Page 1
Wasted costs
Latest Update
14 October 2015
Author(s)
Guy Mansfield QC - 1 Crown Office Row
Pritesh Rathod – 1 Crown Office Row
Michael Deacon – 1 Crown Office Row
The court's power to make a wasted costs order (WCO) is entirely statutory. It is
available in both the civil and criminal jurisdictions. In the civil jurisdiction it is created
by the Senior Courts Act 1981 and the court's powers are governed by express
provisions of the Civil Procedure Rules 1998/3132. The criminal jurisdiction is created by
the Prosecution of Offences Act 1985 and the powers are governed by the Costs in
Criminal Cases (General) Regulations 1986/1335, as amended.
The law relating to wasted costs is entirely domestic law and limited to England and
Wales. It has no particular links to European Union law. No particular human rights
issues arise in relation to wasted costs.
Overview of Topic
1. The court has power in any proceedings in the Civil Division of the Court of Appeal,
the High Court and any County Court to disallow, or (as the case may be) order the
legal or other representative concerned to meet, the whole of any wasted costs or
such part of them as may be determined in accordance with rules of court.
2. In criminal proceedings the Criminal Division of the Court of Appeal, the Crown Court
and the Magistrates Courts have the same powers as the Civil courts. The same
powers are given to the Court of Protection, First Tier and Upper Tier Tribunals.
3. It is critically important to keep mind at all times that this jurisdiction is simply part
of the court's costs' jurisdiction. As such it is a summary jurisdiction. An application
for a WCO is part of the trial process. Lengthy hearings are not permitted.
4. The overriding requirements of the procedure to be followed are that any procedure
must be fair and must be as simple and summary as fairness permits. Hearings
should be measured in hours not in days or weeks. Judges must be astute to control
anything which threatens to become costly satellite litigation.
5. The jurisdiction to make a WCO is founded on breach of duty owed by the legal
representative to the court to perform his duty to the court in promoting within his
own sphere the cause of justice. The legal representative owes no separate duty to
Page 2
the other parties or their lawyers.
6. Any person considering applying for a WCO, or any lawyers against whom such an
application has been made or threatened should take care to have clearly in mind the
procedural rules and practice in the CPR and the guiding principles set down by the
Court of Appeal and House of Lords.
7. THE STATUTORY BASIS: Section 51(6) of the Senior Courts Act 1981 (SCA 1981),
as amended, is the source of a Civil court's power to make a WCO. In the Criminal
courts there are provisions in the same terms under s.19A of the Prosecution of
Offences Act 1985 (POOA 1985).
8. Provisions in the same terms are made (1) in relation to appeals against orders made
in restraint and receivership proceedings by s.89(4) and (7) of the Proceeds of Crime
Act 2002, (2) in relation to matters in the Court of Protection by s.55 of the Mental
Capacity Act 2005, and (3) in respect of matters in First Tier and Upper Tier
Tribunals by s.29 of the Tribunals Courts and Enforcement Act 2007. Because the
terms are identical the relevant courts will apply them in the same way as Civil and
Criminal Courts.
9. Section 51 (6) of the SCA 1981 and s.19A (1) of the POOA 1985 each respectively
provide:
"In any ... proceedings ..., the [court] may disallow, or (as the case may be)
order the legal or other representative concerned to meet, the whole of any
wasted costs or such part of them as may be determined in accordance with rules
of court."
10. Definitions are the same in both Civil and Criminal jurisdictions: see s.51(7) and (13)
of the SCA 1981 and s.19A (3) of the POOA 1985. These provide respectively:
a. "'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 is unreasonable to expect that party to pay."
b. "legal or other representative", in relation to any proceedings, means a person
who is exercising a right of audience, or a right to conduct litigation, on behalf of
any party to the proceedings.
11. Part IIA of the Regulations provide that a legal or other representative against whom
action is taken by a magistrates' court under s.19A may appeal to the Crown Court
and that a legal or other representative against whom action is taken by the Crown
Court may appeal to the Court of Appeal.
12. CORE MATTERS: See the judgment in Ridehalgh v Horsefield [1994] Ch. 205.
13. Improper, unreasonable and negligent: The leading authority is Ridehalgh v
Horsefield [1994] Ch. 205 in the Court of Appeal. It qualified the terms in the
statute:
a. "Improper" covered, but was not confined to, conduct which would ordinarily be
held to justify disbarment, striking off, suspension from practice or other serious
professional penalty.
b. "Unreasonable" aptly described conduct which was vexatious, designed to harass
the other side, rather than advance the resolution of the case, and it made no
Page 3
difference that the conduct was the product of excessive zeal and not improper
motive.
c. "Negligence" should be understood in an non-technical way to denote failure to
act with the competence reasonably expected of ordinary members of the
profession: it is not negligent "unless the error was such as no reasonably wellinformed and competent member of that profession could have made". It is
worth noting in the context of this requirement that the Court of Appeal has since
observed when making a wasted costs order that the negligence in question must
be of such gravity as to constitute a breach of the legal representative’s duties to
the court (Persaud v Persaud [2004] EWCA Civ 394, [2004] 1 Costs LR 1; see
also Adegbulugbe v Nursing & Midwifery Council and Ors [2014] EWHC 405
(Admin), [13]).
