The Court of Appeal has held that the costs of a fee earner attending at rehabilitation case management meetings and upon deputies are recoverable, in principle. In Hadley v Przybylo [2024] EWCA Civ 250 (15 March 2024) the Claimant appealed the decision of Master McCloud who had decided that such time was an irrecoverable cost in the litigation. 
Speed Read 
For those wanting a speed-read the decision in Hadley can be summarised thus: 
1. Costs of attending rehabilitation case management meetings and deputies are recoverable in principle as an item of costs. It would still be subject to the test of reasonableness and proportionality. Such time is not automatically recoverable and recoverability would be fact and case specific. 
2. The correct test of recoverability is that set out in Re Gibsons Settlements Trusts namely (i) was the cost of use and service in the action (utility); (ii) was it relevant to an issue (relevance); and (iii) was it attributed to the defendant’s conduct (attributability). 
3. The most appropriate phase for such work was Issue and Statements of Case. The descriptions of phases are deliberately wide as there can not be a bespoke process for every kind of claim. 
4. The Court of Appeal generally discourage the claiming of an item of costs as damages. 
Original Decision 
In the original decision (read our previous report here) Master McCloud determined that the costs of dealing with rehabilitation case management hearings were irrecoverable as an item of costs between the parties on the basis that these were not “incurred in the progression of the litigation.” Some £52,000 worth of time was ultimately disallowed. 
Which Phase? 
One of the points considered in the original decision was which phase the time for rehabilitation meetings would go. The Court of Appeal reflected that the Issues and Statements of Case phase used was “probably” correct: 
“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)” 
The Court of Appeal stated they were very reluctant to start suggesting changes to the wide descriptions of the phases and reflected that as costs budgeting covered so many different types of claims it could not be expected to bespoke for every claim. 
On this point, the Civil Justice Council’s recommendations for bespoke budgeting in some case types have already been accepted by the Master of the Rolls so this position may alter in future. 
Damages or Costs? 
Master McCloud had intimated that the costs of dealing rehabilitation meetings might be recoverable as damages rather as an item of costs. The Court of Appeal expressed they had no view on this but expressed a “general reluctant to encourage the claiming of particular items of costs as damages in the same proceedings.” It was said that judges determining damages were not necessarily skilled at costs and that such an approach may run the risk of double-recovery (an item recovered as damages and costs). 
The Court of Appeal concluded that they did not need to determine this point as it was immaterial to the question as to the potential recovery of the rehabilitation meeting costs. 
The Importance of Rehabilitation Meetings 
It is worth pausing to reflect on the importance of solicitor engagement with the Case Manager and Rehabilitation team. 
The Defendant had argued that such time was clinical in nature, a medical process. This does not account for the fact that consideration has to be given to how rehabilitation can be funded and specifically the legal tests as to what would and would not be considered reasonable. This will undoubtedly inform the approach to be taken to rehabilitation. The value of a particular treatment has to be weighted against its cost and the extent the same might be recoverable. 
It also ignores the fact that there is clearly a holistic view at play. The rehabilitation informs the litigation and the litigation informs the rehabilitation. The two are not mutually exclusive. 
The Case Manager’s involvement can also aid in the narrowing of issues around prospective expenditure, acting to help resolve claims. It also gives Claimant’s the security of knowing that elements of the rehabilitation package are not disputed and will ultimately be recovered. For Defendants and Insurers it gives a strong indication of the anticipated liability, useful when considering reserves. 
The Correct Test – is an item of cost recoverable or not? 
The Court of Appeal held that the correct test as to whether an item of cost was recoverable between the parties or not was the test set out in re Gibsons Settlements Trusts namely that the costs 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). 
The Court stated that these three strands of reasoning provided the applicable general test as to the recoverability of given item of cost. 
The Court of Appeal Decision 
The Claimant’s position was that the cost of attendance at rehabilitation case management meetings (and attendances on deputies) were a recoverable cost in principle. It was accepted that such time would be open to challenges as to reasonableness and proportionality but that these arguments would be dealt with at the end of the case. 
It was the Defendant’s case that whilst they accepted a legal representative could gather information from the rehabilitation team, regular and extensive attendances at weekly meetings were not recoverable as costs. Crucially the Defendant did not challenge the importance of appropriate rehabilitation nor that the recoverable costs “can include the cost of interim remedies and/or interim protection of a litigant's position pending final determination of his or her claim, and that this might include obtaining funds to meet a claimant's rehabilitation and other needs” 
The Court of Appeal noted that the Defendant therefore 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” 
It was reflected that the real complaint “in this case was the large sums that had either already been incurred, or were included in the future costs, by reference to rehabilitation and, in particular, the attendance at every routine rehabilitation case management meeting.” 
The Court of Appeal had two issues to address: 
1. Are costs in rehabilitation meetings recoverable in principle? 
2. And if so are there any limits that the court should place on its recoverability now or should those be addressed at assessment? 
The Court of Appeal held as follows: 
56. 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, summarised at paragraph 53 above, indicate that, in principle, these costs could be recoverable, subject, of course, to questions of reasonableness and proportionality. 
57. 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. 
58. 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. 
59. Standing back, and addressing this as a matter of principle, we echo what we said at paragraph 47(d) above. 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. 
60. In this case, therefore, what may or may not be recoverable on assessment is a matter for the costs judge. That is why we do not need to address the witness statements in any detail, or reach any conclusions as to Mr Barnes' explanation for the extent of this category of costs. However, we should say 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. We note that, in his oral submissions, Mr Barnes accepted that the claim for the future costs before the Master was "less compelling" than the claim in respect of the claimant's solicitor's earlier involvement in the rehabilitation meetings. That may be an understatement. We also note that Costs Judge Brown baulked at a claim for £86,000 odd in BCX v DTA, whilst in the present case, the costs claimed under the same head is for more than £130,000. 
So in short, such costs are recoverable in principle and can be dealt with at assessment. The precise amount would be fact and case specific. 
A Warning 
The Court of Appeal did provide this warning: 
61. We therefore agree with the Master (and the defendant) that, at the very least, these figures are plainly open to challenge. They seem to go well beyond the usual costs of reasonable liaison with case managers and deputies. We do not know if the claimant's solicitor operated on the assumption that he was entitled to attend every routine rehabilitation case management meeting, but for the reasons we have given, if he did, he was wrong to do so. There was no such default or blanket entitlement, and the Serious Injury Guide and the Rehabilitation Code do not justify a contrary approach. And whilst it is accepted that a damages claim for the costs of rehabilitation can be the subject of a reduction if the judge concludes that they were spent on poor or inadequate case management (see Loughlin v Singh & Ors [2013] EWHC 1641 (QB), where Kenneth Parker J reduced the damages under this head of claim by 20%), so that a solicitor needs to keep an appropriate eye on the rehabilitation plans going forward, that does not justify any sort of default or blanket entitlement either. 
So Practitioners need to be aware of the work they are undertaking, consider whether it is justifiable and reasonable to do so. If it is not there are risks of reduction and disallowance. 
The decision is likely to be welcomed by Claimant practitioners given the importance of engagement in the rehabilitation process in many personal injury claims. 
There remains a warning that such time is only recoverable in principle. Fundamentally this means there is no automatic entitlement to time spent attending rehabilitation meetings and deputies. Practitioners will need to be mindful of what is reasonable and proportionate. 
So arguments on the principle of recovery fall away but arguments on the extent of recovery will continue to be had. 
Should you have any queries arising from this article or upon costs generally then please do not hesitate to get in touch with our friendly team either via phone 01482 534567 or e-mail 
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