What is a Precedent H?

In Multi-Track cases, the process of costs recovery begins with costs budgeting. A costs budget, also known as Precedent H, sets out, at the outset of litigation, the level of recoverable costs for the receiving party. It also provides guidance for how parties should allocate their time and resources throughout the proceedings.

Unless the court orders otherwise, costs budgeting is required in all Multi-Track cases. Where the claim value does not exceed £50,000, only the front sheet of the budget is required with the Directions Questionnaire.

If the claim is valued at more than £50,000, a full budget must be filed 21 days before the first Case Management Conference (CMC). The rules are contained in CPR Part 3 and Practice Direction 3D.

What is involved in costs budgeting?

Costs budgeting is a case management process used to control expenditure throughout litigation. A Precedent H must be prepared by the parties, verified with a statement of truth, and drafted with reference to all issues in the case.

When preparing a costs budget, parties should consider:

• Who will be working on the case and their hourly rates
• Forecasted expert and witness evidence
• Contingencies for potential developments
• Directions and trial length as indicated in the Directions Questionnaire

Once filed, Precedent H budgets should be exchanged and agreed through Precedent R (Budget Discussion Reports). If agreement cannot be reached, the case will proceed to a Costs and Case Management Conference (CCMC), where the court will approve or amend the budget.

Failure to file a costs budget, or filing one late, may result in severe sanctions, including being limited to recovering court fees only. If this occurs, an urgent application for relief from sanctions should be made.

Incurred and budgeted costs

Each party must file a Precedent H in the prescribed form, which records:

1. Incurred costs up to the CCMC (including pre-action costs, statements of case, and issue of proceedings)
2. Estimated future costs for each remaining phase through to trial, such as:

• Disclosure
• Witness statements
• Expert reports
• ADR/settlement
• Pre-trial review
• Trial preparation and trial itself
• Contingencies for likely but non-standard costs

This enables the court to manage costs effectively and ensure proportionality throughout the litigation. An accurately prepared cost budget helps avoid unnecessary disputes and strengthens a party’s position when seeking recovery at the conclusion of proceedings.

Why is timely filing a costs budget important?

The importance of filing a costs budget on time cannot be overstated. If a costs budget is not filed in accordance with the rules, for example, if it is not filed 21 days before the CMC in claims exceeding £50,000, the court may impose significant sanctions.

In many cases, the defaulting party may be restricted to recovering court fees only, regardless of the actual costs incurred.

Timely and accurate filing ensures that all incurred and anticipated costs are properly recorded and considered by the court. It also provides an opportunity to resolve disputes at an early stage, which can reduce the need for lengthy and expensive arguments later in the proceedings.

Why instruct ARC Costs to prepare your Precedent H?

At ARC Costs, our team has extensive experience in costs budgeting, with an average recovery rate of 81% on the budgets we draft. With a dedicated Cost Budget Manager and senior oversight of every Precedent H, we ensure accuracy, strategy, and the best prospects of maximising recoverable costs.

Our service includes:

• Drafting every Precedent H with precision, reviewed by at least two senior staff members
• Leveraging knowledge of local courts to maximise recovery in each phase
• Adopting a pragmatic and amicable approach to negotiations, with clear advice on every offer received
• Providing advocacy for CCMCs where required
• Preparing and filing all necessary court documents, including Precedent Rs, Composite Summaries, and phase breakdowns

We also support clients beyond budgeting, including detailed assessment, bills of costs, points of dispute, replies, and representation at hearings by our costs lawyers.

If you would like to speak with a member of our team about preparing or negotiating your Precedent H, please get in touch using the contact form at the top of this page.