Amendments to the CPR coming into force in April 2017 deal with matters surrounding budgets. The amendments are to Rules 3.15 and 3.18 and are as a result of recent case law. The changes, detailed below, replace ‘budget’ with ‘budgeted costs’ which means that, with effect from 6th April 2017, only estimated costs are caught by the provisions of CPR 3 Part 2, whereas previously both estimated and incurred costs were caught. The new CPR 3.15(4) reflects the Sarpd decision, with parties requesting the Judge records a comment on the level of incurred costs. The new CPR 3.18(c) gives force to any comments made at the CCMC as to whether the incurred costs appear reasonable/unreasonable or proportionate/disproportionate.
(1) In addition to exercising its other powers, the court may manage the budgeted costs to be incurred by any party in any proceedings.
(2) The court may at any time make a ‘costs management order’. Where costs budgets have been filed and exchanged the court will make a costs management order unless it is satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made.
By a costs management order the court will—
(a) record the extent to which the budgeted costs are agreed between the parties;
(b) in respect of budgeted costs which are not agreed, record the court’s approval after making appropriate revisions.
CPR 3.15 subparagraph (4) is inserted which provides “Whether or not the court makes a costs management order, it may record on the face of any case management order any comments it has about the incurred costs which are to be taken into account in any subsequent assessment proceedings.”.
In any case where a costs management order has been made, when assessing costs on the standard basis, the court will–
(a) have regard to the receiving party’s last approved or agreed budgeted costs for each phase of the proceedings; and
(b) not depart from such approved or agreed budgeted costs unless satisfied that there is good reason to do so.
CPR 3.18 subparagraph (c) is inserted which provides the court will “take into account any comments made pursuant to Rule 3.15(4) or paragraph 7.4 of Practice Direction 3E and recorded on the face of the order”.