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Cost Budgets and Precedent H – Essential Guidance
The normal rule in litigation is that the successful party is entitled to recover its costs from the other party. The Civil Procedure rules now give courts wide discretion in controlling the amount of costs parties can recover. The rules require parties to submit a budget (i.e. breakdown) of the legal costs they expect to incur. Precedent H is the prescribed form for that budget which must be filed in the majority cases which are valued at over £25,000.
There is a strict deadline for filing precedent H which must be met or the consequences can be dire, with the chance to recover legal costs from the other side dramatically reduced.
The purpose of cost budgeting is to control recoverable costs. It does not govern a client’s own liability for their own solicitors’ costs, disbursements such as experts and travel fees or barristers fees. There will always be a proportion that are unlikely to be recovered meaning there is an inevitable shortfall, the general rule is that a successful party can expect to recover between 60-90% of their own costs. Parties to litigation must always be aware if they win and make excellent recovery it will not amount to the other side paying all their costs.
Precedent H is a standard format and a clunky tool which sets out predefined stages with provision for contingencies. Often work does not fit neatly into one stage or another and there are numerous problems where the form simply fails to provide the opportunity to record important costs which have already been incurred. This can take some careful drafting and knowledge of the court’s approach.
A precedent H that accurately predicts what costs are likely to be incurred in a way that a judge will be able to follow can convince the court that the costs are justified. This is essential to ensuring that the maximum amount is recoverable.
If you require any advice regarding a matter similar to this then please do not hesitate to get in touch with our experienced team of dispute resolution solicitors on 01392 207020.