Costs of attending rehabilitation meetings recoverable “in principle”

Court of Appeal says this does not mean attendance is always recoverable

The costs of fee-earners attending rehabilitation case meetings are recoverable in principle, the Court of Appeal ruled last week.

But Lord Justice Coulson, giving the unanimous decision, emphasised that this did not mean they were automatically recoverable – it depended on the facts.

In Hadley v Przybylo [2024] EWCA Civ 250, Master McCloud held that costs which were “inherently non-progressive”, in terms of moving the case forward, were not properly claimable in a budget between the parties. She decided that the costs of rehabilitation meetings fell into this category.

She added that, if she were wrong, there was no current phase appropriate for such costs and a separate phase should be created ad hoc for them.

Master McCloud granted leave to appeal and the case was leapfrogged to the Court of Appeal given the issue’s importance.

Coulson LJ confirmed that the three criteria in In re Gibson’s Settlement Trusts [1981] Ch 179 provided the applicable general test as to the recoverability of any given item of cost. These are that the costs must relate to something which (i) proved of use and service in the action; (ii) was relevant to an issue; (iii) was attributed to the defendant’s conduct (i.e. that which gave rise to the cause of action in the first place).

He said that the master’s categorisation of ‘progressive’ and ‘non-progressive’ costs 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 [of the Senior Courts Act 1981].

“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 meant the master may have applied the wrong test, but that could simply have been a matter of the language she used.

The real question, Coulson LJ went on, was whether having a fee-earner attend rehabilitation case management meetings fell within the notion of costs.

The court found there was actually “very little difference” between the parties’ positions. The defendant accepted 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”; so the complaint was really about the level of costs, Coulson LJ found, and in particular attendance at every routine rehabilitation case management meeting.

“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… indicate that, in principle, these costs could be recoverable, subject, of course, to questions of reasonableness and proportionality.

“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.

“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.”

This meant it would be wrong to decide that the costs of the solicitors’ attendance at rehabilitation case management meetings were always irrecoverable – but, equally, this did not mean routine attendance at such meetings would always be recoverable. “It will always depend on the facts.”

Though the appeal court did not need to consider what may or may not be recoverable here, it noted 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”.

The figures were “plainly open to challenge” as they seemed to go “well beyond the usual costs of reasonable liaison with case managers and deputies”.

Coulson LJ allowed the appeal and remitted the costs for assessment.

He also addressed the question of the correct phase for these costs, concluding that the ‘Issues and statements of case’ phase “probably” was the right one. “None of the phases, or the assumptions that go with them, are an obvious fit for this element of the costs claim, but this was probably the most apposite phase in which to include them.”

He added: “We would also be very reluctant to start suggesting changes to the deliberately wide description of the phases within Precedent Form H. Form H applies to all civil litigation, so it cannot be expected to provide a bespoke fit for every type of claim.

“That also provides an explanation as to why the mere fact that the stated assumptions do not expressly include a particular item of cost (such as the attendance at rehabilitation case management meetings in issue in this case), cannot be regarded as determinative. The stated assumptions should not be read as if they had statutory force.”

The court did not offer a view on the defendant’s suggestion that these costs may be recoverable as a head of special damages instead, but expressed its “general reluctance to encourage the claiming of particular items of costs as damages in the same proceedings”.

Christopher Barnes KC and Matthew Stockwell (instructed by Gamlins Law) for the appellant. Andrew Davis KC (instructed by Keoghs LLP) for the respondent.

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20 Mar 2024

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