Multi-Track Cost Budgeting (Precedent H) vs Failing to File a Budget
The consequences of filing a Precedent H costs budget in multi-track proceedings versus failing to file, and how cost budgeting affects recoverable costs.
Overview
In multi-track cases (generally claims over £25,000), parties are ordinarily required to file and exchange costs budgets using Precedent H at the first costs and case management conference (CCMC), or no later than 21 days before it under CPR PD 3E. The budget sets out each phase of estimated costs. Once approved or agreed, the budget limits the costs recoverable on a standard basis assessment — courts will not depart from it unless there is good reason (CPR 3.18). A party that fails to file a Precedent H without good reason is treated as if their budget consisted only of the applicable court fees (CPR 3.14). This is a severe sanction that effectively caps cost recovery to a fraction of actual spend, and it may not be easily remedied.
Side-by-Side Comparison
File Precedent H Costs Budget
Pros
- Costs recoverable on standard assessment up to the approved budget — predictability for both sides
- Budget can be revised upward if there is a significant development (CPR 3.15A)
- Demonstrates transparency and proportionality to the court
- Avoids the catastrophic CPR 3.14 sanction that limits recovery to court fees only
Cons
- Significant time and cost to prepare — particularly for complex multi-party litigation
- Once approved, difficult to increase — requires application showing significant change
- Budget limits apply even if actual costs exceed the budget due to unforeseen complexity
Best For
All multi-track cases — filing a Precedent H is the default requirement and should be treated as mandatory unless the case is specifically exempt (e.g. value under £25,000, certain Business and Property Courts cases).
Fail to File a Budget
Pros
- No administrative burden in preparing the budget
- In rare cases where relief is granted promptly, the sanction may be lifted
Cons
- CPR 3.14 sanction: costs capped at court fees only on standard assessment — potentially tens of thousands of pounds in unrecoverable costs
- Relief from sanctions requires a Denton application — serious breach, usually weak excuse, uncertain outcome
- Even if relief is granted, the court will require the budget to be filed immediately and may impose costs penalties for the delay
- Fundamentally undermines the financial viability of pursuing or defending the claim
Best For
There is no scenario in which deliberately failing to file a budget is advisable. Failure is almost always inadvertent; prevention is far better than cure.
Key Differences
Our Recommendation
File a Precedent H budget for every multi-track case and diarise the 21-day CCMC deadline prominently. The CPR 3.14 sanction is one of the harshest automatic penalties in civil litigation — even a well-evidenced Denton application may not fully rescue a party from the consequences of late or non-filing.