Precedent T and changes to the Costs Budgeting Process.

There were significant changes made to Civil Procedure Rules which came into action in October 2020, containing new guidelines for variations in costs budgets. In an attempt to consolidate the process of revising cost budgets, the new CPR rules include the introduction of a Precedent T form and bring into force a new ‘oppressive behaviour’ clause in an attempt to deter potential abuse of the costs budgeting process.

However, the most noteworthy change is the introduction of new formal procedures for potential variations in costs budgets and the compulsory duty to do so in the event of a significant development during the litigation process, which has been discussed in detail in a previous blog post.

Essentially, according to the legal revisions, if significant developments occur in the litigation, the revising party must use the new Precedent T to outline the particulars of the additional costs and justify that these additional costs have not been accounted for in previous cost budgets or variations. This must then be submitted to the Court along with additional information regarding the previously agreed budget and an explanation of the points of difference if not agreed between the parties. Unlike before, even in cases where both parties agree to the changes, the new CPR also requires the court to approve, vary or disallow those variations.

Precedent T is the new budget variation form introduced in October of 2020 as part of The Civil Procedure (Amendment #3) Rules and Practice Directions in 2020. The updated document includes a separate column to cover potential variations in cost budgets. The updated CPR and Practice Directions also cover rules CPR 3.12 to 3.18, Practice Direction 3E and a separate Guidance Note, which all have impacts on the process of calculating, and updating, budgeted costs and variations.

Another interesting feature of the updates to the CPR and Practice Directions 3E in 2020 was the introduction of an ‘Oppressive Behaviour’ clause which is explained as:

‘Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.’ (PD 3E, G. 13)

Overall, both the introduction of Precedent T and the Oppressive Behaviour clause of new CPR are especially pertinent in an ever-changing and developing Legal System. Precedent T is has arguably made budget variations much more practical and concise for all parties involved and standardised the process. Further, the prior introduction of the Oppressive Behaviour clause to the Budget Costs calculation rules would have evidently prevented many instances of abuse of authority and ultimately created an objective environment in which costs were assessed. Although guidance is almost non-existent and incredibly vague as to what constitutes ‘oppressive behaviour’, it’s an extremely exciting time to be a learned costs counsel, waiting in anticipation of an opportunity to use this ever-relevant introduction to the rule of Law. Watch this space!

How Can Dynamic Costs Assist?

Here at Dynamic Costs we are highly experienced in advising and assisting with costs budgeting and disputes in relation to drafting of the Precedent T and the application and witness statements seeking permission to revise the costs budget.

Should you wish to discuss your costs query with us, please contact us on 0121 827 3759 or Alternatively, you can complete our online query form and we will contact you to discuss your query further.