PD 51ZG1

Practice direction 51ZG1 applies to Part 7 multi track claims, issued between 6 April 2025 and 6 April 2028, to which Costs Management applies (the existing limitations remain in CPR 3.12) which is proceeding in the Business and Property Courts of England and Wales, the Business and Property Courts in Manchester and Leeds or as Business and Property work in the county court at Manchester, Leeds or Central London.

Unless otherwise ordered, all parties (except litigants in person) shall file and serve a simplified costs budget (Precedent Z) no later than 21 days before the first CMC. 

Where the claim has a value of £1million or more (where the claim has no statement of value; seeks non-monetary relief or the parties are unable to agree, the claim shall be treated as if it had a value of £1million or more) the court shall not manage the costs unless the litigation can only be conducted justly and proportionately by being costs managed. In these circumstances the court will, at the first CMC, give directions as to any costs management to include service of a Precedent H if required and service of budget discussion reports. 

Where the claim has a value of less than £1million, parties must file and serve a simplified budget discussion report no later than 7 days pre CMC, the court will then consider at the CMC and make a costs management order unless satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made. 

When the court does not make a costs management order, unless otherwise ordered, each party shall file and serve an updated simplified costs budget no later than 28 days before i) the start of trial ii) the start of any trial window or iii) 7 days before any PTR whichever is earlier and the court may order one at any time. 

PD 51ZG2 

Practice direction 51ZG2 applies to Part 7 multi track claims, issued between 6 April 2025 and 6 April 2028, to which Costs Management applies (the existing limitations remain in CPR 3.12), which has a value under £1million, proceeding in the county court at Central London or at the Leeds or Bristol District Registries, to which PD 51ZG1 and CPR 44.13 (QOCs) do not apply.

Unless otherwise ordered, all parties (except litigants in person) shall file and serve a simplified costs budget (Precedent Z) no later than 21 days before the first CMC. 

Parties must file and serve a simplified budget discussion report no later than 7 days pre-CMC, the court will then consider at the CMC and make a costs management order unless satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made. 

When the court does not make a costs management order, unless otherwise ordered, each party shall file and serve an updated simplified costs budget no later than 28 days before i) the start of trial ii) the start of any trial window or iii) 7 days before any PTR whichever is earlier and the court may order one at any time. 

PD 51ZG3

Practice Direction 51ZG3 applies to Part 7 multi track claims, issued between 6 April 2025 and 6 April 2028, to which Costs Management applies (the existing limitations remain in CPR 3.12) which is proceeding in the District Registry at Manchester or Birmingham to which CPR 44.13 (QOCS) applies. 

Unless otherwise ordered, all parties (except litigants in person) shall file and serve a simplified costs budget (Precedent Z) no later than 21 days before the first CMC. 

The defendant shall by no later than 14 days before the first case management conference file and serve a simplified budget discussion report, unless notice has been given that either party intends to seek a direction for a split trial/preliminary issue trial or that the litigation can only be conducted justly and at proportionate cost if the court manages using Precedent H (notice must be given no later than 21 days before the CMC). 

The court will not make a costs management order in respect of the defendant’s costs unless satisfied that the litigation can only be conducted justly and at proportionate cost if such an order is made.  
At the first CMC the court may give costs management directions to include making no costs management order; managing the claimant’s costs using the simplified costs budget or giving directions for costs management to include the requirement for Precedent H’s to be filed. 

When the court does not make a costs management order, unless otherwise ordered, each party shall file and serve an updated simplified costs budget no later than 28 days before i) the start of trial ii) the start of any trial window or iii) 7 days before any PTR whichever is earlier and the court may order one at any time. 

In practice

So, what does this mean in practice? 

These Practice Directions only apply to claims issued between 6 April 2025 and 6 April 2028 so we will not see them in practice just yet but must still be alive to identifying these claims where we can. 

The pilot proceeds in the BPC (London, Manchester and Leeds) to include Business and Property work in these county courts, in the county courts at Central London, Leeds and Bristol District Registries where QOCS does not apply (i.e. no personal injury claims) and in the Manchester and Birmingham District Registries where QOCS does apply (personal injury claims). 

All parties, except litigant in persons, must file and serve a simplified costs budget no later than 21 days before the first CMC – even defendants in cases where QOCS applies. This takes the form of a Precedent Z (Precedent Cost Forms – Justice UK) which is a two page document setting out the grand totals incurred and to be incurred in each phase (broken down into counsel’s fees, other disbursements and time costs) and an allowance for assumptions to include confirming the hourly rates. In reality it is likely that the same amount of work will be required to prepare this document as is required in preparing a Precedent H as the same underlying calculations are required – what work has been done and what work will be done. 

CPR 3.14 – the automatic sanction for failure to file a costs budget has been disapplied but this has been replaced in each practice direction with the wording “If a party has failed to comply with its obligations under this Practice Direction, including the failure to file a simplified costs budget or Precedent H, the court may impose sanctions which may include limiting the recovery of the costs to be incurred to the applicable court fees.”  Whether this will still require relief from sanctions applications to be prepared and filed remains to be seen. 

Under PD51ZG1, where the value of the claim is over £1million, nothing further is required prior to the first CMC and the court will simply consider whether any costs management process is required. 
Where the value is under £1million or falls within PD51ZG2, the parties must file and serve simplified costs budget discussion reports (Precedent RZ) no later than seven days pre-CMC. In essence, this is the same as the original Precedent R document, there is simply a breakdown between counsel’s fees and other disbursements.

In QOCS cases governed by PD51ZG3, only the defendant needs to file and serve a Precedent RZ, but note that this is no later than 14 days before the CMC, so a much shorter turnaround time. There are also a number of caveats – if either party gives notice, no later than 21 days pre-CMC, that either they will be seeking a direction for a split trial/preliminary issues hearing or that full costs budgeting is required (Precedent H) then the budget discussion report is not required and the court will consider giving costs management directions at the CMC. This means that directions need to be considered prior to the service of costs budgets and claimant budgets will potentially require consideration upon immediate receipt as to whether the standard costs management process should apply. 

In all cases, CPR 3.15, 3.15A, 3.16, 3.17 and 3.18 apply with necessary modifications to refer to the simplified costs budgeting documents. 

In all cases, where a costs management order is not made, the provisions of Part 44 and PD 3.2-3.7 apply (costs budgets to be treated as costs estimates) and unless the court orders otherwise, each party shall file and serve an updated simplified costs budget no later than 28 days before the start of trial, or the start of the trial window, or seven days before the PTR, whichever is earlier, so ensure that this is diarised when directions are finalised. The court can also order a party to file an updated simplified costs budget at any stage, so bear in mind that if you are concerned about an opponent’s spend, you should be flagging this with the court to get them to request an up-to-date position. 

It will be interesting to see how far-reaching these pilot schemes are and whether parties actively try to avoid the relevant courts or whether they engage with the process on the basis that it will be rolled out across other divisions.