The Government has extended the defamation costs budgeting pilot until 30 September 2012 and made significant changes to the way in which the scheme works with effect from 1 October 2011.

  1. The Court no longer has jurisdiction to approve or disapprove any budget items which have been agreed between the parties.  
  2. The rules now make clear that the Court cannot approve costs before the date of the first case management conference, although it may record its comments on those costs and should take them into account when considering the reasonableness and proportionality of all subsequent costs. The previous rules were unclear, with some Masters assessing incurred costs and others declining to do so.  
  3. There is express recognition that the Court is not expected to undertake a “detailed costs assessment in advance”. The Court’s role is to consider whether the budgeted totals for each stage of the work are within the broad range of reasonable and proportionate costs.  
  4. On detailed assessment, the Court will now be required to “have regard to” the receiving party’s last approved budget and cannot depart from that budget unless satisfied that there is good reason to do so. This replaces a requirement that the Court must approve costs as reasonable and proportionate if they fall within the budget, unless there have been significant changes in circumstances. This amendment, and the one identified at 3 above, make clear that the Court is required to undertake a proper detailed assessment at the end of the case, adjudicating on each item claimed, and cannot simply allow a receiving party to recover all of their costs up to the approved budget cap. This is good news for paying parties.  
  5. The Court is required to manage the costs of the litigation as well as the case itself in a manner which is proportionate not only to the value of the case and the reputational issues at stake, but now also in a way that is proportionate to the public interest issues raised.  
  6. When Solicitors liaise monthly with their opponents, they must now confirm not only that the budget is not being exceeded, but that it is not likely to be.