Costs budgeting and costs management

Costs management is the process undertaken by the court to manage both the steps to be taken and the costs to be incurred by the parties so as to further the overriding objective (CPR 3.12(2)).

Costs management is achieved through costs budgeting and costs management orders (CMOs), which essentially seek to ensure proactive and proportionate costs management. This topic specifically deals with costs budgets and CMOs.

Costs budgets are documents prepared for the court which contain the information required for costs budgeting, inputted into a costs budget known as Precedent H. The importance of costs budgeting is that at the end of the proceedings the successful party can recover costs under the approved budget within 14 days of the conclusion of the hearing. This is designed to avoid the time, expense and delay caused by detailed assessment where costs cannot be agreed.

CMOs record the cost budgets as agreed by the parties or the court approved budget, where there is a failure by the parties to agree—a CMO can be made at any time.

Note, costs budgeting does not apply to cases that