What is the primary function of cost budgeting in litigation?

What is the primary function of cost budgeting in litigation?

• A. Increase costs
• B. Estimate and control costs
• C. Hide costs
• D. Eliminate all costs

Answer: (B)

The core idea here is planning and controlling what litigation is going to cost. Cost budgeting asks you to forecast the likely total expenses of the case—fees, disbursements, and other recoverable costs—and then monitor actual spending against that forecast as the case proceeds. This helps you allocate resources wisely, assess financial risk, and, crucially, keep costs proportionate and reasonable in the eyes of the court. By having a budget upfront and tracking progress, you’re better positioned to decide whether to push ahead, settle, or adjust strategy before costs spiral. The other options miss the point: budgeting isn’t about increasing costs, hiding costs, or eliminating all costs. It’s about estimating and controlling what costs will be, so they’re predictable and manageable.

The core idea here is planning and controlling what litigation is going to cost. Cost budgeting asks you to forecast the likely total expenses of the case—fees, disbursements, and other recoverable costs—and then monitor actual spending against that forecast as the case proceeds. This helps you allocate resources wisely, assess financial risk, and, crucially, keep costs proportionate and reasonable in the eyes of the court. By having a budget upfront and tracking progress, you’re better positioned to decide whether to push ahead, settle, or adjust strategy before costs spiral.

The other options miss the point: budgeting isn’t about increasing costs, hiding costs, or eliminating all costs. It’s about estimating and controlling what costs will be, so they’re predictable and manageable.