In the eagerly awaited decision in Harrison v University Hospitals Coventry & Warwickshire NHS Trust  WECA Civ 792 (see article, page 8), the key findings of the Court of Appeal were that (1) budgeted costs will not be departed from in the absence of a ‘good reason’; (2) incurred costs do not form part of the budgeted costs; and (3) the good reason test does not apply to those incurred costs. So, what does this decision mean in practice, and what further observations can we make?
Of particular interest is how the courts will deal with ‘incurred costs’. During the Court of Appeal case, the court’s attention was drawn to incurred costs when the respondent presented what was described by Davis LJ as ‘an ingenious argument’ regarding incurred costs being potentially approved ‘through the back door’ at the budgeting stage. The respondent submitted that: ‘The incurred costs will have acquired a special status: in that, while not “approved” as such, they will have been taken into account by the court at the costs management hearing in managing the future estimated costs.’ Please click here to read the full article.
Joanne Chase is a Senior Associate at Clarion. You can contact her at email@example.com or on 0113 336 3327.