The changes (among other things) reduce the existing structure for costs budgeting, which until now spanned three sources:
- the Rules themselves (CPR 3.12 to 3.18)
- the Practice Direction (PD 3E); and
- a separate Guidance Note.
They also introduce Precedent T, the form which a party must use from today when seeking agreement, and/or court approval for a change to its agreed/approved budgeted costs.
The Guidance has now become part of the Practice Direction and some of the former PDs have been incorporated into the Rules, whilst others have given way to judicial guidance.
However, the most notable change is the introduction of the new formal procedure for varying your costs budget and imposition of a mandatory duty on parties to do so where there is a significant development in the litigation.
The new procedure is set out in CPR 3.15A, and can be summarised as follows:
- If a significant development occurs in the litigation, the revising party must —
(a) serve particulars of the variation proposed on every other party, using Precedent T;
(b) confine the particulars to the additional costs occasioned by the significant development; and
(c) certify that the additional costs are not included in any previous budgeted costs or variation.
- The revising party must submit the particulars of variation promptly to the court, together with the last approved or agreed budget, and with an explanation of the points of difference if they have not been agreed.
- The court may approve, vary or disallow the proposed variations, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed, or may list a further costs management hearing.
- Where the court makes an order for variation, it may vary the budget for costs related to that variation which have been incurred prior to the order for variation but after the costs management order.
One other notable introduction to the revised PD 3E:
G. Oppressive behaviour
13. 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.
It is unclear how high the bar will be set for such a finding.
Watch this space.