Costs budgeting—courts' approach
Costs budgeting—courts' approach

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • Costs budgeting—courts' approach
  • Costs budget discussion reports
  • Court's role in managing incurred costs
  • Parties have agreed their respective budgets
  • Parties have not agreed their respective budgets
  • Parties have not agreed their respective budgets—contingencies
  • Parties have not agreed their respective budgets—court approach
  • Parties have not agreed their respective budgets—disproportionate costs budgets
  • Parties have not agreed their respective budgets—failure to object to a party's costs budget
  • Parties have not agreed their respective budgets—is a hearing required?
  • more

Costs budget discussion reports

Parties are required to file budget discussion reports (BD reports) with the court. The reports are designed to assist the judge in understanding what costs have been agreed between the parties and which costs are disputed and why. Each party has to prepare its own report on its opponent’s costs and the court will consider the report alongside the costs budget when determining the amount it will approve. For more detailed information, see Practice Note: Costs budget discussion reports (BD reports).

Court's role in managing incurred costs

CPR 3.5(4) provides that:

  1. in performing its costs management functions, the court has oversight of both the incurred and estimated future costs (budgeted costs), and

  2. the extent to which the parties disagree with one another's budgets should be recorded

In conjunction with CPR 3.5(4), CPR 3.18(c) provides that the court’s comments recorded on the costs budget can be taken into account at the detailed assessment stage.

CPR PD 3E, para 7.4 provides that as part of the costs management process the court may not approve costs incurred before the date of any costs management hearing. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all budgeted costs.

What are incurred costs?

For guidance, see: Costs budgeting—completing Precedent