Costs budgets and necessary costs
It has been suggested that in the case of Stocker v Stocker  EWHC 1634 the most interesting observation by Mr Justice Warby was:
“I readily acknowledge the importance of ensuring that the costs budgeting process does not result in a party being unable to recover the costs necessary to assert their rights.”
I would entirely agree if it were not for the fact the judge has so clearly misdirected himself in relation to the post-Jackson approach to costs.
“These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.”
CPR 44.3(2)(a), relating to assessment on the standard basis:
“Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred”
The fact a case is subject to costs management does not mean that it is therefore immune to the new proportionality test. The same approach surely applies to both budgeting and assessment. To ensure proportionality, in both cases a figure may be allowed that is less than the “necessary” to conduct the case.
But, perhaps it is me that is wrong.
Perhaps a judge setting a budget is only concerned with fixing a figure that allows for all “necessary” work to be done. If that figure is ultimately found to be disproportionate for the facts of the case, it is then for the judge on assessment to reduce the costs below the approved budget on the basis that this amounts to a “good reason”. If that is so, it undermines two of the purported benefits of costs management: certainty for the parties as to the extent of the adverse costs they are likely to face and avoiding the need for detailed assessment.
Having said that, at this stage nothing would surprise me about the implementation process.