Introduction

Rules for costs management, including rules for filing and exchange of a CPR costs budget are outlined under Part 3 of the Civil Procedure Rules and Practice Direction 3E.

In Multi-Track cases, a CPR Costs Budget must be filed with the Directions Questionnaire if the claim value is under £50,000, or 21 days before the first Case Management Conference (CCMC) if the claim is pleaded over £50,000 unless the Court otherwise orders . It is usually best to file a Budget with the Directions Questionnaire to avoid the risks of being awarded Court fees only, and having to apply for relief from sanctions.

A Costs Budget should include details of your base costs incurred to date, and future costs to be incurred for the totality of the case up to and including Trial. VAT and additional liabilities are not included within the Budget figures.

Amending a CPR Costs Budget before Filing

Your CPR Costs Budget should be updated prior to the budget being approved to ensure incurred and anticipated costs are up to date. 

On conclusion of a claim, there can be a significant discrepancy between incurred costs shown in the Bill and Budget. This can be due to the passage of time that has passed between the Cost Budget preparation and any CCMC. This discrepancy can be avoided if an updated Cost Budget is filed and served prior to any CCMC.

Amending a Previously Filed CPR Costs Budget

If a CPR Costs Budget has been filed and approved and it transpires that the current budgeted costs are insufficient, you will need to gain consent from the opposing party to make an amendment to the CPR Costs Budget. If an amended Budget is sought but agreement cannot be reached, the Court must be notified of the same via an application and you must show a significant development has occurred.

What Happens if the Amendment is Not Agreed?

PD3E 7.6 sets out the procedure for amending your Budget.  The applying party shall disclose an amended Budget to the other side first, failing agreement to which, an application should then be made to the Court for a revised Budget, “together with a note of (a) the changes made and the reasons for those changes and (b) the objections of any other party”.  In order for the application to succeed, you must be able to demonstrate a significant development in the litigation.

What Can be Considered as a Significant Development?

Under Practice Direction 3E 7.6, the Court has jurisdiction when revising a CPR Costs Budget, therefore, even if agreement to amend the Budget is sought from the other side, you must show a material change in circumstances which could not have been foreseen when the original Budget was prepared.

This was demonstrated in the case of Sharp V Blank when the defendant made an application to have its CPR Costs Budget amended. The Chief Master stated;

“The policy is clear. If there have been significant developments, the budgets must be revised. A claim for additional costs should not be left until a detailed assessment because the parties need to know what is their exposure to costs and the costs of detailed assessment should be minimised.”

An example of a significant development may be that in a PI claim, the Defendant has provided surveillance evidence, which would significantly affect the phases of Disclosure and Expert Reports.  In Sharp V Blank, the Chief Master also stated;

“Interim applications may be significant developments as may the consequences that flow from an interim application.”

In the case of Churchill v Boot, it was held that the change in the monetary value of a claim did not amount to a significant development in the case and permission to amend the costs budget was refused.  

The Judge in this case stated that the doubling value of the claim did not mean that the costs would be higher. Picken J stated that the case had taken a typical course following the original CPR Costs Budget and that the developments could have been predicted at the time of drafting the original costs budget.

He further stated that an adjournment had the potential to be a significant development however, on the facts of this case, it could not be considered as a significant development under paragraph 7.6 of PD3E.

How Can We Assist?

If you would like to find out more about best practice in preparing  your Cost Budget, please feel free to view the section on our website for further guidance or have a look at our frequently asked questions to find out more, including making amendments to a costs budget and finding a good reason to depart from a costs budget.