Equity Solicitors v Javid

A wasted costs order requires conduct that is improper, unreasonable or negligent. Wasted costs alone are insufficient. A solicitor who has filed a notice of acting may arrange for another firm to take over and, after receiving a clear assurance from that firm’s senior partner that it will represent the client at an imminent hearing, may rely on that assurance. The solicitor may assume that the new firm will attend and file a notice of change. On the evidence, the solicitor’s conduct was competent and public-spirited rather than negligent, so the wasted costs order was unjustified.

The appeal arose from divorce proceedings in the Birmingham County Court. The appellant solicitors had assisted a vulnerable woman who wished to defend the divorce but could not afford private representation. They filed a notice of acting, prepared her affidavit and draft answer, and arranged for another firm with legal aid facilities and a Sylheti-speaking representative to take over and attend the next hearing.

The appellant firm notified the court that it would not attend. The replacement firm did not attend, although the woman appeared in person. HHJ Cardinal dismissed her application and ordered the appellant solicitors to pay £981.13 in wasted costs, holding that they remained obliged to attend because no notice of change had been filed. The central issue was whether the appellant firm had acted negligently by relying on the replacement firm’s assurance without checking that a notice of change had been filed.

The Court of Appeal unanimously allowed the appeal and set aside the wasted costs order.

1. Material error in the lower court’s reasoning. HHJ Cardinal treated the appellant solicitors’ letter as an attempted but impermissible removal from the court record. The letter did not say that. The judge’s criticism was therefore based on an inaccurate quotation and an unfair characterisation of the solicitor’s conduct.
2. Reliance on the replacement firm. The uncontroverted evidence showed that the appellant solicitor had spoken to the senior partner of the replacement firm, obtained an assurance that it would attend, transferred the file, prepared the necessary documents and notified the client, the other solicitors and the court. There was no particular necessity for a notice of change to be filed before the hearing. If the replacement firm attended, it would file the notice and thereby remove the appellant firm from the record.
3. Professional standard. In those circumstances, the appellant solicitor was entitled to rely on the assurance given by the senior partner. He was entitled to assume that the replacement firm would attend and file a notice of change. His failure to make a further check did not fall below the standard of a competent solicitor. He had not acted negligently.
4. Wasted costs. Since the conduct relied upon was neither improper, unreasonable nor negligent, there was no justification for a wasted costs order, notwithstanding that costs had been incurred when the hearing could not proceed.

Lord Justice Wilson agreed with the judgment in full. He added that judges placing decisive reliance on a letter should quote it accurately or summarise it with exceptional care. He also regarded the application as cautionary evidence of the danger of pursuing wasted costs proceedings without reconsidering the position after receiving the relevant evidence.

1. Court of Appeal (Civil Division): On 20 March 2009, the appeal was allowed and the order requiring the appellant solicitors to pay £981.13 in wasted costs was set aside: [2009] EWCA Civ 535.
2. Birmingham County Court: On 16 September 2008, HHJ Cardinal dismissed the application for leave to file an answer out of time and ordered the appellant solicitors to pay wasted costs of £981.13.