Court of Appeal rules costs of attendance to case management meetings recoverable

The anticipated Court of Appeal judgment of Hadley v Przybylo was handed down on 14 March 2024. The panel, consisting of Lord Justice Coulson and Lord Justice Dingemans, considered whether the cost of a fee earner’s attendance at rehabilitation case management meetings was irrecoverable in principle as legal costs.

This “landmark ruling” by the Court of Appeal marks a significant win for claimants, particularly those involved in catastrophic injury claims, as it addresses the recoverability of costs associated with rehabilitation.

The crux of the case revolved around whether a claimant’s solicitor could recover costs incurred in attending meetings connected with the claimant’s rehabilitation.

A previous ruling had gone against the claimant, but the Court of Appeal ruled in favour of the claimant in March.

The proceedings concerned a serious road traffic accident that caused the claimant to suffer catastrophic injuries including numerous broken bones, damage to his spleen, bladder, kidney and lungs, a traumatic brain injury, permanent brain damage and sub-arachnoid haemorrhaging.

Following the accident, the claimant underwent extensive rehabilitation at numerous facilities and once a Court of Protection order was in place, the claimant was discharged into the community with a team of carers that provided 24-hour care.

At the first hearing, the cost budget put forward on behalf of the claimant sought in excess of £1 million in costs. Master McCloud ordered that the parties engage in alternative dispute resolution (ADR) in respect of the future costs.

Following ADR, only one phase, the “Issues and Statements of Case”, remained in issue, in which circa £68,000 was claimed for estimated costs.

The defendant challenged the costs claimed in this phase on the basis that a solicitor’s attendance at case management meetings with medical and other professionals during management of the claimant’s rehabilitation needs, and at meetings with professional deputies (said to be part of creating a Schedule of Loss) were not in principle recoverable as costs of the litigation.

Master McCloud considered whether such attendances were progressive. She determined that they were not and that the costs were not capable of being recovered inter-partes.

Master McCloud accepted that it was a general principle that “costs” were legal costs which were incurred in the progression of litigation. Therefore, costs which were inherently non-progressive were not, in her judgment, ‘costs’ properly claimable in a budget between the parties.

Master McCloud ruled that having a fee earner attend rehabilitation case management meetings was not progressive and could not therefore be caught within the umbrella of “costs”.

Likewise, a fee earner attending on deputies to obtain input for the ongoing drafting of the Schedule of Loss was non-progressive. The Master suggested that information regarding case and money management could be obtained by the occasional letter to the case manager and deputies.

Master McCloud did give permission for a ‘leapfrog’ appeal to the Court of Appeal.

Overturning the ruling

In that appeal, the Court of Appeal overturned Master McCloud’s ruling. It held that the test of whether a legal cost is recoverable inter-parties remains that as stated in In re Gibson’s Settlement Trusts [1981] Ch 179 at 184F-G. To be recoverable, the cost must relate to something which (i) proved of use and service in the action; (ii) was relevant to an issue; and (iii) was attributed to the defendant’s conduct. Coulson LJ summarised these tests as: (i) utility, (ii) relevance and (iii) attributability. The Court of Appeal held that attendance at case management meetings satisfied that test and, as a result, the costs associated with that attendance were recoverable in principle.

However, the court went to some lengths to point out that this did not mean that the costs of attending each and every case management meeting could be recovered. It acknowledged that it was important that the claimant’s solicitors keep a watchful eye on the rehabilitation plans (and, so, avoid a reduction in the claim for the costs of that rehabilitation if it is found to have been of poor quality or inadequate – as occurred in Loughlin v Singh & Ors [2013] EWHC 1641). But held that, whether the cost of any specific attendance was recoverable was a matter of fact, to be determined by considering whether the attendance in question satisfied the test of recoverability in In re Gibson’s Settlement Trusts. In addition, the court acknowledged that the costs must always be reasonable and proportionate to be recoverable. In the case, the claimant’s claim for costs for attendance at case management meetings was more than £130,000. It is fair to say that the court was not overly enamoured at that sum.

In short, and at considerable relief to those practising in this area, the costs of attending case management meetings can be recovered in principle, but to be recoverable, the solicitor’s attendance needs to have relevance to the progress of the case, and be as a result of the injury caused to the claimant. In addition, the costs must be reasonable and proportionate to the amount at stake and issues in the case.

Clearly a sensible and proportionate approach needs to be taken. Not all attendances at the multi-disciplinary team meeting (used to discuss the progress the client is making) will be recoverable, nor will all time spent liaising with the case manager and/or deputy. What is recoverable is – and as some would say it has always been – a question of reasonableness and proportionality on a case-by-case basis.

We also now know that the substantive claim had settled, subject to the approval of the court, for circa £14m which means, had the value of the claim been set out as more than £10m on the Claim Form, this case would not ordinarily have been subject to costs budgeting in the first place.