CIVIL PROCEDURE BACK TO BASICS 89: THE 2% CAP ON COSTS BUDGETING: SOMETHING TO WATCH OUT FOR
Some draft orders for CCMCs I have seen recently included, towards the end a provision for the 2% cap on the budgeting process to be be applied. Anyone faced with such a draft should point to the provisions of CPR 3.15(3).
THE WORDING OF THE DRAFT ORDERS
The wording usually reads.
“The 2% cap in relation to the recoverable costs of Costs Management shall be disapplied”
THE STAKES CAN BE HIGH
In one case I was involved, and representing the party likely to be the paying party, in the costs claimed in the budget were in excess of £2 million (nearer £1 million after budgeting ), so the sums allowed for budgeting are already high.
The first point that needs making is that parties should look out for this type of provision, it may be being included as a matter of course. The second point is that the lifting of the cap is not a matter of course. A party seeking to disapply the 2% cap must satisfy the court that there are “exceptional circumstances”.