Costs Update #23

‘On rare occasions, like the transit of Venus or a triple Jovian eclipse but far less predictably, costs budgeting ceases to be a cause of judicial ennui and raises instead something of interest legally.’ – Master McCloud

The ‘something of interest’ in the case of Hadley (a Protected Party by his Litigation Friend Laura McCarry) v Przybylo is whether time spent by fee earners in a serious injury case attending case management meetings of medical and other professionals and meetings with Court of Protection deputies can be included as a future cost in the Claimant’s budget.

The Claimant’s estimated time was included in the Issue/Statements of case phase on the basis that regularly attending case management meetings with medical professionals and meetings with Court of Protection deputies was an integral part of maintaining and updating the Claimant’s schedule of loss.  

Master McCloud accepted the Defendant’s argument that it is a general principle that only costs which are incurred in the progression of litigation can be included in a costs budget.

The Master considered that the question to ask was “Does an item of a specific type in a budget materially progress the case?”  Her view was that information to feed into the schedule of loss could be obtained by the occasional letter to the case manager or relevant deputy or through obtaining documents for later disclosure in the disclosure phase and via the case manager’s or deputies’ witness statements.  This was “qualitatively different” from attending meetings for input into a schedule of loss, as was claimed on a very significant scale in this case.

In the absence of any authority on the point, and with practices apparently differing, Master McCloud’s view was that the time claimed was inherently non-progressive and could not therefore be costs properly claimable (and de facto recoverable) in a budget between the parties.

The judgment goes on to consider the contrary view – if the time claimed could be categorised as costs of the litigation, what phase would those costs be included in for budgeting purposes? Master McCloud’s view was that a bespoke phase or phases would be needed for these costs if the amount could be determined in advance.  If the amount was not clear enough, the matter could be left for detailed assessment.

The Master considered her judgment to be of sufficient importance as to justify a “leapfrog” appeal to the Court of Appeal.

The judgment is interesting for another reason.  Faced with a claimant budget which exceeded £1M, Master McCloud’s opinion was that the obligation to discuss and try to agree a budget, as required by the CPR, provided ‘insufficient encouragement’ to focus and resolve issues in advance of the CCMC.  To counter this, the Master directed the parties to “… engage in ADR in respect of the parties’ costs (insofar as they are not already agreed), the professionals engaged in the ADR being appropriately experienced/qualified costs professionals …”.

COMMENTARY BY ANDY ELLIS

There are three aspects that I picked up for comment which I will take in reverse order. The first is the practice of ordering parties to engage in ADR to agree budgets or at least narrow the parameters of disagreement. I have a difficulty with the implication that the court does not wish to be involved with resolving disputes over budgets, especially when there is such a high bar for establishing good reason to depart from a budget on detailed assessment.  I have sympathy, however, with the constraints on judicial resource that often do not allow sufficient time to do a ‘proper job’ with this branch of case management.

As to the question of which bucket costs of this type should be allotted to if they are recoverable in principle, I do not believe that a bespoke category should be created for meetings of the kind described.  The phases set out in Precedent H are sufficiently broad thematically to cover these meetings in Issue/Pleadings, Disclosure or even Trial Preparation, provided that mention is made within the assumptions accompanying the budget submission. My reading of Master McCloud’s ratio is that costs of attending meetings of this kind are not reasonably incurred.  I do not think the term ‘progressive’ is especially helpful or necessary to the decision.  I would be wary of spending money on a trip to the Court of Appeal when its evaluation will largely be case-specific.  Once it is accepted that some consideration of the outcome of medical or other professionals’ case management meetings is relevant to the quantification of loss, and that some communication is reasonable with those professionals in order fully to appreciate the evolving prognosis, the allowance of recoverable costs is, I suspect, a question of degree rather than straight-jacketed categorisation of a ‘non-progressive’ class of work.