We highlighted in our June 2017 newsletter that the decision of the Court of Appeal in Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792, was one to watch. The decision is finally out and assists in clarifying certain points deriving from the Merrix case, namely, what is the effect of an approved costs budget on (i) estimated and (ii) incurred costs during detailed assessment. With respect to (i), the court upheld the Merrix decision, holding that the costs judge should not depart from the receiving party's last approved or agreed budget, unless satisfied that there is good reason to do so. Unfortunately, the Court of Appeal declined to address what constitutes a "good reason". The article highlights the implications which would ensue if "good reason" proves to be a fairly low barrier.

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