Section III of CPR Part 3 deals with costs capping. CPR 3.19, 3.20 and 3.21 set out the general principles, the procedure for applying for a costs capping order and for varying such an order.

Costs capping orders can be made only in respect of costs (including disbursements) to be incurred after the date of the costs capping order. Subject to that, the court may make a costs capping order in respect of the whole of the litigation, or any particular issue or issues ordered to be tried separately.

The criteria which have to be satisfied before the court will make a costs capping order are that: it is in the interests of justice to do so; or, there is a substantial risk that without such an order costs will be disproportionately incurred; and, it is not satisfied that that risk can be adequately controlled by case management directions and detailed assessment of the costs.

An application for a costs capping order must specify whether the order sought is in respect of the whole of the litigation or a particular issue which is ordered to be tried separately, or (although the rule does not specifically so state), up to a particular point in the proceedings. The application must be accompanied by an estimate of costs setting out the costs and disbursements incurred by the applicant to date, and the future costs and disbursements of the proceedings which the applicant is likely to incur (CPR 3.20)