Mengiste & Anor v Endowment Fund for the Rehabilitation of Tigray & Ors

A judge who has made adverse findings in a substantive judgment will ordinarily remain the appropriate judge for consequential costs issues. However, the ordinary position does not displace the Porter v Magill test for apparent bias: [2002] 2 AC 357. Recusal is required where a fair-minded and informed observer would conclude that there is a real possibility of bias. That may occur where criticisms of legal representatives were unnecessary to the decision, expressed in absolute and grave terms without hearing their explanation, repeated, and closely connected with a later wasted costs application. Convenience does not alter the test. A Stage 1 wasted costs order requires a strong prima facie case of improper, unreasonable or negligent conduct and resulting costs, but an appeal against that threshold decision will ordinarily be inappropriate. An exception may arise where it is linked to a successful recusal appeal.

Claimants in proceedings concerning an Ethiopian investment brought a claim in England after Ethiopian proceedings had resulted in execution against their investment. The defendants obtained a stay on forum and fair-trial grounds before Peter Smith J. The judge criticised the claimants’ solicitors for failing properly to prepare their Ethiopian law expert, Mr Jones, and later refused to recuse himself from a wasted costs application brought by the defendants. He also made a Stage 1 wasted costs order.

The solicitors appealed against both decisions. The central issues were whether the judge’s criticisms created apparent bias requiring recusal, and whether the evidence could support the Stage 1 threshold.

1. Recusal appeal allowed. The judge should have recused himself from the wasted costs application. The applicable test remained whether a fair-minded and informed observer, having considered all the circumstances, would conclude that there was a real possibility that the judge was biased: [2002] 2 AC 357.
2. The ordinary rule is that the judge who heard the substantive case should deal with consequential costs issues, even after making adverse findings. It is not, however, a separate or modified recusal test. The judge’s criticisms of the solicitors were not necessary to evaluate Mr Jones’s evidence. They anticipated a possible wasted costs application and were made without evidence or submissions from the solicitors, without leaving open the possibility of another explanation, and in grave and absolute terms. Their repetition and close connection with the proposed application reinforced the appearance of a predisposition.
3. Judicial criticism made in the proper discharge of the judicial function does not ordinarily create apparent bias. But the circumstances requiring recusal cannot be defined merely by calling them exceptional. The [2002] 2 AC 357 test must be applied directly and fearlessly. Convenience, including the difficulty for another judge of hearing the application, cannot alter that test.
4. Stage 1 wasted costs challenge dismissed. The threshold required a strong prima facie case that the solicitors had acted improperly, unreasonably or negligently, that their conduct caused costs, and that an order was just. The admitted breaches of the Civil Procedure Rules 1998, Part 35, concerning expert evidence, together with the centrality and serious defects of Mr Jones’s evidence, were sufficient to meet that threshold. Causation was a question of fact, and it was open to the court to infer that some costs would inevitably have been incurred.
5. The Stage 1 wasted costs order was set aside as the consequence of the successful recusal appeal. The court declined to direct that no further wasted costs application be made. Any Stage 2 application was for another judge, and the Court of Appeal expressed no view on its outcome.

• Court of Appeal (Civil Division) [2013] EWCA Civ 1003 : allowed the appeal on recusal, set aside the Stage 1 wasted costs order as its consequence, and dismissed the separate challenge seeking to prevent any further Stage 1 wasted costs application.
• High Court (Chancery Division): Peter Smith J stayed the underlying proceedings on jurisdictional grounds, refused recusal, and made a Stage 1 wasted costs order. No citation for those decisions was stated in the judgment.