Category: Costs Management

When Can a Costs Budget Be Varied? The Importance of a “Significant Development”

ujjainimistryLeave a comment

The appeal decision in Bassey v Whittaker & Watford Insurance Company Europe Ltd  [2026] EWHC 2126 (KB) reinforces the restrictions on varying an approved costs budget. Where there is no significant development in a case, the court does not have a general discretion to vary costs budgets.

Costs budgets are intended to give parties and the court a degree of certainty about the costs of future stages of litigation. That certainty would be somewhat weakened if an approved budget could be revised whenever a party believed its costs had become greater than originally budgeted.

In this judgment, Mr Justice Cavanagh provides an important reminder of the limits on the Court’s power to vary an approved costs budget. Mr Justice Cavanagh emphasises the fact the Court has a discretion to vary an approved costs budget only once the requirements of CPR 3.15A are satisfied; and a “significant development” in the litigation is an essential prerequisite to obtaining any variation under CPR 3.15A.

It is, therefore, not sufficient to merely argue that costs have increased, that the litigation has become more expensive, or that the original budget has proved to be inadequate, as reasons to vary the budget. The Applicant must state genuine examples of significant developments in the litigation to justify a revision.

Background Facts

The appeal arose in the context of a personal injury claim brought by the Respondent who suffered serious injuries when he was struck by a car driven by the First Defendant. The Appellant is the Second Defendant, the First Defendant’s insurer. The Appellant had admitted liability and the proceedings were proceeding as to quantum.

The Respondent’s budget was approved by DJ Maddison at the Costs and Case Management Conference on 18 December 2024, at approximately £1.03m. The Appellant’s budget was approved at approximately £341,000. The case was complex, involving substantial medical and non-medical expert evidence and a projected 10-day Trial.

A further hearing took place on 27 November 2025, before DJ McLoughlin, where the Appellant made an application to vary the directions set by DJ Maddison on 18 December 2024. A directions order was made, which included at paragraph 3 a direction that the parties file and serve Precedent Ts to take account of the increased costs associated with the amendments made to the 18 December 2024 Order.

The Respondent sought a further £238,350 and a Costs Management Hearing was listed for 6 February 2026. The preamble to the Order dated 6 February 2026 stated “Upon the Court recording that the amendments to the Order of DJ Maddison dated 18th December 2024 were not a significant development within CPR 3.15A but does not prevent the costs being increased”.

The issues in the appeal

The main question on appeal was whether, having found that the varied directions were not a significant development under CPR 3.15A, the District Judge had power to vary the approved cost budget.

The High Court rejected the Respondent’s argument that the November 2025 order amounted to an agreement that the budgets could be revised, or that there had been significant developments. The reference in the November 2025 order to preparing Precedent Ts was so these would be ready if it was later decided there were significant developments and budgets should be revised. The High Court also found that the District Judge had decided that there had been no significant developments, as recorded in the preamble.

 

Mr Justice Cavanagh referred to Master Kaye’s Judgment in Persimmon Homes Limited v Osborne Clark LLP [2021] EWHC 831 (Ch), on the matter of whether significant developments are a necessary pre-condition to the variation of a cost budget.

Mr Justice Cavanagh agreed with the conclusions set out by Master Kaye in Persimmon Homes, that it was clear from the purpose, structure and language of CPR 3.15 and 3.15A, that the existence of significant developments since the cost’s budgets were approved were a necessary precondition before a costs budget could be varied. This confirmed that the Court does not have a general discretion to vary costs budgets if there have been no significant developments. The court left open the position whether there was power to vary costs budgets in the absence of significant developments if the parties were agreed, as this did not arise on the facts; Mr Justice Cavanagh declared this point should be decided in a case in which it arises.

The meaning of ‘significant developments’ is not defined in the CPR. Mr Justice Cavanagh further relied on the words of Master Kaye in Persimmon, stating that “an order for variation cannot be made in order to remedy a budget in respect of developments which could or should have been covered at an earlier approval or variation.” He then went on to state that just because some estimates and assumptions change, does not mean that those developments are considered to be significant developments. It would not be in the interests of justice or the overriding objective if there was scope to continuously revise costs budgets if there are frequent developments in the litigation.

