All multi-track cases commenced on or after 1 April 2013 in the County Court or the Chancery Division or Queen’s Bench Division of the High Court (except claims commenced on or after 22 April 2014 valued at £10 million or more and claims by children commenced on or after 6 April 2016) are subject to costs management, unless the proceedings are the subject of fixed costs or scale costs, or the Court orders otherwise. The Costs Management Provisions may also apply to any other proceedings, including applications where the Court so orders (CPR 3.12(1A)).

The purpose of Costs Management is that the Court should manage both the steps to be taken and the costs to be incurred by the parties to any proceedings so as to further the overriding objective. All parties, except litigants in person, must file and exchange budgets in accordance with the rules, or as directed by the Court. This must be done by the date not less than 21 days before the first case management conference (CPR 3.13) (unless the claim is less than £50,000 when the budgets must be filed and served with the directions questionnaires). Any party which fails to file a budget when required to do so, will be treated as having filed a budget comprising only the applicable Court fees (CPR 3.14).

The Court may make a Costs Management Order at any time. Such an order will record the extent to which budgets are agreed between the parties and, in respect of budgets which are not agreed, record the Court’s approval after making appropriate revisions. Once a Costs Management Order has been made, the Court will thereafter control the parties’ budgets in respect of recoverable costs (CPR 3.15).