Lauren Day
Partner, Solicitor & Head of Dispute Resolution
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Date Published:05 May 2021 Last Updated:18 Jan 2022

A reminder to act promptly when varying cost budgets

Dispute Resolution

In the recent case, Persimmon Homes Ltd and another v Osborne Clark LLP [2021] EWHC 831 (Ch), Master Kaye, refused the Claimants’ permission to amend an agreed costs budget in a professional negligence claim after an attempt to almost double the sums allowed.

In this professional negligence claim, the Claimants sought to vary their previously agreed costs budget on the basis of a change to request for information, additional costs and case management conferences and disclosure. This resulted in the Claimants making an application to increase their costs budget from c£1.4 million to c£2.8 million.

Since October 2020, the process of applying to vary a costs budget has been set out within CPR 3.15A. With that said, this rule is still in its infancy and so there has been limited case law since its introduction.

The Persimmon Homes case has made it clear that a party applying to vary its costs budget must satisfy a ‘’threshold test’’. Such test involves two mandatory requirements before the Court will use its discretion to sanction any variation:

  1. The applicant must show that there has been a significant development in the litigation since the last approved or agreed budget which warrants a revision; and
  2. The particulars of the variation must be submitted promptly to the Court and other parties.

It was further emphasised by Master Kaye that is not appropriate for a party to wait until the full implications of a development are understood before applying to vary a costs budget.

This case has highlighted the importance of keeping costs budgets under constant review and compliance with CPR 3.15A when applying to vary a budget. It further demonstrates the extent of obligations on the parties brought about by CPR 3.15A, to revise budgets upwards or downwards throughout the litigation process.