Where the parties have filed budgets in accordance with Practice Direction 3E, but the Court has not made a Costs Management Order under Rule 3.15, the Part 44 Practice Direction (paras 3.1 to 3.7) applies.

If there is a difference of 20% or more between the costs claimed by the receiving party on detailed assessment, and the costs shown in a budget filed by that party, the receiving party must provide a statement of the reasons for the difference with the bill of costs.

If a paying party claims that it reasonably relied on a budget filed by the receiving party or wishes to rely upon the costs shown in the budget in order to dispute the reasonableness or proportionality of the costs claimed, the paying party must serve a statement setting out its case in this regard in its Points of Dispute.

On assessment, the Court may have regard to any budget previously filed by the receiving party or any other party in the same proceedings. The budget may be taken into account when assessing the reasonableness and proportionality of any costs claimed.

Where there is a difference of 20% or more between the costs claimed by a receiving party and the costs shown in a budget filed by that party and where it appears to the Court that the paying party reasonably relied on the budget, the Court may restrict the recoverable costs to such sum as is reasonable for the paying party to pay in the light of that reliance, notwithstanding that such sum is less than the amount reasonably and proportionately incurred by the receiving party.

Where it appears to the Court that the receiving party has not provided a satisfactory explanation for that difference, the Court may regard the difference between the costs claimed and the costs shown in the budget as evidence that the costs claimed are unreasonable and disproportionate (the Part 44 Practice Direction (paras 3.5 to 3.7)).

Excerpt from the Senior Courts Costs Office Guide 2021