Costs budgets—reviewing and amending
Costs budgets—reviewing and amending

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

  • Costs budgets—reviewing and amending
  • Developments in this area
  • Continual monitoring of cost budgets
  • Different approach depending on whether there is an agreed or an approved costs budget
  • Conditions for revising a costs budget under CPR PD 3E, para 7.6
  • What are ‘future’ costs for the purposes of CPR PD 3E, para 7.6?
  • What is ‘significant developments’ for the purposes of CPR PD 3E, para 7.6?
  • Notice of an application under CPR PD 3E, para 7.6
  • CPR 3.14 sanction in place—what impact does this have?
  • Unanticipated events at the time the costs budget was agreed/approved
  • more

Developments in this area

Proposals are being considered by the CPR Committee in relation to CPR PD 3E. For details, see: Tracker—costs management and costs budgeting review and future changes—Proposals to deal with revisions to costs budgets.

Continual monitoring of cost budgets

Once a costs budget has been completed and agreed with the other side, or approved by the court, the court will undertake active costs management of the case throughout the proceedings. The parties therefore need to monitor their costs budgets to ensure that they are staying within the budgeted costs for each phase of the proceedings. If the costs incurred are greater than those set out in the costs budget, it is unlikely that the additional costs spent will be recoverable on a costs assessment.

CPR 3.18(b) allows a costs judge to depart from an approved/agreed court budget when undertaking a costs assessment on a standard basis, but there must be a good reason to do so—simply failing to keep track of costs such that the estimate is exceeded is not be a good reason. For guidance on the application of CPR 3.18, see Practice Note: Detailed assessment and costs budgeting.

It is therefore essential to:

  1. prepare the costs budget with care to ensure that it fully takes into account the work required to be undertaken

  2. continually review