‘A costs (Mc)cloud with a silver lining’
The case of Hadley v. Przybylo [2024] EWCA Civ 250[1] arose out of a road traffic accident in which the claimant suffered catastrophic injuries. At a cost budgeting hearing before Master McCloud, the parties were ordered to engage in ADR in respect of the future costs. Following ADR only one item of future costs remained in dispute – namely a figure of £68,400, claimed within the ‘Issues and Statements of Case’ phase, in respect of solicitor attendance at case management meetings with medical and other professionals, and for meetings with financial and Court of Protection deputies (said to be part of maintaining the Schedule of Loss).
In a judgment dated 22nd June 2023[2], Master McCloud considered that she was being called upon to decide a point of principle and determined that solicitor (or fee earner) costs of attending (numerous) rehabilitation case management meetings were not in principle progressive of the litigation and that the information required could be obtained by way of an occasional letter to the relevant case manager or deputy or by obtaining documents for later disclosure. Accordingly, she disallowed some £52,000 worth of future costs, but gave ‘leapfrog’ permission to the claimant to appeal to the Court of Appeal.
In a single judgment dated 28th February 2024 and to which all members of the Court contributed, it was held that the Master had been wrong to conclude that the costs of attending rehabilitation case management meetings and the like were irrecoverable in principle as costs. Section 51(1) of the Senior Courts Act 1981 provides for a party to recover the costs of an incidental to the proceedings and the case of In re Gibson’s Settlement Trusts [1981] Ch 179 is authority for the proposition that in order to be recoverable, costs must related to something which (i) proved of use and service in the action; (ii) was relevant to an issue; (iii) was attributable to the defendant’s conduct (i.e. that which gave rise to the cause of action in the first place).
Therefore, the recoverability of the costs of attending rehabilitation case management meetings and the like will depend on the application of three criteria in In re Gibson’s Settlement Trusts (sometimes summarised as utility, relevance and attributability) and the reasonable and proportionate costs of a claimant’s costs that meet such criteria will generally be recoverable. The precise amount of recoverable time spent by a solicitor in respect of rehabilitation will always depend on the facts of the case.
Takeaway: Both claimants and defendants will doubtlessly regard the judgment in this case as offering something of a silver lining! Claimants on the basis that there is no bar to claiming the costs of attending rehabilitation meetings and defendants on the basis that ‘routine’ attendance by claimant solicitors cannot be assumed to be recoverable.
[1] https://www.bailii.org/ew/cases/EWCA/Civ/2024/250.html
[2] At [2023] EWHC 1392 (KB) see: https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/KB/2023/1392.html&query=(2023)+AND+(EWHC)+AND+(1392)
