Budgeting – Top 10 tips and pitfalls

Budgeting – Top 10 tips and pitfalls


  1. Good budgeting starts when you open the file and getting your file notes right.

To seek maximum recovery at the conclusion of the claim, capture all the time spent on the file in file notes.  Remember the Phases.  Ensure you state under which Phase the time should be claimed, particularly if the time claimed covers more than one Phase.  The Judge may not agree with the Draftsman’s “Guesstimate”.

When preparing a lengthy letter, make sure that there is a file note that covers the time spent.  Again more than one phase, break it down for each Phase.

A good file note includes :-

  • The date.
  • A description of the work undertaken. The more description, the more chance of recovery.
  • The name of the fee earner completing the work.
  • The time taken under each Phase / Task and Activity.


  1. Check the actual date the Budget needs to be filed.

Is there a date on the Court Order? If so, file by the date specified.

If not (CPR 3.13) :-

  • value of the claim is less than £50,000.00, the Precedent H must be filed with the Direction Questionnaire.
  • In any other circumstances, unless the Court has provided a specific date, it should be filed 21 days before the first CMC (CPR 3.13). The 21 days are clear days, ie., if the date of the CMC is 5th February it should be at Court by 14th  Remember if there are Bank Holidays these need to be excluded from the 21 days.

Don’t file the budget late or you could be restricted to applicable Court fees only (CPR 3.14).  Parties can agree a 28 day extension for filing / serving the same as long as no hearing dates are placed at risk [CPR 3.8(4)].

In CPR 36.23 – Cases in which the offeror’s costs have been limited to court fees.  If a Claimant beats their own Part 36 offer, they may have a chance of recovering 50% of their post-budget costs.

Relief from sanctions is unlikely.  In Lakhani v Mahmood [2017] 4 Costs LO 4523 , the budget was one day late, and relief was refused despite it being the Christmas period.


  1. Get the budget right – Cost the file fully at budget stage.

Start to draft the budget early.  Ensure the file is costed in full so all ‘incurred costs’ have the maximum chance of recovery.  If you ‘guesstimate’ the incurred costs, there is a risk you will under estimate or even miss partial costs under a Phase.  These costs cannot be increased at a later date.  If you over guess what it due this may have a knock-on effect on what will be offered for anticipated costs (CPR 3.17).


  1. Hourly Rates – are they reasonable?

A Court cannot approve or set the hourly rates for the budget; this will be down to the Judge at an Assessment hearing (CPR 3.15(8)).  The Court will only fix a budget for the work under each Phase.  They can however look at the rates and the hours already expended in the ‘incurred costs’ and consider these when setting the ‘anticipated costs’. (CPR PD 3E.12)

Ask yourself :-

  • Have you used SCCO Guideline rates or inflated CFA rates?
  • Are the rates reasonable? do they take in to consideration the experience of the fee-earner? A Solicitor with 8 years’ PQE is unlikely to get the same as a Solicitor with over 20 years’ PQE.
  • Does the case reflect an increased rate? A £20,000.00 claim is unlikely to recuperate Grade A rates.
  • Will rates increase through the life of the ‘anticipated costs’ section of the file. If so, make sure the draftsman knows this so they can build the same into the budget and explain within the assumptions.

Consider the complexities of the claim and whether a reduced rate should be claimed to ensure maximum recovery of costs and correct time for the future costs.

Counsel and Experts should also provide hourly rates also.


  1. Anticipated Work

Think carefully about the work required under each Phase.  Don’t forget routine communications as well as documentation time and lengthy Conferences.


  1. Disbursements

Ask the Experts and Counsel for quotes for all anticipated work.  Do not say ‘TBC’ as this will result In the amount being approved as £0.00.

If it is a complicated matter and you need to utilise Counsel for preparing documents, make sure their fee is included.  The number of people that think I will prepare “the Schedule” and then instruct Counsel to do so is unbelievable.  Remember Counsel may charge more than you would claim for your time.

If Counsel already know the file, ask for their input in relation to work which they believe they will need to do prior to the Trial.

If the fees are argued at the CCMC and you have quotes available on the day, the Court may take these into consideration instead of reducing considerably.


  1. Can I update the budget prior to the CMC?

Yes, if it has not yet been approved.  Consider:-

  • Has a substantial period elapsed since it was prepared eg., Court delay is setting down for the hearing and substantial work undertaken?
  • Has the initial CMC been adjourned, and substantial work undertaken?
  • Has there been a change in the proposed / agreed Directions?
  • Are there any other significant changes eg., an Expert recommending a further report from another discipline of Expert?

If the budget has already been approved previously, a Precedent T can be used to amend the budget prior to the CMC, if there has been a significant change.


  1. Assumptions

These need to set out the basis for the budget.  They should justify the costs already incurred and explain the level of anticipated costs.  They should match the proposed / agreed Directions.  The assumptions are the starting point for any future applications to revise the budget.

The assumptions should include only those aspects that significantly impact upon the level of costs, albeit in brief details.

If you don’t anticipate something eg., Part 18 questions make it clear so you can apply to vary if Part 18 questions are subsequently required.

Under disclosure, indicate roughly the number of pages you anticipate disclosing and what you expect from the Defendant.  This way if the Defendant discloses substantially more documents, an application to vary is more likely to be successful.

Under ADR, mention the location of the JSM/mediation venue and if it changes and the cost will be more, an application can be made to vary.

Other key considerations are :

  • Liability – accepted or disputed?
  • Split Trial required?
  • Number of Experts and extent of involvement.
  • Witnesses – how many will each party have? How many witness summonses?
  • Is a further CMC likely? Yes, if a split Trial
  • Will there be an actual PTR hearing?
  • How long will the Trial last? What is the location and likely travel for each party?


  1. Contingencies

Yeo -v- Times Newspapers [2015] EWHC 209 (QB) gives guidance as to contingencies:-

  • They must involve work that does not fall within the main categories.
  • It must identify what the work would be.
  • How likely is the work likely to be required?

Remember only to include things that are more than likely to be required.


  1. Items of work quite often overlooked when looking at anticipated costs
  • Pension Loss, alongside the loss of earnings claim.
  • Medical reports not yet exchanged.
  • Whether the case will be a split-Trial.
  • Further medical reports required which are recommended in other reports.
  • Updated medical records which may be required for future Experts.

Partners In Costs has been at the forefront of costs budgeting since the Jackson reforms in 2013. We offer costs budget training to all levels of negligence and injury claims teams.   If you require any assistance with your legal costs requirements, please do get in touch with the team on 03458 72 76 78 or Contact Us – PIC


Jayne Allison, Costs Consultant.