In the recent High Court case of Williams-Henry v Associated British Ports & Anor (Re Wasted Costs Order) [2024] EWHC 2415 (KB) (24 September 2024), Mr Justice Ritchie set out his 10 factors for considering whether a wasted costs order is appropriate.

BACKGROUND
Williams-Henry (“the Claimant”) sustained a brain injury having fallen from a pier and brought a personal injury claim against the owner of the pier, Associated British Ports (“the Defendant”). At trial, Ritchie J found the Claimant had lied throughout conversations with medical experts and witness statement. A finding of fundamental dishonesty against the Claimant followed and the Defendant unsuccessfully applied for a £300,000 wasted costs order against the Claimant’s Solicitors (the Respondent). 

PARTIES POSITIONS
The Defendant asserted that the Claimant’s solicitors were negligent and acted unreasonably in their: failure to produce proper standard disclosure; failure to read documents; failure to draft proper witness statements; failure to cross check what the Claimant told them against source documents; failure properly to advise the Claimant on the risk that she would be found fundamentally dishonest; failure to engage in ADR properly; failure to terminate their own retainer and failure to act on instructions.

The Respondent’s disputed each allegation. Many of the points raised could not be fully responded to as the Claimant did not waive privilege.  They denied continuing the claim just for their own profit and raised the fact that the Claimant disputed the fundamental dishonesty allegation and sought to prove quantum; the multidisciplinary team considered the Claimant was genuine, the Claimant was supported by her medico-legal experts and the case was far from hopeless; there was no evidence of impropriety or negligence.

THE LAW
The definition of wasted costs is found in Sections 51(7) Senior Courts Act 1981 as:

 ‘wasted costs’ means any costs incurred by a party—

(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or

(b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.

Ritchie J applied 10 factors in assessing whether a wasted costs order was appropriate.

1. Summary Process – wasted cost are generally dealt with at the end of a case and are not intended to become satellite litigation and must be managed in a proportionate manner.
2. Two stages – accusation then defence – at both stages, if the procedural threshold [of raising a prima facie and a defence] is not met, a wasted costs order can be considered
3. Sufficient particularity – accusations of acting improperly, unreasonably or negligently must be set out with sufficient particularity
4. Improper conduct – includes conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice for the Respondent or other serious professional penalty; significant breach of a substantial duty imposed by a relevant code of professional conduct and conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion
5. Unreasonable conduct - the acid test is whether the conduct permits of a reasonable explanation.
6. Negligent conduct - may involve duty, breach, causation and damage, so an actionable breach of the legal representative's duty to his own client but is not limited to professional negligence in relation to the lawyer's client.
7. Proof and Privilege - the Court will take into account that fact that lawyers will have their hands tied behind their backs when defending themselves against accusations if their clients do not waive privilege in the response to the Applicant's allegation of acting improperly, unreasonably or negligently.
8. The hopeless case principle – A lawyer is not acting improperly, unreasonably or negligently simply because he acts for a party who pursues a claim or a defence which is plainly doomed to fail.
9. Causation of wasted costs – must be shown on the balance of probabilities to be "wasted" and so should never have been incurred.
10. Is it just? -  in all the circumstances whether it is just to make a wasted costs order?

RULING
Apply the above factors, Ritchie J found that only the failure to draft a proper witness statement was proven on a prima facie basis. However, the Defendant failed to satisfy the requirement for clear identification of the allegedly wasted costs, failed to identify the sums claimed and has not established the necessary causal link between the improperly, unreasonably or negligently accusations and any wasted costs.