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The obligation on the parties under CPR r. 3.13 is to ‘file and exchange’ budgets by the stated time.
The rules use ‘exchange’ here rather than serve. This tends to suggest that the usual rules relating to service found in Part 6 of the CPR do not apply to cost budgets. Some caution should be adopted in relation to this approach, however. The notes to rule 3.13 in the White Book refer interchangeably to ‘exchange’ and ‘serve’ and in 3EPD.7.7, there is reference to ‘re-serving’ a costs budget after budgeted costs have been approved or agreed. In cases such as BMCE Bank International Plc v Phoenix Commodities Pvt Ltd  EWHC 3380 (Comm) the requirement to ‘exchange’ has been assumed to be a requirement to serve. The safer approach is to assume that the requirements of Part 6 apply to cost budgets.
Rule 6.20 provides that service may be by fax or other electronic means in accordance with Practice Direction 6A. 6APD.4 provides the circumstances in which a document may be served by email. Rule 6.27 (referring to rule 6.15) allows an application for service by alternative method to be made.
In practice, the COVID-19 pandemic ought not to have a significant impact on a party’s ability to serve a costs budget in accordance with the rules. Provided sufficient time is allowed, it ought still to be possible to effect service of a cost budget by first class post. Plainly, budgets sent only in hard copy to a firm’s offices may not be received in a timely manner by the fee-earner acting. However, this problem can easily be overcome simply by sending a copy of the cost budget by email in addition to serving it by first class post. In circumstances where the COVID-19 pandemic genuinely prevents this from happening, it is likely to amount to a good reason within the second limb of the Denton test for relief from sanctions/for a retrospective extension of time.
The position with filing is more important, given that a sanction is imposed automatically by the late filing of a cost budget under rule 3.14. Rule 5.5 allows the making of practice directions providing for the filing of documents by email. Practice Direction 5B is such a Practice Direction, however, a number of significant courts are excluded from it, (see 5BPD.1.2). These are courts for which CE-filing must be used in accordance with Practice Direction 51O. Given the length and likely file size of a cost budget, it ought always to fall within the scope of documents which may be filed by email, save where the proceedings are in a court covered by Practice Direction 51O.
This article was first published by LexisPSL.
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