The High Court’s decision in Rudan Business Holding SA v Tridan Trusted Advisors AG & Ors (Re Leo Services Holding Ltd) [2025] EWHC 3565 (Ch) provides a detailed application of the two-stage threshold test for costs budget variations under CPR 3.15A, confirming that the “promptness” requirement will be strictly enforced even where significant developments are plainly established.
Background
This matter concerned an unfair prejudice petition presented by Rudan Business Holding S.A (the Petitioner) under section 994 of the Companies Act 2006. The Petitioner and the First Respondent, Tridan Trusted Advisors AG, each held a 50% shareholding in Leo Services Holding Limited (the Company). The petition alleged that the affairs of the Company were being conducted in a manner unfairly prejudicial to the Petitioner’s interests, focusing on allegations that the Second Respondent, Daniel Tribaldos, had falsified a loan agreement and subsequently removed the Petitioner’s nominees from the board of a key subsidiary, Leo Trust Switzerland AG, before transferring the shares in that subsidiary and another to entities he controlled.
The first costs and case management conference (CCMC) was heard in March and April 2022 by Deputy ICC Judge Lambert, who approved the parties’ costs budgets for the liability phase of the proceedings. Shortly thereafter, in May 2022, the Respondents served an Amended Points of Defence and Counter-Petition which substantially expanded the factual and legal issues in dispute. The Petitioner served an Amended Reply in August 2022. The disclosure process became protracted and complex, involving applications for Letters of Request to the Swiss courts under the Hague Convention to obtain permission to disclose documents located in Switzerland. This led to the vacation of the original trial window in 2023 and the listing of a Further CCMC.
The Further CCMC eventually took place before Deputy ICC Judge Jones on 6 May 2025, where directions were given for a 16-day trial (including two days’ pre-reading) in a window beginning on 29 June 2026. At that hearing, the consideration of both parties’ applications to revise their costs budgets was adjourned to a separate hearing. Both the Petitioner and the Respondents had filed revised costs budgets in late April 2025, seeking very substantial increases to their previously approved figures. The hearing before Deputy ICC Judge Kyriakides on 18 December 2025 was to determine the principle of whether variations to those budgets should be allowed, with quantum to be addressed separately.
Costs Issues Before the Court
The court was required to determine the competing applications by the Petitioner and the Respondents to revise their respective costs budgets upwards. The Petitioner sought an additional £2,269,495, increasing its total budget from approximately £2.67 million to approximately £4.84 million. The Respondents sought an additional £1,644,045, increasing their total budget from approximately £1.75 million to approximately £3.40 million. The applications engaged the provisions of CPR 3.15A, which mandates revision of a budget where significant developments in the litigation warrant such revisions.
The key issues for the court were: first, identifying whether the events relied upon by each party constituted “significant developments” in the litigation; second, determining whether each party had submitted particulars of the proposed variation “promptly” as required by the rule; and third, if both threshold tests were met, exercising discretion as to whether to allow the revisions and in what amount.
The Parties’ Positions
The Petitioner argued that multiple significant developments warranted budget revisions. Its primary contention was that the Respondents’ Amended Defence in May 2022 fundamentally expanded the scope of the litigation by introducing numerous new allegations, expanding the defence from 21 to 51 pages. This, it argued, had a cascading effect, increasing the work required for subsequent phases including disclosure, witness statements, trial preparation, and the trial itself, which had increased from an eight-day to a sixteen-day estimate. The Petitioner also pointed to the specific costs of the effective Further CCMC in May 2025. On promptness, the Petitioner submitted that in the context of this case — where proceedings were effectively paused during the Swiss disclosure process — it was sensible and proportionate to serve a single revised budget ahead of the Further CCMC in April 2025. It argued no prejudice arose from this approach.
The Respondents similarly relied on the expansion of issues from the amended pleadings as a significant development, particularly impacting disclosure and witness evidence. They also emphasised the unexpected scale of the electronic disclosure exercise, which necessitated engaging FTI Consulting LLP as an e-disclosure provider. The Respondents contended that they had acted promptly by serving a revised budget on the Petitioner in January 2023, although this budget was never formally filed with the court. The Respondents also submitted that the court’s primary role was to manage future costs prospectively and that allowing revisions long after costs had been incurred undermined the costs budgeting regime.
The Court’s Decision
Deputy ICC Judge Kyriakides applied the two-stage test derived from Persimmon Homes Ltd v Osbourne Clark LLP [2021] EWHC 841 (Ch) and Sharp v Blanks [2017] EWHC 3390 (Ch). The court first had to be satisfied that there had been a significant development since the last approved budget and that particulars of the variation were submitted promptly. Only if both thresholds were met would the court exercise its discretion on quantum.
The court also drew on the policy purposes underlying the costs budgeting regime, as identified in both Persimmon and Sharp: predictability of costs exposure for the parties, greater accuracy in costs recovery, the likely reduction in detailed assessment costs where accurate budgets are in place, and the inherent desirability of significant developments being reflected in the budgets.
Significant Developments
The court made findings on a phase-by-phase basis. The non-consequential amendments in the Respondents’ Amended Defence, and the consequential Amended Reply, were held to be significant developments in the litigation. They expanded the case from a 21-page defence to a 51-page document, introducing new issues not reasonably anticipated at the time of the original budgeting. Many of the new allegations did not arise from the Petitioner’s own amendments and could not have been foreseen.
