Haigh, R (on the application of) v Westminster Magistrates' Court & Ors

At a stage-one hearing concerning a possible wasted costs order, the court may confine the inquiry to allegations that are sufficiently supported to justify further investigation. A relatively informal threshold is satisfied where the available material indicates that the application is likely to succeed if the material remains untested or unchallenged. The court may reject broad or generalised allegations that do not demonstrate a sufficient prospect of recoverable costs, particularly where further investigation would be disproportionate. The stage-two inquiry should remain confined to the allegations and costs that pass that threshold.

The claimant’s application concerned alleged improper or unreasonable conduct and associated wasted costs arising from the introduction of unfounded fraud allegations, including reference to without-prejudice material, and the instruction of Mr Fenwick QC. At the hearing, the court also determined an application for recusal and whether the earlier judgment could be reopened on a wider basis.

The court declined recusal and ruled that the stage-two hearing should proceed narrowly, focusing on paragraphs 50 to 59 of the earlier judgment and the allegations connected with the Fenwick costs. The central issue was which allegations satisfied the stage-one threshold for further investigation.

1. The court declined to recuse itself. It held that the stage-two hearing should proceed on a narrow basis and that the wider criticisms of the earlier judgment were irrelevant to the allegation of wasted costs under consideration.

2. The stage-one test was satisfied in relation to the allegation of improper or unreasonable conduct, the costs flowing from the instruction of Mr Fenwick QC, and the introduction of allegations of fraud. The reference to without-prejudice material formed part of the fraud allegation and had no separate independent future.

3. The stage-one test was not satisfied in relation to more general assertions that costs had been increased. Those assertions were either too general to justify further investigation or concerned matters unlikely to carry significant financial weight, making further inquiry disproportionate.

4. The stage-two hearing was therefore confined to the Fenwick costs and the connected fraud allegations. The parties were directed to amend the application, provide evidence and skeleton arguments within the specified timetable, agree a hearing bundle, and prepare for a half-day hearing. Costs of the hearing were reserved.