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CPR update

8 November 2005
The issues

Costs – Estimate of Costs

The facts

40th update to the Civil Procedure Rules amends the Costs Practice Direction at Section 6. The Section 6 deals generally with costs estimates defining an estimate of costs as an estimate of base costs including disbursements already incurred together with an estimate of base costs including disbursements which will be incurred if that party is successful and which will be recovered from the other side if the party is successful in the case.

The new Section provides that the Court may require a party to file an estimate of costs at any stage and that it may direct a party to prepare the estimate in such a way as to show the likely effect of giving or not giving a particular case maangement direction such as for example, an Order for a Split Trial.

The evidence should be substantially in the form given in Precedent H to the Schedule of Costs Precedents annexed to the Practice Direction. A Schedule must be filed in every case with an Allocation Questionnaire and with a Pre Trial Checklist (unless the case is within the financial scope of the small claims regime). The estimate must also be served on the party that the solicitor represents.

Section 6.5A now provides that if there is a difference of 20% or more between the base costs claimed on Detailed Assessment and the costs shown in an estimate of costs filed by that party that the party whose bill is being assessed must provide with the Bill of Costs a statement explaining the difference. If the party which is challenging the bill wishes to argue that it relied on the estimate of costs that had been filed by the other side or wished to rely upon the estimate in order to show that the costs claimed were unreasonable or disproportionate, that a statement must be served setting out that parties’ case in the Points of Dispute.

The Court has now directed on the assessment to have regard to any estimate that has previously been filed when considering whether the costs claimed are reasonable and proportionate. In particular, where there is a difference of 20% between the base costs claimed and the costs shown in the estimate of costs, and where the Court is not satisfied that the receiving party is provided with a satisfactory explanation for that difference or if the Court believes the paying party reasonably relied on that estimate then the Court may regard the difference between the costs claimed and the costs shown as evidence of the costs claimed are unreasonable or disproportionate.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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