Costs Of Attending Rehabilitation Case Management Meetings Not Inherently Irrecoverable | CA Decision

On 8 June 2020, Hadley suffered catastrophic injuries in a road traffic accident when Przybylo drove into the back of Hadley’s car, causing it to be shunted into an oncoming vehicle. The proceedings were commenced on 5 November 2020, and Przybylo admitted negligence for the accident. The case was then subjected to cost budgeting, with a particular focus on the recoverability of costs associated with the claimant’s legal representation at rehabilitation meetings.

Following submissions, the Master McCloud first dealt with “the concept of ‘costs’ in litigation”. She said:

“10. I accept the Defendant’s argument at hearing that it is a general principle that ‘costs’ are legal costs which are incurred in the progression of litigation. They may be pre-action for example or they may be reasonably incurred but found in hindsight not to be useful yet such costs can still be ‘progressive’ even if they rule out some things which are then not pursued. But costs which are inherently non-progressive are not in my judgment ‘costs’ properly claimable in a budget between the parties. It is not unusual in assessing a bill of costs to disallow items with the brief statement ‘non-progressive’ for example and it seems to me that if costs fall into that category then they are not suitable for inclusion in a budget.

“11. If costs are progressive, then for the purposes of budgeting one has to proceed to fix the reasonable budget sum as a best judicial estimate of future costs, doing the best one can without the assistance of actual material showing work done, such as a Costs Judge would have at a detailed assessment. But the question “are these in principle claimable at all as costs?” is a latent but usually uncontentious one lurking in any costs decision as to quantum whether in budgeting or assessment of costs. It has raised its head in this case.”

The Master then asked herself whether the proposed costs relating to attendance at rehabilitation case management meetings were, in principle, progressive of the litigation. She concluded that they were not. Amongst other things, she said:

“14. The argument that simply attending on these individuals is an ‘integral part’ of producing the Schedule of Loss, and hence allowable for inclusion as a budget item under that head is weak, in my judgment. Information about case management, or incurred expenses of such things as money management can be achieved by the occasional letter to the case manager or relevant deputy or from obtaining documents for later disclosure, in the disclosure phase, and ultimately also in the Case Manager’s or Deputies’ witness statements which may or may not be needed for the purposes of a formal deputyship expert. Those are qualitatively different things from attending meetings for input into a Schedule of Loss, as is claimed here on a very significant scale. Thus, nothing in this decision says that in principle some phases in a budget cannot include engagement with case managers or deputies, such as for disclosure or witness statements and occasional letters. Past deputyship costs one notes are a matter of fact based on invoices possibly assessed by the SCCO, and the future cost of deputyship is a matter for a deputyship expert…

“16. Thus, the (numerous) attendances of the sorts proposed here do not in my judgment progress litigation in this case. Note that I am not here saying that these costs are ‘unreasonable’ or ‘disproportionate’: those would be the tests I would apply if I were accepting that in principle they were ‘costs’ for the purposes of a budget in the first place.

“17. 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. However, that question strictly does not arise given my decision above.”

The Master gave ‘leapfrog’ permission to appeal to the Court of Appeal on the basis that, her view, she was deciding a point of principle.

Point of principle?

The Court of Appeal found that Master McCloud herself believed she was addressing a point of principle, as evidenced by her judgment and the grant of ‘leapfrog’ permission to appeal. This permission suggested she recognized the potential significance of her decision beyond the immediate case. However, the Court also acknowledged the presence of factors that might suggest otherwise, such as the allowance of some costs by the Master that were related to the disputed attendances, which could indicate her decision was more about the reasonableness and proportionality of specific costs rather than a broader principle.

Despite these considerations, the Court concluded that Master McCloud did indeed decide a point of principle. This conclusion was based on the language of her judgment and her actions, including the provision of ‘leapfrog’ appeal, which indicated her intention to establish a legal precedent. Furthermore, the Court noted that if treated as a principle, Master McCloud’s decision could significantly impact the recoverability of similar costs in future personal injury litigation, necessitating a definitive ruling from the Court of Appeal.

“…we consider that the Master did decide a point of principle. Certainly that is what she thought she was doing, and the language of her judgment, in the round, supports that. We refer in particular to [1], [9], [11], [13] and [14] of her judgment, the relevant parts of which are set out at paragraphs 12-16 above. We also refer to [15], where the Master acknowledges the need for collaboration, but says that that does not mean that “having lawyers attend rehabilitation meetings amounts to litigation costs”.

Therefore, the Court of Appeal proceeded to address the substance of the principle decided by Master McCloud, analyzing its compatibility with existing legal frameworks and its practical implications for personal injury litigation. This careful consideration underscored the Court’s commitment to ensuring that legal principles are applied correctly and reflect the realities of litigation practice.

The Parties’ Arguments

Appellant’s Argument:

• The Master erroneously concluded that the costs of a fee earner’s attendance at rehabilitation case management meetings were inherently non-recoverable.
• Such involvement is crucial for accurately assessing and facilitating the claimant’s rehabilitation and future needs, thereby relating directly to the litigation.

Respondent’s Argument:

• The attendance of fee earners at rehabilitation meetings did not constitute a cost that advances the litigation and, therefore, should not be recoverable.

Decision

“59. Standing back, and addressing this as a matter of principle, we echo what we said at paragraph 47(d) above. 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.

“60. In this case, therefore, what may or may not be recoverable on assessment is a matter for the costs judge. That is why we do not need to address the witness statements in any detail, or reach any conclusions as to Mr Barnes’ explanation for the extent of this category of costs. However, we should say that, at first sight, the figures – both in relation to the costs incurred, with which the Master was not directly concerned, and the future costs – seem very high. We note that, in his oral submissions, Mr Barnes accepted that the claim for the future costs before the Master was “less compelling” than the claim in respect of the claimant’s solicitor’s earlier involvement in the rehabilitation meetings. That may be an understatement. We also note that Costs Judge Brown baulked at a claim for £86,000 odd in BCX v DTA, whilst in the present case, the costs claimed under the same head is for more than £130,000….

“65. Accordingly, for the reasons we have given, we allow the appeal. But the only real consequence is that the defendant can take all the reasonableness/proportionality arguments that they always wanted to take at the assessment stage. Those are arguments for which, as we have said, we have sympathy. In all those circumstances, we would urge the parties to agree a realistic order as to the costs of this appeal.”