Capturing costs between budget and CCMC: practical guidance

It is not unusual to incur substantial costs in the run up to CCMC after costs budgets have been submitted.  

Recovering these costs will be important to the receiving party, but often filing and service requirements of costs management documents can mean a bespoke approach is best adopted on a case-by-case basis, to ensure capture is maximised.

There are however some general steps that can be taken.

If a delay exists between budget and CCMC, either because the budget had to be advanced with the Directions Questionnaire or because the CCMC was adjourned post-filing and service, the budget may need to be brought up to date in respect of incurred costs. Updating the budget is particularly important if the incurred costs do not represent all costs up to and including the CCMC.

Alternatively, a schedule can be produced which sets out by phase the incurred costs since the budget and anticipated costs up to and including the CCMC. It should not be assumed that the anticipated costs relate solely to the CMC phase. Work relating to issue/statements of case, disclosure and ADR/settlement phases is very often being undertaken at this stage in the litigation.

On occasion, it may be appropriate to prepare both an updated budget and a schedule depending on the amount of costs in question, the length of any delay and any additional direction from the court.

In the absence of an order stating otherwise, the budget should be re-filed and re-served not later than 21 days before the first case management hearing. The schedule can be made available to the CCMC advocate to hand up to the Judge so that the costs are properly captured and reflected as accurately as possible on the approved version of the budget. The court can then be left to concentrate on setting the budget going forward. 

This approach not only accords with CPR 3.17 (3) (a) but also the case of Discovery Land Company, LLC & Ors v Axis Speciality Europe SE [2021], in which it was determined that work done but not yet billed, including disbursements, should be treated as incurred costs even if those costs cannot be quantified with precision. This decision provides for a degree of flexibility if the costs incurred immediately before the CCMC later turn out to be more or less than anticipated.

If the opponent attempts to challenge the level of incurred costs at this point in the litigation, reference to 3.17 (3) (a) should not only be made in relation to the fact the court may not approve costs up to and including the costs management hearing, but it may also be beneficial to refer to the fact that the Judge in the Discovery case said it was unhelpful for the court to comment on incurred costs at the CCMC stage. As the receiving party, avoiding recorded comment adverse to costs recovery later down the line is worth making the effort for.

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