Will budgeting changes make any difference?

Next month, the Civil Procedure Rule Committee will be giving detailed consideration to amendments being drawn up that will introduce changes to the way costs budgeting operates.

The changes are based on recommendations made by a special subcommittee of the CPRC, which has been examining the operation of costs management in detail. The subcommittee, led by Mr Justice Coulson, acknowledges that so far, budgeting has led to ‘significant delays’ in the pre-trial process, and is ‘eating up hard-pressed judicial resources’.

So what improvements does it propose – and will they make any difference?

One of the big changes is that cases relating to children will no longer need to be budgeted. This will certainly be welcomed by PI lawyers, given the difficulty in producing a budget that is anywhere near accurate, in cases where a proper prognosis is still a long way off – because the injuries will take years to stabilise.

What’s more, in children’s cases, the costs will be covered by detailed assessment at the end of the case in any event – making going through the rigmarole of a budget potentially pointless.

On the detailed assessment point, the same is true of cases involving protected parties. Some subcommittee members had seen this as a reason for also excluding cases involving protected parties from budgeting – but this was ultimately rejected by the CPRC, on the basis that defendants should have the benefit of budgeting in these cases.

So adult protected-party cases will remain within the costs management regime.

One welcome change is that judges will be given the discretion to disapply budgeting in cases where a claimant’s injuries are terminal – although such cases will not be automatically exempt. Given that most judges seem keen to get out of budgeting whenever they can, one would expect this new discretion to be exercised fairly generously in this type of case.

In a bid to encourage agreement of budgets, an earlier deadline is being introduced, obliging parties to file and exchange budgets 21 days before the CMC, and to agree as many component elements as possible. Seven days before the CMC, alternative figures must be filed for any of the phases not agreed.

Clearly this will force parties to focus their minds on the budget at an earlier stage – but of course there is no guarantee that it will make parties any better at actually reaching agreement.

Earlier this summer, a temporary break from budgeting was announced for some clinical negligence cases, to clear the current logjam.

But disappointingly for clinical negligence lawyers, the CPRC has concluded that clin neg will remain firmly within the budgeting framework (this will not affect the temporary exemption) – despite its obvious failure in that sphere, where budgets are almost never agreed between parties, and the strain on court resources has been shocking.

From the defendant perspective, hopes that defendants might be relieved of the requirement to prepare a budget - which, in the personal injury costs regime at least, is largely a futile exercise - have been dashed, with the CPRC concluding that defendants will still need to file budgets, to keep things equal with claimants. 

Defendants will also be disappointed that there is no move to incorporate incurred costs into the budget – on the basis that this would make budgeting even more complex. 

The CPRC also cleared up the vexed question of whether or not judges should be looking at and approving hourly rates in the budget – something that has caused a remarkable amount of confusion since budgeting was introduced. The answer is no; the court’s approval should only relate to the totals for each phase, and it is ‘not the role of the court to fix or approve hourly rates’.

The CPRC also suggested some improvements to the Precedent H form.

So overall, what will be the impact of these fresh changes, when they come in? They will no doubt add a drop or two of oil to the budgeting machine, and help it to run a touch more smoothly. But they are certainly not the full-scale remodelling - or indeed dismantling and rebuilding - that many litigators would have liked to see.

Rachel Rothwell is editor of Litigation Funding magazine