Common Costs Budgeting Mistakes - and How SPH Costing Services Can Help Solicitors Avoid Them

Costs budgeting remains one of the most important, and often misunderstood, aspects of modern litigation. Even experienced solicitors can encounter difficulties where budgets are prepared without specialist costs input or are not kept under review as proceedings develop.

At SPH Costing Services, we regularly assist solicitors where avoidable budgeting issues have limited recovery or caused unnecessary disputes. Below, we set out the most common costs budgeting mistakes — and explain how we can help prevent them.

1. Under-Estimating Future Phases

A frequent issue we see is under-estimation of later phases such as disclosure, witness evidence and trial preparation. Where figures are too low, firms can find themselves undertaking substantial work that is not, or only partially, recoverable.

How we help: We work closely with solicitors at the outset of proceedings to prepare realistic, defensible budgets. By drawing on experience of how costs are scrutinised at both budgeting hearings and detailed assessment, we help ensure that future phases properly reflect the likely work involved.

2. Weak or Generic Budget Assumptions

Budget assumptions are often overlooked, yet they are critical in explaining why costs are reasonable and proportionate. Generic or poorly drafted assumptions are more vulnerable to challenge and may limit recovery later on.

How we help: SPH Costing Services prepares clear, case-specific assumptions that link directly to the pleaded issues and litigation strategy. This strengthens the budget at approval stage and provides essential context if costs are later assessed.

3. Treating Costs Budgeting as a Box-Ticking Exercise

Costs budgeting should support the way a case is run, not restrict it. We often see budgets prepared under time pressure or without proper costs input, which can cause difficulties as the case progresses.

How we help:By becoming involved early, we ensure that the costs budget aligns with the solicitor’s strategy for conducting the litigation. Our role is to support the efficient prosecution or defence of the claim, while protecting recoverable costs.

4. Failure to Monitor and Update the Budget

Even the most carefully prepared budget can become outdated if circumstances change. Amendments to pleadings, unforeseen interlocutory applications or changes in scope can all justify a revision.

How we help: We provide ongoing advice throughout the life of the case, including reviewing spend against budget and advising on whether a variation application is appropriate. This helps solicitors address issues proactively, rather than at the point of assessment.

5. Leaving Costs Advice Too Late

Costs specialists are often instructed only when recovery is challenged, or when a budget has already become unrealistic. At that stage, options can be limited.

How we help: Early instruction allows us to identify potential issues before they impact recovery. Whether at pre-action stage, costs budgeting or later review, timely costs input can make a significant difference to the outcome.

Why Instruct SPH Costing Services?

SPH Costing Services provides practical, commercially focused costs advice at all stages of litigation. Our involvement can:

• Improve the accuracy and credibility of costs budgets

• Support stronger budget approval outcomes

• Reduce the risk of unrecoverable work

• Assist with ongoing budget management and variation

• Maximise recovery at detailed assessment

We work as an extension of the solicitor’s team, offering clear and pragmatic advice tailored to each case.

Conclusion

Costs budgeting is not simply a procedural requirement — it is a key part of effective litigation management. Involving a costs draftsman early and throughout proceedings can help solicitors avoid common pitfalls and protect recoverable costs.

If you would like to discuss how SPH Costing Services can assist with costs budgeting or ongoing costs management, we are happy to provide initial guidance.

Frequently Asked Questions About Instructing SPH Costing Services

When should we instruct SPH Costing Services in relation to costs budgeting?Ideally, we should be instructed at the earliest opportunity, including at pre-action stage or when preparing the initial costs budget. Early involvement allows potential issues to be identified and addressed before they affect recovery.

Can SPH assist if a costs budget has already been approved?

Yes. We regularly advise on ongoing budget management, monitoring spend against budget and advising on whether a variation may be appropriate following changes in scope or circumstances.

Do you only assist with preparing costs budgets?

No. In addition to costs budgeting, we assist with drafting Bills of Costs, costs negotiations, detailed assessments, Legal Aid costs and Court of Protection matters. We can support solicitors at any stage of the costs process. We also support our local and police Authority Clients.

How do you work with solicitors during the case?

We work as an extension of the solicitor’s team, providing practical and responsive advice tailored to the needs of the case. Our aim is to support effective case management while protecting recoverable costs.

Is a costs draftsperson cost-effective for budgeting work?

Yes. Early costs input often results in higher recovery and fewer disputes later on. Our involvement at the budgeting stage can help avoid unrecoverable work and costly problems at assessment