Ridehalgh v Horsefield & Anor

A wasted costs order is available where a legal representative’s improper, unreasonable or negligent conduct causes identifiable unnecessary costs, and it is just to require compensation. Negligence is used untechnically, but the applicant must show conduct below the standard reasonably expected of a competent practitioner.

Mere error, an unsuccessful case, a different tactical choice or reliance on properly obtained specialist advice is insufficient. The court must allow for advocacy under pressure, client confidentiality, legal aid and the representative’s professional duties. Causation is essential. Applications should ordinarily be dealt with fairly, summarily and after trial where possible.

Six appeals concerned wasted costs orders against solicitors and counsel. The appeals arose from county court proceedings concerning possession, industrial deafness, a contractual claim and a claim for payment, and from High Court proceedings concerning a statutory demand, matrimonial trusts and a property-development claim. Five appeals challenged orders already made; in the sixth, the Court had invited solicitors to show cause why an order should not be made.

The common issue was when the conduct of a legal representative could properly be treated as improper, unreasonable or negligent, whether it had caused unnecessary costs, and whether an order was just in the circumstances.

The Court delivered a single unanimous judgment. It gave guidance on the wasted costs jurisdiction and allowed each appeal or declined to make the proposed order.

1. Applicable test. A wasted costs order requires three stages: improper, unreasonable or negligent conduct; causation of unnecessary costs; and a conclusion that it is just to order compensation. The jurisdiction is compensatory, distinct from professional discipline, and rests on the representative’s duty to the court. Dishonesty, criminal conduct or personal obliquity is unnecessary, but mere mistake or error of judgment is insufficient. The Court adopted the approach in Myers v Elman [1940] AC 282 and the three-stage guidance in In re A Barrister (Wasted Costs Order) (No.1 of 1991) [1993] QB 293.
2. Meaning of the statutory terms. Improper conduct includes a substantial breach of professional duty or conduct condemned by professional and judicial opinion. Unreasonable conduct includes vexatious or harassing conduct, but not an unsuccessful result or a different tactical choice where there is a reasonable explanation. Negligence means failure to act with the competence reasonably expected of ordinary practitioners, although the applicant must prove no less than the standard required in an ordinary negligence action. A hopeless case may be presented on instructions, but a legal representative must not assist an abuse of process.
3. Safeguards. The wasted costs provisions in the Courts and Legal Services Act 1990 apply notwithstanding the advocate’s immunity from negligence claims under section 62, although conduct in court must be plainly unjustifiable after proper allowance for pressure and the demands of advocacy. Client privilege may prevent a representative from explaining his conduct, so doubt should generally benefit the respondent. Causation must be proved. A solicitor remains professionally responsible when taking counsel’s advice, but reliance is more reasonable where the advice is specialist. The procedure must be fair, simple and summary, and the representative need only show cause after an apparently strong prima facie case.
4. Applications. In Ridehalgh, Allen, Roberts, Philex, Watson and Antonelli, the Court found that the relevant conduct was not sufficiently improper, unreasonable or negligent, or that causation was not established. The proposed order in Ridehalgh was not justified. The orders in Allen, Roberts, Philex and Watson were set aside or discharged. In Antonelli, the order against counsel was quashed and the respondents were ordered to pay her application costs.

• Court of Appeal (Civil Division) — Heard six appeals from the Blackpool, Liverpool and Edmonton County Courts and from the Chancery, Family and Queen’s Bench Divisions of the High Court. The Court allowed the appeals or declined to make the proposed wasted costs order.