Tag: costs budgets

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.

Master orders Labour Party to present common and non-common elements in single costs budget

Anna LockyerLeave a comment

On the basis it would be “expensive and speculative” to produce separate costs budgets for the defended claim and the Part 20 claim, Master Dagnall decided only one budget would be required at the CCMC stage.

By way of background, Taylor and others v Evans (as representative of the Labour Party) and others (Named Third Parties) [2023] EWHC 2490 (KB) is a data protection claim relating to an internal report that was compiled when the Labour Party was being investigated by the Equality and Human Rights Commission regarding allegations of anti-Semitism.

The draft report was leaked soon after the last general election at a time when Jeremy Corbyn was being replaced by Sir Keir Starmer. The Defendant’s main defence and premise on which their Part 20 claim is brought, is that third parties, who at the material time were employees and officers of the Defendant but aligned with Mr Corbyn, leaked the internal report and were engaged in a conspiracy to undermine Sir Keir Starmer.

In relation to budgeting Master Dagnall took the view that “if the main claim and the Part 20 claim are to be tried together as I have directed is to be the case, then, unless there is some particularly good reason, they are simply producing figures for each phase.”

Master Dagnall then went on to say “at this point the underlying purpose of the budgeting process is to tell parties, what is reasonable and proportionate for each party to spend; and this is done by the court and the other parties simply being given proposed figures for each phase, and the figures for each phase then being settled by agreement or court approval.”

“It seems to me it would be perfectly possible for a judge at trial to say that a particular costs order should be made which reflects the fact that some issues were, it turns out, not the concerns of the claimants and they have sought to distance themselves from those issues. It seems to me those are decisions which can only be taken at trial itself and I am not convinced myself at this point that it is clear that such is going to be the situation, and do not think that I should be directing the budgeting process on the basis that such is likely to occur.”

“I also bear in mind that it is always open to the judge to consider that there is good reason to depart from the costs budgets, and the judge can deal with such a situation at trial in a number of different ways, by making a variety of different costs orders or simply directing that the cost budgets will, in one way or another, be given no or only limited weight. But it seems to me that these are all matters pre-eminently for the trial judge. Costs budgeting may effectively limit the spending decisions taken by parties as they go along, but the actual consequences as to what should happen to costs should be matter for the trial judge.”

“In any event, I do not regard it as clear enough that there are uncommon costs to make a specific direction about any particular category of costs.”

“The parties are under their ordinary duties when preparing costs budgets to consider whether or not the ordinary form of them is inappropriate. If they do so consider, and consider that there are costs which simply relate only to one of the other sides and not another, then the court would normally expect them to refer to that and, in some way or other, reflect it in their material.”

“For me to lay down any rule at this point seems to me as inappropriate, so I am not going to do so.”

“In my judgment, the parties should just simply provide costs budgets on the ordinary basis.”

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

Capturing costs between budget and CCMC: practical guidance

Anna LockyerLeave a comment

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.

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

Changes to Trial witness statements in the Business and Property Courts from 6th April

Dominic ReganLeave a comment

From 6th April Trial witness statements in the Business and Property Courts are subject to drastic reforms . Radical features include

1. A duty to explain to a witness at the outset the proper purpose and content of a witness statement;

2. Directions as to how the interview should be conducted;

3. Provisions as to what questions can be put and how they are to be worded;

4. A duty for solicitors to preserve a dated record of the interview (SBP 3.11(3) ).

5. An obligation for each witness to sign off a declaration about compliance.

6. An obligation for the relevant legal representative to certify that they have explained the Rules to the witness and to confirm that the statement adduced was prepared in compliance with the new obligations.

When preparing budgets it is imperative that these onerous obligations are recognised when costing the acquisition and preparation of witness evidence. 

This blog was written by Professor Dominic Regan who is working with the Costs and Litigation Funding team as a consultant.

A Complete Chronological guide to budgeting case law

1 Comment

There are many case authorities in relation to budgeting since the process was implemented, it is hard to keep track of them all. Here is a complete list of cases.

 

2014

Appeals

Havenga -v- Gateshead NHS Foundation Trust [2014] EWHC B25(QB)

General guidance

A & B (Court of Protection: Delay & Costs) [2014] EWCOP 8)

Hegglin -v- Persons Unknown & Google Inc [2014] EWHC 3793 (QB)

Thomas Pink Ltd -v-Victoria’s Secret UK Limited [2014]

Yeo-v-Times Newspapers Ltd  [2014] EWHC 2853 (QB)

 

2015

General guidance

BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

(GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Stocker -v- Stocker [2015] EWHC 1634 (QB))

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB))

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

Judicial guidance cases

GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB)

Late filing of a budget

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Overspending on the budget

CIP Properties (AIPT) Limited -v- Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC)

Excelerate Technology Ltd -v- Cumberbatch [2015] EWHC B1 Mercantile)

Parish -v- The Danwood Group Ltd [2015] EWHC 940(QB)

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Proportionality in budgeting

(BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

 

2016

General guidance

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Campbell -v- Campbell [2016] EWHC 2237 (Ch)

