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The boundaries of costs budgeting in PI claims: rejection of solicitors’ costs of attending MDT meetings

Hadley v Przybylo is in many ways an ‘ordinary’ claim for catastrophic injury, insofar as there ever can be such a thing.

That said, two interesting points arose in relation to costs budgeting. As Master McCloud notes in a judgment handed down today, cases involving costs budgeting are often a cause of judicial ennui – and one might venture that perhaps that ennui is sometimes not limited to the judiciary. But Hadley brought into sharp focus a question which has been causing increasing friction in recent times. The judgment is not yet widely available but can be downloaded here.

The Claimant’s budget in Hadley was very substantial – over £1.1m. The Issues/ Statements of Case phase raised incurred costs just shy of £185,000 and sought estimated costs of a little over £72,000, giving a phase total in excess of £1/4m. The Claimant had initially objected to costs budgeting on the basis of the value of the claim but the Court was against him on that.

The Master also ordered costs ADR, which proved be very helpful and led to substantial agreement between the parties. The Defendant’s budget was agreed and only the Claimant’s Issues / Statements of Case phase remained in issue. It became clear at the Costs Management Hearing that the underlying source of the difference was that the Claimant’s solicitors sought to include their costs of attendance at MDT meetings and regular contact with the Case Manager and Deputies, arguing the results would feed into the Schedule of Loss.

The Defendant took the opposite position, contending that the budget ought to be limited to costs which moved the case on (in the usual way) and that such costs fell outside the categories of matter to be included in the Issues / Statements of Case phase in any event. The Schedule could be drafted from the information made available and did not require such input from the solicitors.

The Judge started from the perspective that costs are those which progress the litigation. In considering whether attendance at those MDTs or such extensive liaison with treating professionals was progressive of the litigaiton, the Judge concluded that the information to be fed into the Schedule could be achieved by the “occasional letter” from the Case Manager or Deputy. The Judge did not rule out sums in the disclosure or witness statements phases where appropriate but did consider that attendance by the Claimant’s solicitor at MDTs and such extensive liaison was not progressive and thus could not be included in the costs budget. Indeed, the Judge concluded that there was no current phase into which such costs could be slotted.

The Judge also found, as a matter of fact, that even had such costs been allowable then the Claimant’s proposed costs were in any event unreasonable.

This is undoubtedly a useful decision for Defendants, resolving the argument as to whether such costs ought to be included in a budget. In that regard, it is perhaps no more than a restatement of first principles. It does not deal with the ongoing issue of whether there should be witness statements from Case Managers and the like as that was not the focus of the decision. However,  it offers valuable guidance to those undertaking costs management as to the boundaries of costs in substantial injury claims.

Master McCloud gave the Claimant permission to appeal as part of the judgment and has made a leapfrog order to the Court of Appeal.

Andrew Davis KC represented the Defendant, instructed by James Fisher of Keoghs LLP

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