Underspend is not a ‘good reason’ to depart

In Utting v City College Norwich [2020] EWHC B20 (Costs) 22 May 2020 the question at large was whether an underspend in respect of the budgeted sum is a ‘good reason’ to depart from the budget (so as to allow a line-by-line assessment).

The parties settled the substantive claim without the involvement of the Court but Master Brown was asked to provide judgment on this issue.

The Defendant relied upon Salmon v Bart Health [2019] while the Claimant relied on Chapman v Norfolk and Norwich University Hospital NHS Foundation Trust, March 2020.

Master Brown favoured the approach in Chapman and determined that if an underspend were to be good reason for departing from the budget it would be liable to undermine the effectiveness of costs budgeting, in that solicitors who come-in under budget would be subject to a detailed assessment whereas those who exceed the budget would receive the budgeted sum and avoid detailed assessment.

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