Revising your costs budget – The new Precedent T
Since 1 October 2020 there has been a new form to be used when it is necessary for a party to revise its previously approved budget, and that is the Precedent T. Prior to this point, there was no set format when these kinds of changes were required, so this now makes the matter more simplified for the Courts, and indeed all the parties, to deal with.
A budget should be varied when there are significant developments in a case and a party is required to revise their costs budget upwards, or indeed downwards, as appropriate. A significant development is something that could not have been reasonably anticipated when the initial budget was drafted. Such a development may occur in the normal course of the litigation, but just not considered to be relevant to the case at the time the budget was drafted and approved.
Having the Precedent T in place seeks to make the process of budget variation more simplified and attempts to join both Precedent H and Precedent R to produce a combined document. The Precedent T consists of 3 pages. The first, a summary page, sets out the totals which were approved at the CMO or agreed between the parties for the various phases, broken down into the incurred and estimated blocks of time. There then follows a column for each phase to include the total cost of the variation, be it up or down. There is no distinction given here as to profit costs or disbursements, just a total figure. Then a column to show the total amount sought for each phase, to include the approved/agreed budget, and the variation cost together. A final column leaves space for the allowed or agreed costs to be entered.
The second page gives some additional detail to the variation costs, splitting each phase into profit costs and disbursements and giving a column in which to provide an explanation for the significant development. Taking the lead from the Precedent R there are two final columns where the opposing party may make their offer and any comments regarding the significant development.
The final page of the Precedent T simply gives the party the ability to set out specific fees of experts, if these are involved in the variation, as they are given their own place in a Precedent H.
It is important to remember when preparing any variation that the costs sought to be added are not included in any previously budgeted costs. This could be something that complicates matters when significant developments may follow on from contingency costs previously budgeted for. It must be clear that these are above and beyond anything previously included.
Overall, the changes have succeeded in providing to parties a user-friendly, and concise document which allows it to be seen how the costs of the variation are to be applied, and giving the parties the basis of negotiations by explaining the variation, and giving the opportunity to comment on the same.
Of course, preparation of budget revisions and variations is something that here at Renvilles we have dealt with since costs budgeting began. The Precedent T tool now helps us make that task more simplified, and clear for all involved, and allows us to continue to deliver our expected high-quality service to all our Clients.
By Claire Corrie – Costs Lawyer