Background
The case concerned a dispute where, following a costs and case management conference (CCMC) in June 2024, the court had expected agreed budgets to be filed. Due to administrative oversights, unresolved disputes were not brought to the judge’s attention, and no Costs Management Order (CMO) was made. It was only in early 2025, when the claimant sought to amend its budget for disclosure, that the court became aware of the outstanding issues.
Retrospective Budgeting
The claimant argued that the court had no power to make a CMO retrospectively in respect of budgets filed in June 2024, as this would be impermissibly "retrospective". Instead, it sought approval of its revised (and significantly increased) budget.
This argument was rejected, the Judge holding that:
CPR 3.15(2) permits a CMO to be made ‘at any time’, meaning the court could properly assess the reasonableness of the June 2024 budgets as if they had been promptly considered.
This was not a retrospective order altering past decisions but a record of what the court would have approved at the time, ensuring a disciplined approach to costs management.
The alternative would have been to allow the parties to bypass earlier budgeting stages and seek approval only for revised figures, something that would undermine the purpose of costs control.
Approach to Budget Revisions Under CPR 3.15A
The claimant later sought a £295,000 increase in its disclosure budget (from £80,000 to £376,000), citing:
Protracted disputes over the Disclosure Review Document (DRD).
Additional issues and expanded search parameters.
A vastly underestimated initial data volume (revised from 1.5GB to 58GB).
The court held:
While the claimant’s original assumptions were too narrow, the increased volume justified some uplift.
However, the lack of detailed justification for the four-fold increase in solicitor hours was problematic.
The court approved a revised budget of £120,000 for solicitor time (up from £58,000) and £50,000 for disbursements (up from £7,500), but rejected the full increase as disproportionate.
Takeaways
- Courts Can Retrospectively Approve Budgets. CPR 3.15(2) allows CMOs to be made at any stage, ensuring historical estimates are properly recorded.
- Budget Revisions Must Be Justified. Parties cannot rely on vague assertions; significant increases require clear evidence of changed circumstances.
- Proportionality Remains Paramount. Even where disclosure volumes increase, courts will not rubber-stamp disproportionate adjustments.
This decision reinforces the importance of timely engagement with budgeting, as well as clarifying that courts will not allow parties to circumvent earlier budgeting stages by seeking approval only for revised figures, while at the same time recognising that genuine developments may justify adjustments under CPR 3.15A.
