Matthew Hall, Chartered Legal Executive, in our Serious Injuries Team discusses the recent Court of Appeal judgment in Hadley v Przybylo.
On 15 March 2024, the Court of Appeal handed down judgment in the appeal on behalf of Mr Hadley, against the first instance decision of Master McCloud sitting in the High Court. The decision on appeal related to a Costs and Case Management Conference, at which Master McCloud ruled that the costs of the Claimant’s Solicitor attending meetings relating to his rehabilitation were not progressive of the litigation, and therefore not recoverable, raising what was considered to be a point of principle.
The Court of Appeal found that the test applied in the first instance decision was incorrect and the correct test is that established in re Gibson’s Settlement Trust [1981] Ch 179 (summarised as demonstrating utility, relevance and attributability (see para 37 of Hadley)) as opposed to simply asking whether or not the costs were ‘progressive’ as the Master had done; The Court also held that this element of costs (attendance upon the Case Manager and Deputy) will generally be recoverable if reasonably and proportionately incurred. Further guidance was given as to how such costs should be phased and presented in a costs budget.
There was understandably a collective sigh of relief amongst claimant lawyers, and perhaps many defendant lawyers and their insurers too. There has been plenty of legal commentary upon the reasoning of the Court of Appeal and the effects of the judgment.
I would like to pick up on two points in relation to the involvement of a Claimant’s solicitor in their client’s rehabilitation.
The first is paragraph 59 of the judgment, which is a neat summary of how both sides should always approach the issue of the costs of attending rehabilitation meetings:
‘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.’
Rehabilitation is an integral part of modern catastrophic injury litigation. It is necessary for a Claimant’s solicitors to be closely involved in the process, to understand the purpose, effectiveness and direction of the rehabilitation, the likely recoverability of the expense being incurred, and the effect of the rehabilitation on the direction of the litigation.
Often, it is a process in which a Defendant’s insurers and their solicitors wish to be involved, and where a genuinely collaborative and sensible approach is taken, this is to be encouraged. At all stages of a claim, it can be helpful for a Defendant to understand the Claimant’s needs and to be on board with providing interim funding for all that is needed to meet them.
It is well recognised that early access to rehabilitation can improve long term outcomes for seriously injured Claimants. It is plainly in the interests of a Defendant’s insurer that a Claimant makes as good a recovery as possible. The better a Claimant’s recovery, the less the Defendant can expect to pay to compensate them for future losses.
Many cases will involve a complex and difficult rehabilitation journey, for instance where there are severe behavioural and cognitive challenges for the injured person, safeguarding issues, relationship problems, housing complications, or the involvement of criminal proceedings to give just a few examples. The attendance of a Claimant’s solicitor at rehabilitation meetings can be very time consuming, but without their attendance and involvement, the case is all the more difficult, and the litigation can often be drawn out.
Attendance at rehabilitation meetings can help enormously with understanding the Claimant’s long-term care, therapy and accommodation needs, which informs the quantification of the claim. It is difficult to see how those issues could ever be fully understood and resolved in the litigation if Claimants’ solicitors were inhibited in attending such meetings by a blanket ban of recovery of the costs of so doing.
The second point is one which it is said will provide clarity and guidance to Claimant solicitors, and is at Paragraphs 25 – 26 of the judgment:
‘There was some debate, both before the Master and before us, as to whether the ‘Issues and Statements of Case’ was the correct phase of the budget for the identification of these costs. We conclude that it probably was. 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. We note that it was the same phase under which a similar claim was addressed by Costs Judge Brown in BCX v DTA [2021] EWHC B27 (Costs) …
… 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.’
The costs of attending upon the case manager, and indeed the Claimant’s Deputy, do not readily fit into one of the prescribed phases in a Costs Budget. While the Court of Appeal concludes that the ‘Issue/ Statements of Case’ phase is probably the correct phase, the reality for practitioners is more nuanced and complex, and it is helpful that the Court recognised that there is no perfect solution.
The rehabilitation journey is a thread which runs through disclosure, the expert evidence, the witness evidence, and of course, the Schedule of Loss. My experience is that attendances upon the Case Manager and Deputy can fall across the Issue/ Statements of Case, Disclosure, Witness Evidence and Expert Reports phases, as well as the other phases to a lesser degree.
This Appeal is perhaps the first time that the senior judiciary has delved into the quirks and nuances of rehabilitation in catastrophic injury cases. It is therefore a very interesting read, but also serves as a reminder to practitioners of our educative function.
In my view, the case is but the start of the journey in helping the Courts to understand the interplay of rehabilitation and litigation. Often, our experience on the ground dealing with these cases will be invaluable to the judge assessing a costs budget, and it falls to us to help the judge to understand why our involvement in the rehabilitation process is so essential.
