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Are you aware of the impending update? The Civil Procedure Rules are being updated on the 6th April 2016 and there are some important changes that will you should be aware of.
The most important changes are to Part 3 – The Court’s Case Management Powers and Part 47 – Procedure for Assessment of Costs and default Provisions.
Part 3 – The Court’s Case Management Powers
CPR 3.13 will be renamed and will read “Filing and exchanging budgets and budget discussion reports”. This section becomes more comprehensive. CPR 3.13 (1) specifies that unless the court orders otherwise, all parties except litigants in person must file and exchange budgets:
(a) where the stated value of the claim on the claim form is less than £50,000.00 with their directions questionnaire; or
(b) in any other case not later than 21 days before the first CMC.
CPR 3.13 (2) goes on to state, that in the event that parties file and exchange their budgets under paragraph 1, all other parties not being litigants in person must file an agreed budget discussion report no later than 7 days before the first CMC.
This rule applies to proceedings issued on or after 06th April 2016 – therefore only need to file budget discussion report on those cases issued on or after 06/04/2016.
Under 3.12 for proceedings issued on or after 06/04/2016 if the claim involves a minor then unless court orders otherwise, the budgeting process will not apply.
The impact this will have on your case load, is that going forward most multi-track claims where the value is less than £50,000.00 then a Precedent H will need to filed with the directions questionnaire, the key is to remember the value of the claim as to when the budget will need to be filed. If you have cases that fall under subsection 2, the key is to diarise this date and instruct a Cost Draftsman once directions are lodged with the court and a date received for the CMC. This should in theory save money in respect of revising any budget prepared after filing the same with directions and prior to the CMC.
Some court’s have already been ordering budget discussions to take place prior to CMC’s, the aim of a budget discussion report is to detail which phases or items within each phase is agreed or still in dispute. Budget discussion reports aid district judge’s in their examination of budgets and makes the process more efficient and streamline.
Practice Direction 3E – Costs Management
The Table of Contents will now include Budget Discussions Report, now Paragraph 6A and now inserts annex A Precedent H, annex B Guidance Notes for Precedent H and annex C Precedent R Budget Discussion Report under Paragraph 7.1.
Paragraph 2 (b) will refer to cases where the Claimant has a limited or severely impaired life expectation, 5 years or less remaining, then the Court will ordinarily dis-apply cost management under section II of Part 3. You must bear this in mind if you have cases such as mesothelioma and other cases where life expectation is short.
Moreover, the new paragraph 6 (a) states that that where a party’s budgeted costs do not exceed £25,000.00 or the value of the claim as stated on the form is £50,000.00 then the parties must only use the first page of the precedent H. Prior to this update, any precedent H which exceeded £25,000.00 needed to be filed with a breakdown of each phase. Going forward you need to take note of the value of the claim on the Claim Form as you may only need to lodge the front page. This rules takes immediate effect as from 06/04/2016 and is not dependent on when cases are issued.
Part B of this part of the Practice Direction will now read “Budget discussion report”, Part 6A will now read as follows:- the budget discussion report required by rule 3.13 (2) must set out:- (a) those figures which are agreed for each phase, (b) those figures which are not agreed in each phase and (c) a brief summary of the grounds of dispute.
Further guidance within the Practice Direction has been provided in respect of hourly rates claimed within cost budgets. Paragraph 7.10 states that the making of a cost management order under rule 3.15 concerns the totals allowed for each phase of the budget. The underlying detail in the budget for each phase is for party’s reference and the purpose is only to assist the court in fixing a budget. Stops a mini detailed assessment taking place at the CCMC.
Part 47 Procedure for Assessment of Costs and Default Provisions
The most important update within this Part is 47.6 (2) which on the 06 April 2016 will read as follows: the receiving party must also serve a copy of the notice of commencement and the bill and if a costs management order has been made a breakdown. Important as again immediate effect from 06/04 and not dependent on date of issue.
Guidance is provided within Paragraph 8 under 5.8 Practice Direction 47, which states:- where a CMO has been made the costs are to be assessed on the standard basis and the receiving party’s budget has been agreed by the paying party or approved by the Court the bill must be divided into separate parts so as to distinguish between the costs claimed for each phase of the last approved or agreed budget and within each such part the bill must distinguish between the costs shown as incurred in the last agreed or approved budget and the costs shown as estimated. Paragraph 9 now provides guidance in relation to the 1% and 2% costs incurred initially creating the budget and subsequently revising the same, work done in respect of the 1% and 2% should be set out separate parts not included within the 10 phases.
The new changes now tie in with the Precedent Q.
Since the introduction of the Precedent Q, any files billed by JFS ( those which have been subject to a CMO) have been spilt pre April and Post April 2013. Our Bills have also been split into phases for incurred and estimated costs. The benefit of implementing this practice prior to the update is that we are already familiar with the practice and it shows our foresight in being able to predict future changes.
Rebecca Parson – Costs Supervisor
24 March 2016