Court considers whether the costs budgeting regime fetters costs judge's discretion at a detailed assessment of costs

The novel issue in this case was whether the costs budgeting regime fetters a costs judge's powers and discretion at a detailed assessment of costs. A number of detailed assessments have been adjourned pending the outcome of this decision.

The appellant argued that where a receiving party claims costs which are at or less than the budgeted figure, those costs should be assessed as claimed (unless the paying party can show a good reason to depart from the budget). The respondent argued that the paying party is entitled to a full detailed assessment, with the budget being just one factor in determining reasonable and proportionate costs (ie the costs judge is not fettered by the budget).

Carr J agreed with the appellant and said that the words of CPR r.18 (the effect of a costs management order) were clear and concluded 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".