The result of any Improper, Unreasonable or Negligent Act or Omission on the part of any legal or other representative or any employee of such a representative
Some Court Hearings are a complete waste of time. You can attend to find that your opponent has not bothered to turn up. That the witnesses' do not speak English and in some bizarre cases, your opponent conceded liability but their lawyers ran it to the court door. In any one of this situations the costs for the day will have been wasted and it is right that the solicitor responsible be ordered to pay the wasted costs for the day.
Excl: English Courts do not use gavels.
SUMMARY
The courts have the power pursuant to s.51(6) - 7 Senior Courts Act 1981 to order a legal representative, whose conduct in proceedings can be shown to have been improper, unreasonable or negligent, can to pay some or all of the "Wasted Costs" costs.
A wasted cost order can be ordered against a solicitor to pay either/or both, his clients wasted costs and his opponents wasted costs.
In rare circumstances, a Wasted Costs Order can be made against a witness or an expert witness.
In rarer circumstances still, ALL PARTIES, can be ordered to pay wasted costs when both solicitors are found to have failed to comply with directions. Re L (Case Management: Wasted Costs) [2016] 3 WLUK 156.
An application for wasted costs can be made at any time in proceedings, up to and including during detailed assessment, but in general, it is best dealt with after trial, so that the conduct of the legal representative can be assessed in the context of the whole proceedings.
LEGAL TEST
Pursuant to Section 51(7) Senior Courts Act 1981 "in sub-section (6), "wasted costs" means any costs incurred by a party: -
(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or
(b) which, in the light of any such act or omission occurring after they were incurred, the court considers it was unreasonable to expect that party to pay."
CPR PD 46 para 5.5 set out the principles established in Re A Barrister (Wasted Costs Order) (No 1 of 1991) [1993] QB 293 and applied Ridehalgh which in turn established, namely; that is appropriate to make a Wasted Costs Order against a legal representative if the following 3 elements test is met
The legal representative (or other representative) has acted improperly, unreasonably or negligently.
Their conduct has caused a party to incur unnecessary costs or has meant that costs incurred by a
party prior to the improper, unreasonable or negligent act or omission have been wasted.
It is just, in all the circumstances, to order the legal representative (or other representative) to compensate that party for the whole or part of those costs.
As for the meaning of 'improper', 'unreasonable' or 'negligent' 'conduct,' Ridehalgh being the leading authority defined them as:
"Improper" means a significant breach of substantial professional duty and conduct that would be regarded as improper by a consensus of professional, including judicial, opinion. This includes, but is not limited to, conduct which would justify suspension, striking off and disbarment from the legal profession, or other serious professional penalty.
"Unreasonable" means vexatious, designed rather to harass the other side than to progress the case. The test is whether the conduct permits a reasonable explanation.
"Negligent" should be understood in an un-technical way, to denote failure to act with the competence reasonably to be expected of ordinary members of the profession.
Common examples of when the court will make a wasted costs order:
Solicitor signed statement of truth on a Schedule of Loss claiming physiotherapy charges and yet, their client had not undertaken physiotherapy: - Brown v Haven Insurance Company Ltd (unreported), 7 January 2016, (Leeds County Court), Lingard J had no hesitation in ordering the claimant's solicitors to pay the wasted costs of an incorrect claim for physiotherapy charges.
Solicitors forgot to check that their client had a grant of probate prior to proceedings being issued: - Rafferty v Royal Wolverhampton NHS Trust (County Court at Wolverhampton) (31 May 2022)Opens in a new window, the court made an order for wasted costs against a solicitor who had forgotten to check that their client had a grant of probate before proceedings were issued.
Solicitors forgot to translate their client's witness statement into his native language before trial: - Rainer Hughes Solicitors v Liverpool Victoria Insurance Company Ltd & Ors (Rev1) [2024] EWHC 585 (KB) (15 March 2024)Opens in a new window, an appeal court upheld a wasted costs order against a firm of solicitors that failed to translate their client’s statement and pleadings for use at trial. It was held that HHJ Monty was “fully entitled to conclude that Rainer Hughes had been negligent in the sense identified in Ridehalgh and that it was a breach of the firm’s duty to the court and also a breach of the overriding objective".
In our own experience, these Orders are most frequently made when another party does not attend a hearing and the court choses to adjourn.
AGAINST WITNESSES
As eluded to above, in certain circumstances in certain circumstances a Wasted Costs Order can be made against a witness, usually an expert witness whom could rightly said to have acted improperly, unreasonably or negligently.
The Supreme Court's majority decision in Jones v Kaney [2011] UKSC 13, held that expert witnesses' immunity from suit should be abolished.
Regardless, the court has always had power under section 51 of the SCA 1981 to make a costs order in appropriate circumstances against an expert witness who, by their evidence, caused significant expense to be incurred and did so in flagrant reckless disregard of their duties to the court. Some courts have considered this a Wasted Costs Order as in Phillips and others v Symes and others (No 2) [2004] EWHC 2330 (Ch))
By way of an example; in Thimmaya v Lancashire NHS Foundation Trust (30 January 2020), (HHJ Claire Evans), the County Court ordered a medical expert to pay a significant proportion of the defendant's costs following the claimant discontinuing her clinical negligence claim after the expert was unable to articulate the legal test for breach of duty at trial. The judge found that the expert's inability to articulate the legal test for negligence at trial amounted to improper, unreasonable or negligent conduct, such that the jurisdiction to make a non-party costs order against him was engaged.
However, in all circumstances; we would suggest that the safer course of action would be to seek the Wasted Costs Order against the solicitors whom put the evidence forward.
PRCOEDURE
An application for Wasted Costs can be made at any time during the Proceeding. This includes following an interlocutory hearing or after trial but in general, the appropriate time should be at the conclusion of a hearing so that the conduct of the legal representative can be assessed in the full real context rather than with speculation. This is in line with CPR PD 46 para 5.2 and Filmlab Systems International Ltd and another v Pennington and others [1995] 1 WLR 673). However, if a wasted costs order application is to be made after the trial, it must be made promptly (Sharma v Hunters (Wasted Costs) [2011] EWHC 2546 (Fam)).
These applications can be made orally to the presiding judge or they can be made in writing pursuant to CPR Part 23. For the costs of a wasted interlocutory hearing an oral application should be sufficient however, we would suggest that for anything more i.e. the cost of proceedings or a full trial date, it should be in writing an the judge asked to make a direction for service of the same.
COMMENT
We act for a variety of commercial, lay and legal entities and have successfully secured numerous Wasted Costs Order arising from the improper, unreasonable or negligent conduct while in turn, successfully defeating such applications being made against our instructing solicitors.
And as in all cost matters, the party seeking to have their costs assessed MUST serve a Statement of Costs.
Should you be concerned that your costs are being wasted or have been threatened with such an application then contact us today.
D E F I N I T I V E D E C I S I V E D I R E C T
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