Background
The claimant, an RTA victim, suffered catastrophic injuries including permanent brain damage. Following a prolonged period of hospital care and rehabilitation, he was discharged into the community where he required round-the-clock care. The defendant driver admitted liability shortly after the commencement of proceedings.
The issue
At the costs budgeting hearing before Master McCloud, it emerged that a substantial proportion of the claimant’s proposed budget for the Issues and Statements of Case phase - £68,000 of £163,000 claimed - was to cover the cost of time to be spent by solicitors in meetings with financial and Court of Protection deputies and for attending case management meetings with medical and other professionals. This, the claimant’s solicitors argued, was a normal part of the process of settling the schedule of loss. Whilst the master was content that the cost of some interaction between lawyers and those involved in the claimant’s case management may be reasonable (giving the example of liaison over a witness statement from the case or care manager), she found that costs relating to the attendance at rehabilitation or case management meetings were, in principle, not ‘progressive’ of the litigation. To the extent that solicitors required information about the client’s costs and case management that could be garnered from documents obtained for disclosure, or via simple correspondence; whereas attendance at the case management meetings was simply not an ‘integral part’ of preparing the schedule of loss as the claimant’s solicitors had asserted. Most of the case management meeting costs were disallowed. The claimant appealed, with leave from the Master.
Decision
Although the Master clearly intended to disallow the case management related costs as a matter of principle, her judgment had strayed into criticism of the claim on the basis that the proposed level of contact with case managers and the like was excessive or disproportionate (as opposed to irrecoverable per se); indeed, the Master went on to allow some of the disputed costs. Nonetheless, and although it was arguable that the Master had not made an appealable decision at all (as opposed to a discretionary case management decision), the Court of Appeal was prepared to treat the decision as decision a point in principle and one that should be subject of a definitive ruling.
Noting first that a party can recover ‘costs of and incidental to the proceedings’: S.51(1) Senior Courts Act 1981, the Court of Appeal suggested a three-point test as to recoverability of a given item, involving an assessment of ‘utility, relevance and attributability’. Unsurprisingly, the court found that whilst it would be unreasonable to rule that costs falling within any generic category are automatically recoverable or irrecoverable, it will generally be the case that the reasonable and proportionate costs of the claimant’s rehabilitation that meet those criteria will be recoverable. Finding that the disputed costs were recoverable in principle, the judgment rested on three grounds. Firstly, the defendant had accepted that the role of the claimant’s legal representative may reasonably involve the incurring of costs for the purpose of furthering rehabilitation needs. [Ultimately, the defendant’s complaint went to the reasonableness of the claim, in particular the apparently excessive claim for time spent at regular routine case management meetings]. Secondly, both the Serious Injury Guide and the Rehabilitation Code contemplated the involvement of the solicitor in ongoing rehabilitation meetings, a clear indication that as a matter of principle this was a recoverable category of costs. Thirdly, it was ‘tolerably clear’ that the solicitor’s involvement in the claimant’s rehabilitation – which included several case meetings - had benefitted both parties; and again this tended to suggest that - at least in principle – the cost may be recoverable. Nonetheless, the court was clear that there was no ‘default of blanket entitlement’ to attend every routine rehabilitation meeting. Whereas the decision clears the way to claims for ‘reasonable liaison with case managers and deputies’, the court regarded the claimant’s figures as ‘plainly open to challenge’.
Additional point of interest: The Court of Appeal found that the Master was wrong to the extent that she may have considered the recoverability of a particular item of cost to depend on it meeting the threshold of materially progressing the case; a potentially narrower test than that provided by S.51(1) SCA 1981. This is quite interesting, and may be heartening for receiving parties, given the frequency with which the bald objection ‘non-progressive’ (or such like) appears in points of dispute on detailed assessment.
Link to judgment: Hadley v Przybylo [2024] EWCA Civ 250 (15 March 2024) (bailii.org)
