The Precedent T came into force on 1 October 2020 and the new provision can be found at CPR3.15A. The rules impose a mandatory duty on each party to revise their Costs Budgets when there is a ‘significant development’ in the litigation. The Costs Budgets can either be revised upwards or downwards.
Following on from my colleague Kris Kilsby’s blog, which can be read here we take a look at how we have found the Precedent T in practical terms over the last six months.
One of the main questions we are asked is when to file the Precedent T. This of course will vary from case to case and is dependent upon the circumstances. If the ‘significant development’ does not require an Application to be made, the Precedent T must be submitted promptly to the other party for agreement subject to CPR 3.15(3)to(5).
However, if an Application is required (for example to vary the timetable or rely on additional evidence), thus requiring additional costs we would advise you to file the Precedent T with the Application in order to give yourself the best chance of the Court allowing the variation.
It is essential that Parties act quickly when a ‘significant development’ arises. They should inform the opposite party that an Application is to be made and the Precedent T should be prepared at that point and served upon the opposite party and filed at Court as soon as possible thereafter. It is good practice to file the Precedent T with the Application as this provides the Parties an opportunity to agree the costs before a Hearing.
When considering if there is a ‘significant development’ we would recommend you consider the assumptions and the Directions which were agreed at the Costs Management Hearing. Any variation from the Directions could warrant a revision to the costs budget. Here at Paramount Legal Costs, we were recently successful in an Application to increase a Costs Budget by £55,000.00 to allow for an additional expert and an increase to the trial length.
On the contrary, it is also important to note that the Precedent T can also be used to revise a budget downwards, if say, an expert is no longer required. Whilst this could easily be overlooked, it is extremely important to give this matter serious consideration to ensure that the ‘budgeted costs’ remain protected. If for example, the Claimant makes a better-than-expected recovery and the instruction of a particular expert is no longer required, this could be considered a ‘significant development’ and if a Precedent T is not filed, the paying party will no doubt seek to argue that there is a ‘good reason’ to depart downwards from the approved Costs Management Order. If successful, all of the original ‘budgeted’ costs would then be subject to assessment and the test of reasonableness and proportionality.
It is now more important than ever to monitor your budgeted costs, as the Court will not look favourably on Parties exceeding costs budgets where no attempt has been made to address the situation prior to settlement.
Should you require any assistance with regards to costs budgeting, please do not hesitate to contact the Litigation team at Paramount Legal Costs or you can email me, Emma Robson, Costs Lawyer, by clicking here