14. Unjustifiable conduct: Breach of duty to the court: The conduct complained of
must be "unjustifiable": Ridehalgh v Horsefield [1994] Ch. 205 at 226, 231, 236 and
237.
15. It is a necessary requirement of any WCO that the lawyer should have been in
breach of duty to the court: Ridehalgh v Horsefield [1994] Ch. 205 at 227 and 233.
16. Hopeless cases are not without more a basis for a WCO: The mere fact that the
lawyers have pursued arguments or conducted litigation which the court has found to
be hopeless is not necessarily evidence of breach of duty to the court.
"It is not for counsel or solicitors to impose a pre-trial screen through which a
litigant must pass before he can put his complaint or defence before the court."
Ridehalgh v Horsefield [1994] Ch. 205 at 229 and 233-234. See too B v Pendelbury
[2002] EWHC 1797 (QB); [2002] C.P.L.R. 743 at para.25:
"It is axiomatic that a solicitor is bound by the instructions of his client. He is not
obliged to act as a filter between the instructions provided by the client and the
opposing party. Quite simply, a solicitor owes no duty to the opposing party
although he does, of course, owe such a duty to the court.It is the duty of the
advocate to present his client's case even though he may think that it is hopeless
and even though he may have advised his client that it is. So it is not enough
that the court considers that the advocate has been arguing a hopeless case. The
litigant is entitled to be heard; to penalise the advocate for presenting his client's
case would be contrary to the constitutional principles to which I have referred."
Per Lord Steyn in Medcalf v Mardell (Wasted Costs Order) [2002] UKHL 27; [2003] 1
A.C. 120 at para.56.
17. Where it alleged that the legal representative has pursued a hopeless case, the
question is whether no reasonably competent legal representative would have
continued the action. That question cannot be answered affirmatively unless the
representative also acted unreasonably which is akin to establishing abuse of
process: Dempsey v Johnstone [2003] EWCA Civ 1134; [2004] 1 Costs L.R. 41.
18. Salient points of principle to be extracted from Ridehalgh and applicable in
both the Civil and Criminal Jurisdictions: The wasted costs jurisdiction discloses
a tension between two important public interests, one that the wasted costs orders
should not become a back-door means of recovering costs not otherwise recoverable
against a legally-aided or impoverished litigant and that the remedy should not grow
Page 4
unchecked to become more damaging than the disease and, on the other hand, that
litigants should not be financially prejudiced by the unjustifiable conduct of litigation
by their or their opponents' lawyers: Ridehalgh v Horsefield [1994] Ch. 205 at 226.
19. The court's jurisdiction to make a wasted costs order against a legal representative is
founded on breach of the duty owed by the lawyer to the court to perform his duty
as an officer of the court in promoting within his own sphere the cause of justice:
Ridehalgh v Horsefield [1994] Ch. 205 at 227 and 233.
20. If the client does not waive privilege, judges must make full allowance for the
inability of the respondent lawyers to tell the whole story. Where there is room for
doubt the respondent lawyers are entitled to the benefit of it. It is only when, with all
allowances made, a lawyer's conduct of proceedings is quite plainly unjustifiable that
it can be appropriate to make a wasted costs order: Ridehalgh v Horsefield [1994]
Ch. 205 at 237.
21. The overriding requirements of the procedure to be followed are that any procedure
must be fair and must be as simple and summary as fairness permits. Hearings
should be measured in hours not in days or weeks. Judges must not reject a weapon
which Parliament has intended to be used for the protection of those injured by the
unjustifiable conduct of the other side's lawyers, but they must be astute to control
what threatens to become a new and costly form of satellite litigation: Ridehalgh v
Horsefield [1994] Ch. 205 at 238-239.
22. The jurisdiction to make a WCO must be exercised with great care: Tolstoy
Miloslavsky v Aldington [1996] 1 W.L.R. 736. It is important to note that the fact
that the trial judge has criticised a party in the context of giving judgment does not
mean that s/he is unable to consider the merits of a wasted costs application against
that party. The judge who dealt with the proceedings should ordinarily deal with all
costs matters. However, on some occasions the strength of the criticisms made are
such that the judge should recuse himself if the test for apparent bias laid down in
Porter v Magill [2002] 2 A.C. 357 is met (Mengiste v Endowment Fund for the
Rehabilitation of Tigray [2013] EWCA Civ 1003).
23. The legal representative should not be called on to reply unless an apparently strong
prima facie case has been made against him: Ridehalgh v Horsefield [1994] Ch. 205
at 239.
