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Changes To The Cpr – Budgets

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On 6 April 2017, a further update was introduced to the CPR in relation to the budgeting regime, which is designed to take into account the decision of the Court of Appeal in SARPD Oil International Limited v Addax Energy SA [2016] EWCA Civ 120.

The intention is to make the rules clearer that the costs being considered at a Costs and Case Management hearing are the ‘budgeted costs’, which can be defined as ‘the costs to be incurred’ (CPR r3.15(1)). Thus, all references to the budget in CPR 3, have been replaced by the phrase ‘budgeted costs’ in an effort to make this clearer.

Of course, this does not mean that you should not still include the incurred costs in the budget any more, since there is now the additional provision that the court record on the order, even if budgeted costs are agreed, any comments they have about incurred costs. The rule also provides that those comments ‘are to be taken into account in any subsequent assessment proceedings’. This provides additional ‘weight’ to any comments made by the judge on budgeting and this further clarity will come as a blessing to defendants faced with front-ended cases.

Having said that, the new precedent R confuses matters somewhat in that it states at the top ‘include only budgeted costs’. This, then, follows the rules that the only costs to be included on the precedent R are those which are to be incurred and not those which have been incurred. Notwithstanding this, the document then still includes a section for pre-action costs, which cannot fall under the heading of budgeted costs.

It can only be assumed that the reference to pre-action costs on that form is an error. The pre-action costs will still be included in the budget and any comment on those is to be recorded in the order, so it seems unnecessary to complete that section in any event.


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