Harrison v Harrison

A wasted costs order is compensatory, not punitive or regulatory. The applicant must prove that improper, unreasonable or negligent conduct caused recoverable loss. The jurisdiction is a remedy of last resort and should remain a fair, simple and proportionate summary procedure. Even where misconduct and loss are established, the court retains a discretion to refuse relief, including where the likely recovery is already secured or the application has become disproportionate. These considerations may apply at the preliminary stage, before the legal representative is required to show cause.

The applicant sought a wasted costs order against counsel who had acted for the respondent on a without-notice application for a freezing order. The underlying claim had been struck out and the costs payable by the respondent had subsequently been agreed and substantially paid. The applicant claimed that counsel’s conduct had caused approximately £59,000 of costs in setting aside the freezing order.

The application was heard as a possible preliminary or substantive stage of the wasted costs jurisdiction. The central issues were whether the applicant had proved recoverable loss and whether, in the circumstances, it was proportionate and appropriate to exercise the discretion to make an order.

1. Application dismissed. The jurisdiction under section 51(6) of the Supreme Court Act 1981 concerns costs incurred as a result of an improper, unreasonable or negligent act or omission by a legal representative.
2. Following Ridehalgh v Horsefield [1994] Ch 205, the jurisdiction must not be used as a means of recovering costs otherwise irrecoverable or allowed to become disproportionate satellite litigation. The applicant must establish a causal link between the conduct and the costs, and bears the burden of proving that an order should be made. The procedure should be fair, simple and summary so far as fairness permits, and the court retains a discretion to refuse relief.
3. The remedy is one of last resort. It is appropriate only in a plain and obvious case or where the applicant makes out a strong prima facie case, and it should ordinarily be capable of determination in hours rather than days. Those principles were supported by Medcalf v Mardell [2003] 1 AC 120, D v H [2008] EWHC Fam 559, Koo Golden v Bank of Nova Scotia [2008] PNLR 32, Re Freudiana Holdings and Hedrick v Standard Bank London [2008] EWCA Civ 905.
4. Even at the first stage, lack of proportionality may justify refusing to require the respondent to show cause. The principle in Chief Constable of North Yorkshire v Boardsley [2000] Lloyd’s Rep PN 675 applied.
5. The applicant failed to prove on the balance of probabilities that he would suffer loss. The claimed costs formed part of the overall costs figure agreed between the parties, and there was no evidential basis for treating them as separately preserved. In any event, the resources devoted to the application were wholly disproportionate to any possible benefit. The court therefore declined to examine the merits of the individual allegations and dismissed the application as without merit.

• High Court: A deputy High Court judge struck out the respondent’s underlying claim and ordered her to pay indemnity costs. The Court of Appeal later refused permission to appeal on 30 October 2008. The present court dismissed the subsequent wasted costs application.