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.

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. In any case where a CMO has been made, the court when assessing costs on the standard basis will have regard to the receiving party’s last approved or agreed costs budget and will not depart from it unless it is satisfied that there is good reason to do so (CPR 3.18).

Note, costs budgeting does not apply to cases that come within the extended fixed recoverable costs (FRC) regime. Most civil cases, unless excluded, that are valued at no more than £100,000 and