Missing the precedent R budget discussion report deadline – what happens?
There is no prescribed rule that sets out the consequence of either the failure to file, or the late filing of the precedent R, within the requisite time limit. Consequently, the court has discretion in its approach and one option available to them, for example, is to order an unless order setting out the consequences of that failure. This is very different to the automatic sanction that applies to failing to file the costs budget.
However, the recent case of Alexandra Handy v Dr Mohammed Azhar Aslam & Linia Limited [2021] sheds some light on one of the court’s options. In this case the second defendant had failed to file and serve a precedent R budget discussion report, as required by CPR 3.13(2) and paragraph 11 of practise direction 3E. The failure to file the precedent R resulted in Deputy District Judge O’Connell refusing the second defendant permission to challenge the costs budget.
The claimant had filed and served her budget within the time limits prescribed by the rules and had indicated that an updated budget would be filed and served 14 days prior to the costs and case management conference. Consequently, the second defendant had the information required to prepare the precedent R within the prescribed time limits. The second defendant’s justification for failing to file and serve the precedent R was because they were waiting to receive the claimant’s updated budget. The claimant’s intention to file an updated budget had no relevance to any delay in preparing a precedent R. Notwithstanding that, the claimant filed an updated budget 7 days prior to the hearing, therefore there was no good reason why a precedent R had not been filed.
DDJ O’Connell commented “I take the view that if there is no objection, no discussion report has been filed; that I am going to allow that budget as it has now been served in the sum of £298,208.90”.
Notification that an updated budget is to be filed prior to the hearing is not a reason to fail to file and serve a budget discussion report until receipt of that updated budget, or at all, which is what happened on this occasion. It is common practice, which the court also commented on, to file an updated budget to reflect the current position regarding incurred costs, particularly in view of CPR 3.17(3)(a) which states “the court may not approve costs incurred up to and including the date of any costs management hearing”. This is not a justification for parties to not meet the time limits set out in the court rules.
On this occasion DDJ O’Connell found that the claimant’s costs budget could be viewed as unchallenged by the second defendant and was therefore allowed as claimed.
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Published 7 July 2022
Sue Fox