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

Signia Wealth Limited -v- Marlborough Trust Company Limited [2016] EWHC 2141 (Ch) –

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Late filing of a budget

Jamadar -v- Bradford Teaching Hospitals NHS Trust [2016] EWCA Civ 1001

Murray -v-BAE Systems PLC (Liverpool County Court, 1st April 2016)

Outcome of budgets and costs of assessment

Sony Communications International AB -v- SSH Communications Security Corporation [2016] EWHC 2985 (Pat)

Proportionality in budgeting

(Considers Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Revising the budget

Warner -v- The Pennine Acute Hospital NHS Trust (Manchester County Court 23rd September 2016)

The budgeting procedure

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

 

2017

Departing from the budget on detailed assessment

RNB v London Borough of Newham [2017] EWHC B15 (Costs)

General guidance

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017]  EWCA Civ 792

MacInnes -v- Gross [2017] EWHC 127 (QB)

Napp Pharmaceutical Holdings Ltd v Dr Reddy’s Laboratories (UK) Ltd & Ors [2017] EWHC 1433 (Pat)

Judicial Guidance cases

Findcharm Ltd -v- Churchill Group Ltd [2017] EWHC 1109 (TCC)

Woodburn v Thomas (Costs budgeting) [2017] EWHC B16 (Costs)

Late filing of a budget

Asghar -v- Bhatti [ 2017] EWHC 1702 (QB)

Mott & Anor v Long & Anor [2017] EWHC 2130 (TCC)

Outcome of budgets and costs of assessment

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792)

Merrix -v- Heart of England NHS Foundation Trust [2017] EWHC 346 (QB)

Part 36 in budgeting

Car Giant Limited -v- the Mayor and Burgesses of the London Borough of Hammersmith [2017] EWHC 197 (TCC)

Proportionality in budgeting

Rezek-Clarke -v- Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (Costs)

Revising the budget

Asghar -v- Bhatti [2017] EWHC 1702 (QB)

Sharp v Blank & Ors [2017] EWHC 3390 (Ch)

Sir Cliff Richard OBE -v- The BBC & Chief Constable of South Yorkshire Police [2017] EWHC 1666

 

2018

Departing from the budget on detailed assessment

Jallow v Ministry of Defence [2018] EWHC B7 (Costs)

Nash v Ministry of Defence [2018] EWHC B4 (Costs)

General guidance

Yirenki v Ministry of Defence, [2018] 5 Costs LR 1177

 

 

Costs Budgeting – claims over £10m

Andrew McAulayLeave a comment

In Signia Wealth Limited -v- Marlborough Trust Company Limited [2016] EWHC 2141 the court considered whether costs budgeting was appropriate.

Practical points

  • If there is no value on the claim form, then despite the amount of the claim – costs management applies.
  • The combined value of the claim for costs was considered when deciding whether the proportionality test was engaged.
  • Will an inequality of arms be a determining fact when deciding if costs management applies?  If making submissions regarding the same, then evidence to support the financial circumstances should be provided.

This was a high value claim and the court was asked to consider whether the claim should be taken out of the costs management regime.

The claimant identified that because neither the claim nor the additional claim had specified a monetary value in excess of the £10m limit, the claim was not automatically taken out of the costs management regime by virtue of CPR 3.12 (1)(b).

Costs budgets were filed and both parties’ claims for costs totalled £4.14m, the value of the claim was in the region of £13m. Consequently, the court found that the proportionality argument was engaged.

The court considered whether CPR 3.15(2) applied -“Where costs budgets have been filed and exchanged the court will make a costs management order unless it is satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made.

The court commented:

“13. It is not in doubt now that this claim is within the costs management regime. That is so because neither the claim form nor the additional claim mentioned the value of £13 million, which is said to be the value of the shares which were held by the first defendant. Had the figure been mentioned in the additional claim form, then the costs management regime would not have applied.

14. It seems to me that, given that this claim is within the regime, the proper approach for the court to adopt is to apply the test set out at CPR 3.15(2), namely the court must be satisfied, if this case is to be taken outside the regime, that the claim can be conducted justly and at proportionate cost in accordance with the overriding objective without a costs management order being made. If the court is not so satisfied, then the claim must stay within the costs management regime.”

The court  further commented that the incurred costs as against the future costs needed to be considered.   “If a point had been reached at which point future costs were to be de minimus, there was little point it requesting parties to undertake the expense of costs management. Although costs management was occurring later than desirable, there were significant future costs to be incurred and therefore this was a case to make observations about costs which have been incurred”..

The defendant argued that there was an inequality of arms, the second defendant was an individual.  However, no evidence was provided to support her financial circumstances and therefore the court found that it would not be right to make a decision in relation to the costs management.

The court considered that the claim fell within the costs management regime and therefore the proper approach for the court to adopt was to apply the test set out in CPR3.15(2).

Because there were issues of proportionality which needed to be considered  and there were real benefits for the parties if there was a costs management order, the court ordered that there be a costs management hearing.

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

Joanne Chase1 Comment

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.

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