24. The Civil Procedure Rules: CPR Rule 46.8: Rule 46.8 is in these terms:
"(1) This rule applies where the court is considering whether to make an order
under section 51(6) of the Senior Courts Act 1981 (court's power to disallow or
(as the case may be) order a legal representative to meet 'wasted costs').(2) The
court will give the legal representative a reasonable opportunity to make written
submissions or, if the legal representative prefers, to attend a hearing before it
makes such an order.(3) When the court makes a wasted costs order, it will-(a)
specify the amount to be disallowed or paid; or (b) direct a costs judge or a
district judge to decide the amount of costs to be disallowed or paid. (4) The
court may direct that notice must be given to the legal representative's client, in
such manner as the court may direct- (a) of any proceedings under this rule; or
(b) of any order made under it against his legal representative."
25. The Civil Practice Direction: 46n PD 5: The relevant part of the Costs Practice
Direction (CPR Pt 46n PD 5) is not set out in full. It should be read carefully by
Page 5
anyone concerned with a possible application. Important points to note are:
a. 5.2 - ... Such orders can be made at any stage in the proceedings up to and
including the proceedings relating to the detailed assessment of costs. In general,
applications for wasted costs are best left until after the end of the trial.
b. 5.3 - The court may make a wasted costs order against a legal representative on
its own initiative.
c. 5.4 - A party may apply for a wasted costs order- (a) by filing an application
notice in accordance with Pt 23 or (b) by making an application orally in the
course of any hearing.
d. 5.5 - It is appropriate for the court to make a wasted costs order against a legal
representative, only if- (a) the legal representative has acted improperly,
unreasonably or negligently; (b) the legal representative's 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; (c) it is just in all the circumstances to order the legal representative to
compensate that party for the whole or part of those costs.
e. 5.6 - The court will give directions about the procedure to be followed in each
case in order to ensure that the issues are dealt with in a way which is fair and as
simple and summary as the circumstances permit.
f.
5.7 - As a general rule the court will consider whether to make a wasted costs
order in two stages- (a) at the first stage, the court must be satisfied- (i) that it
has before it evidence or other material which, if unanswered, would be likely to
lead to a wasted costs order being made; and (ii) the wasted costs proceedings
are justified notwithstanding the likely costs involved. (b) at the second stage the
court will consider, after giving the legal representative an opportunity to make
representations in writing or at a hearing, whether it is appropriate to make a
wasted costs order in accordance with para.5.5 above...
g. 5.8 - the court may proceed to the second stage described in para.5.7 without
first adjourning the hearing if it is satisfied that the legal representative has
already had a reasonable opportunity to make representations.
h. 5.9 - On an application for a wasted costs order under Pt 23 the application
notice and any evidence in support must identify- (a) what the legal
representative is alleged to have done or failed to do; and (b) the costs that the
legal representative may be ordered to pay or which are sought against the legal
representative.
26. The Costs in Criminal Cases (General) Regulations 1986, as amended
"3A. Application and definitions. This Part of these Regulations applies to action
taken by a court under section 19A of the Act and in this Part of these
regulations:- 'wasted costs order' means any action taken by a court under
section 19A of the Act; and 'interested party' means the party benefiting from the
wasted costs order and, where he was legally aided, or an order for the payment
of costs out of central funds was made in his favour, shall include the authority
responsible for determining costs payable in respect of work done under the legal
aid order or out of central funds as the case may be.3B.- (1) A wasted costs
order may provide for the whole or any part of the wasted costs to be disallowed
or ordered to be paid and the court shall specify the amount of such costs. (2)
Page 6
[Deleted by amendment] (3) When making a wasted costs order the court may
take into account any other order as to costs in respect of the proceedings and
may take the wasted costs order into account when making any other such order.
(4) [Deleted by amendment] 3C. [This makes certain procedural provisions in
relation to appeals.] 3D. Recovery of sums due under a wasted costs order Where
the person required to make a payment in respect of sums due under a wasted
costs order fails to do so, the payment may be recovered summarily as a sum
adjudged to be paid as a civil debt by order of a magistrates' court by the party
benefiting from the order, save that where he was receiving services funded for
him as part of the Criminal Defence Service, or provided for him under
arrangements made for the purposes of Part 1 of the Legal Aid, Sentencing and
Punishment of Offenders Act 2012, or an order for the payment of costs out of
central funds was made in his favour, the power to recover shall be exercisable
by the Lord Chancellor.
