Costs budgets and costs management: the rules: quick guide

by Practical Law Dispute Resolution

A short guide to the rules for costs management in litigation, focusing on the key provisions of Civil Procedure Rule (CPR) 3 and Practice Direction (PD) 3D. This guide outlines when costs budgeting applies to Part 7 multi-track cases, including relevant exceptions and the court's discretion to order costs management. It explains the procedural requirements for filing and exchanging costs budgets using Precedent H, agreeing budgets through a budget discussion report (Precedent R), and the sanction under CPR 3.14 for non-compliance. The note addresses the court's role in making a costs management order (CMO), the distinction between incurred and budgeted costs, and the process for revising an approved budget under CPR 3.15A following a "significant development". It also considers the effect of a CMO on detailed assessment, the "good reason" test for departing from a budget under CPR 3.18, and the simplified costs budgeting pilot schemes.