In clinical negligence the costs budget does more work than in almost any other claim type. The phases are expert-heavy, the disclosure is substantial, and the case can run for years before anyone argues about a bill. By the time it does, CPR 3.18 means the budget has already shaped most of the argument.
This guide sets out the rules as they stand, and where clinical negligence departs from the general position.
First: check whether the claim is costs-managed
Costs management ordinarily applies to Part 7 multi-track claims subject to the exclusions contained in CPR 3.12. Those exclusions do not prevent the court from ordering costs management in other proceedings where appropriate, so the procedural position should always be checked against the particular orders made in the claim.
The ordinary exclusions are where:
- the amount claimed as stated on the claim form is £10 million or more, or the claim is unquantified and the claim form states a value of £10 million or more;
- the claim is made by or on behalf of a person under the age of 18, in proceedings commenced on or after 6 April 2016;
- the proceedings are subject to fixed costs or scale costs; or
- the court otherwise orders.
The child exception matters a great deal in this field and is easily overlooked. A significant proportion of high-value clinical negligence — birth injury in particular — is brought on behalf of a child, and those claims fall outside the ordinary costs-management regime.
Reaching 18 does not automatically bring an existing claim into costs management. CPR 3.12(1)(c) provides that on a child reaching majority the exception continues to apply unless the court otherwise orders.
None of that removes the court’s power to order costs management where it considers it appropriate. CPR 3.12(1A) provides that the Section and Practice Direction 3D apply to any other proceedings where the court so orders. In high-value clinical negligence litigation that possibility is real, and the safe assumption is always to check the orders actually made rather than to reason from the claim type alone.
The deadlines, and the sanction that follows them
Where costs management applies, CPR 3.13 provides that:
- where the stated value of the claim is less than £50,000, budgets are ordinarily filed with the directions questionnaire;
- in other applicable cases, budgets are ordinarily filed and exchanged not later than 21 days before the first case management conference;
- an agreed budget discussion report is ordinarily filed no later than 7 days before that hearing.
CPR 3.14 is unforgiving about the first of those. A party required to file a budget which fails to do so will be treated as having filed a budget comprising only the applicable court fees unless relief is obtained. On a claim that has already absorbed several expert reports that is a severe outcome, and an application for relief is a poor substitute for a diary entry.
What the costs management order actually does
This is the most commonly misunderstood part of the regime. Under CPR 3.15 the court will:
- record the extent to which the budgeted costs are agreed between the parties;
- for budgeted costs that are not agreed, record the court’s approval after making appropriate revisions; and
- record the extent (if any) to which incurred costs are agreed.
The distinction that matters is this: incurred costs are recorded rather than approved; future budgeted costs are agreed or approved.
In clinical negligence that distinction carries real weight, because substantial work — records, screening reports, early expert evidence, letters of claim and response — is often undertaken well before the first CMC. A significant part of the claim therefore never passes through costs management at all and falls to be dealt with at detailed assessment on ordinary principles.
Assumptions: where clinical negligence budgets become vulnerable
Clinical negligence budgets are particularly dependent upon good assumptions, because the future work can be driven by experts, medical records and developments that are difficult to predict precisely at the outset. A phase figure without a meaningful assumption behind it is considerably harder to defend. The assumptions should make clear what work the phase figure actually allows for.
Expert disciplines
Identify the expert disciplines presently anticipated and why they are required. Where breach and causation require different disciplines, or several experts are likely to be needed on causation or quantum, that should not be hidden inside a generic expert figure. The budget should reflect the case that is actually anticipated.
Conferences and joint statements
Consider whether the budget allows for:
- conferences with counsel and experts;
- questions to experts;
- supplementary reports;
- expert discussions; and
- joint statements where reasonably anticipated.
These can become substantial areas of expenditure on a complex clinical negligence claim.
Medical records and disclosure
Clinical negligence claims can involve very substantial quantities of medical material. The likely quantity and complexity of those records should inform assumptions for disclosure, solicitor review, expert evidence and preparation of the case. Where exceptionally large records volumes are anticipated, say so.