27. Practice Direction (Criminal Proceedings: Costs) [2015] EWCA Crim 1568:
Practice Direction (Criminal Proceedings: Costs) [2015] EWCA Crim 1568, which
came into force on 5 October 2015, is not set out in full. It should be read carefully
by anyone concerned with a possible application. Important points to note are:
"4.2.2 The Judge has a much greater and more direct responsibility for costs in
criminal proceedings than in civil and should keep the question of costs in the
forefront of his mind at every stage of the case and ought to be prepared to take
the initiative himself without any prompting from the parties. 4.2.3 Regulation 3B
of the General Regulations requires the court to specify the amount of the wasted
costs and before making the order to allow the legal or other representative and
any party to the proceedings to make representations. In making the order the
court may take into account any other orders for costs and may take the wasted
costs order into account when making any other order as to costs. The court
should also give reasons for making the order and must notify any interested
party (which includes the Legal Aid Agency and Central Funds determining
authorities) of the order and the amount. 4.2.4 Judges contemplating making a
wasted costs order should bear in mind the guidance given by the Court of Appeal
in In re A Barrister (Wasted Costs Order) (No 1 of 1991) [1993] QB 293. The
guidance, which is set out below, is to be considered together with all the
statutory and other rules and recommendations set out by Parliament and in this
Practice Direction. (i) There is a clear need for any Judge or court intending to
exercise the wasted costs jurisdiction to formulate carefully and concisely the
complaint and grounds upon which such an order may be sought. These
measures are draconian and, as in contempt proceedings, the grounds must be
clear and particular. (ii) Where necessary a transcript of the relevant part of the
proceedings under discussion should be available and in accordance with the
rules a transcript of any wasted cost hearing must be made. (iii) A defendant
involved in a case where such proceedings are contemplated should be present if,
after discussion with an advocate, it is thought that his interest may be affected
and he should certainly be present and represented if the matter might affect the
course of his trial. CrimPR 45.2(1) requires that the court must not make a costs
order unless each party, and any other person affected, (a) is present, 17 or (b)
has had an opportunity to attend or to make representations. (iv) A three stage
test or approach is recommended when a wasted costs order is contemplated: (a)
Has there been an improper, unreasonable or negligent act or omission? (b) As a
result have any costs been incurred by a party? (c) If the answers to (a) and (b)
are “yes”, should the court exercise its discretion to disallow or order the
representative to meet the whole or any part of the relevant costs, and if so what
specific sum is involved? (v) It is inappropriate to propose any settlement that
the representative might forgo fees. The complaint should be formally stated by
Page 7
the Judge and the representative invited to make his own comments. After any
other party has been heard the Judge should give his formal ruling. Discursive
conversations may be unfair and should certainly not take place. (vi) The Judge
must specify the sum to be allowed or ordered. Alternatively the relevant
available procedure should be substituted should it be impossible to fix the sum:
see para 4.2.7 below. 4.2.5 The Court of Appeal has given further guidance in In
re P (A Barrister) [2001] EWCA Crim 1728; [2002] 1 Cr App R 207 as follows: (i)
The primary object is not to punish but to compensate, albeit as the order is
sought against a non party, it can from that perspective be regarded as penal. (ii)
The jurisdiction is a summary jurisdiction to be exercised by the court which has
“tried the case in the course of which the misconduct was committed”. (iii)
Fairness is assured if the lawyer alleged to be at fault has sufficient notice of the
complaint made against him and a proper opportunity to respond to it. (iv)
Because of the penal element a mere mistake is not sufficient to justify an order:
there must be a more serious error. (v) Although the trial Judge can decline to
consider an application in respect of costs, for example on the ground that he or
she is personally embarrassed by an appearance of bias, it will only be in 18
exceptional circumstances that it will be appropriate to pass the matter to
another Judge, and the fact that, in the proper exercise of his judicial function, a
Judge has expressed views in relation to the conduct of a lawyer against whom
an order is sought, does not of itself normally constitute bias or the appearance
of bias so as to necessitate a transfer. (vi) The normal civil standard of proof
applies but if the allegation is one of serious misconduct or crime clear evidence
will be required to meet that standard. 4.2.6 Though the court cannot delegate its
decision to the appropriate authority, it may require the appropriate officer of the
court to make enquiries and inform the court as to the likely amount of costs
incurred. By CrimPR 45.9(5), the court is entitled to the assistance in this respect
of the party who incurred the costs concerned. 4.2.7 The court may postpone the
making of a wasted costs order to the end of the case if it appears more
appropriate to do so, for example, because the likely amount is not readily
available, there is a possibility of conflict between the legal representatives as to
the apportionment of blame, or the legal representative concerned is unable to
make full representations because of a possible conflict with the duty to the
client. 4.2.8 A wasted costs order should normally be made regardless of the fact
that the client of the legal representative concerned is legally aided. However
where the court is minded to disallow substantial legal aid costs, it may, instead
of making a wasted costs order, make observations to the determining authority
that work may have been unreasonably done: see para 4.3 below. This practice
should only be adopted where the extent and amount of the costs wasted is not
entirely clear."
28. Privilege: Ridehalgh v Horsefield [1994] Ch. 205 at 236-237: Privilege raises
difficult and important issues. Its importance must not be overlooked by a potential
applicant or respondent to an application for a WCO and should be considered
carefully before making an application. Its impact will be significant. Where an
applicant seeks a wasted costs order against the lawyers on the other side, legal
professional privilege may be relevant both as between the applicant and his lawyers
and as between the respondent lawyers and their client. In either case it is the
client's privilege, which he alone can waive.
