Jurisdiction(s):
United Kingdom

Key definition

Costs definition

What does Costs mean? In litigation, costs are the legal fees, disbursements, court fees and VAT incurred in bringing, defending or appealing a claim, and the sums a court or tribunal may order one party to pay another for those liabilities. The concept is governed by procedural rules and case law rather than a single statutory definition: England and Wales (CPR 44–47), Northern Ireland (RCJ Ord 62), Scotland (where the equivalent term is expenses), and Ireland (Legal Services Regulation Act 2015 and the Legal Costs Adjudicators). The general approach is broadly consistent, subject to local terminology and procedure. Typical features include the discretionary rule...

CPR 3.15(6), 3.15A, 3.17, 3.18: Managing and Varying Costs Budgets and Recovery Consequences (England and Wales)

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Practice notes

Timetable or directions to review Costs Budgets

Preparing a costs budget can be demanding, particularly in intricate matters where the kind and scale of work needed to advance or defend a claim may evolve over time. CPR 3.15(6) recognises this and allows the court to set a timetable or issue further directions for future budget reviews. This enables the parties to keep their budgets under ongoing review and, where suitable, to request amendments. When such directions are made, parties must diarise them and complete the reviews in accordance with those directions.

Continual monitoring of cost budgets

Once a costs budget is finalised and either agreed with the other side or approved by the court, the court will actively manage costs throughout the proceedings. Parties must therefore monitor spend against the budgeted figures for each phase to ensure they remain within limits. If actual costs exceed the budgeted sums, the additional expenditure is unlikely to be recoverable on a costs assessment. CPR 3.18(b) allows a costs judge to depart from an...

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Web page updated on 21/05/2026

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