Precedent H : What is a Costs Budget?

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If you have worked in any area of law, you will have no doubt encountered the term “Precedent H”; but what is Precedent H? and what is the purpose of a precedent H? Below, we have answered some of the most frequently asked questions regarding the legal costs budget.


What is Precedent H?


A Precedent H is a standard costs budgeting tool, also known as a costs budget, which can be used to assess costs upon the conclusion of a claim. The parties involved in the claim are required to exchange and file these documents with the Court at the beginning of the proceedings.


What is the purpose of a Precedent H?

This document includes the base costs incurred to date and allows for constant monitoring of costs. Furthermore, it assures that the costs of the claim remain proportional to the issue in dispute. If a party believes that the opposition may incur costs disproportionally, they are permitted to report this to the Court who can grant relief when appropriate.


What is included in a Costs Budget?


Within the costs budget, there are sections for different types of costs. The incurred costs on the Precedent H are those which have been incurred up to and including the date of the first costs management order. Moreover, the budgeted costs within the budget are those which are incurred after the date of the first costs management order. A budget hearing may take place, in which the estimated time and grade of the fee earner may need to be justified.

If the monetary value of the case is less than £50,000, then the parties are only required to use the first page of the Precedent H.


What is a budget discussion report?


A budget discussion report can also be known as a Precedent R. This document allows the opposing parties to comment on each other’s Precedent H costs budget. However, this can only be completed on claims which commenced after the 6th of April 2016. Within the CPR and Practice Direction 3E, there are rules set out which outline the stipulations regarding budget discussion reports, such as; you must file an agreed budget discussion report at least seven days before the first case management conference.

During most cases, parties are only required to file a Precedent H and Budget Discussion report, as other documents tend to be necessary in exceptional circumstances.


Does the Precedent H include VAT?


No, it does not. The costs budget excludes VAT (if applicable), Court fees, success fees and ATE insurance premiums (if applicable), Detailed Assessment costs, costs of appeal and costs of enforcing any judgment.

Additionally, interim applications are generally not included in the budget, as these can be claimed for following the conclusion of the case.


When should you file a budget?


When engaging in Court proceedings, it is imperative that you file documents in the correct time frames as you can be penalised for late service. Therefore, the Precedent H costs budget should be filed no later than 21 days before the first case management conference.


How can ARC Costs Assist?


When preparing a Costs Budget, one must be very diligent and ensure that they draft the document correctly and in proportion to the issue in dispute. Otherwise, you risk the amount of recovery within the case. At ARC Costs, our experienced Costs Draftsmen and Costs Lawyers are able to provide an excellent service in which they can prepare a comprehensive and proportional Costs Budget.

Furthermore, they can utilise their extensive legal knowledge when constructing a Budget Discussion Report in order to correctly scrutinise the opposing party’s report and proceed within the matter effectively.

For further information or to discuss your query, call one of the team or 01204 397302, or email one of our experts at Alternatively, you can contact us via submission of our contact form, and one of the team will give you a call back to provide free initial advice.


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