The Court of Appeal recently handed down judgment in Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792 and with it provided some much required clarity.

In summary:

- Incurred costs are to be assessed in accordance with CPR 47 in the usual way and are essentially 'up for grabs';

- Estimated costs shall be allowed as drawn, subject to those costs falling within the approved budget. Estimated costs are still subject to challenge under CPR 3.18 should either party be able to demonstrate 'good reason' to depart from the approved budget;

- For the purpose of deciding which proportionality test applies, a claim shall be considered commenced on the date which the Claim Form is issued by the Court, not the date on which a Claimant took steps to have the Claim Form issued.

- Following assessment, the costs are still capable of downward revision in accordance with the  global proportionality test, regardless of whether there has been an approved budget.