Firms need to be aware of the new rules of costs budgeting that have come into effect from 1st October 2020. The revised Rule 3.15A says –
3.15A.—(1) A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.
(2) Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5).
A costs budget will need to be revised if there are significant developments. This might be upwards or downwards. The rule requires this to be done promptly. The party seeking the revision must firstly contact the other side and seek agreement using Precedent T.
3.15A (4) then says –
(4) The revising party must submit the particulars of variation promptly to the court, together with the last approved or agreed budget, and with an explanation of the points of difference if they have not been agreed.
Following this –
(5) The court may approve, vary or disallow the proposed variations, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed, or may list a further costs management hearing.
It is noticeable that the word ‘promptly appears twice! How promptly?
QB Master McLeod has said that there is not much excuse for a delay once there is a significant development. She also warned that the court was unlikely to be sympathetic to a revision application in the absence of a discussion with the other side. But she also acknowledged that this might be ‘tricky’ where the opponent was slow or unresponsive –
Under the old rules a budget could only be revised if there was ‘good reason’ to do so. This new rule will make if far more challenging to show this if you go over budget without having applied to revise. There is a tendency to put the budget to once side once agreed/approved and focus on the case itself. This is a risky approach. You should see reviewing the budget as part of the ongoing life of the case whenever a significant stage is reached.