Costs Budgeting: Recent Amendments

As is often the case, the first attempt at a new process is not perfect and requires tweaking as time goes on; cost budgeting is no different it would seem. Having noted that the budgeting process is utilising a great deal of court time and resources, efforts have recently been made to streamline the process; from the court’s point of view at least.

As of the 6th April 2016 several changes have been made to the process and practitioners should therefore familiarise themselves accordingly to prevent any potential breaches.


Previously, costs budgets were required to be filed either as ordered in the notice of proposed allocation or alternatively seven days prior to the CMC. As a result of what was often a considerable delay thereafter until the CMC, the cost budgets were essentially redundant by the time the hearing took place as the majority of the costs had by that stage been incurred. Accordingly, the deadline for filing cost budgets has now changed. If the value of the claim is under £50,000 then budgets must be filed with the Directions Questionnaire; in all other cases they must be filed not less than 21 days before the CMC. The deadline for failing to comply remains that the defaulting party is treated as having filed a budget comprising only of court fees, thus all parties should ensure compliance.

Budget Discussion Reports

Furthermore it is now a requirement that a budget discussion report be filed no later than 7 days before the first CMC. The report is essentially a summary of the parties’ respective budgets setting out those figures which are agreed for each phase, those figures which are not agreed for each phase and a brief summary of the grounds of dispute. This document being intended to enable the Judge to see at a glance the issues he or she is being asked to determine and potentially save on the court time required to prepare for such a hearing.


Annex B of Practice Direction 3E sets out the Precedent H Guidance Notes which practitioners should review carefully as despite their title, they must be followed in all respects. Within the Guidance Notes is a section that may assist practitioners, being a list of assumptions; that is to say a number of elements within each phase that the court will assume to have been carried out. The effect being that practitioners do not have to set out at great length those items of work that the court accepts are part and parcel of proceedings. Moreover practitioners should be brief when setting out any parts over and above those assumptions, again with a view to streamlining the process.


Although not met with universal approval, it seems that cost budgeting is here to stay, for the foreseeable future at least. As a result it is important that close attention is paid to any developments in the process to avoid the possibility of falling foul of the requirements.