29. The first of these situations can cause little difficulty. If the applicant's privileged
communications are germane to an issue in the application, to show what he would
or would not have done had the other side not acted in the manner complained of,
he can waive his privilege; if he declines to do so adverse inferences can be drawn.
Page 8
The respondent lawyers are in a different position. The privilege is not theirs to
waive. In the usual case where a waiver would not benefit their client they will be
slow to advise the client to waive his privilege, and they may well feel bound to
advise that the client should take independent advice before doing so. The client may
be unwilling to do that, and may be unwilling to waive if he does.
30. So the respondent lawyers may find themselves at a grave disadvantage in
defending their conduct of proceedings, unable to reveal what advice and warnings
they gave, what instructions they received.
31. Judges who are invited to make or contemplate making a wasted costs order must
make full allowance for the inability of respondent lawyers to tell the whole story.
Where there is room for doubt, the respondent lawyers are entitled to the benefit of
it. It is again only when, with all allowances made, a lawyer's conduct of proceedings
is quite plainly unjustifiable that it can be appropriate to make a wasted costs order.
32. Reliance on counsel: A solicitor does not abdicate his professional responsibility
when he seeks the advice of counsel. He must apply his mind to the advice received.
But the more specialist the nature of the advice, the more reasonable is it likely to be
for a solicitor to accept it and act on it: Ridehalgh v Horsefield [1994] Ch. 205 at
237. However, the solicitor must exercise independent judgment and not follow
counsel blindly: Tolstoy Miloslavsky v Aldington [1996] 1 W.L.R. 736.
33. Causation: "Demonstration of a causal link is essential" - Ridehalgh v Horsefield
[1994] Ch. 205 at 237. The applicant must establish that costs would not otherwise
have been incurred. It must be more probable than not that such wasted costs were
caused by the unjustifiable conduct of the lawyer in question. Brown v Bennett
(Wasted Costs) (No.1) [2002] 1 W.L.R. 713.
34. In the absence of a causal link no order will be made, Byrne v Sefton HA [2001]
EWCA Civ 1904; [2002] 1 W.L.R. 775 (see an example of the application of this rule
in the case of Adegbulugbe v Nursing and Midwifery Council [2014] EWHC 405
(Admin), in which case the negligence of a firm of solicitors was causative of wasted
costs but that of counsel instructed by that firm was not. The judge must identify the
conduct of the legal representative relating to the error in question which was
improper, reasonable or negligent and then make the assessment of the costs
actually wasted: Kilroy v Kilroy [1997] P.N.L.R. 66.
35. Threats to apply for WCOs: The threat of proposed applications should not be
used as a means of intimidation. On the other hand, if one side considers that the
conduct of the other is improper, unreasonable or negligent and likely to cause a
waste of costs it is not objectionable to alert the other side to that view; the other
side can then consider its position and perhaps mend its ways. Drawing the
distinction between unacceptable intimidation and acceptable notice must depend on
the professional judgment of those involved: Ridehalgh v Horsefield [1994] Ch. 205
at 238.
36. Timing of the application: Wasted costs orders should not, save in exceptional
circumstances, be sought until after trial. There is a number of dangers if
applications are made at an interlocutory stage, among them the risk that a party's
advisers might feel they could no longer act, so that the party would in effect be
deprived of the advisers of his choice. It is impossible to lay down rules of universal
application, and sometimes an interlocutory battle resolves the real dispute between
Page 9
the parties. But speaking generally in the ordinary way applications for wasted costs
are best left until after the end of the trial: Ridehalgh v Horsefield [1994] Ch. 205 at
238 and Gray v Going Places Leisure Travel Ltd [2005] EWCA Civ 189; [2005] C.P.
Rep. 21.
37. The applicant: The court itself may initiate the inquiry whether a wasted costs order
should be made. In straightforward cases (such as failure to appear, lateness,
negligence leading to an otherwise avoidable adjournment, gross repetition or
extreme slowness) there is no reason why it should not do so. But save in the most
obvious case, courts should be slow to initiate the inquiry. If they do so in cases
where the inquiry becomes complex and time-consuming, difficult and embarrassing
issues on costs can arise: if a wasted costs order is not made, the costs of the
inquiry will have to be borne by someone and it will not be the court; even if an
order is made, the costs ordered to be paid may be small compared with the costs of
the inquiry. In such cases courts will usually be well advised to leave an aggrieved
party to make the application if so advised; the costs will then, in the ordinary way,
follow the event between the parties: Ridehalgh v Horsefield [1994] Ch. 205 at 238.
38. Procedure: Ridehalgh v Horsefield [1994] Ch. 205 at 238: The procedure to be
followed in determining applications for wasted costs must meet the requirements of
the individual case before them. The overriding requirements are that any procedure
must be fair and that it must be as simple and summary as fairness permits.
39. Fairness requires that any respondent lawyer should be very clearly told what he is
said to have done wrong and what is claimed. But the requirement of simplicity and
summariness means that elaborate pleadings should in general be avoided.