Conclusion

The appeal was allowed because the District Judge had no power to order variation of the costs budgets when he had found there had been no significant developments since the costs budgets had been finalised, and he had not erred in this finding

A development under CPR 3.15A will not be considered to be ‘significant’ merely because it leads to additional work and an approved costs budget is not automatically capable of being varied simply because the costs have increased. Mr Justice Cavanagh made clear that “it would not be in the interests of justice or the overriding objective if there was scope for constant tinkering with budgets if there are developments in the litigation”. There must be a genuine and significant change in the litigation which warrants revision. Filing a Precedent T does not itself establish entitlement to variation of the cost budgets.

For practitioners, the safest approach is to monitor budgets continuously, identify significant developments as they occur, record their impact on future work and make any necessary application promptly.

Ujjaini Mistry is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

Parties claimed costs multiple times more than the claim was worth

Katie SpencerLeave a comment

Background

In O’Sullivan v Trading 212 UK Ltd [2026] EWCC 32 (03 June 2026), the Claimant brought a claim arising from the Defendant’s closure of his trading account. The Court was highly critical of the parties’ approach to litigation, noting the apparent absence of ADR and the disproportionate escalation of a modest claim into a half‑million-pound costs dispute.

Costs awarded

Applying the usual rule, CPR 44.2(2), the Court held that the Defendant was the successful party and the Claimant should pay the Defendant’s costs.

However, the Court identified specific issues which justified departures from the default position.

  1. The Defendant’s late disclosure

Although the late disclosure did not affect the outcome, it prolonged the trial, triggered additional applications and increased costs for both parties.

The Court deprived the Defendant of its own costs for the disclosure phase and ordered the Defendant to pay the Claimant’s costs caused by the late disclosure.

The Claimant claimed £54,115, whereas a total of £27,000 plus VAT was allowed.

  1. The Defendant’s Strike-Out application

This application was pursued based on the Claimant’s alleged conduct towards witnesses. Although the application was adjourned on the basis of undertakings, the Court found it was reasonable to bring some form of application.

The Defendant claimed £59,513.67, which the Court found disproportionate. A total of £15,000 was allowed.

The Court adopted a broad‑brush approach to summary assessment, emphasising that costs should be assessed by reference to overall proportionality rather than a line-by-line analysis.

The Court declined to engage in wider conduct-based arguments advanced by both parties, considering such analysis disproportionate.

Departing from the Costs Budgets

Despite CPR 3.18, the Court found good reason to depart from the approved costs budgets, resulting in downward revisions.

The Court looked at proportionality, the value of the claim and the relatively small number of documents. The Court also observed that the case had likely been misallocated and should not have proceeded on a multi-track basis of this scale. The court also raised concern about the hourly rates, finding significant reductions necessary.

Conclusion

The table below demonstrates the disparity between costs incurred and costs allowed, highlighting the severity of the disproportion:

Party Costs incurred Costs allowed
Claimant £246,426 £32,400

(For the Defendant’s late disclosure)
Defendant £452,456.26 £128,750

 

 

Following set-off, the Claimant was ordered to pay £96,350.

This case serves as a clear reminder that the Court will closely scrutinise proportionality in litigation and may impose significant downward adjustments, even where costs budgets have been approved.

Katie Spencer is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

The practicalities of costs budgeting in the B&PC when a preliminary issue or split trial may be appropriate

Anna LockyerLeave a comment

The Chancery Guide at paragraphs 6.10 and 6.11 is practical: consider early (and in any event before the first CMC/CCMC) whether a decisive issue can be tried first, or whether the case should be staged (for example, liability then quantum). It is important to align the case-management proposal with (i) the DQ narrative, (ii) draft directions for the first CMC, and (iii) the costs budget, clearly setting out stage 1 work.

Paragraph 6.37D confirms that this approach also applies to PD51ZG1 and the relevant guidance is set out as follows:

6.10 Costs and time can sometimes be saved by identifying decisive issues, or potentially decisive issues, and ordering that they are tried first. A trial of a preliminary issue may also be appropriate where its determination, although not itself decisive of the whole case, may enable the parties to settle the remainder of the dispute or otherwise shorten the proceedings. An example would be a relatively short question of law which can be tried without significant delay (or much in the way of disclosure or witness evidence) but which would be determinative of one or more of the key issues in dispute.

6.11 Parties should actively consider at the earliest opportunity, and certainly in advance of the first CMC / CCMC, whether there are any issues which are suitable for determination as a preliminary issue, or which should be tried separately such as a split between liability and quantum. If possible, parties should indicate when filing DQs whether a preliminary issue or split trial is under consideration and provide a summary of the proposed approach in Section I of the DQ. Parties should give careful consideration to the approach to costs budgeting and disclosure where a preliminary issue or split trial is proposed or agreed.

