Patel v Air India Ltd & Anor

For a wasted costs order under the Senior Courts Act 1981, a weak claim, a less-than-even prospect of success, or ultimate failure is insufficient. The applicant must establish qualifying improper, unreasonable or negligent conduct, a breach of the legal representative’s duty to the court or conduct akin to abuse of process, and causation of the costs claimed. Public funding does not alter those principles and cannot be used as a basis for circumventing the ordinary costs position. A solicitor is not negligent merely for following counsel’s advice unless the advice is shown to have been so bad that reliance on it was negligent. Wasted costs orders remain exceptional and are appropriate only in the clearest cases.

Mrs Patel brought a disability discrimination claim against Air India after arriving at Heathrow without the agreed wheelchair assistance. Following her death, her daughter continued the proceedings and Howells became her solicitors. After trial, the Leicester County Court judge criticised the evidence and ordered Howells personally to pay Air India’s costs from 1 August 2008, including the trial costs, under section 51 of the Senior Courts Act 1981. The central issue on appeal was whether the solicitors’ conduct was improper, unreasonable or negligent, whether it involved a breach of duty to the court or conduct akin to abuse of process, and whether it caused the costs claimed to be wasted.

Lord Justice Longmore gave the leading judgment, with which Lord Justices Rix and Jacob agreed. The appeal was allowed.

1. The lower court had not found that the claim was hopeless. A conclusion that it had less than a 50 per cent chance of success, was likely to fail, or failed at trial to meet the balance of probabilities did not establish hopelessness. The evidence was difficult and largely hearsay, but the claim was not devoid of a proper evidential basis.
2. Under section 51(7) of the Senior Courts Act 1981, costs must have been incurred as a result of improper, unreasonable or negligent conduct. The principles in Ridehalgh v Horsefield [1994] Ch 205 and Persaud v Persaud [2003] EWCA Civ 394 required more than a hopeless claim: there also had to be a breach of the solicitor’s duty to the court or conduct akin to an abuse of process. The judge made no finding satisfying that requirement.
3. The legal-aid position was irrelevant to the wasted-costs discretion. Section 22(4) of the Access to Justice Act 1999 provides that publicly funded parties’ rights do not affect other parties’ rights or liabilities or the ordinary principles governing the court’s discretion. The materially similar former provision in the Legal Aid Act 1988 was noted for the same reason.
4. There was no breach of duty merely because a solicitor signed the re-amended Particulars of Claim on the information available. Privilege had not been waived, and the evidence did not establish that counsel’s advice was so bad that it was negligent for the solicitors to follow it.
5. Causation was also unproved. It was speculative to assume that the Legal Services Commission would have withdrawn funding or that the proceedings would consequently not have occurred. Defendants had other possible remedies, including strike-out applications and correspondence with the Commission. The inability to recover costs from a legally aided claimant could not be circumvented by a wasted costs order except in the clearest cases. This was not such a case.

1. Court of Appeal (Civil Division): Appeal allowed.
2. Leicester County Court: Following the trial and judgment on the disability discrimination claim, HHJ Hampton ordered Howells personally to pay Air India’s costs from 1 August 2008, including the costs of the trial.