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A good cost budget is one that anticipates the potential work to be undertaken throughout litigation. The benefit of an effective costs budget cannot be understated because it provides clarity to both parties regarding costs and can facilitate quicker settlements, both in the substantive matter and when it comes to costs recovery.
However, litigation does not always proceed as anticipated. Unexpected events can render a previously well-prepared cost budget obsolete. While the Civil Procedure Rules provide a mechanism for varying cost budgets under CPR 3.15A, the recent decision in Bassey v Whittaker & Anor [2026] EWHC 2126 (KB) offers further clarification on how broad the Court’s discretion is when asked to approve a budget variation.
Background: Bassey v Whittaker & Anor
This was a high-value personal injury claim involving a claimant pedestrian who was struck by a vehicle driven by the First Defendant.
A Costs and Case Management Conference (CCMC) took place on 18 December 2024. At that hearing, the Second Defendant, the First Defendant’s insurer, conceded liability. Directions were also set through to trial, including:
- Rolling disclosure every four months;
- Exchange of updated expert evidence;
- Exchange of witness evidence; and
- A trial window between June 2026 and December 2026.
The Claimant’s budget was initially drafted at almost £2 million but was reduced by DJ Maddison to just over £1 million.
In July 2025, the trial window was extended to March 2027. An application was made to vary the Directions Order, and a further case management hearing took place on 27 November 2025.
Following that hearing, a consent order was made which varied a number of directions. As part of the order, the parties agreed that:
“The parties shall file and serve Precedent Ts… to take account of the increased costs associated with the amendments to the order of DJ Maddison dated 18 December 2024.”
The matter was subsequently listed for a costs management hearing on 6 February 2026.
The Application to Vary the Cost Budget
The Claimant prepared a Precedent T seeking approval to increase the approved budget by £238,350.
At the hearing on 6 February 2026, the parties could not agree on whether there had been a significant development sufficient to justify a variation under CPR 3.15A.
The preamble to the order made that day stated that the amendments to the Directions Order:
“were not a significant development within CPR 3.15A but does not prevent the costs being increased”.
A further hearing was due to take place to assess the quantum of any potential increase.
The Defendants appealed the decision to proceed with a cost budget variation despite the finding that there had been no significant development.
What Questions Did the Court Need to Decide?
Mr Justice Cavanagh first considered whether the parties had agreed that the budgets should be varied or that there had been a significant development. The Court concluded that:
- There was no agreement that the budgets should be varied; and
- There was no agreement that a significant development had occurred.
Accordingly, two key issues remained for determination.
1. Can a Cost Budget Be Varied Without a Significant Development?
Mr Justice Cavanagh considered the earlier decision of Master Kaye in Persimmon Homes Ltd v Osborne Clark LLP [2021] EWHC 831 (Ch). In reviewing CPR 3.15 and CPR 3.15A, the Court concluded that there must be a significant development before the Court can exercise its discretion to decide whether a cost budget should be varied.
In other words, the existence of a significant development is a mandatory threshold requirement.
2. Did the Circumstances Amount to a Significant Development?
The Claimant argued that several developments met the threshold, including:
- Changes in the Claimant’s rehabilitation programme;
- The requirement for a further round of updated expert evidence;
- The extension of the trial window; and
- The need for two additional quantum witness statements.
The Defendants relied on comments made by DJ McLoughlin at the February 2026 hearing. He considered that all of these matters were either known or reasonably anticipated when the original costs budget was approved.
As a result, the Defendants argued that the developments could not satisfy the CPR 3.15A test.
What Is a ‘Significant Development’ Under CPR 3.15A?
Mr Justice Cavanagh considered the threshold that must be met before a development can be regarded as significant.
The Court held that a significant development is: “something that was not and could not reasonably have been anticipated” when the approved costs budget was set.
Importantly, whether a development is significant will always depend on the specific facts of the individual case.
Applying that test to the facts before him, Mr Justice Cavanagh concluded that the matters relied upon by the Claimant did not reach the required threshold. Accordingly, the approved costs budget was not varied.
Key Takeaways for Costs Budgeting
The decision highlights the importance of preparing an accurate and comprehensive costs budget from the outset.
Practitioners should ensure that their budget accounts for all potential developments that may arise during the normal course of litigation. Failure to anticipate such costs may leave a party with an inadequate budget and limited prospects of successfully obtaining a variation.
Following Bassey v Whittaker, the opportunity to vary an approved costs budget may be restricted to developments that are genuinely unusual, unforeseen, and incapable of reasonable anticipation when the budget was approved.
Can You Still Depart from an Approved Costs Budget?
That does not mean that all is lost if a budget variation is refused. At the conclusion of proceedings, a party may still seek to argue that there is a good reason to depart from the approved costs budget. However, such arguments are likely to face significant challenges where the Court considers that the budget could or should have been varied during the litigation process.
Need Expert Advice on Cost Budgeting?
If you would like expert advice on cost budgeting, cost management, or budget variations under CPR 3.15A, please get in touch with Peak Costs.