Practical steps (for one party, or both parties by agreement)

  • Confirm whether PD51ZG1 applies (including any dispute about whether the claim is £1m or more / seeks only non-monetary relief) and diarise the budgeting steps.
  • Define the preliminary issue / split with precision: what is being tried first, why it is (potentially) decisive, and what it will remove from the remainder of the case.
  • Stress-test the procedural footprint for stage 1: what (if any) disclosure, witness evidence and expert evidence is genuinely required now, and what can properly be deferred.
  • Shape budgeting assumptions to match staging: make clear which work/phases are included in stage 1 and what is excluded (with a mechanism to revisit later if a second stage remains).
  • Engage early with the other side to narrow the issue(s) and, if possible, agree directions (or at least exchange short position statements before the CMC).
  • Use the DQ and draft directions to put a workable proposal before the court: issue(s), estimated hearing length, evidence/disclosure limits, listing window, and what happens after determination (ADR/stay/further directions).
  • Be ready on proportionality: a short comparison of time/cost for “single trial” vs “preliminary issue/split” is often what makes the application persuasive at the first CMC.

If you want a preliminary issue or split trial, the practical route is to define the issue tightly, demonstrate a genuinely reduced stage 1 footprint (disclosure/evidence), and present a directions and budgeting proposal the court can adopt at the first CMC.

The full guide can be found here: The Business and Property Courts of England & Wales Chancery Guide 2022

Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

SCCO Updates Filing Guidance for Court of Protection Bills

Leah MorrisLeave a comment

The Senior Courts Costs Office (SCCO) has earlier this week issued revised guidance on filing supporting papers for Court of Protection bills, coming into effect on 20 April 2026. These updates aim to streamline the assessment process and improve efficiency for both practitioners and Costs Officers.

The SCCO continues to support two methods for submitting supporting documents: digital bundles provided via the Document Upload Centre (DUC) and physical files of papers sent in the post or DX. A summary of the latest guidance is set out below.

1) Digital Bundles via the Document Upload Centre (DUC)

The Document Upload Centre (DUC) allows users to submit supporting papers electronically and is the SCCO’s preferred method, provided submissions follow the required format.

It is important to note:

  • The DUC is only for supporting documents
  • Key documents, including the bill of costs, N258B and court orders, must still be filed via CE-File in the usual way
  • To access the DUC, users must request a link by emailing the SCCO

In terms of formatting, bundles must be in PDF format only. File names should include the SCCO reference number, the Protected Party’s surname, and the billing period or case type (for example, statutory will or property sale). The SCCO also find it helpful if an indication of the bill type is included within the file name, such as general management with the relevant period dates, so it is recommended that this is included.

Where possible, a single bundle should be submitted. If multiple files are necessary, these should be clearly labelled with the relevant date ranges rather than uploading individual documents separately.

Documents must be arranged in chronological order (oldest first), with key documents placed at the beginning of the bundle. These include:

  • The OPG102 and OPG105
  • Client care letter
  • Disbursement evidence
  • Counsel fee invoices

The level of detail within documents remains important. Emails and file notes should clearly show dates and times, with correspondence identifying both sender and recipient. File and attendance notes must also record the fee earner completing the work and the time claimed.

To assist Costs Officers in locating documents quickly, the SCCO recommend:

  • Including a detailed index or bookmarks with clear dates and descriptions so items can be easily identified and cross-referenced against the bill of costs
  • Adding hyperlinks to documents where possible
  • Avoiding duplication of documents or email chains

In terms of timing:

  • For existing cases: upload at the same time as filing the bill (once the SCCO reference number is available)
  • For new cases: upload after receiving confirmation of the SCCO reference number (e.g. SC-2025-COP-001234)

2) Physical Paper Filing

Firms can still submit hard copy bundles by post. While digital filing is encouraged, it is not mandatory.

If submitting papers physically, they should be sent to:

Senior Courts Costs Office
Thomas More Building
Royal Courts of Justice
Strand
London
WC2A 2LL
DX: 44454 Strand

Many of the same principles apply to paper bundles as to electronic ones. Files should be clearly labelled with the SCCO reference number, the Protected Party’s name and the billing period or case type, and documents should be organised in chronological order.

Key documents should be placed at the front of the bundle (or the first bundle if multiple are submitted), including:

  • The OPG102 and OPG105
  • Client care letter
  • Disbursement evidence
  • Counsel fee invoices
  • A copy of the e-filing acceptance notice, including return details
  • Where multiple boxes or bundles are required:
  • Label them sequentially (e.g. Box 1 of 2)
  • Arrange documents chronologically across all boxes and bundles
  • In terms of timing:
  • Papers should be sent as soon as possible after CE-File acceptance
  • They must be submitted within 28 days

Mandatory Filing Notification

Each time a bill is submitted via CE-File, you must clearly state how you intend to file supporting documents. This should be included in the “filing comments” by confirming either ‘paper’ or ‘DUC’. Failure to include this information may result in the filing being rejected.

Final Thoughts

These updates from the SCCO reflect a continued move toward digital efficiency while still accommodating traditional filing methods.

For practitioners, the key takeaway is simple: clarity, organisation, and compliance with formatting rules are essential. Adopting the DUC where possible, and doing so correctly, will help avoid delays and ensure a smoother assessment process, particularly given the continued delays and significant turnaround time for receipt of assessed bills, which remains in excess of a year at present.

For further guidance or to request DUC access, contact the SCCO directly at scco@justice.gov.uk.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at costs.support@clarionsolicitors.com.

Drafting Costs Management Orders

Anna LockyerLeave a comment

There can be uncertainty around the content and wording to include in draft costs management orders, a point reinforced by Senior Master Cook in Baroness Lawrence & Ors v Associated Newspapers Limited [2025] EWHC 3207 (KB) when he ordered a re-draft of an incorrectly drawn costs management order, observing “parties seldom draft proper or effective costs management orders”, despite his King’s Bench Division Guide note on Cost Management Hearings, setting this out at Paragraph 13 of Annex 8:

Essentially, confirmation of any agreed/not agreed incurred costs, the amounts by which the budgeted costs of each party have been agreed or approved (as required by CPR 3.15(2)) and any comments made by the court at the hearing with regards to the predications the assumptions are based on, should be clearly recorded on the Order. These statements may include the extent of disclosure; the number of days any experts will attend trial; and whether a mediation or some other settlement meeting is anticipated.

There are occasions when a table can be included in the costs management order that sets out the budgets’ figures, distinguishing those agreed from those approved.

If directed by the court, costs set out in this tabular form, may replace the requirement for front sheet costs budgets.

There are also certain judges who prefer an additional provision in a costs management order, referring to how departures from budgets would only be allowed with good reason, as per CPR 3.18(b). This may be provided for as follows:

“This costs management order is without prejudice to any issue which a party wishes to take on detailed assessment save that the court will not depart from the receiving party’s last approved or agreed budget unless there is good reason to do so.”

In recent years, templates have remained mostly unchanged, but the courts seem increasingly focused on ensuring costs management orders are properly prepared. Having a correct draft ready ahead of a costs management hearing, can be crucial to obtaining the desired outcome.

Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

When High-Value Claims Still Require Budgeting: Garry White & Ors v Uber London Limited & Ors

Katie SpencerLeave a comment

The Claim

In the case of Garry White & Ors v Uber London Limited & Ors, approximately 13,000 London black cab drivers issued group proceedings against companies within the Uber group, claiming losses of around £199 million. A further claim, valued at approximately £141 million, was brought by the assignee of two private hire operators, Kabbee and Iride.

Although the total value of the litigation is around £340 million, each driver’s individual claim is relatively modest (circa £15,000), making group litigation a proportionate approach.

The claims arise from allegations that Uber unlawfully obtained a private hire vehicle operator licence by misrepresenting its operating model. It is said that this enabled Uber to compete directly with licensed black cab drivers while undercutting regulated fares, causing substantial financial loss between 2012 and March 2018.

The Preliminary Limitation Issue

Uber denies liability and argues that the claims were issued outside the six-year limitation period.

The Claimants rely on Section 32 of the Limitation Act 1980, arguing that time did not begin to run until they could reasonably have discovered the relevant facts, which they say occurred in June 2018 following a licensing appeal hearing.

The court has ordered that limitation be determined at a standalone five-day preliminary trial. A representative sample of 20 Claimants (10 chosen by each side) will be used to assess when sufficient knowledge arose. If the Defendants succeed, the litigation may conclude at that stage.

The Costs Budgeting Decision

A significant procedural issue to be determined was whether costs budgeting should apply.

