Precedent H Costs Budget UK: Form & Guidance
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If you are running a civil case in England and Wales, the question of costs is rarely an afterthought. Since the costs management reforms, the court often needs both sides to set out what they expect to spend, phase by phase, and then agree (or argue about) what is reasonable and proportionate.
Precedent H is the form that captures that budget. Alongside it sits the Budget Discussion Report (sometimes called Precedent R), which records where the parties agree, where they don't, and the figures each side says the court should approve. This guide walks through what these documents are for, when they apply, how the phases work, and the common pitfalls to watch for when you prepare them.
Overview
Precedent H is the standard costs budget form used in civil proceedings in England and Wales. It sets out, phase by phase, the costs a party has already incurred and the costs they estimate they will incur to take the case through to conclusion.
The form sits within the costs management regime under the Civil Procedure Rules, with the detailed requirements found in CPR Part 3 and Practice Direction 3E. The Budget Discussion Report is the companion document. Once both sides have exchanged their Precedent H forms, they complete a Budget Discussion Report to flag the figures that are agreed and the figures that are disputed, together with any brief reasons.
The court then uses both documents at the costs and case management stage to decide what budgeted figures to approve for each phase going forward. The aim is to bring predictability to litigation costs, reduce satellite arguments at the end of a case, and keep spending proportionate to what is actually at stake in the claim.
Key steps
- Check whether a budget is required. Costs budgeting does not apply to every case. Read the current version of CPR Part 3 and PD 3E to confirm whether your claim falls inside or outside the regime, as thresholds and exceptions change over time. If in doubt, raise it with the other side early rather than assuming.
- Download the current Precedent H template. Use the official version published by the Ministry of Justice rather than an old copy floating around your firm. The spreadsheet has built-in formulas that total each phase and roll up to the grand total, so using the live template reduces the chance of arithmetic errors when figures are updated.
- Work through each phase methodically. The phases typically cover pre-action, statements of case, case management conference, disclosure, witness statements, expert reports, pre-trial review, trial preparation, trial, settlement or ADR, and any contingent cost categories. For each phase, allocate fee earner time, disbursements, court fees, counsel's fees, and expert fees based on what the case actually requires.
- Record your assumptions clearly. Under each phase there is space to note the assumptions that drive the figures, for example the number of witnesses, the scope of disclosure, or the length of trial. Clear assumptions make it easier for the other side and the court to see why the numbers look the way they do, and they matter if you later apply to revise the budget.
- Prepare and exchange the Budget Discussion Report. Once budgets have been exchanged, set out each phase with the figure claimed, the figure offered, and a short comment on the points in dispute. File both documents in line with the directions given or the timescales in the rules. Be ready to justify your figures at the hearing.
Common questions
Q What is Precedent H used for?
Precedent H is the costs budget form used in civil litigation in England and Wales. It sets out, phase by phase, what a party has already spent and what it expects to spend taking the case to trial. The court uses it at the costs and case management stage to approve a budget that the party can then recover against if it wins, subject to the usual rules on assessment.
Q When does a shorter version of Precedent H apply?
A shorter, less detailed version of the form is generally used for lower value claims where the costs claimed fall below a threshold set out in Practice Direction 3E. The thresholds are updated from time to time, so always check the current version of the rules rather than relying on figures mentioned in older guidance. If your case is borderline, it is safer to prepare the full form.
Q What is the Budget Discussion Report?
The Budget Discussion Report, often called Precedent R, is the document in which the parties record their response to each other's budgets. For each phase it shows the figure claimed, the figure the other side is prepared to agree, and a short note explaining any disagreement. The court reads this at the case management hearing to focus on genuinely disputed phases.
Q Can I include the cost of preparing the budget itself?
The time spent preparing the initial budget and associated costs management documents is treated differently from other work on the case. There are rules capping what can be recovered for budget preparation and for the costs management process itself. You should not inflate other phases to absorb this work, and you should check the current caps in PD 3E when putting your figures together.
Q What happens if my actual costs exceed the approved budget?
If your costs end up higher than the budgeted figure for a phase, you may have difficulty recovering the excess from the losing side unless you can show a good reason to depart from the budget. If something significant changes in the case, you can apply to revise the budget, but you should do so promptly rather than waiting until the end.
Q Do I need a costs lawyer to prepare Precedent H?
You do not have to use a costs lawyer or costs draftsman, but many firms do because getting the phases and assumptions right takes experience. A badly prepared budget can be heavily reduced at the hearing, which affects how much the client can recover later. At minimum, have the figures checked by someone familiar with the current costs management rules.
Q What is a contingent cost on Precedent H?
Contingent costs are costs for work that may or may not need to be done, depending on how the case develops. Typical examples include applications that have not yet been made or specific interlocutory steps that are only likely in some scenarios. They are listed separately from the main phases so that the court can consider whether to approve them now or leave them for later.
Sources
This guide is based on primary UK law and official guidance.
- Guidance · HMCTSPrecedent H form (Ministry of Justice)gov.uk
- Guidance · HMCTSCivil Procedure Rules Part 3 and Practice Direction 3Ejustice.gov.uk
- Guidance · HMCTSCivil Procedure Rules Part 44 (General rules about costs)justice.gov.uk
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.