Simplified Costs Budgeting 2025

Costs Budgeting News!

Simplified Costs Budgeting Pilots 2025 or Costs Budgeting “Lite”

Which cases does simplified costs budgeting apply to?

The 179^th Amendment of the CPR Rules bring a 3 year simplified costs budgeting pilot or costs budgeting “lite”, which is due to start on 6 April 2025 and will test new approaches to costs budgeting.

The CPR Rules Committee has approved 2 budgeting pilots, for certain matters in the Business and Property Courts (BPC) and also for certain other cases with a value of less than £1 million. The CPR 179^th Amendment rules set out the details of the pilot schemes in schedule 2 and schedule 3 of the Practice Directions. A further pilot is being worked on in respect of cases involving one way costs shifting.

The new Practice Directions are known as PD 51ZG1 and PD 51ZG2.

Which proceedings does Practice Direction 51ZG1 – Schedule 2 apply to?

The provisions of the pilot scheme set out in schedule 2 apply to Part 7 multi track proceedings in certain Business and Property Courts and certain Business and Property work in the County Court, issued on or after 1 April 2025, for a period of 3 years.

It applies in the Business and Property Court of England and Wales, in the BPC in Manchester and Leeds or as Business and Property work in the County Court in Manchester, Leeds or Central London.

Which proceedings does Practice Direction 51ZG2 – Schedule 3 apply to?

The provisions of the pilot scheme for simplified costs budgeting set out in schedule 3 apply to Part 7 multi track claims which are subject to costs budgeting, issued on or after 1 April 2025, for a period of 3 years, with a value of less than £1 million and which are proceeding in the Central London County Court, or the Leeds or Bristol District Registries.

What are the new simplified costs budgeting documents called?

New simplified documents have been created, with a simplified costs budget being Precedent Z, a simplified budget discussion report, which is Precedent RZ and the variation form for the simplified costs budget being Precedent TZ.

When does the simplified costs budget need to be filed?

Unless the Court orders otherwise, all parties except litigants in person shall file and serve a simplified costs budget by no later than 21 days before the first Case Management Conference.

How does the value of the claim affect the simplified costs budget?– Schedule 2 BPC only

Where the relevant claim has a value of £1 million or more (or in circumstances where the claim contains either no statement of value or seeks only non-monetary relief, or the parties are unable to agree whether the value of the claim is £1 million or more, unless the court orders otherwise, it shall be treated as if it had a value of £1 million or more), the court shall not manage the costs of the parties unless satisfied that the litigation can only be conducted justly and proportionately if a costs management order is made.

Where a Costs Management Order is to be made, the Court will give directions to include the type of costs budget to be filed, whether a simplified costs budget, Precedent H costs budget or an updated simplified costs budget.

When does a simplified discussion report need to be filed?

Where a party has been served with a simplified costs budget, each represented party must file and serve a simplified costs budget discussion report no later than 7 days before the first CMC.

Important to note

Where the Court has not made a costs management order, the PD sets out the requirement for updated simplified costs budgets to be filed no later than 28 days prior to trial, 28 days before start of trial window or 7 days before a PTR hearing, whichever is sooner.

Notwithstanding the above, please be aware that the court may order a party to file an updated simplified costs budget at any stage of the proceedings.

Beware, if a party fails to comply with its obligations under the PD, including failure to file a simplified costs budget or Precedent H, the Court can impose sanctions including restricting the party’s costs to be incurred, to court fees only.

If you would like to speak to us in respect of costs budgeting or costs management, please feel free to call us on 01925 422 945, email us at enquiries@costslawyeruk.com or fill in our enquiry form and we will be in touch shortly.