White v White

At the first stage of an application for wasted costs, the court must be satisfied both that the available material would, if unanswered, be likely to justify an order and that the proceedings are proportionate to the likely costs involved.

A failure to warn a legal representative that an application may later be made will rarely justify refusal by itself. Existing orders governing costs between the parties remain highly material. Even where delay or default appears plausible, wasted costs proceedings should be refused if their expense would be disproportionate to the sum recoverable and would create undesirable satellite litigation.

The successful parties in a bitter family dispute sought wasted costs against the opposing solicitors. Their original application identified 20 matters, but the Deputy High Court Judge refused relief on every matter. Permission to appeal was confined to three interlocutory applications involving alleged delay in serving documents and witness statements.

No wasted costs application or warning had been given when those applications were determined. The costs incurred in connection with them totalled about £1,200. The central issue was whether the judge had properly exercised his discretion in refusing wasted costs proceedings, particularly in light of the absence of an earlier warning and the likely expense of pursuing the application.

1. The appeal was dismissed unanimously. Schiemann LJ delivered the leading judgment. Mummery LJ agreed, and Dyson LJ agreed while adding reasons of his own. The disproportionate cost of pursuing wasted costs proceedings over approximately £1,200 decisively justified refusal of the application. Further investigation was likely to cost substantially more than the amount at stake and would constitute undesirable satellite litigation.

2. The application remained at the first stage of the procedure in paragraph 53.6 of the Practice Direction to Part 48 of the Civil Procedure Rules 1998. At that stage, the court must have material which, if unanswered, would probably lead to a wasted costs order. It must also be satisfied that the proceedings are justified despite their likely cost. The proportionality requirement was an overwhelming reason for refusing to proceed.

3. Dyson LJ held that an earlier failure to notify the legal representative of a possible wasted costs application will rarely be sufficient by itself to justify refusal. That conclusion was consistent with Ridehalgh v Horsefield [1994] Ch 205, which recognised that reasonable notice may allow the other side to reconsider its conduct, while prohibiting intimidation.

4. The costs orders already made between the parties were nevertheless highly material. The judge could take account of the fact that one summons resulted in no order as to costs and another was withdrawn by consent with costs in the cause. A third order required the defendants to bear the costs in any event, but this did not overcome the decisive objection of disproportionality.

5. Wasted costs applications are generally best determined after trial, although no universal rule applies. At the second stage, if reached, an order is appropriate only where the representative acted improperly, unreasonably or negligently, caused considerably unnecessary costs, and it is just to require compensation. That stage was not reached here.

The appellant was ordered to pay the respondents’ costs of the appeal, subject to detailed assessment.

1. Court of Appeal (Civil Division): The court dismissed the permitted appeal unanimously and upheld the refusal to commence wasted costs proceedings concerning the three interlocutory applications.
2. High Court, Chancery Division: Mr David Oliver QC, sitting as a Deputy High Court Judge, refused the successful parties’ application for wasted costs in respect of all 20 matters advanced. Arden LJ subsequently granted permission to appeal in relation to one head concerning three interlocutory applications.