40. No formal process of discovery will be appropriate. There can be no interrogation by
the applicant of the respondent lawyer, or vice versa.
41. Hearings should be measured in hours, and not in days or weeks. Judges must not
reject a weapon which Parliament has intended to be used for the protection of those
injured by the unjustifiable conduct of the other side's lawyers, but they must be
astute to control what threatens to become a new and costly form of satellite
litigation.
42. It is not mandatory for the application to be made at the end of the trial. The
applicant may ask for time to consider whether to apply. Even if an application is
made, it is normal for the court to give directions in relation to the disposal of the
application rather than deal with it straight away: Gray v Going Places Leisure Travel
Ltd [2005] EWCA Civ 189; [2005] C.P. Rep. 21.
43. The application for a WCO can be made after the order in relation to the proceedings
has been drawn up, although the court hearing the application late will not
necessarily grant it if there is no good reason for the delay: Gray v Going Places
Leisure Travel Ltd [2005] EWCA Civ 189; [2005] C.P. Rep. 21.
44. Show Cause: Two Stage Process: Ridehalgh v Horsefield [1994] Ch. 205 at
239 and Civil Practice Direction 46.5: Although the Rules and Practice Direction
require that in the ordinary way the court should not make a wasted costs order
without giving the legal representative a reasonable opportunity to appear and show
cause why an order should not be made, this should not be understood to mean that
the burden is on the legal representative to exculpate himself.
45. A wasted costs order should not be made unless the applicant satisfies the court, or
Page 10
the court itself is satisfied, that an order should be made. The representative is not
obliged to prove that it should not. But the rule clearly envisages that the
representative will not be called on to reply unless an apparently strong prima facie
case has been made against him and the language of the rule recognises a shift in
the evidential burden.
46. So CPR PD 46.5 makes it plain that unless there is a clear case to answer the
application should not be permitted to proceed.
47. Discretion: Ridehalgh v Horsefield [1994] Ch. 205 at 239: The jurisdiction to
make a wasted costs order is dependent at two stages on the discretion of the court.
The first is at the stage of initial application, when the court is invited to give the
legal representative an opportunity to show cause. This is not something to be done
automatically or without careful appraisal of the relevant circumstances.
48. The costs of the inquiry as compared with the costs claimed will always be one
relevant consideration. This is a discretion, like any other, to be exercised judicially,
but judges may not infrequently decide that further proceedings are not likely to be
justified.
49. The second discretion arises at the final stage. Even if the court is satisfied that a
legal representative has acted improperly, unreasonably or negligently and that such
conduct has caused the other side to incur an identifiable sum of wasted costs, it is
not bound to make an order, but in that situation it would of course have to give
sustainable reasons for exercising its discretion against making an order.
50. The importance of summary disposal: Costly and complex enquiries are not
appropriate: If it is not practicable, consistent with fairness to the respondent legal
representatives to dispose of the application summarily, the application will not be
allowed to go forward: Ridehalgh v Horsefield [1994] Ch. 205 at 239. See further the
citation from Medcalf v Mardell (Wasted Costs Order) [2002] UKHL 27; [2003] 1 A.C.
120, para.24 discussed under Key Areas below:
"Save in the clearest case, applications against the lawyers acting for an opposing
party are unlikely to be apt for summary determination, since any hearing to
investigate the conduct of a complex action is itself likely to be expensive and
time-consuming."
51. In Hedrich v Standard Bank London Ltd [2008] EWCA Civ 905; [2009] P.N.L.R. 3,
Ward L.J. observed:
"[12] The admonition to ensure that the remedy is not more painful than the
disease has been stressed many times."
He continued:
"[13] In Freudiana Holdings, Re ( unreported) CA November 28, 1995 Rose L.J.
said: 'Unless wasted costs proceedings can take place in summary form, on or
soon after delivery of judgment, they are unlikely to be appropriate.' Millett L.J.
said: 'The jurisdiction to make a costs order is a summary jurisdiction. It follows,
first, that the hearing should be short; secondly, that the procedure followed
should not be unduly elaborate; and thirdly that the jurisdiction should only be
exercised in reasonably plain and obvious cases."
Page 11
52. Thus an application for a WCO was held to be inappropriate and not allowed to
proceed beyond show cause where complicated proceedings requiring detailed
investigation into the facts would ensue: Gray v Going Places Leisure Travel Ltd
[2005] EWCA Civ 189; [2005] C.P. Rep. 21. Where the sum claimed by way of costs
was £169,000 and the estimated costs of the application were £130,000 the
application failed at the Show Cause stage: Chief Constable of North Yorkshire v
Audsley [2000] Lloyd's Rep. P.N. 675. The procedure is a summary one.