The effective Further CCMC listed for 6 and 7 May 2025 was a significant development, as it was an unanticipated hearing to re-set the entire procedural timetable and address additional matters including the trial length. However, the earlier adjournment of a CCMC in June 2024 was not a significant development. The court accepted the Respondents’ submission that the adjournment was a normal part of litigation. A February 2023 hearing on the Petitioner’s application to extend time for inspection of documents was similarly not significant.
The expansion of issues from the amended pleadings and, for the Respondents, the unexpected scale of data collection were significant developments in the disclosure phase. The Petitioner’s original budget had estimated a population review of 250–300 documents and production of around 2,000 documents from the Respondents. In fact, the Petitioner carried out a population review of 9,722 documents. The Respondents’ position was more stark: 3,340,540 documents were collected, of which 91,710 were migrated to a Review Workspace, necessitating the engagement of FTI Consulting LLP as an e-disclosure provider — an expense the original budget had expressly excluded.
The increased scope of issues and disclosure justified a finding of significant development for witness statement preparation. However, the court held that a party’s internal decision to change solicitors and redistribute work between solicitors and counsel — as the Respondents had done following their instruction of Gresham Legal — was not a significant development. It was an internal matter arising from the choice of the party, not a change in the litigation itself. The court added that if the overall total of the approved budgeted costs for a phase was not changed by such redistribution, the Respondents should not be penalised merely because of the reallocation; but any additional costs above the approved amount would fall to be dealt with at detailed assessment.
No significant development was found for the expert evidence phase. The Petitioner relied principally on the introduction of an issue under section 191 of the Companies Act 2006. The court found, however, that this issue was introduced by the Petitioner’s own Amended Petition, for which permission had been granted in the order of 21 March 2022, and that paragraph 12 of that order already made provision for expert reports on the relevant share valuations. The costs of that expert evidence should therefore have been included in the Petitioner’s budget as originally approved. The court also held that a substantial increase in the Petitioner’s solicitors’ hourly rates — Freshfields’ rates having risen by approximately 25% in June 2024 — was not a significant development in the litigation warranting a budget revision. It was a matter between the solicitors and their client. The Respondents’ claimed variations for this phase were also rejected: the increase in expert fees from £45,000 to £65,000 was unexplained, and the only change identified — a Panamanian expert no longer being required — would logically reduce fees, not increase them.
The increase in trial length from eight to sixteen days was a significant development warranting increases to both parties’ trial preparation and trial costs. However, the court rejected the Petitioner’s argument that the adjournment of the trial from 2023 to 2026, and the consequent increase in lawyers’ fee rates, constituted a separate significant development. An adjournment during which lawyers raise their fees does not fall within that category.
On contingent costs, the court found that the withdrawal of an anticipated injunction application was a significant development warranting a downward revision of the Respondents’ budget. However, most other contingent cost variations were refused. The Respondents’ overspend on the security for costs application was not a significant development: they should have anticipated a contested hearing and budgeted for it. An application by the Petitioner for security for costs, which was issued and then withdrawn within weeks, was not significant either. Nor was an application for an extension of time for disclosure, which the court treated as part and parcel of normal litigation.
Promptness
The court emphasised that the core purpose of costs management is the prospective control of future costs. It rejected the Petitioner’s argument that waiting to submit a single comprehensive revision until before the effective Further CCMC was “prompt” in this context. The court stated that this approach was “approaching costs budgeting from the wrong direction,” echoing Master Kaye’s language in Persimmon. The purpose of costs budgeting is to provide prospective predictability and certainty, not to approve incurred costs retrospectively. Where a significant development occurs, the mandatory obligation under CPR 3.15A is to revise the budget promptly in relation to that development — even if this results in multiple revisions over time. A single belated application, filed after the relevant costs have been fully incurred, effectively transforms the court’s function from approving prospective budgets into conducting what amounts to a summary assessment.
The parties were found not to have acted promptly regarding revisions for statements of case, disclosure, and witness statements. The significant developments in the pleadings were known by mid-to-late 2022, and the disclosure exercise had been completed by January 2023, yet revised budgets were not submitted until April 2025 — well after the relevant costs had been incurred. The Petitioner’s delay of nearly three years from service of the Amended Defence, and over two years eight months from service of the Amended Reply, could not on any interpretation be considered prompt. The Respondents’ position was no better: even if the January 2023 budget were relied upon, it was served nearly eight months after the Amended Defence and was never submitted to the court.
The Respondents’ January 2023 budget itself was not capable of satisfying the submission requirements of CPR 3.15A. It was served on the Petitioner but never filed with the court. ICC Judge Greenwood did not have a copy of it at the directions hearing on 2 February 2023, and its only appearance in the court file was as an exhibit to a witness statement filed in support of the Respondents’ security for costs application on 6 April 2023. That did not constitute submission of a costs budget to the court. The court also noted that the figures in the January 2023 budget differed significantly from the April 2025 revision — for statements of case alone, the claimed increase rose from £114,299 to £185,784 without explanation — illustrating the difficulties courts face when asked to approve incurred costs rather than prospective estimates.
The court found the parties had acted promptly regarding the Further CCMC costs, trial preparation, and trial phases. The scale of additional work for trial could only be properly assessed as the May 2025 CCMC approached, when the trial length was determined.
Conclusion on Allowable Variations
The court held that both threshold tests were satisfied only for the phases concerning the Further CCMC (held on 6 May and 18 December 2025), trial preparation, and trial. In principle, revisions to the budgets for these three phases would be allowed, with the quantum of those increases to be agreed between the parties or determined subsequently. All other requested variations were disallowed at this stage, primarily for failure to meet the promptness requirement. For those phases, the parties’ recourse will be to argue at detailed assessment that there is good reason to depart from the last approved budget under CPR 3.18.
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