Gary Knight

Application to Vary an Approved Costs Budget

Partner and Costs Lawyer Gary Knight recently received instructions to assist with an application to vary an approved costs budget, he found the process of interest and so thought he’d share.

First port of call:


(1) A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.

(2) Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5).

(3) The revising party must—

(a) serve particulars of the variation proposed on every other party, using the form prescribed by Practice Direction 3D;

(b) confine the particulars to the additional costs occasioned by the significant development; and

(c) certify, in the form prescribed by Practice Direction 3D, that the additional costs are not included in any previous budgeted costs or variation.

(4) The revising party must submit the particulars of variation promptly to the court, together with the last approved or agreed budget, and with an explanation of the points of difference if they have not been agreed.

(5) The court may approve, vary or disallow the proposed variations, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed, or may list a further costs management hearing.

(6) Where the court makes an order for variation, it may vary the budget for costs related to that variation which have been incurred prior to the order for variation but after the costs management order.

Simple enough, however the difficulty is not in the preparation of the required, and easily obtainable, Precedent T or the setting out of which phases will increase (or decrease for that matter), but the justification of the variation by showing a “significant development”.

First things first, if the budget needs to be varied, get the application in ASAP.

Then, familiarise yourself/selves with:

Persimmon Homes Ltd & Anor v Osborne Clark LLP & Anor [2021] EWHC 831 (Ch)

You can read the rest of Gary’s commentary on Application to Vary an approved costs budget here including previous judgments and the importance of three significant developments in support of the application to vary. We hope you find it useful!