the Costs Management Order, that an updated front sheet is filed and served clearly showing the split between non-assessed incurred costs, and approved anticipated costs, so that costs in any subsequent Bill of Costs can be directly compared to the Budget utilising the Precedent Q.
How Can ARC Costs Assist?
As expert Costs Draftsmen and Costs Lawyers, we can assist in the preparation of Costs Budgets (or updating them utilising the Precedent T process), Bills of Costs and Precedent Q to ensure the maximum recoverability of your legal costs. As Costs Lawyers, we can also assist paying parties in contesting budgeted Bills of Costs, and provide representation at Detailed Assessment and Costs & Case Management Conferences where Costs Management Orders will be made for either Claimant or Defendant parties. If you require our assistance, please get in touch and call us on 01204 397302, or email one of our costs experts at firstname.lastname@example.org.
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