The Court of Appeal recently handed down judgment in Harrison v University Hospitals Coventry & Warwickshire NHS Trust  EWCA Civ 792 and with it provided some much required clarity.
- 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.
The outcome of Harrison is one of mixed fortunes. The decision on the first issue follows the position established in Merrix and is an important point for receiving parties. However, the decision on the proportionality issue is a significant counterweight to that, particularly given the significant strengthening of the proportionality test post April 2013 and it is possible to see a number of cases proceeding to assessment where the only major issue will be the application of the global proportionality test.