Wilsons Solicitors v Johnson

A wasted costs order may be made against a representative where negligent preparation or presentation causes costs to be incurred unnecessarily. Inadequate pleadings and an inability to clarify the issues at a case management discussion may justify an inference of negligence, particularly where the defects concern analysis and formulation rather than matters typically attributable to the client.

Rule 48 requires a reasonable opportunity to make representations. It does not impose a mandatory two-stage procedure or require a separate hearing. Tribunals should apply the principles governing the equivalent High Court jurisdiction and should state those principles, and their application, expressly in their reasons.

The Employment Tribunal ordered Wilsons Solicitors to pay wasted costs incurred by the respondent companies in connection with an abortive telephone case management discussion, and to repay costs already paid by the claimants. The discussion had been unable to define the claims because the pleadings remained substantially incomplete and unclear.

Wilsons appealed, arguing principally that the defects might have resulted from the clients’ instructions, that a further show-cause stage was required, that no costs had been wasted, and that the procedure and timing of the order were defective.

1. Appeal dismissed. The Employment Tribunal had found, without challenge, that the amended particulars were inadequate and that the claims were not clarified at the case management discussion.
2. Rule 48 of the Employment Tribunal Rules requires the principles applicable to the equivalent High Court jurisdiction to be applied. The relevant principles derive principally from Ridehalgh v Horsefield, Medcalf v Mardell, and their summary in Mitchells v Funkwork Information Technologies York Ltd, as explained in Ratcliffe Duce and Gammer v Binns.
3. The requirement in rule 48(6) to give the representative a reasonable opportunity to make oral or written representations was satisfied. Rule 48 does not require a separate second hearing or a mandatory two-stage procedure. The two stages described in Ridehalgh concern the reasoning process, not procedural stages.
4. Where the criticism concerns defective preparation and presentation, the issue is whether the representative acted negligently by ordinary professional standards. The distinction between pursuing a hopeless case and abusing process did not apply.
5. A tribunal may infer that defects in pleadings and failure to clarify the case resulted from the representative’s negligence where they concern failures of analysis and formulation, especially when the representative does not raise client responsibility or privilege and instead maintains that the work was adequate.
6. The attendance costs of the respondents, and the claimants’ costs of instructing Wilsons for the abortive discussion, were wasted because the intended definition of the issues was not achieved. The timing of the order was a matter of case management and disclosed no error of law.
7. It would have been preferable for the Employment Judge to refer expressly to rule 48 and the governing authorities in her reasons, since wasted costs orders are serious and involve at least a finding of negligence. That omission did not invalidate the order in the circumstances.

• Employment Appeal Tribunal: dismissed the appeal against the wasted costs order made by Employment Judge Cox in the Leeds Employment Tribunal.
• Leeds Employment Tribunal: ordered Wilsons Solicitors to pay £403 to the First Respondent and £660 to the Second and Third Respondents, and to repay the claimants’ costs paid in relation to the abortive case management discussion.