Razaq v Iqbal & Ors

On an appeal from a wasted costs decision, the applicant bears the burden of establishing that the impugned conduct caused costs that would otherwise have been avoided. An appellate court should not interfere with a first-instance finding of fact where it has an evidential basis and is not one which no reasonable judge could have reached. Relief from sanctions under Civil Procedure Rules 1998, rule 3.9, involves the structured approach in Denton v TH White [2014] 1 WLR 795, applied in the context of all the circumstances of the case.

The claimant brought a personal injury claim arising from an alleged road traffic accident. The claim was dismissed at trial as fundamentally dishonest, with indemnity costs ordered against him. During the costs proceedings it emerged that his former solicitors had failed to communicate a drop-hands offer made by the second defendant.

HHJ Hellman granted the solicitors relief from sanctions and permitted late evidence, but dismissed the wasted costs application. He found negligence and breach of the solicitors’ duty to the client, but was not satisfied that there had been a breach of duty to the court or that the failure caused avoidable costs. The second defendant appealed, and renewed permission to appeal the relief-from-sanctions decision.

1. Permission to appeal the relief-from-sanctions decision was refused. HHJ Hellman had applied the approach required by rule 3.9 of the Civil Procedure Rules 1998 and Denton v TH White [2014] 1 WLR 795. His assessment of the competing prejudice and the need to consider evidence from a party potentially liable for wasted costs disclosed no arguable error of law or procedural irregularity.

2. The challenge to the finding on causation failed. The burden was on the applicant to establish that, but for the solicitors’ conduct, the relevant costs would have been avoided. The judge was entitled to treat the competing accounts of what advice would have been given and what the claimant would have done as matters requiring caution. He was also entitled to consider that the claimant had pursued the claim to trial despite advice that it was weak.

3. The appellate court applied the approach reflected in The Mayor and Burgesses of the London Borough of Haringey v Ahmed & Ahmed [2017] EWCA Civ 1861: a first-instance factual finding should not be disturbed where there is an evidential basis for it and it is not a finding which no reasonable judge could have made.

4. The ground concerning the first stage of the wasted costs test in Ridehalgh v Horsefield [1994] Ch 205 was adjourned for case-management purposes and became academic once the causation challenge failed. The appeal was dismissed.

• High Court (Queen's Bench Division): the appeal from HHJ Hellman’s order of 15 February 2019 was dismissed. Permission to appeal the grant of relief from sanctions was refused.
• County Court: HHJ Hellman granted relief from sanctions and permission to rely on late evidence, but dismissed the wasted costs application.