This week, Dominic Regan addresses estimates & revisits the problem of incurred costs
- A costs management order is always predicated upon the standard basis.
- Merrix and Harrison show courts cannot depart from the agreed figure for estimated costs without good reason.
- What to do about incurred costs is a lingering issue in costs management.
Budgeting is brilliant except when it isn’t. The concept whereby the proposed spend of each party is scrutinised at the outset is sound. Grandiose spending plans can be slapped down before the money is spent, before the damage is done.
In Merrix v Heart of England NHS Foundation Trust [2017] 1 Costs LR 91 the crucial issue was the relationship between an approved budget at the outset and a detailed assessment at the conclusion of the same action. The defendant asserted that, while relevant, a budget was not conclusive and so a full blown detailed assessment remained essential. The receiving party understandably argued that, since it had come in on budget,
