[2017] EWHC 346 (QB) (24 Feb 2017). The central message of the judgment is that the approved or agreed budget will bind the parties at detailed assessment when costs are to be assessed on the standard basis. Paragraphs 92 through to 94 of the judgment set out the central message but clearly matters must be determined on a case by case basis.

92 In my judgment, the answer to the preliminary issue is as follows: where a costs management order has been made, when assessing costs on the standard basis, the costs judge will not depart from the receiving party’s last approved or agreed budget unless satisfied that there is good reason to do so. This applies as much where the receiving party claims a sum equal to or less than the sums budgeted as where the receiving party seeks to recover more than the sums budgeted.

93 The appeal will therefore be allowed.

94 To use a preliminary issue in a factual vacuum for resolution of issues such as this is inevitably to apply a blunt tool. There are so many potential variables and nuances that the answer on any particular given set of facts might require refinement. But the central message is that set out in CPR 3.18, namely that the approved or agreed budget will bind the parties at the detailed assessment stage (on a standard basis) whether the costs claimed are for less than, equal to or more than the sums approved or agreed by that budget, unless there is good reason otherwise.

So what is a good reason? There is a plethora of cases relating to budgets and detailed assessment that can assist but the straight answer is that we must look at this on a case by case basis and react to changes in litigation and therefore budgets at the time and not wait until detailed assessment to deal with matters. Budgets can go down as well as up and this is an important factor where there is a risk your client will have to pay costs of the proceedings.

Do you require assistance in reviewing your budgets to ensure your clients are protected and that they will recover the maximum costs as ordered or, in the alternative, they are not open to having to pay costs that are unreasonable?

Will you and your colleagues benefit from a short in-house seminar to reflect on the issue of budgets, how to manage the same and protect your clients on detailed assessment? If so, please email Jill Paveley or call 01268 572320, to arrange the same.