Try to claim costs for rehab, Master says no, no, no
Hadley (A Protected Party by his LF) v Przybylo [2023 EWHC 1392 (KB)
This case provides guidance on cost budget negotiations and work concerning case managers, the MDT team, Deputies and any other similar parties. The latter being a topic often discussed in legal costs circles when preparing cost budgets and now preparing Precedent S Bills; which phase does this work belong under?
Given the decision made in this Judgment, it is likely that Paying Parties will now try to use this case as justification for opposing/disallowing any and all costs related to case management and deputyship.
We must point out that nothing in this decision says that in principle some phases in a budget cannot include engagement with case managers or Deputies, such as for disclosure or witness statements and occasional letters.
This case focuses on lawyers attending case management meetings on a regular, and in this case very extensive basis, as opposed to time incurred in relation to disclosure of case management-related documents and liaising over a witness statement from the case manager and/or Deputy.
Cost Budget Negotiations and CCMC Attendance by Costs Professionals
This was a substantial budget in a complex and very serious claim and a simple obligation to discuss and seek to agree the costs budget as per CPR was unsatisfactory. The Master felt that there was a possibility that this would not encourage the parties to focus their minds on working to resolve issues. The Master believed that the presence of costs professionals during the cost budget negotiation process and at court so often narrows issues before the court becomes involved. In this case, the Master ordered the parties to engage in ADR to resolve issues in the budget before any outstanding phases were considered by the court. The professionals instructed to engage in the cost budget ADR had to be appropriately experienced/qualified costs professionals.
In this case, the parties engaged in ADR of the budgets using qualified costs lawyers and all but one matter had been agreed on the budget. The Master pointed out that this had saved time and money and also enabled an important point of principle to be identified.
Work Involving the MDT Team, Deputies and Others
The Claimant had claimed 3 hours per week for attending on the case manager and Deputies. The Claimant argued that the time for the Solicitor attending case management meetings with medical and other professionals in the course of management of the Claimant’s rehabilitation needs, and for meetings with financial and court of protection deputies was part of inputting into a Schedule of Loss. In their experience, such charges are allowed to be included in budgets in the Issue phase and that such is the practice of other Masters. They argued that the work is reasonably necessary to progress the litigation because they assist in maintaining the Schedule of Loss as the claim proceeds.
The Defendant, as a matter of principle, argued that such attendance charges ought to be ruled as inadmissible in a budget as they are not progressive of litigation. This work did not fall within the guidance as to the categories of matters to be included in the Issues and Statements of Case phase in any event. In contrast, the Defendant’s experience was that such charges were often rejected for inclusion in budgets.
No relevant authority could be found to assist the court, so it fell to the Master to make a decision. The Master accepted that it is a general principle that ‘costs’ are legal costs which are incurred in the progression of litigation. Non-progressive costs are disallowed in a Bill, therefore those costs should not be included in a budget. The decision the Master needed to make was; is this type of work, in principle, claimable at all as costs?
In Master McLeod’s judgement, having a fee earner attending rehabilitation case management meetings is not progressive and does not fall within the notion of ‘costs’. Likewise, a fee earner attending on Deputies so as to seek input into the ongoing drafting of the case in the form of the Schedule is not progressive. The Master opined that it was a weak argument that attending on these individuals is an ‘integral part’ of producing the Schedule and should be allowable for inclusion in the budget.
The Master went on to say that information about case management, or incurred expenses of such things as money management can be achieved by the occasional letter to the case manager or relevant Deputy or from obtaining documents for later disclosure, in the Disclosure phase, and ultimately also in the case manager’s or Deputies’ witness statements which may or may not be needed for the purposes of a formal Deputyship expert.
The Issue phase in this case was drastically reduced by the Master in light of her decision.
The Master gave leave to the Claimant to Appeal and raised the possibility of leapfrogging the case to the Court of Appeal given the important issues.
Food for thought:
- The Master mentioned on more than one occasion that it was for the Claimant to consider whether the costs in question may be claimable as damages – how will this be billed to the client? Will this give rise to more solicitor/own client charging?
- The Master also mentioned that the assessment of these costs was a matter for Detailed Assessment – does this go against the clarity and certainty that the cost budgeting process aims for? Will there now be an increase in Detailed Assessments?
- In the alternative to her decision, the Master commented that should costs of the type in dispute be deemed recoverable then the preference would be to have those costs placed into bespoke phases when budgeting the case – does the Master believe these costs should be a ‘contingent cost’? The guidance notes suggest this is for anticipated costs only – so where does the incurred work relating to these costs go in the budget?
- Do Lawyers have an internal plan in terms of liaising with case managers, the MDT team and Deputies and attendance at the MDT meetings – does this need to be considered in-house to ensure matters are addressed efficiently and are cost effective?
No doubt an Appeal will be issued in due course, so it is likely that there will be more to come on this subject.
For all your costs budget preparation, costs budget negotiations and CCMC attendance needs, then please do not hesitate to contact us here at PIC.
Victoria Stewart, Costs Lawyer
05.07.23