Byrne v Sefton Health Authority

A wasted costs order under section 51(6) of the Supreme Court Act 1981 requires the person concerned to be a legal or other representative in relation to the relevant proceedings. A solicitor who ceased acting before proceedings were commenced does not satisfy that definition. The general power to order costs against a non-party under section 51(3) is exceptional and must be exercised cautiously. It is not a substitute for the specific wasted-costs jurisdiction merely because solicitors acted inadequately. There must be a sufficient causal link between the person’s conduct and the costs incurred. Costs caused by the claimant’s later decision to commence and pursue the proceedings cannot ordinarily be attributed to former solicitors whose earlier conduct merely left the limitation defence available.

Mr Byrne brought clinical negligence proceedings against South Sefton Health Authority concerning treatment in 1989. The claim was dismissed on limitation grounds. The county court ordered the claimant’s former solicitors, Dooley & Co, to pay the Health Authority’s costs personally, finding that they had acted unreasonably and negligently by failing to obtain adequate reports or issue protective proceedings within the limitation period.

Dooley & Co had ceased acting for Mr Byrne before the proceedings were commenced. The appeal concerned whether they fell within section 51 of the Supreme Court Act 1981, and whether the general power to order costs against a non-party could support the order.

1. Appeal allowed. The costs order against Dooley & Co was set aside.
2. Section 51(13) of the Supreme Court Act 1981 defines a legal or other representative as a person exercising a right of audience or a right to conduct litigation on behalf of a party. The latter expression takes its meaning from section 119(1) of the Courts and Legal Services Act 1990, including issuing proceedings and performing ancillary functions.
3. Dooley & Co had not issued the proceedings or performed ancillary functions in relation to them. Since they had ceased acting before proceedings began, they were not legal or other representatives in relation to those proceedings. The court therefore had no jurisdiction to make a wasted costs order under section 51(6).
4. Section 51(3) confers a general power to order a non-party to pay costs, but such orders are exceptional and require considerable caution. In practice, the power concerns a person who has maintained, promoted or encouraged litigation as its real protagonist. It should not ordinarily be used against solicitors merely because they performed their client’s instructions inadequately; Parliament provided the specific wasted-costs regime for unreasonable or negligent conduct by legal advisers.
5. An order under section 51(3) also requires an effective causal link between the conduct complained of and the costs incurred. The relevant costs here arose from Mr Byrne’s decision, on the advice of Carter Hodge, to issue proceedings in 1998 despite the expired limitation period. Dooley & Co’s earlier conduct had enabled the claim to be dismissed, but was not the effective cause of the Health Authority’s costs.
6. The decision in Kleinwort Benson v De Montenegro was confined to its special facts. Brown & Another v Bennett & Others (No.2) concerned representatives who had issued or conducted the proceedings and did not assist Dooley & Co.

Lord Justice Longmore and Lord Justice Peter Gibson agreed with Chadwick LJ. Appeal allowed with costs.

• Court of Appeal: allowed the appeal against the costs order made by Mr Recorder Braithwaite QC in the Liverpool County Court.
• Liverpool County Court: dismissed the claimant’s proceedings on limitation grounds and ordered Dooley & Co to pay the Health Authority’s costs personally under section 51 of the Supreme Court Act 1981.