RUTA KERSEVICIENE v MIDE QUADRI & Anor

A wasted costs application should not be used to circumvent the general rule that respondents will ordinarily recover no costs for attending an oral permission hearing. The court must first consider whether the material, if unanswered, would probably justify a wasted costs order and whether the proceedings are justified by their likely costs. Alleged failures of exposition or mistaken reliance on earlier advocacy do not amount to improper or unreasonable conduct without more. Applications for wasted costs should generally be made after trial, because an early application may distract legal representatives from pursuing their clients’ interests. Attendance is unnecessary where the respondents’ concerns could adequately be corrected by a short letter or written submission.

The judgment concerned the renewal of an application for permission to appeal in five related County Court cases. Permission had already been granted on two grounds concerning the exclusion and reliability of evidence from a solicitor. The appellants sought permission to add a data-protection ground which had not been advanced before the trial judge. That application was refused.

The respondents then sought an order that the appellants’ solicitors, Ersan & Co, show cause why they should not pay the respondents’ costs of attending the renewal hearing. The alleged misconduct concerned the reframing of the data-protection argument, reliance on an earlier advocate’s skeleton argument, and failure to identify clearly the change in approach.

1. Application dismissed. The respondents’ application for an order requiring Ersan & Co to show cause why they should pay the respondents’ costs was dismissed.
2. The respondents did not need to attend the permission hearing to correct the position which they said had been created by the appellants. A short letter from the respondents’ solicitors could have identified the relevant matters and would have avoided costs of £67,095.78. The court was able to determine the permission application without the respondents’ assistance.
3. The alleged shortcomings in the renewal application did not, without more, amount to improper or unreasonable conduct. They could be understood as a failure of exposition or a mistaken attempt to rely on the earlier skeleton argument. The presentation of the revised argument at the hearing did not establish misconduct.
4. Nor was it likely, if unanswered, that the evidence and materials would lead to a wasted costs order against the solicitors. Following advice from properly instructed specialist counsel will ordinarily not make a solicitor liable, although exceptions may exist.
5. Under CPR PD 46, the court must consider at the first stage whether wasted costs proceedings are justified notwithstanding the likely costs. The size of the costs incurred by the respondents did not justify the application, because those costs could have been avoided or substantially reduced by written communications.
6. Wasted costs applications should generally be made after trial. An early application may divert legal representatives from advancing their clients’ interests to defending themselves. The present case did not fall within an exception requiring the application to be determined immediately.

• High Court (Queen’s Bench Division): HHJ Backhouse dismissed the underlying application to debar reliance on the solicitor’s evidence on 5 October 2021.
• High Court, permission stage: Sir Stephen Stewart granted permission on two grounds concerning expert evidence and statistical reliability, but refused permission on the additional data-protection ground.
• High Court (Queen’s Bench Division): The renewal application for the additional ground was refused, and the respondents’ application for a wasted costs order against Ersan & Co was dismissed.