COST BITES 135: COSTS OF SOLICITOR ATTENDING REHABILITATION CASE MANAGEMENTS – MAY BE RECOVERABLE, BUT IT DEPENDS…

In Hadley -v- Przybylo [2024] EWCA Civ 250 the Court of Appeal considered the issue of whether a solicitor in a personal injury case could recover the cost of attending rehabilitation case meetings. It was decided that the costs are potentially recoverable.

 

“… it seems to us that the Serious Injury Guide and the Rehabilitation Code both envisage the possible involvement of a solicitor in ongoing rehabilitation meetings. Whilst the extent of them, and the amount of necessary attendance, is a matter for the assessment of the cost budget or detailed assessment, both of those guides would clearly indicate that, as a matter of principle, this was a recoverable category of costs.”

THE FACTS

The first instance decision was considered in an earlier post. The item in dispute was whether “The issue of the inclusion of time costs for fee earner attendance at case management meetings of medical and other professionals, and meetings with or attendance on Court of Protection deputies.”

The Master decided it was not.

THE COURT OF APPEAL DECISION

On appeal it was held that the costs were potentially recoverable. It was a matter of fact in each case.  It was dangerous for the claimant’s solicitor to assume that such costs were potentially recoverable.

7 Analysis

7.1 Ground 1: The Applicable Test as to Recoverability

48. The claimant complains that the Master applied the wrong test as to recoverability. She said at [10] that the general principle was that ‘costs’ “are legal costs which are incurred in the progression of litigation”. She went on to say:
“…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.”
The claimant’s argument is that the categorisation of costs between “progressive” and “non-progressive” costs is a division unknown to the authorities. It is not the test set out in In re Gibson’s Settlement Trust. Therefore, it is said that the Master erred in principle when, at [12] and [13], she said that a fee earner attending rehabilitation case management meetings was not progressive and therefore was not recoverable as costs.

49. In response, the defendant argued that the expression “progressive of the litigation” was simply shorthand for the ‘use and service’ criterion in In re Gibson’s Settlement Trusts and that it was not a departure from the test of ‘costs of and incidental to’ the litigation. The words were deployed by a very experienced judge, well-used to assessing costs, and there is no proper ground of complaint.

50. In our view, the Master’s categorisation may well have been shorthand, but it was at least potentially unhelpful. It may have equated to the ‘use and service’ criteria in In re Gibson’s Settlement Trust, but that is not entirely clear. Moreover, if an item of cost has to “materially progress the case” to be recoverable, then there must be a risk that some items of cost would fail to meet that test, but would be recoverable under the wide words of s.51. In particular there is a risk that, if all that matters is whether or not the item materially progressed the case, then incidental costs, which are recoverable in principle under s.51, and which have been found to encompass a wider category then simply the costs of the case, may become irrecoverable. This can be illustrated by reference to the Roach and Fullick line of cases. There, it might have been difficult to say that the attendance at the inquest “materially progressed” the litigation. But the costs were found to be recoverable because they were incidental to the litigation.

51. Accordingly, we consider Ground 1 of the appeal is well-founded: on the face of the judgment, the Master may have applied the wrong test. But of course, that could simply be a matter of the language that she used, rather than a matter of substance. So success on Ground 1 does not necessarily get the claimant home. The real issue is whether the Master was right to say, as she does at [13], that “having a fee earner attending rehabilitation case management meetings…does not fall within the notion of ‘costs’.”

7.2 Ground 2: Are These Costs of Attendance Recoverable in Principle?

52. It is the claimant’s case that the cost of attendance at rehabilitation case management meetings (and attendance on deputies) is a recoverable cost in principle, and that the judge was wrong to rule otherwise. Mr Barnes expressly accepted that challenges as to reasonableness and proportionality were open to the defendant, but were for another day. Mr Davis submitted that, whilst a legal representative could gather information from an injured person’s rehabilitation team, regular and extensive attendance at weekly meetings was not recoverable as costs. To that extent, Mr Davis relied on the decision in BCX v DTA.

53. We consider that, on analysis, there was very little difference between the parties’ positions. The defendant does not contest the importance of appropriate rehabilitation in this sort of case (paragraph 46 of Mr Davis’s skeleton). The defendant also accepts that recoverable costs can include the cost of interim remedies and/or interim protection of a litigant’s position pending final determination of his or her claim, and that this might include obtaining funds to meet a claimant’s rehabilitation and other needs (paragraphs 48 and 49 of Mr Davis’ skeleton). The defendant therefore accepts that “the role of a legal representative litigating a personal injury claim can be said reasonably to include costs for the purposes of furthering the claimant’s rehabilitation needs” (paragraph 50 of Mr Davis’ skeleton).

54. So what the defendant was really complaining about in this case was the large sums that had either already been incurred, or were included in the future costs, by reference to rehabilitation and, in particular, the attendance at every routine rehabilitation case management meeting. The Master appeared to agree with that complaint. She referred on a number of occasions to the amount of time being claimed under this head: at [14], for example, she said that the amount claimed was “on a very significant scale”. To that extent, of course, she was echoing what Costs Judge Brown had said in BCX.

55. As we see it, there are two issues. First, is this element of costs recoverable in principle? Secondly, if it is, are there any limits that this court should place on its recoverability at this stage, or should those be addressed on assessment?

56. In our view, this element of the costs was recoverable in principle. There are three reasons for that. First, and most obviously, the defendant’s fair concessions, summarised at paragraph 53 above, indicate that, in principle, these costs could be recoverable, subject, of course, to questions of reasonableness and proportionality.

57. Secondly, it seems to us that the Serious Injury Guide and the Rehabilitation Code both envisage the possible involvement of a solicitor in ongoing rehabilitation meetings. Whilst the extent of them, and the amount of necessary attendance, is a matter for the assessment of the cost budget or detailed assessment, both of those guides would clearly indicate that, as a matter of principle, this was a recoverable category of costs.

58. Thirdly, it is tolerably clear from the evidence that we have seen in the statements that this is a case where the claimant’s solicitor’s involvement in the rehabilitation of the claimant has generally been beneficial for both parties. We also note that the defendant’s solicitor has attended one or more of these same meetings, again suggesting that, in principle, this is a recoverable item of cost.

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.

61. 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. There was no such default or blanket entitlement, and the Serious Injury Guide and the Rehabilitation Code do not justify a contrary approach. And whilst it is accepted that a damages claim for the costs of rehabilitation can be the subject of a reduction if the judge concludes that they were spent on poor or inadequate case management (see Loughlin v Singh & Ors [2013] EWHC 1641 (QB), where Kenneth Parker J reduced the damages under this head of claim by 20%), so that a solicitor needs to keep an appropriate eye on the rehabilitation plans going forward, that does not justify any sort of default or blanket entitlement either.

62. Accordingly, with that potentially large caveat, we allow Ground 2 of the appeal.

8 Disposal
63. 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.

64. 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.

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.