British Transport Police v Soods Solicitors

A wasted costs order under Magistrates' Courts Act 1980 requires a finding that the legal representative acted improperly, unreasonably or negligently before causation and the interests of justice arise. A case stated which raises only causation cannot properly invite the appellate court to assume fault. Any challenge to the absence of a fault finding must be framed through appropriate findings of fact and, where necessary, an application to amend the case stated. The court also noted, without deciding the point, that the High Court possesses an inherent jurisdiction to order costs against a solicitor who acts without authority.

The Chief Constable appealed by way of case stated from the refusal of District Judge Purdy at Westminster Magistrates' Court to make a wasted costs order against Soods Solicitors. The order was sought after solicitors purported to act for a Ugandan company in proceedings concerning the forfeiture of approximately £100,000 under sections 298 and 301 of the Proceeds of Crime Act 2002. The company was subsequently found not to exist and documents produced on its behalf were forged.

The District Judge made no finding of fault and stated questions concerning the proper test of causation and its effect on the interests of justice. The central issue was whether the High Court could determine causation without a finding of fault.

1. Appeal dismissed. The District Judge had expressly made no finding that Soods Solicitors acted improperly, unreasonably or negligently. The appeal therefore proceeded on a case stated which raised causation questions that did not arise.
2. The governing approach to wasted costs is the three-stage test in Ridehalgh v Horsefield & Anor [1994] Ch 205: whether the legal representative acted improperly, unreasonably or negligently; whether that conduct caused unnecessary costs; and whether it is just to order compensation for all or part of those costs.
3. A wasted costs order under section 145A(1) of the Magistrates' Courts Act 1980 cannot stand unless and until fault has been found. The appellate court could not assume fault merely because causation would otherwise be relevant. It had not seen the evidence and could not properly determine whether the solicitors fell below the standard reasonably expected of a competent solicitor or breached the Money Laundering Regulations 2007.
4. If the Chief Constable wished to challenge the absence of findings on fault, the appropriate course was to seek a case stated containing findings of fact and findings on the alleged breach, or to apply to amend the case stated under section 28A of the Senior Courts Act 1981. No such application had been made.
5. The court observed that a different possible basis might have been an inherent jurisdiction to order costs against a solicitor who acted without authority. The existence of such jurisdiction in a magistrates' court was expressly left undecided. The High Court jurisdiction was supported by Geilinger v Gibb [1897] 1 Ch 479 and Yonge v Toynbee [1909] 1 KB 215.
6. Soods Solicitors were awarded the costs of the appeal, to be assessed if not agreed.

• High Court (Administrative Court) — The appeal by way of case stated from the District Judge's refusal of a wasted costs order was dismissed.
• Westminster Magistrates' Court — District Judge Purdy refused the application for wasted costs on 3 May 2011.