Breach and causation
The budget should identify what issues remain contested. A claim in which breach and causation are both firmly denied is materially different from one where breach has been admitted and the dispute centres on causation or quantum.
Witness evidence
Do not overlook the Witness Statements phase. Clinical negligence cases involving complex factual histories, family evidence, treating clinicians or substantial loss can generate considerable witness work.
Quantum evidence
Where relevant, assumptions should address anticipated evidence concerning care, occupational therapy, accommodation, life expectancy, loss of earnings, pension loss and other specialist heads of loss.
Trial preparation
Trial preparation should be based on a realistic view of likely trial length, expert attendance, counsel involvement, bundles, conferences and preparation.
The purpose of assumptions is not to predict every development in the litigation. It is to define what work was reasonably contemplated when the budget was prepared. That also makes it easier to identify a genuine significant development later and to consider whether a Precedent T variation is required.
Varying the budget: CPR 3.15A and Precedent T
A budget is not fixed for the life of the claim. CPR 3.15A requires a party to revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions. The revision is made on Precedent T, annexed to Practice Direction 3D.
Two points are worth holding on to:
- The obligation runs both ways. It is not only a mechanism for asking for more.
- The test is a significant development in the litigation — not simply that a phase has cost more than originally expected. Late disclosure of a substantial further body of records, an amended defence, an additional expert discipline or a material change in the shape of the trial may qualify. A phase overrunning does not automatically justify a variation.
Variations are best considered when the development occurs rather than when the bill is drawn. A Precedent T served late invites the argument that the development cannot have been significant if it did not prompt a revision at the time.
Why it all comes back at detailed assessment
CPR 3.18 is the reason the budget repays the attention. For the phases it covers, the approved or agreed budget becomes the principal control on recovery. On assessment, the court will not depart from the approved or agreed budgeted costs without good reason.
An under-stated phase is therefore difficult to recover from, because the answer to “this cost more than budgeted” is usually “then it should have been varied”. Incurred costs, by contrast, remain open to the ordinary reasonableness and proportionality arguments — which is precisely why the split between incurred and estimated costs matters so much on a long-running clinical file.
Seniority, delegation and the composition of the budget
A costs-management hearing is concerned principally with whether the total budgeted costs for each phase fall within a reasonable and proportionate range. That does not make the composition of the figures irrelevant.
A clinical negligence budget should still be capable of explaining:
- the level of fee earner required;
- the work capable of delegation;
- the number and type of experts anticipated;
- counsel’s involvement;
- the expected volume of medical records and disclosure; and
- the work underlying each phase total.
The objective is not to conduct a detailed assessment in advance. It is to present a realistic and evidence-based forecast of the reasonable and proportionate cost of progressing the litigation.
A practical checklist
- Check the position under CPR 3.12 first, and check the orders actually made — the exclusions do not prevent the court from ordering costs management.
- If the claim is made by or on behalf of a child, record why no budget is required, so that it is not later assumed to have been missed.
- Diarise the CPR 3.13 dates on the correct basis for the claim: with the directions questionnaire where the stated value is under £50,000, and 21 days before the first CMC in other applicable cases, with the budget discussion report 7 days before the hearing.
- State the expert disciplines and the anticipated records volume as explicit assumptions.
- Keep the incurred and estimated split clean — incurred costs are recorded, not approved.
- Consider Precedent T when the development occurs, not when the bill is drawn.
- Make sure fee-earner level and delegation can be explained from the budget, not only from the bill.
DMD Costs prepares clinical negligence costs budgets for claimant solicitor firms — Precedent H, the supporting assumptions, Precedent T variations, and the bill of costs drafting that follows.
Rules cited: CPR Part 3 Section II (rules 3.12, 3.13, 3.14, 3.15, 3.15A and 3.18) and Practice Direction 3D, checked 18 August 2026. Costs management is PD 3D; PD 3E deals with costs capping. This guide is general information for professional readers and is not advice on any particular claim.