Although claims valued at £10 million or more are ordinarily excluded from the costs management regime, the court retains discretion. The Defendants sought to disapply budgeting, relying on the overall high value of the claim, the existence of litigation funding and ATE insurance, and the alleged additional burden budgeting would impose.

The Claimants argued that, despite the aggregate value, the case is fundamentally a mass claim by individuals of limited means. They required clarity regarding potential adverse costs exposure and future funding requirements.

The Court agreed with the Claimants. While acknowledging that very high-value claims are generally unsuitable for costs management, this case was considered materially different. The modest individual claims and group structure justified greater costs oversight and transparency.

Why This Matters

This decision reinforces that the £10 million threshold is not decisive. Courts will look beyond the headline value of proceedings and consider the nature of the parties and the practical impact of costs exposure.

In large-scale group actions involving individuals with limited financial resources, costs budgeting may be viewed as an important tool to promote fairness, proportionality and effective case management and there are steps you can take ahead of the first CMC if you consider a CMO to be useful in your case.

Katie Spencer is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors and can be contacted on 07741 988 925 or at Katie.Spencer@clarionsolicitors.com.

Report from the Committee of Public Accounts – Costs in Clinical Negligence

Bethany CollingsLeave a comment

The Committee of Public Accounts has published its latest report on the rising costs in clinical negligence – an important read for all those practising in this area. Notably, the report recommends that the Department for Health and Social Care clarify its position on a fixed recoverable costs scheme for lower-value clinical negligence cases at the earliest opportunity.

You can find the full report here.

Bethany Collings is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

Since costs were to be assessed on the indemnity basis, the Court declined to determine an application to vary the Claimant’s approved costs budget

Katie SpencerLeave a comment

In the case of Xtellus Capital Partners Inc v Dl Invest Group Pm S.A. [2025] EWHC 2168 , Judge Bird found that the Defendant’s unreasonable conduct during the proceedings justified ordering that the Claimant’s costs be assessed on the indemnity basis for all phases of the case.

The Claimant had applied to vary its approved budget because its actual costs exceeded the approved amounts, but the Judge considered whether it was necessary to decide that application since the assessment would be on the indemnity basis.

CPR 3.18 governs departures from approved budgets when costs are assessed on the standard basis; it does not apply where the assessment is on the indemnity basis.

CPR 44.4(3)(h) requires the court, on detailed assessment, to have regard to the receiving party’s last approved or agreed budget. Budgets therefore remain potentially relevant even on an indemnity basis assessment, and the Court may depart from them without requiring a “good reason’.

However, the Judge decided that it was best not to deal with the budget variation application at this stage. He gave two reasons:

  1. On an indemnity assessment the Court can depart from approved budgets, so leaving the matter to a detailed assessment would not prejudice the Claimant; and
  2. Deciding the variation now would involve applying the “reasonable and proportionate costs” test, which is appropriate for the standard basis, not for the indemnity basis.

In conclusion, an application to vary an approved budget is not automatically necessary where costs are to be assessed on the indemnity basis. The Court may instead leave the issue to be resolved at the detailed assessment stage.

Katie Spencer is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors and can be contacted on 07741 988 925 or at katie.spencer@clarionsolicitors.com.

Budgeting GLOs: Second CMC (Mark 2), Tranche 3

Anna LockyerLeave a comment

“Over-lawyering” was the key criticism of the High Court in another round of costs budgeting the Pan Nox Emissions group litigations.

In this third Tranche, the Claimants’ budgets were reduced from £55.7m to £21m and the Defendants’ budgets from £75.8m to £48m with Mrs Justice Cockerill DBE and Senior Costs Judge Rowley deciding that in respect of the Claimants’ budgets “the largest reductions stem from the layers of representation leading to, for example, claims for individual, non-lead firms to audit or replicate work already being done by the Lead firms”.

The full judgment can be read here: Various Claimants v Mercedes-Benz Group AG & Ors (Re Pan NOx Emissions Litigation) [2025] EWHC 2307 (KB) (10 September 2025)

CJC Report on Litigation Funding

Bethany CollingsLeave a comment

The Civil Justice Council (CJC) has today published its much-anticipated report on litigation funding – arriving slightly ahead of the expected summer 2025 release. You can read the full report here.

Watch this space for our detailed blog outlining the key takeaways.

Bethany Collings is an Associate in Clarion’s Costs and Litigation Funding Team and can be contacted at bethany.collings@clarionsolicitors.com or on 07774 951949.