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Costs Budget - A Team Effort


Many people are not fans of costs budgeting and it is tempting to think that this is a task to be left to your costs draftsman.

There are four things to consider before you delegate this task to your costs draftsman and then simply file the Precedent H:

1. Do they possess the correct skills to prepare an effective budget?
2. Does the budget reflect what you know about the case?
3. When will I have to pay for my cost budget to be prepared?
4. Does my costs draftsman share risk with me?

Do they possess the correct skills?

- Many costs draftsmen have spent a large proportion of their career simply counting letters and calls and have limited appreciation of the realities and complexities of litigation. This can result in your incurred costs being an accurate reflection of work undertaken but anticipated costs being based upon superficial assumptions or on generic estimates which do not reflect:

o The issues live between the parties
o The conduct of your opponent
o Appropriate time for dealing with expert reports
o A misunderstanding of the process of litigation

- Often preparation of costs budgets is delegated to a junior costs draftsman whilst those more senior concentrate on the more glamorous elements such as Points of Dispute, negotiation or attendance at Detailed Assessment. This is a fundamental error. Preparation of a costs budget required a detailed understanding of the litigation process allied with technical accuracy and foresight based on experience.

At Deep Blue Costs we believe that costs budgets should only be prepared by costs professionals experienced in cases similar to yours. In the same way solicitors specialise, so should costs draftsmen. They are then able to consider all eventualities and effectively predict the costs which flow from these.

- Are the assumptions detailed within the costs budget appropriate and sufficiently detailed? Such as:

o The number of interlocutory applications envisaged
o Number of witnesses and how many days attending trial / witness statements
o Assumptions as to the opponents experts and witnesses / witness statements
o Extent of disclosure documentation anticipated

- Is the costs draftsman sufficiently experienced to estimate expert fees and disbursements correctly? Will the costs draftsman identify when it is necessary to contact experts to obtain fee estimates? Too often standard estimates are included which do not reflect the true cost of a particular expert or discipline of expert. This can cause significant difficulties at the conclusion of the case.

Does the budget reflect what you know?

Every experienced solicitor develops a keen sense of how a case will develop based on the stance of the opponent, the nature of the case and the client. This is something that is often not apparent to a costs draftsman from review of your file of papers. Your costs draftsman should ask questions to clarify any uncertainty as to how the case will progress. Many costs draftsman when they are uncertain will rely on their experience. However generic experience is no substitute for your understanding of the case, having been involved from the outset.

Your costs draftsman should provide you with a detailed advice to accompany the Precedent H detailing the assumptions anticipated time is based upon. This will allow you to be certain that your costs draftsman has grasped the nature of your specific case.

It is tempting to rely completely on your costs draftsman. However preparation of a Precedent H is a team effort. You need to engage in critically assessing the budget prepared. You are the most informed and last quality control before a costs budget is prepared. A few minutes spent reviewing a costs budget can have a significant impact on the level of your fees recovered.

When do you have to pay for your costs budget?

The requirement for a costs budget has a significant impact on a solicitor's cashflow, given the case may not settle for months or even years after a costs budget is prepared. Many costs draftsman render a bill at the point that a costs budget is produced. This is a significant burden where you have hundreds of cases subject to cost budgeting. This also does not take account of any reductions to the fees permitted for preparation of the costs budget.

We believe that it is unreasonable for your costs draftsman to be an additional burden. Your costs draftsman should work as part of your team and should therefore not have better payment terms than you. At Deep Blue Costs we only invoice for preparation of your costs budget at the conclusion of the case and only require payment once you have been paid by your opponent. (Where you are instructed on a conditional fee basis)

Does your costs draftsman share risk with you?

Unfortunately not all cases where a costs budget is prepared are ultimately successful. At Deep Blue Costs we do not charge for costs budgets where a case is unsuccessful. We also reduce our fee in line with that recovered. So where 80% of the fee is recovered we only charge 80%.

To arrange for a genuine expert to prepare your costs budgets, who shares risk and does not invoice until your case concludes contact Deep Blue Costs at This email address is being protected from spambots. You need JavaScript enabled to view it. or call 0114 303 2407.

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