Key Acts
Senior Courts Act 1981
Prosecution of Offences Act 1985
Powers of Criminal Courts Act 2002
Mental Capacity Act 2005
Tribunals Courts and Enforcement Act 2007
Key Subordinate Legislation
Civil Procedure Rules 1998/3132
CPR Practice Direction 46
Costs in Criminal Cases (General) Regulations 1986/1335 as amended
Practice Direction (Criminal Proceedings: Costs) [2015] EWCA Crim 1568
Key Quasi-legislation
None.
Key European Union Legislation
None.
Key Cases
Page 12
Ridehalgh v Horsefield [1994] Ch. 205
Medcalf v Mardell (Wasted Costs Order) [2002] UKHL 27; [2003] 1 A.C. 120
Barrister (Wasted Costs Order) (No.1 of 1991), Re [1993] Q.B. 293
Key Texts
None.
Analysis
KEY AREAS OF COMPLEXITY OR UNCERTAINTY
Principles stressed by The House of Lords In Medcalf v Mardell (Wasted Costs Order)
[2002] UKHL 27
1. In Medcalf v Mardell (Wasted Costs Order) [2002] UKHL 27; [2003] 1 A.C. 120, Lord
Bingham of Cornhill endorsed Ridehalgh. He added this:
"[13] It does however appear, from material laid before the House, that the clear
warnings given in that case have not proved sufficient to deter parties from
incurring large and disproportionate sums of costs in pursuing protracted claims
for wasted costs, many of which have proved unsuccessful."
2. With the benefit of that experience he emphasised two matters in particular:
"[23] First, in a situation in which the practitioner is of necessity precluded (in the
absence of a waiver by the client) from giving his account of the instructions he
received and the material before him at the time of settling the impugned
document, the court must be very slow to conclude that a practitioner could have
had no sufficient material. Speculation is one thing, the drawing of inferences
sufficiently strong to support orders potentially very damaging to the practitioner
concerned is another. … The second qualification is no less important. The court
should not make an order against a practitioner precluded by legal professional
privilege from advancing his full answer to the complaint made against him
without satisfying itself that it is in all the circumstances fair to do so. … Even if
the court were able properly to be sure that the practitioner could have no
answer to the substantive complaint, it could not fairly make an order unless
satisfied that nothing could be said to influence the exercise of its discretion. Only
exceptionally could these exacting conditions be satisfied. Where a wasted costs
order is sought against a practitioner precluded by legal professional privilege
from giving his full answer to the application, the court should not make an order
unless, proceeding with extreme care, it is (a) satisfied that there is nothing the
practitioner could say, if unconstrained, to resist the order and (b) that it is in all
the circumstances fair to make the order.[24] … Save in the clearest case,
applications against the lawyers acting for an opposing party are unlikely to be
apt for summary determination, since any hearing to investigate the conduct of a
Page 13
complex action is itself likely to be expensive and time-consuming. The
desirability of compensating litigating parties who have been put to unnecessary
expense by the unjustified conduct of their opponents' lawyers is, without doubt,
an important public interest, but it is, as the Court of Appeal pointed out in
Ridehalgh v Horsefield at page 226, only one of the public interests which have to
be considered."
3. Lord Steyn said:
"56 … It would appear that the inclusion of the word negligent in substitution for
'reasonable competence', is directed primarily to the jurisdiction as between a
legal representative and his own client. It is possible to visualise situations where
the negligence of an advocate might justify the making of a wasted costs order
which included both parties, such as where an advocate fails to turn up on an
adjourned hearing so that a hearing date is lost. The breach of the advocate's
duty to the court will be clear and if the breach was not deliberate, the term
negligent would best describe it. For a person exercising a right to conduct
litigation (i.e. a litigation agent) it is less difficult to think of apt examples
affecting the other side."
Legal Aid: Generally an irrelevant consideration
1. Courts to which applications for WCOs are made must bear prominently in mind the
peculiar vulnerability of legal representatives action for publicly funded persons. It
would subvert the benevolent purpose of the legal aid legislation if such
representatives were subject to unusual personal risk. Their advice and their conduct
is not to be tempered by the knowledge that their client is not the paymaster and so
in all probability not liable for the costs of the other side: Ridehalgh v Horsefield
[1994] Ch. 205 at 234.
2. The court in such cases of a legally aided party should be slow to supplement
statutory duties or impose supplementary duties by placing a higher standard on the
parties and their lawyers: Tate v Hart [1999] Lloyd's Rep. P.N. 566.
3. Where privilege has not been waived and the court has not seen counsel's advice,
the court should not infer simply from the extension of the legal aid for trial, that the
solicitors had asserted that there were good prospects of success: Dempsey v
Johnstone [2003] EWCA Civ 1134; [2004] 1 Costs L.R. 41.
3. Firms practising in areas funded by legal aid should be aware of the case of Holden
and Co LLP v Eastbourne BC [2014] EWHC 1322 (QB). In that case, an individual
was funded by an emergency legal aid certificate which was due to last for eight
weeks, and the firm representing him appealed the respondent local authority’s
refusal of housing assistance to its client. The hearing on the appeal was adjourned
because the local authority did not provide the housing file to the firm in good time.
