Thomas Hadley v Mateusz Przybylo

Costs included in a budget must be legal costs that materially progress the litigation. A category of expenditure that is inherently non-progressive is not a budgetable or recoverable head of costs in principle.

Attendance by solicitors at rehabilitation case-management meetings, or meetings with Court of Protection deputies to obtain input into an ongoing Schedule of Loss, is not ordinarily progressive of the litigation. That conclusion is distinct from whether costs are reasonable or proportionate. Those questions arise only after the expenditure is shown to be costs in principle.

The claimant, a protected party in a serious personal injury claim, sought to include substantial future solicitor attendance costs in the Issues and Statements of Case phase of a costs budget. The claimed work involved regular meetings with a case manager and Court of Protection deputies, said to assist with maintaining the Schedule of Loss.

The parties resolved almost all budget issues through court-ordered ADR. The remaining issue was whether such attendance costs were costs in principle and, if so, whether they belonged in the Issues and Statements of Case phase.

1. Principle of progressive costs. Legal costs are costs incurred in the progression of litigation. They may be pre-action costs, or costs which later prove unhelpful, provided they are nevertheless progressive. Costs which are inherently non-progressive are not properly claimable in a budget.
2. Applicable question. Where a whole category of expenditure is challenged, the court must ask whether an item of that specific type materially progresses the case. If it does not, it is not budgetable or recoverable in principle.
3. Application. Regular attendance by a fee earner at rehabilitation case-management meetings did not materially progress the litigation. Nor did attendance on deputies to obtain input into the ongoing drafting of the Schedule of Loss. Such expenditure might potentially form part of damages, but that was not an issue for determination.
4. The decision did not exclude all legal engagement with case managers or deputies. Occasional correspondence, obtaining documents for disclosure, or work connected with witness statements may be qualitatively different and may fall within an appropriate budget phase.
5. Reasonableness and proportionality are distinct questions. They arise only after expenditure is established as costs in principle. The court therefore did not decide those issues, although it indicated that the proposed extent of attendance would in any event have been excessive.
6. If such expenditure were allowable in principle, no existing budget phase would necessarily be appropriate. The court indicated that a separate phase might need to be created, or the item left for detailed assessment if it could not be estimated reliably. The claimant was given permission to appeal.