Bennett v The Chief Constable of Merseyside Police

For a wasted costs order, the court must establish that costs were improperly, unreasonably or negligently incurred. Costs are not wasted merely because the litigation had little prospect of success or recovery, if the client made an informed choice to incur them after appropriate advice. The court may require disclosure of privileged advice only if the client voluntarily waives legal professional privilege. Where the client, after independent advice, makes an informed decision not to waive privilege and confirms satisfaction with the work and costs, the court should not pursue the wasted-costs inquiry further.

The appellant appealed by case stated from a Liverpool magistrates’ court decision to make no order for costs after the Chief Constable withdrew an application under Proceeds of Crime Act 2002, section 298, concerning cash seized from the appellant.

The Administrative Court had dismissed the appeal as totally without merit and awarded the Chief Constable £15,000 costs. It then considered whether the appellant’s legal representatives should personally pay some or all of the costs under section 51(6) of the Senior Courts Act 1981. The central issue was whether the court could determine that the costs were improperly, unreasonably or negligently incurred without knowing the legal advice given to the appellant.

1. The appeal had already been dismissed as totally without merit. The Chief Constable’s costs of the appeal were summarily assessed at £15,000 and were ultimately made enforceable.

2. In considering a possible wasted costs order under section 51(6) of the Senior Courts Act 1981, the court needed to know what advice the appellant had received. Although the costs appeared disproportionate and the appeal had no prospect of success, those matters alone did not establish that the costs had been improperly, unreasonably or negligently incurred.

3. A litigant may choose to spend money on proceedings with little prospect of recovering it. If that choice is informed, legal representatives do not act improperly, unreasonably or negligently merely by carrying out the client’s instructions.

4. The appellant’s legal advice and related communications were protected by legal professional privilege. The privilege belonged to him, and disclosure could occur only if he waived it.

5. After hearing the court’s concerns, the appellant obtained independent advice and decided not to waive privilege. He confirmed that he was satisfied with the work and considered the costs reasonable. The court was satisfied that this was an informed decision and concluded that there was no reason to pursue the wasted-costs issue further.

6. The direction requiring the legal representatives to attend and show cause was set aside. No further hearing was listed. The Chief Constable’s costs were ordered to be paid within 28 days.

• High Court (Administrative Court): [2018] EWHC 3611 (Admin) dismissed the appeal by case stated from the Liverpool magistrates’ court and subsequently set aside the direction for the appellant’s legal representatives to show cause in relation to a possible wasted costs order.
• Liverpool magistrates’ court: made no order for costs after the withdrawal of the forfeiture application.