UK: On A Budget: The New Costs Management Order

Last Updated: 8 November 2011
Article by Richard Langley

This article was first published in the Solicitors Journal on 18 October 2011 and is reproduced by kind permission.

The new costs management order is here to stay, and those firms that master the art of costs budgeting early on will have an advantage, says Richard Langley.

Courts have always grappled with how to manage cases and had a variety of tools at their disposal for this purpose. In 1595, the Master of the Rolls decided in one chancery case that the pleading, at 120 pages long, was eight times longer than it needed to be. The remedy was to order that the pleader be brought into Westminster Hall at 10.00am the next Saturday, whereupon a hole be cut in the middle of the pleading so that it could be placed over the pleader's head, who would then be led around "bare headed and bare faced" before being sent to the Fleet Prison until he had paid a £10 fine (Mylward v Weldon [1595] EWHC Ch 1).

The latest tool is a costs management order (CMO), to be found in the new practice direction 51G, which came into effect on 1 October 2011. For the time being, it applies only to the Mercantile and Technology and Construction Courts, but all litigators need to get their heads around it now.

PD51G requires parties to draw up detailed budgets for the costs they have incurred and estimate to the end of the case. These are set out in an Excel spreadsheet in prescribed form HB before the first case management conference. The judge will consider the budgets and may make a CMO, approving the budget or a revised (presumably cut down) version of it. If a budget should subsequently turn out no longer to be accurate, parties must produce a revised budget, showing the departures and the reasons for that.

Approved costs budgets do not obviate the need for a detailed assessment at the end of the case. The CMO cannot approve costs that have already been incurred (although it may record comments on them), but, with regard to costs incurred in accordance with an approved budget, the court on detailed assessment will not depart from the budgeted figure unless there is good reason to do so.

Solicitors who do not routinely practise in the TCC or the Mercantile Courts may be tempted to take the view that costs budgeting is not for them. That would be a mistake. Costs budgeting is here to stay and will in time become as much a part of the litigation culture as summary assessment and CFAs have over the past ten years.

No one disputes that case management powers in the CPR have failed to reduce costs in the multi-track. This has led Lord Justice Jackson to advocate costs management. Despite the opposition of the circuit judges (who submitted that "judicial productivity would be likely to fall as fast as morale if we are required to do this work"), he concluded that "a powerful case has been made out for introducing costs management in... multi-track cases". He recommended that the introduction be gradual (not least to enable demoralised circuit judges to get trained up) and therefore the pilot should be seen as a step towards implementation across the multi-track generally.

Getting ahead

Form HB (nine pages long) is intimidating, even if it is conceptually simple. Jackson LJ reckons it will take around two hours to complete in most cases. Smarter (and better resourced) firms will invest in software that will automatically populate the form and track actual against estimated time asthe case goes along. Clients will appreciate seeing the sort of detailed estimates that costs budgeting will require. And so those firms that become skilled in costs budgeting will use it not just to comply with their professional obligations but also as a marketing tool.

Will it reduce costs? History suggests not. Every introduction of new procedures creates further work that lawyers are entitled to be paid to carry out. The additional costs are not so much from completing the form as from having to map out the case in so much detail at the outset. Jackson LJ was aware of this but pointed out that quantity surveyors have to be paid to monitor the costs of a construction project, yet no onesuggests that they should be dispensed with to save the costs of employing them. So, modern litigators must add project management to their skill sets. Builders are adept at quoting a fixed price for a job based on certain assumptions. Similarly, they areadept at claiming for the extras (at time cost on a fixed margin) as soon as the project deviates from those assumptions. Solicitors will have to become so adept if they are to thrive in years to come.

Jackson LJ is trusting that judges will also become proficient in active costs management (although one might be forgiven for doubting whether most will have the time, let alone the skills and inclination, to do so). In litigation both parties are usually incentivised to spend more time on a case to improve the prospects of winning it (and thereby recover the costs too). Costs budgeting is not obviously going to reverse that incentive, save in the most actively managed of cases.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Richard Langley
In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions