Cotham School v Bristol City Council & Ors (costs budgets)

In Part 8 proceedings, the general rule is that parties are not required to file and serve costs budgets. The court nevertheless has power to make a costs management order and to require a litigant in person to file a budget. That power may be exercised where the litigant instructs direct-access counsel and substantial recoverable costs may arise. The decision is fact-sensitive. The court should consider whether costs management would assist in controlling potentially disproportionate costs, while recognising that budgeting will often be unnecessary for ordinary litigants in person.

This was a ruling given on the court’s own initiative concerning an order made in earlier proceedings requiring all parties to file and exchange costs budgets. The second defendant was not represented by solicitors but instructed counsel on a direct-access basis. She sought confirmation that the standard notice of the case management conference, which stated that litigants in person were not obliged to file budgets, relieved her from the order. The issue was whether the court’s order applied to her notwithstanding the general provisions governing Part 8 proceedings and litigants in person.

1. The costs budget order applied. The second defendant was required to file and serve a costs budget. The contrary direction in the standard hearing notice was erroneous in the circumstances of this case.
2. Under Civil Procedure Rules 1998, rule 3.12(1), parties in Part 8 proceedings generally do not have to comply with costs budgeting. In Part 7 proceedings, rule 3.13(1) similarly excludes litigants in person from the ordinary obligation to file and serve budgets.
3. Those general rules do not remove the court’s discretionary powers. Rule 3.12(1A) permits the court to make a costs management order in Part 8 proceedings. Rule 3.13(3) permits the court to order a person who would otherwise be exempt to file and serve a costs budget.
4. The discretion must be exercised by reference to the circumstances of the case. A budget may be appropriate where a litigant in person instructs direct-access counsel, substantial disbursements and legal fees may be incurred, and a successful costs claim could be significant. The ordinary case involving a litigant in person will commonly require no costs management.
5. The judge considered Campbell v Campbell [2016] EWHC 2237 (Ch), where the desirability of budgeting was recognised in a complex case involving direct-access counsel and potentially substantial recoverable costs. The different circumstances in CJ and LK Perk Partnership v Royal Bank of Scotland [2020] EWHC 2563 (Comm) explained why budgeting had there been refused at that stage.
6. Given the substantial counsel fees already incurred and the prospect of a significant costs claim if the second defendant succeeded at trial, requiring all parties to budget was an appropriate measure of effective costs management.