The Court of Appeal’s decision in Hadley v Przybylo [2024] EWCA Civ 250 is something of a curiosity. It overturned the earlier decision of Master McCloud who had decided, as a matter of principle, a fee earner’s attendance at rehabilitation case management meetings was an irrecoverable cost in the litigation.
The claimant’s representatives hailed the Court of Appeal’s decision as a judgment that “provides clarity regarding the recoverability of rehabilitation-related costs” and “a significant win for claimants”.
The figures are somewhat confusing from the judgment, but it seems as though more than £130,000 was being claimed in relation to such work, including incurred costs, and Master McCloud disallowed £52,000 of future costs as part of her costs management decision on the basis these costs were not “incurred in the progression of the litigation”.
The issue in the earlier judgment was identified as:
“In particular that issue is where the inclusion of solicitor attendance time in the budget, for attending case management meetings with medical and other professionals in the course of management of the claimant’s rehabilitation needs, and for meetings with financial and court of protection deputies said to be part of inputting into a Schedule of Loss, are in principle costs which may be included in a budget and whether, if so, it is appropriate to include those in the ‘Issues Statements of Case’ phase of the budget on Form H.”
Master McCloud had concluded:
“Thus, the (numerous) attendances of the sorts proposed here do not in my judgment progress litigation in this case. … If (per contra) I had decided that these sums of proposed expenditure in principle would progress the litigation then I would indeed have next to consider whether the proposed extent of attendance was reasonable and proportionate. Were I to have to decide that I would say that the sum and the extent of proposed attendance is unreasonable and would have striven to budget a lesser sum.”
The Court of Appeal disagreed on the issue of whether such costs were irrecoverable as a matter of principle:
“In our view, this element of the costs was recoverable in principle. … It would be wrong to decide that the costs of the solicitors’ attendance at rehabilitation case management meetings are always irrecoverable. Equally, it would be wrong for the claimant’s solicitor to assume that routine attendance at such meetings will always be recoverable. It will always depend on the facts.”
However:
“We therefore agree with the Master (and the defendant) that, at the very least, these figures are plainly open to challenge. They seem to go well beyond the usual costs of reasonable liaison with case managers and deputies. We do not know if the claimant’s solicitor operated on the assumption that he was entitled to attend every routine rehabilitation case management meeting, but for the reasons we have given, if he did, he was wrong to do so.”
Having decided to allow the appeal, the question then arose as to what the consequences were. This is where it gets a bit odd:
“The claimant asked us to rule that, if the costs were recoverable in principle, they should be the subject of a detailed assessment, rather than sending the issue back to the cost budgeting process. The defendant does not dispute that disposal, since the case has been compromised (subject to the approval of the court), and all that is likely to remain is that detailed assessment of costs.
We were initially concerned that if we followed that course, there would be no figure, other than that of the Master, for this phase of the cost budget. However, from a pragmatic perspective, we are persuaded that that will not matter. That is because we consider that, in all the circumstances, the Master’s overall cost budget figures were fair and reasonable. In addition, although she had to accept the incurred costs for budgeting purposes, it is apparent that, on assessment, there may be significant argument about the level of these costs. The claimant’s position is therefore properly protected.”
If I have understood this properly, this means that the claimant’s budget, as approved by the Master for the relevant phase, will remain unaltered on detailed assessment. It is difficult to see how the claimant will be able to argue “good reason” to depart from the budget if the Court of Appeal has decided the “overall cost budget figures were fair and reasonable”.
The claimant will be able to seek recovery of the significant incurred costs at detailed assessment. However, given the concern expressed by Master McCloud and the Court of Appeal on the level of such costs, in can be anticipated that these are liable to be reduced significantly.
As such, it is odd that the claimant’s solicitor claimed this judgment “ensures that claimants, often in extremely complex matters involving catastrophic injury, can gain the necessary support and assistance throughout their case”. Although some costs relating to attendance at case management meetings may be recoverable, it appears likely this will be of an order of magnitude smaller than what the solicitor believed was reasonable and necessary during the claim itself.
A further oddity about this decision is the context of how the original issue arose. The Master was being asked to approve a figure for future work as part of the costs management process. The Court of Appeal’s decision is of almost no value to this issue: “It would be wrong to decide that the costs of the solicitors’ attendance at rehabilitation case management meetings are always irrecoverable. Equally, it would be wrong for the claimant’s solicitor to assume that routine attendance at such meetings will always be recoverable. It will always depend on the facts.” How does this assist a judge undertaking costs management where the decision as to what to allow for any given phase will always be made on a broadbrush basis? What should judges factor in if work relating to attendance at rehabilitation case management meetings is being sought? £5,000, £10,000, £50,000?
The Court of Appeal noted, as to this issue: “it is important that it should now be the subject of a definitive ruling”. However, their answer appears to be little better than: “it depends”.
