Precedent T: Budget Variation Notice 2023

Our specialist budgeting team assist in preparing Costs Budgets, and advising on the procedure for updating your Precedent H following a change of circumstances.

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What is the Precedent T (Budget Variation Notice)?

As of 1st October 2020, a new process has been put in place for parties seeking to make changes to their Precedent H. The aim is to address the long-standing issue of inconsistency in varying a costs budget.

Despite the judgment in the case of Sharp v Blank & Ors [2017] EWHC 3390 (Ch), which established the appropriate process to be followed, inconsistencies persisted due to the absence of clear precedent from higher courts. As a result, it was determined that a formal update to the Civil Procedure Rules was necessary to address these issues.

The implementation of the Precedent T document is intended to streamline the approach to making revisions and variations to a costs budget, which has lacked consistency until now. The Civil Procedure (Amendment No. 3) Rules 2020 and the 122nd Practice Direction update finally establish a proper precedent for modifying a Costs Budget.


While the existing rules have outlined the procedure, there has been a lack of clarity on how this information should be presented. The upcoming revisions to Precedent T aim to rectify this by introducing a more streamlined process and providing more comprehensive guidance.

The newly introduced rules also clarify that the Court has the authority to modify any costs incurred after the date of the Costs Management Order, even if those costs were already expended prior to the budget variation.

Grounds for amending a Precedent T

As addressed in our previous blog post on amending an agreed budget, a significant development for the Precedent T will be an event during litigation, that effects the future course of work to be completed, and could not have been foreseen at the time of preparing the initial Costs Budget. 

Rather than relying upon a stare decisis approach, the CPRC have decided to formalise the procedure via the creation of a Precedent T. Guidance is set under the new CPR 3.15A which will require an application to be made to amend Budgets utilising the Precedent T, which allows both parties to explain reasoning for seeking/opposing any variation in the Budget, upwards or downwards.

How can we Assist?

The ARC Costs team are always happy to assist with the preparation of any Cost Budget and negotiation of the same. We can also provide guidance and assistance in updating your approved Costs Budget under the current procedure set out in CPR 3 and PD 3E.

We assist both paying parties and receiving parties.

We can be contacted via email at, or by telephone on 01204 397302. For more information on legal costs, please find out more about our speciality areas of expertise and our services on our legal costs page.

Some of Our Most Frequently Asked Questions 

What is the process of updating an approved budget?

If a Precedent H has been filed and approved, but later requires amendment due to a change in circumstances/significant development in the litigation process, an updated Costs Budget should be prepared in line with Sharp and utilising the Precedent T, seeking consent from the other side for the amendments sought. 

The new Precedent T process can be summarised as follows:

  1. Identify a significant development.
  2. The revising party should complete the Precedent T Form.
  3. They should then serve the Precedent T Form and aim to reach agreement on the proposed variations.
  4. If an agreement cannot be reached, they can then file the Precedent T at the Court, along with the most recent approved or agreed budget and an explanation of any disagreements between the parties.
  5. The Court exercises full discretion and initially seeks to resolve the issues without a hearing. However, if necessary, the Court may schedule a further Costs Management Hearing. The Court has the authority to approve, vary, or disallow the proposed variations.


It should be noted that a previous budgeted costs within the Precedent H could be revised downwards as well as upwards, and so you should bear in mind any arguments to be made by the other side before making any application for an updated Budget.


What Happens if I Don’t Update the Budget and the Case Settles?

The Courts are bound by the last approved Costs Budget, and this is the default starting position upon which costs recovery should be based (see the Court of Appeal decision in Harrison).  If the receiving party is to seek to deviate from the same, they must retrospectively explain under the legal principle of ‘good reason’ to do so however, this is subject to judicial decision and discretion. 

This is a very high hurdle to overcome, and if the court hears questions as to why an application to amend the Costs Budget, via the Precedent T procedure, was not completed at the time, this leaves any receiving party in a difficult position.  It is best to be pro-active in your approach to budgeting, and to amend in the first instance rather than seeking to deal with any ‘good reason’ retrospectively.


What Constitutes a Significant Development in Costs Budgeting?

Before proceeding with any application for a Budget Variation Notice (Precedent T), previous decisions as to how the Costs Budget was originally approved should be considered.  The binding Precedent H which was previously approved will need to be shown to be incapable of befitting the change in circumstances.  Seeking to update the Budget due to a failure to adequately forecast costs in the first instance is not a sufficient reason to fulfil the legal principle of amending the Precedent H.


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