Should the courts be able to interfere with Costs Budgets which have been agreed between the parties?

The rules state that the court will ‘record the extent to which the budgets are agreed between the parties’. Many of us have experienced the court’s refusal to approve those negotiated budgets and have been infuriated with their insistence on interfering with the budget. LJ Jackson, in his draft report, initially wanted the court to be able to alter agreed budgets, however the final report included the provision that the court ‘will record the extent to which the budgets are agreed’.

Lawyers should proceed with caution when attending a CMC where the budgets have been agreed. The sensible approach would be to assume that, once the budget has been agreed, then the budget can be ignored. Alas, this is not the case! The courts are indeed interfering with the budgets, clearly parties are surprised by this approach. I would advise that parties continue to undertake some preparatory work regarding the budget, albeit not to the same extent as would have been required if the costs were contested.

An interesting technical point – if the budgets have been agreed, are they technically ever approved? Note the reference in the CPR to ‘record’ rather than ‘approve’. More to ‘chew the fat’ over some mince pies; or ‘mull over’ some mulled wine.

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