The recent case of Persimmon Homes Ltd & Anor v Osborne Clarke LLP & Anor [2021] EWHC 831 (Ch) (12 April 2021) (Master Kaye) has provided useful guidance on the relevant procedure and principles for applications to vary costs budgets under CPR 3.15A.
Since October 2020, the process of applying to vary a costs budget has been set out within CPR 3.15A. That being said, as this Rule is still in its infancy, there has been little case law since its introduction.
The Persimmon Homes case has made it clear that a party applying to vary its costs budget must satisfy the "threshold test". Such a test involves two mandatory requirements before the Court will subsequently use its discretion regarding the variation itself. The test requires the applicant to firstly show that there has been a significant development in the litigation since the last approved budget which warrants a revision and secondly, that particulars of the variation as submitted promptly, both to the Court and the other parties. It was also emphasised by Master Kaye that it is not appropriate for a party to wait until the full implications of a development are understood before applying to vary a costs budget. CPR 3.15A(6) is intended to cater for costs that will be incurred rather than enabling an applicant to deal with any overspend after costs have been incurred.
It is of course the case that what is and isn't a significant development and what represents a prompt application will depend on the context of each case, although it seems that in the absence of an obviously significant development, such expert evidence being permitted (when it wasn't previously), applicants will have to take steps to evidence why it considers that a significant development has taken place.
If it wasn't clear already, this case has emphasised the importance of keeping costs budgets under constant review and compliance with CPR 3.15A when applying to vary a budget.
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