A claimant issues proceedings in the County Court against a defendant contractor for damages of £120,000 arising from alleged defective building work. The claim is allocated to the multi-track. The court gives case management directions requiring the parties to file and exchange costs budgets by a specified date, which is 21 days before the first case management conference. The defendant's solicitor is unfamiliar with costs budgeting requirements and asks whether the same obligations would apply if the claim had been allocated to a different track.
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ACosts budgets must be filed in all civil proceedings regardless of track allocation, as the CPR requirement for costs budgeting applies universally to ensure proportionality and enable the court to manage cases effectively throughout litigation.
BCosts budgets are mandatory requirements on both the multi-track and fast track, but would not be required if the claim had been allocated to the small claims track where parties typically represent themselves without legal costs.
CCosts budgets are required on the multi-track where directed by the court, but not on the small claims track where costs recovery is generally limited to fixed costs.
DThe costs budgeting requirement applies only to claims exceeding £250,000 in value, so if this claim had been for a lower sum or allocated to the fast track or small claims track, no budget would be required under the CPR.
✓ Correct answer: C. Costs budgets are required on the multi-track where directed by the court, but not on the small claims track where costs recovery is generally limited to fixed costs.The correct answer identifies that costs budgeting under CPR Part 3 Section II applies to multi-track cases (and some fast track cases) where the court so directs, but the small claims track operates under different costs rules with very limited costs recovery, making detailed budgeting unnecessary and disproportionate. Distractor 1 wrongly suggests budgets are never required on fast track. Distractor 2 incorrectly states that all civil claims require budgets regardless of track. Distractor 3 misapplies the financial threshold for budgeting exemptions. Distractor 4 wrongly suggests budgets are optional rather than mandatory when directed.
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