Precedent H (Costs Budget) Service 

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What is a Precedent H?

Costs recovery in any Multi-Track case starts at the point of Cost Budgeting. The Cost Budget (also referred to commonly as the Precedent H) determines at the outset of litigation what the recoverable costs for the receiving party will be, and also where to focus your time and efforts during the course of litigation. 

Costs budget preparation is required in any Multi-Track case or as otherwise ordered, and the front sheet of a Budget is only required in cases where costs do not exceed £50,000. If the claim is worth over £50,000, it should be filed 21 days before the first Case Management Conference (CMC).

What is Involved in Costs Budgeting?

Cost Budgeting can be best described as a costs management process throughout the litigation process. The Precedent H must be prepared by parties caught by the provisions and must be verified with a statement of truth, considering all issues in the case. When first preparing the Costs Budget, the party must consider who will be working on the case, their hourly rates, forecast the future experts and witness required, and build contingencies. Much of the information required can be found in the Directions Questionnaire and proposed directions, and your Costs Budget should reflect the directions and length of Trial you are seeking.

Upon filing a costs budget, each party will get the chance to raise any disputes through the exchange of Precedent R (Costs Budget Discussion Reports), if Budgets cannot be agreed, you will need to proceed to a Costs and Case Management Hearing (CCMC) to get your Precedent H approved.

It is important to note that if you fail to submit a budget or submit it after the deadline, the Court may impose sanctions and you may only be able to recover your Court fees. If such a situation arises, you should urgently apply for relief from sanctions as soon as you become aware of any default or if another party raises an issue.

Incurred and Budgeted Costs

Following the update to Practice Direction 3E (now removed in 2023), the Precedent H guidance notes on costs budgeting were also updated. The update to PD 3E came into force in October 2019 and they defined 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.”

A further important change 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 professionals as there may be sanctions imposed by the Court if the brief fee is placed in the incorrect phase.

Further changes have now been made to the Practice Directions, and the aforementioned updates to Practice Direction 3E have been removed; however, the rules still apply under CPR 3.17.


(1) When making any case management decision, the court will have regard to any available budgets of the parties and will take into account the costs involved in each procedural step.

(2) Paragraph (1) applies whether or not the court has made a costs management order.

(3) Subject to rule 3.15A, the court—

(a) may not approve costs incurred up to and including the date of any costs management hearing;

For more information on costs budgets please have a look at our FAQ’s page.

Why Instruct ARC Costs to Prepare Your Precedent H?

At ARC Costs, our Costs Draftsman pride themselves on their average recovery of 81% of the value of the Costs Budgets drafted. As an experienced team with a dedicated Cost Budget Manager, we handle the full Cost Budget drafting and negotiation process, and ensure:

  • Every Precedent H is drafted with a high degree of accuracy and is vetted by at least two senior members of staff;
  • Our knowledge of local Courts is utilized to benefit how best to go about recovering the maximum amount of future costs in any phase;
  • That an amicable approach is taken to Cost Budget negotiations, and that the client is advised on every offer received as to the potential risks of rejecting any offer;
  • That an advocate is made available for any Costs and Case Management Conference (CCMC) if required;
  • That all accompanying Court documentation is prepared and filed, including Precedent Rs, Composite Summaries, Breakdown of Phases and any other items required.

We can also assist through the process of detailed assessment through the preparation of your bill of costs, points of disputes, replies, and our costs lawyers can provide representation at detailed assessment hearings, if required.


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01204 397302

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