The Legal Aid Agency then reviewed P's certificate and placed an embargo on it while
it sought further information from him. P supplied the information requested and the
embargo was lifted but that was only a matter of days before the adjourned hearing
of the appeal. The day before the hearing H wrote to the court informing it that
without public funding there had been insufficient time to prepare the appeal, that
they would take no active part and would agree to an adjournment. The hearing was
adjourned and the costs reserved. The judge subsequently ordered H to pay
counsel's fee thrown away of £1,100, on the basis that H could have taken action
Page 14
earlier to prevent that day's hearing being ineffective. The appellant firm of solicitors
sought permission to appeal against the wasted costs order, but the application was
refused by the court as it was held that the judge was right to find that the firm’s
conduct was unreasonable within the meaning of that word in the wasted costs
jurisdiction. Importantly, the court rejected the submission that because the legal
aid certificate was embargoed H could simply do nothing. Notwithstanding the
embargo H continued to owe a duty to the court and to the other side not to cause
unnecessary costs to be incurred where that could be done at modest cost to
themselves.
No proceedings on foot when the wrongdoing occurs: No duty to Court
1. Where a legal representative acted negligently but did so at a time when there was
no legal proceeding on foot, there could be no question of that negligence
representing any sort of breach of duty to the court: Radford & Co v Charles [2003]
EWHC 3180 (Ch); [2004] P.N.L.R. 25.
2. So solicitors cannot be liable for costs wasted as a result of an action which never
starts, especially when their actions were no more than negligent and the solicitors
never acted in the litigation once it started: Byrne v Sefton HA [2001] EWCA Civ
1904; [2002] 1 W.L.R. 775.
LATEST DEVELOPMENTS
1. The law and practice in this area is now well settled if not always as well understood
as it should be. The more recent reported cases turn on their facts. Nonetheless the
following cases highlight important aspects of the jurisdiction in practice.
2. In B v A [2012] EWHC 3127 (Fam); [2013] Fam. Law 267 application had been made
and an order obtained for a Tipstaff order on a without notice basis. There had been
a flagrant and serious breach of the principles and procedures which was to be
deprecated (para.34). The case revealed a number of serious and inexcusable
failures by (a) F and his legal advisers, and (b) the court. The serious failures of F's
solicitors to comply with the principles and practices were negligent and could not be
justified or excused by endemic failures to apply them by practitioners and judges in
the Family Division. A wasted costs order in the sum of £18,000 was granted.
3. See likewise Mengiste v Endowment Fund for the Rehabilitation of Tigray [2013]
EWHC 1087 (Ch) where the Court held that the first stage in the procedure to grant a
wasted costs order had been satisfied where a firm of solicitors had allowed a
purported expert witness on the Ethiopian legal code to serve reports and give oral
evidence, following which the court had found his evidence had been tendentious and
inappropriate. The court found that the Legal Representative should be required to
reply. However, the Court of Appeal ([2013] EWCA Civ 1003) subsequently held that
the nature of the judge’s criticisms of the expert witness when giving judgment was
such that the test for apparent bias had been made out, and that therefore the judge
had been wrong to refuse to recuse himself from considering costs issues.
4. The requirement for the behaviour to have caused wasted costs remains critical. See
A (A Child) (Wasted Costs Order), Re [2013] EWCA Civ 43; [2013] 2 F.L.R. 1: even
where litigation conduct had on occasion fallen woefully short of that which was
Page 15
required in mounting a without notice application for permission to appeal in a child
case where the Court of Appeal had given permission to one party to instruct a new
expert, none of the identified errors had been causative of costs being wasted by
either of the opposing parties, and so no order was made.
5. In Ernesto Cancino v Secretary of State for the Home Department [2015] UKFTT
00059 (IAC), the President of the Upper Tribunal, sitting as a Judge of the First Tier
Tribunal, held that an application for wasted costs under s.29 of the Tribunals, Courts
and Enforcement Act 2007, which applies to “legal or other representatives”, includes
Home Office Presentation Officers but does not apply to unrepresented litigants or
Mackenzie friends ([11]).
POSSIBLE FUTURE DEVELOPMENTS
1. No developments are anticipated. For nearly twenty years the courts have made
plain their dislike of expensive and time-consuming satellite litigation.
HUMAN RIGHTS
1. No particular aspects of human rights law arise. The procedure if properly followed is
compliant with art.6 (right to fair trial).
EUROPEAN UNION ASPECTS
1. No particular aspects of EU law arise.
Further Reading
Anyone who is concerned with a possible application for a WCO should start by reading
carefully the judgments in Ridehalgh v Horsefield [1994] Ch. 205 and Medcalf v Mardell
(Wasted Costs Order) [2002] UKHL 27; [2003] 1 A.C. 120 and then the notes in the
White Book to CPR 48.7 to see how the courts have addressed different practical issues
arising and the application of the principles to the facts of cases.
© 2015 Sweet & Maxwell Ltd