Costs budgeting may not be the most glamorous aspect of litigation, but it is crucial to the effective management of any matter. When approached correctly, it helps keep proceedings on track and supports maximum costs recovery. If mishandled, however, it can lead to loss of credibility, reduced recoverable costs, and even exposure to adverse costs orders.
At IG Legal, we have witnessed first-hand the many pitfalls that solicitors can encounter in costs budgeting—and the impact these can have. From budgets not being approved at CCMCs to lost recovery opportunities caused by avoidable errors and simple oversights, the risks are real.
Costs budgeting is both a compliance requirement and a strategic tool—where errors can carry serious consequences. Let us explore five of the most common mistakes solicitors make in costs budgeting… and, more importantly, how to avoid them.
1. Underestimating Future Costs
Whilst it may feel “safer” to submit a conservative budget, underestimating future costs is one of the most damaging errors one can make. If you understate your estimates, you may end up with a budget that fails to reflect the true scope of the litigation—leaving you to justify overspends later and risking significant reductions. Once approved, your budget forms the financial framework for the case. If your projections are unrealistic, attempts to recover sums beyond the approved figures may be refused by a costs judge.
#Forecast Smart or Pay Later
Take the time to build a credible forecast, incorporating realistic assumptions for disclosure, expert evidence, and trial preparation. Consider not only the obvious costs but also appropriate contingencies.
At IG Legal, our costs budgeting specialists bring years of experience in analysing matters just like yours. We do not merely draft precise and reliable budgets—we test assumptions, apply benchmarks, and ensure each figure reflects the complexity and nuances of the dispute. It is all part of our commitment to applying best practices in legal costs budgeting.
2. Overlooking Precedent H Requirements
Submitting a budget that does not comply with Precedent H is a fast track to delay or rejection. Common errors include failing to distinguish properly between incurred and estimated costs, miscalculating hourly rates, including disallowed items, and providing inadequate narrative explanations. Even experienced solicitors can fall foul of the detail—and unfortunately, it is the fine detail that counts when appearing before a budget-hardened judge at the CCMC.
#Check the Details or Risk Non-Compliance
Treat Precedent H as a blueprint—not a formality. Follow the guidance notes and ensure each section is completed accurately, formatted correctly, and supported by a clear narrative. It is surprising how often budgets are submitted missing the basics—such as separating incurred and estimated costs or fully completing each phase. Each phase must be completed in full, assumptions clearly stated, and costs broken down into specific, defensible categories.
At IG Legal, we ensure every costs budget submitted is court-ready and CPR-compliant, down to the last detail. Our Law Costs Specialists prepare meticulous budgets tailored to the specific features of each case—avoiding errors that could jeopardise costs recovery.
3. Treating the Budget as a One-Off Exercise
Budgeting can sometimes feel like a box-ticking exercise, particularly in the pre-CCMC rush. However, if you file and forget your budget, you are missing one of the most valuable tools for managing both costs and client expectations. Costs budgets are not immutable—they provide a benchmark. Should the matter take an unexpected turn—such as new evidence, procedural developments, or unforeseen expert costs—you may need to apply to vary the budget to preserve your entitlement to recovery.
#Review Regularly or Jeopardise Recovery
Revisit your budget regularly and schedule review points around key procedural stages. If the matter evolves in an unexpected way, consider an application under CPR 3.15A to vary the budget. You will need to explain the reasons for the variation and justify any increased projected costs.
At IG Legal, we provide ongoing support throughout the litigation process. Our specialists offer milestone advice, assist with managing costs within approved phases, and prepare variation applications when developments justify amending the original budget.
4. Missing Key CPR Deadlines
The rule that bites the hardest is often CPR 3.13. Parties must file and exchange costs budgets at least 21 days before the first CMC, unless the claim is valued under £50,000, in which case the budget must be filed with the Directions Questionnaire. You also need to be aware of any order in which a timetable for filing budgets is set. A Budget Discussion Report (Precedent R) must be served no later than 7 days prior to the CMC. Miss the first deadline, regarding filing of the Costs Budget and, unless relief is granted, CPR 3.14 applies and your budget is limited to court fees only. Failure to serve a Budget Discussion Report on time, or not at all, and you risk missing the opportunity to make objections and the court may allow your opponent’s budget in full.
#File on Time or Face Court Fee-Only Sanctions
Deadlines under the CPR are strict—and the consequences of non-compliance can be severe. Filing even a day late could cost your client (or your firm) thousands in unrecoverable costs.
At IG Legal, we offer fast-turnaround services without compromising on quality—because we understand that delay may result in significant sanctions. If the deadline has already been missed, our team can assist with an application for relief from sanctions to help recover the position.
5. Going It Alone Without Expert Support
Costs budgeting is a discipline in its own right—part technical, part strategic. With evolving rules and shifting benchmarks, mistakes can result in limited recovery or a budget being heavily reduced at the CCMC. Many firms handle budgeting in-house, only to encounter technical errors, judicial criticism, or delays that derail the process. Effective drafting requires more than form-filling—it demands specialist insight.
#Get the Right Help or Risk Getting It Wrong
The CCMC is not the forum for taking risks. Without expert input, your budget may be rejected, reduced, or rendered ineffective—ultimately costing far more than any saving made by going it alone.
At IG Legal, our Law Costs Specialists do far more than just draft. We review, challenge, negotiate, and represent you at the CCMC—ensuring your budget withstands scrutiny and supports your case strategy throughout. Whether preparing your own budget or reviewing your opponent’s, we provide clear, strategic guidance to maximise recovery and minimise risk.
The Bottom Line on Costs Budgeting
Whilst costs budgeting may appear to operate in the background of a complex dispute, its significance is anything but minor. When done correctly, it protects your client’s position, strengthens your strategic footing throughout proceedings, and secures your firm’s bottom line.
By avoiding common budgeting errors and applying best practice—with our expert support and guidance—you will stand out as a solicitor who not only advocates effectively, but budgets intelligently.
Secure Expert Support to Stay on Track
Get in touch with IG Legal today for specialist costs budgeting advice tailored to your firm’s needs. Whether preparing for a CCMC or navigating post-budget variations, our team ensures your approach mitigates risk and maximises recoverability.