CMCS Common Market Commercial Services AVV v Taylor

A solicitor’s duty in the disclosure process extends to carrying out or personally supervising redactions made before inspection. A solicitor may continue to act where a client restricts that supervision, provided the solicitor makes full disclosure of the position to the opposing party or court and does not knowingly assist an abuse of process. A breach supports a wasted costs order only where it caused the applicant to incur the costs claimed. A loss of an opportunity to save costs is insufficient. The wasted costs jurisdiction is compensatory and exceptional, and remains a remedy of last resort.

The claimant and the defendant were opponents in litigation concerning the beneficial ownership of Wicklands Farm. The defendant also pursued related ancillary relief proceedings. The defendant obtained an unless order requiring the claimant’s solicitors’ client to produce an unredacted bank statement. The client failed to comply and was debarred from defending, after which the substantive proceedings resulted in costs orders against the client.

The defendant applied for a wasted costs order against DWF LLP, which had acted for the claimant’s opponent shortly before the successful disclosure application. She alleged that DWF’s solicitor had breached his duty by failing to supervise the earlier redaction of the bank statement and by failing to cease acting. The issues were whether there had been a breach, whether it caused recoverable wasted costs, and whether an order should be made.

1. Application dismissed. The court found that the solicitor had breached his duty by failing personally to supervise the redaction of a relevant document and by failing fully to disclose that he had neither seen nor retained an unredacted copy.
2. The duty to investigate and supervise disclosure applies equally to the listing of documents and to redaction before inspection. The opposing party is ordinarily entitled to assume that the solicitor has supervised the disclosure process. The principles in Hedrich v Standard Bank London Ltd [2008] EWCA Civ 905 and Myers v Elman [1940] AC 282 applied.
3. There is no inflexible rule that a solicitor must cease acting whenever a client prevents performance of part of the solicitor’s ordinary duty to the court. A solicitor may continue to act if, with the client’s consent, the limitation is fully disclosed. The solicitor must cease acting where the client’s instructions involve knowingly assisting an abuse of process.
4. Redaction may concern irrelevance, privilege, a duty to withhold inspection, or proportionality. The latter grounds engage procedures under the Civil Procedure Rules by which the opposing party may challenge the refusal of inspection. Foreign confidentiality obligations may be relevant, but their effect is for the court to determine.
5. The wasted costs jurisdiction is compensatory. The applicant must prove on the balance of probabilities that the breach caused the costs claimed. A mere lost chance to save costs is insufficient. The defendant’s costs would have been incurred in pursuing the disclosure application even if the solicitor had made fuller disclosure or ceased acting, and the disclosure application itself resulted in a debarring order and payment of its assessed costs.
6. The issue of discretion therefore did not arise. The court nevertheless observed that wasted costs are a last resort, particularly where a remedy against the abusing party was available.