High Court Judge, Master Kaye, has reminded litigators that costs budget increases will not always be sanctioned by the courts.
Facts of the case
The Claimants sought to amend their previously agreed costs budget from £1,455,000 to £2,800,000 as a result of three ‘significant developments’:
- An unanticipated request from the Defendant for further disclosure;
- A request for further information from the Defendant; and
- Additional unexpected CMCs.
Prior to the request for a budget amendment, a Costs and Case Management Conference took place in December 2019 where Deputy Master Linwood approved the parties’ budgets and gave case management directions. The parties agreed on a ‘Model C’ request led search-based form of disclosure.
In February 2020, following the CMC, the Defendant made a request for further information under CPR PT 18. The Claimants responded to the request in August 2020.
On 18 August 2020, the Defendant issued an application for further disclosure. At the additional CMC which took place on 26 August 2020 the Judge made orders relating to disclosure and the CMC. The disclosure application was adjourned to be dealt with at the second unanticipated CMC, which took place on 7 January 2021. The Claimants were directed to address the outstanding aspects of disclosure by 16 October 2020.
The Claimants’ application to vary their cost budget was served on the Defendant on 3 December 2020 and subsequently issued on 21 December 2020.
The Law: Variation Costs
Prior to October 2020 a party could revise its budget upwards or downwards if significant developments of the litigation warranted the revision.
Rule 3.15A states a party must revise its cost budget if significant developments in the litigation warrant the revision. Any revision must be submitted promptly to the other party and subsequently to the court.
When a party submits their application to revise their cost budget, they must:-
- Serve particulars of the proposed variation on every party, using the form prescribed by PD 3E;
- Confine the particulars to the additional costs occasioned by the significant development, and;
- Certify that the additional costs are not included in any previous budgeted costs or variation.
The budget variation must promptly submit the particulars of variation to the court along with the last approved or agreed budget and with an explanation of the points of difference if they have not been agreed.
Master Kaye dismissed the application to vary the costs budget on the basis that either (a) the developments were not significant to warrant a revision to the costs budget, or (b) if they were, the application to revise the budget had not been made promptly.
The case demonstrates the importance of parties reviewing their costs budgets regularly and acting promptly when seeking to revise their budgets.
Do you need assistance?
If you have any questions about the outcomes of this case or need related advice, please contact Kate Andrews, Head of Hamlins Real Estate Disputes team.