Caroline Robinson v Air Compressors & Tool Limited & Ors

A wasted costs order may be made where a legal representative’s conduct is negligent, improper or unreasonable and causes unnecessary costs. Pursuing a hopeless claim alone is insufficient; the conduct must be unjustifiable and may amount to an abuse of process. The court assesses conduct objectively by asking what a reasonably competent legal representative would have done. Legal professional privilege does not prevent that assessment, although the court must not investigate privileged advice or instructions. Continuing proceedings despite clear evidence that the wrong defendants were sued, without investigation or a proper response, may justify a wasted costs order.

The claimant’s solicitors issued an asbestos-related employer’s liability claim against three companies. The second and third defendants pleaded detailed corporate histories showing that they were not the companies identified in the deceased’s historic employment records.

The claimant’s Replies did not address those challenges. She later made an ambiguous application concerning substitution or addition of a party and ultimately consented to dismissal of the claims against the second and third defendants shortly before the hearing of their applications. Master Eastman directed the solicitors to show cause why a wasted costs order should not be made.

1. A wasted costs order was made against the claimant’s solicitors for the costs incurred by the second and third defendants from the filing of the Replies until and including the hearing before Master Eastman on 22 May 2024.
2. The corporate identity issue was not unduly complex. Basic investigation of Companies House records and HMRC employment material should have shown that the defendants could not have been the historic employers during the pleaded periods. The Defences called for a prompt factual response, but the Replies supplied none.
3. The relevant question was whether no reasonably competent legal representative would have continued the proceedings in the circumstances. A hopeless claim is not automatically an abuse of process. The conduct must be unreasonable or improper in the relevant sense: Ridehalgh v Horsefield & Anor [1994] EWCA Civ 40, [1994] Ch 205; Dempsey v Johnstone [2003] EWCA Civ 1134, [2004] 1 Costs LR 41.
4. The court assesses conduct objectively, allowing for a reasonable explanation and the benefit of the doubt where appropriate. Here, the prolonged continuation of the claims without investigation, response or justification was negligent and unjustifiable, and amounted to an abuse of process. In relation to the third defendant it was also improper. Tolstoy-Miloslavsky v Aldington [1996] 1 WLR 736 illustrated conduct that was glaringly without merit and abusive.
5. The court did not need to determine the content of privileged advice or instructions. If the solicitors acted on abusive instructions, a conflict of interest arose; if they acted in the client’s best interests, they should have corrected the position earlier.