News | Budgeting

Costs Budgets And Bills Of Costs – Take The Same Approach!

30 August 2017

The recent decision of Master McCloud, sitting as a deputy costs judge, in the case of Woodburn v Thomas [2017] EWHC B16 (Costs) highlighted how costs budgeting is fundamentally linked to the detailed assessment process.  In this case the costs lawyer drafting the bill of costs separated the costs budgeting and costs management costs into separate ‘non phase’ parts as those costs are subject to the 1% and 2% caps.  This approach was consistent with that proposed by Master Gordon-Saker’s decision in BP v Cardiff and Vale University Local Health Board [2015] EWHC B13 (Costs), however in the Precedent H used during costs budgeting, the costs budgeting and costs management costs were included in the CMC phase.

On detailed assessment the Master directed that the ‘non phase’ costs budgeting and costs management costs that fell within the assumptions of the CMC phase in the Precedent H should be treated as being part of the CMC phase of the bill of costs and thus subject to that budget. All other costs budgeting and costs management costs should remain subject to the 1% and 2% cap.  The result of transferring some of the costs budgeting and costs management costs to the CMC phase was that that phase then exceeded the costs budget. 

The Master recommended that the Rule Committee look to revise the guidance for preparing the Precedent H so that it is now consistent with what is now the approach after Master Gordon-Saker’s decision in BP.

For many years our costs lawyers have been preparing Precedent H costs budgets showing the costs budgeting and costs management costs separately, capped at 1% and 2% and thus avoiding the conflict that occurred in this case between the costs budget and how the bill of costs was drafted.