Variations to budgeted costs and the importance of acting promptly
Since the CPR update in October 2020 (the Civil Procedure (Amendment No 3) Rules 2020 (SI 2020/747)) where we saw the introduction of the Precedent T and implementation of rules governing the variation of costs budgets, practitioners have experienced some uncertainty regarding the implementation of the rules, which continues to develop through case law and is discussed in this article.
One such uncertainty relates to CPR 3.15A (2) which addresses whether Precedent Ts have been served promptly. In Persimmon Homes Limited and Taylor Wimpey Homes UK v Osborne Clarke LLP, both the issues of what comprised as a significant development and what it meant to submit variations promptly were addressed by Master Kaye when the Claimant’s proposed variation was refused.
Master Kaye rejected the Claimant’s application for budget variations on both the basis that developments were not significant, and that the application had not been made promptly.
More recently, in Khokan v Nirjhor (Re Costs) [2024] EWHC 1873 (KB) further judgment has been provided in respect of seeking to vary budget variations promptly. The Claimant’s case had been struck out and the Defendant applied for a variation of the costs budget.
A brief chronology of the costs budgets was as follows;
The Defendant ‘s original costs budget was dated 8 November 2023 with incurred costs of £18,913.70 and estimated costs of £76,000
At the PTR hearing the judge made provision for the parties to file Precedent Ts by 21 June 2024
The Defendant served their Precedent T on 8 July 2024. Revisions reflected an additional £82,954.78
Mr Ahmed (Solicitor advocate for the Claimant) contended that the revisions to the Defendant's budget should not be permitted because the applications to revise the budget had not been made promptly, as required by CPR 3.15A(2). He cited Persimmon Homes Ltd v Osborne Clarke LLP [2021] EWHC 831 (Ch). At [99]-[101] thereof, Master Kaye reiterated that before revisions to a costs budget can be considered, there must be a significant development warranting a revision and there has to be promptness. It is only if both those mandatory requirements are met that the test is satisfied, such that the court will go on to consider whether as an exercise of discretion it should approve, vary or disallow the proposed variations pursuant to CPR 3.15A(5).
Mrs Justice Hill DBE was satisfied that the revisions in the Precedent T reflected significant developments in the litigation, however she took a different view in respect of the other elements of the application. Mrs Justice Hill DBE commented that whilst she did not know the date for Counsel’s advice, the voluntary further particulars were signed on 3 April 2024, and there was no record of the need to vary the budget to reflect these developments being raised at the PTR. It was not clear why these issues were not raised earlier. Raising them at this late stage could not be considered prompt. It would therefore appear that the courts are defining promptness to be very tightly defined, namely that the time from the development to service of the Precedent T was only a matter of months, and in this instance there were no clear good reasons for not applying earlier.
Whilst this case does not definitively provide a timescale as to what could be construed as a prompt submission of a Precedent T it further serves as a reminder to others, together with Persimmon Homes that fee earners should remain vigilant to changes in the litigation on budgeted cases and act promptly to stand the best chance at securing variations to the cost’s budgets. Moreover, this serves as a warning that it is imperative to act as soon as possible so as not to incur limitations on costs related to significant developments which would otherwise be recoverable.
