Background

At first instance, Master McCloud in a case management decision in relation to costs budgeting ruled that a fee earner's attendance at rehabilitation case management meetings was, as a matter of principle, an irrecoverable cost in the litigation. Acknowledging the importance of the issue, permission was granted for a leap-frog appeal to the Court of Appeal.

The Court of Appeal decision

In a decision, which most will have anticipated, the Court of Appeal concluded that Master McCloud's blanket approach was wrong. The judgment delivered by Lord Justice Coulson is summed up in three sentences:

"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."

The Court of Appeal has thus stated the position to be where many practitioners considered it was prior to the decision of Master McCloud, namely that the cost of the attendance at rehabilitation case management meetings may be recoverable but they need to be justified in terms of both reasonableness and proportionality.

In respect of the sums claimed in this case, the Court of Appeal stated:

"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."

Practical impact of the decision

In one sense the decision merely restores the best practice position, but there are certain specific areas worthy of consideration.

i. Inter-party cooperation

As noted by the Court of Appeal, the Serious Injury Guide and the Rehabilitation Code both envisage the possible involvement of a solicitor in ongoing rehabilitation meetings with the extent and the amount of necessary attendance being matters for the cost budget or detailed assessment. If there is a willingness on the party of a claimant's legal representatives to enter into a discussion from an early point in the case as to the necessity for their involvement in rehabilitation meetings and what could be gained from them, then it may be possible to forestall some of the issues and disputes that might arise further down the line. Pre-commencement discussion is the only way that the issue of these costs can be addressed prior to the consideration of costs budgets and/or assessment during or at the conclusion of proceedings.

ii. Costs budgeting

When any relevant claim reaches the Costs Case Management Conference (CCMC) stage, the question of incurred and predicted costs in respect of reasonable liaison with case managers and deputies and attendance at rehabilitation case management meetings will fall to be considered. This decision is helpful in that it provides guidance that such costs can be included within costs budgets, and it will hopefully encourage transparency in identifying such costs within budgets submitted.

While the pre-CCMC costs element is not something upon which the court will rule at a CMCC, it is something upon which it may comment. The post-CCMC costs, however, are where appropriate representations may result in a significant impact being made on the amounts which the claimant seeks to have approved. Each case will turn on its merits but it will be important to ensure that all proper arguments are taken and representations made, exercises which will call for a realistic assessment of what it will be reasonable and proportionate for the claimant's solicitors to do.

A bland assertion that there is a need or purpose for attendance should not be accepted, and there are numerous issues that can and should be addressed including:

• What is the purpose of the attendance?
• Why is attendance considered reasonable and proportionate?
• Can attendance be limited to part only of any meeting?
• Is physical attendance necessary or can the necessary objective be achieved by remote attendance?
• Can the objective of attendance be achieved by a lower grade case-handler?
• Does attendance need to be incurred or could consideration of the notes of the meeting suffice?

The particular issues that will need to be addressed will depend on the circumstances of the case, but it should be remembered that the CCMC will be an opportunity to put down markers and for the court to express its views as to the costs incurred and to be incurred.

iii. Detailed assessment

Should the costs of attendance at rehabilitation case management meetings fall to be considered at the detailed assessment stage, many of the issues taken into account at the CCMC stage raise their head here also.

The simple mantra is that costs need to be reasonable and proportionate and scrutiny will be applied to establish whether the costs claimed meet these criteria. Where costs are assessed with reference to an already approved budget that has been subject to these arguments at the costs management stage, a degree of likely allowed boundaries will already have been established. It seems unlikely that this decision will change the likelihood of attempts to establish 'good reason' to depart from approved budgets as it has not established any new principles.

In conclusion

The decision of the Court of Appeal has confirmed the position to be what most understood it to be prior to the surprising decision of Master McCloud, namely that the cost of the attendance at rehabilitation case management meetings may be recoverable if they are both reasonable and proportionate.

The aim for defendant practitioners comes in defining and adopting the appropriate case management strategy to ensure the adoption of best practice, deter any behaviours identified as leading to unnecessary and unjustified incurring of costs, and effectively to challenge claimed costs which are neither proportionate nor reasonable.

Our Costs Team deals with cases like this on a regular basis. For more information or advice, please contact one of our experts.