Budget Revision: Time it Right!


In this week’s blog, Reuben Glynn, Managing Director, PIC, reminds practitioners about the importance of revising budgets before a current approved/agreed budget has been exceeded.

Practitioners will be aware that CPR PD 3E para 7.6 provides that parties may ‘revise a budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions’.

The hurdle to overcome is a relatively high one and it remains imperative that great care is taken in the first instance to ensure the original budget allows adequate provision for all likely anticipated costs.

However, unforeseen events do of course arise. Wherever possible, applications to revise budgets should be made in advance of the further work anticipated being carried out (Yeo v Times Newspapers Ltd [2015] EWHC 2132 (QB)). The Court will only budget future anticipated costs. If costs have therefore already been incurred outside of the budget, these will fall to be dealt with by way of Detailed Assessment where it will be necessary to persuade the Court there is good reason to depart from the Budget (CPR 3.18).

It is important to properly costs manage a claim so it becomes clear if there is no longer sufficient provision in a phase. If a phase is close to being exceeded and there have been ‘significant developments’ since the original budget was agreed/ approved then steps should promptly be taken to revise the budget.

This does not need to be a formal Application. Steps can be taken to agree a revision with the Opponent. If both sides are in the same position of say having to instruct further experts, or facing an increased time estimate for Trial, then the parties may well be amendable to both agreeing an additional allowance for the relevant Phase. The revised Budgets can then be filed at Court.

If however the parties cannot agree the revision, then CPR PD3E para 7.6 provides that ‘the amended budgets shall be submitted to the Court, together with a note of (a) the changes made and the reasons for those changes and (b) the objections of any other party. The court may approve, vary or disapprove the revisions, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed’.

Churchill v Boot [2016] EWHC 1322 remains a key case providing guidance on what constitutes a ‘significant development’. In this matter an increase in the value of the claim and additional disclosure were not sufficient to justify an increase in the budget. It was noted however that an adjournment could potentially be a significant development, depending on the facts of the case.

In Asghar v Bhatti [2017] EWHC 1702 (QB) the Court allowed a budget to be revised where it had previously been limited to Court fees only due to a failure to file a budget. Significant later developments resulted in the Trial time estimate being increased from six days to twelve days. This was considered a sufficiently ‘significant development’ and the Claimant’s costs budget was allowed to be revised to take into account the additional work required during the extra six days of Trial.

There are no definite rules as to what constitutes a ‘significant development’. Each case will be decided on its own merits. It is important that the original Budget includes good detail as to the future assumptions, so it is clear if costs have been incurred that were not anticipated in the budget. The Precedent R Discussion Report also provides a valuable opportunity to record both parties’ assumptions behind the budget, so it is clearly identifiable on what basis the budget has been approved/agreed.

PIC is always happy to advise on any budgeting issue. If you have any questions or concerns, please contact us here.

Reuben Glynn 9 FINALReuben Glynn is the Managing Director at PIC.

To contact him about any matter raised in this blog or for help with a costs law matter, please click here.