Tag: #costsmanagement

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.

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.

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.

90% Payment on Account where there is a costs budget “Still the Norm”

Bethany CollingsLeave a comment

Earlier this week, following the judgement in Puharic v Silverbond Enterprises Ltd [2021] the High Court confirmed that a 90% payment on account of costs was a reasonable sum for the claimant paying party to have to advance to the successful defendant receiving party. The Claimant had initially offered 50%.

Gavin Mansfield QC, sitting as Deputy Judge of the High Court, said: “the Claimant’s proposal fails to have regard to the developing body of law as to the relationship between costs management and detailed assessment“ and went on to comment that at detailed assessment, pursuant to CPR 3.18, the court will not depart from the approved or agreed budget unless there is a good reason to do so per MacInnes v Gross [2017]. In this case it was found that approved budgeted costs should only be reduced by a maximum of 10%.  Thomas Pink Ltd. v Victoria’s Secret UK Ltd [2014] was also referenced as an example of where 90% of the approved budgeted costs were awarded.

As no submissions were made by the Claimant in the Puharic case to suggest that there would be a good reason to depart from the approved budget, 90% of the approved budgeted costs were ordered to be paid as an interim.

In relation to incurred costs by the time of the CCMC, the Judge asserted that the same point was not applicable as these costs were not subject to the court’s approval. Guidance in accordance with the case of Excalibur Ventures LLC v Texas Keystone Inc [2015] was followed instead. The incurred costs related to the pre-action, issue/statement of case and CCMC phases. The Defendant’s incurred costs of £11,010 for the CCMC phase were recorded in the CMO as “a little high for that phase, but not significantly so” and £10,000 was deemed to be reasonable. There were no issues noted in relation to the pre-action or issue/statements of case phases and so 70% of the incurred costs were deemed a reasonable sum for the purposes of an interim payment.

In relation to the PTR phase, the Defendant sought only 50% of its budgeted costs, because even though work was carried out in this phase, the hearing was vacated.

The Claimant was ordered to make a payment on account of costs in the sum of £187,121.13.