Unparticularised Pleadings and Privilege, Protects Perfidious Plaintiff from Penalisation

Williams-Henry v Associated British Ports Holdings Ltd [2024] EWHC 2415 (KB)

In a wasted costs application against the claimant’s solicitors, unspecified allegations were made which failed to particularise how, why and when the wasted costs arose. Moreover, the claimant refused to waive privilege, leaving some allegations that may have had credence to be decided in favour of the claimant’s solicitors as respondent wasted costs application. As a result, the application was dismissed

The claimant in this case was legally represented by way of a CFA. It involved a high value brain injury, for which liability was partially admitted. The defendant put the claimant to proof on causation, and advanced that the claimant had been fundamentally dishonest. The claimant was found fundamentally dishonest at trial, partially on the basis of video evidence served by the defendant, which was served in July 2023 (with the trial being in March 2024). At least 6 offers to settle were made by the defendant in the months after this surveillance evidence was disclosed, including after the first day of the trial.

Thereafter, the defendant applied for a wasted costs order against the claimant’s legal representatives. The thrust of this application was that they had advanced a ‘hopeless case’ and should have terminated their retainer, although several different allegations were made.

Pursuant to the Senior Courts Act 1981, section 51(6), in order to obtain wasted costs it is necessary for the applicant to show the legal representatives had acted in a manner which was inappropriate, unreasonable or negligent.

In the context of wasted costs applications, this case is particularly noteworthy to remind practitioners that legal privilege can only be waived by the client. Even as respondent to a wasted costs application, it is not for the legal representative to waive privilege. This may be frustrating when you are the respondent if there is a simple explanation such as the client failed to follow your advice, you were just following instructions, etc but at the same time the court cannot make an adverse inference from your refusal to waive privilege. Accordingly, as long as it is possible that there is an innocent explanation for the solicitor’s conduct it is difficult to obtain wasted costs in practice.

The application was dismissed, with Ritchie J observing the following key points.

It was alleged that the respondent had negligently collected and considered information, such as social media posts that would have shown dishonesty on behalf of the claimant. Ritchie J highlighted that it would be unreasonable to expect a solicitor to search and analyse hundreds of potential posts from multiple sources in respect of their client, especially considering dishonesty was not initially in issue.

Faced with the allegations of fundamental dishonesty and the video surveillance, the respondent was able to terminate the CFA it had with the claimant. That being said, it was not a necessity, and this was a choice for the respondent, as Ritchie J points out at paragraph 45, in that the decision not to terminate “was a human and commercial one for the firm, not a matter of professional regulation or a matter for the Court or the Application to comment upon or criticise”. He also commented on the potential implications that dropping a claimant accused of being fundamentally dishonest could have on access to justice on the basis of being at risk of a wasted costs order.

As the claimant declined to waive privilege, any uncertainty as to whether the fault laid with the claimant or the respondent was determined in favour of the respondent. This led to difficulties in surpassing the burden required by the applicant on many of the allegation made. One such allegation trumped by this approach was the alleged failure to advise the claimant in respect of settlement offers made. As the respondent had the shield of privilege in place, it was decided that the respondent had acted on instructions in respect of this, with Ritchie J stating “A lawyer is not liable for a wasted costs order for running a hopeless case on instruction”.

This was also the case when inconsistencies regarding the impact the accident had on the claimant socially came to fruition. A statement made by the claimant stated she had “no nights out, no holidays and no social life”. This was contrary to information that the respondent held at the time that the claimant had been to Benidorm after the accident. There was no evidence that the individual that drafted the statement was aware of the contradiction, and it was impossible to ascertain otherwise due to the veil of privilege. That being said, Ritchie J deemed it was “primae facie unreasonable or negligent”. In the absence of any further information, it was not possible to consider this any more, and even being as it is, it was not deemed possible for this inconsistency to have resulted in wasted costs. This inconsistency instead offered a “large stick with which to beat the claimant” in cross examination.

The allegations made in the application were insufficiently pleaded. At paragraph 41, Ritchie J noted “the Applicant in this case has made the allegations wide ranging and has completely failed to be specific about which costs are claimed as wasted (until the hearing itself) and how much they are. That is an unsatisfactory way of making the application and I take it into account”.  The application had failed to particularise what they alleged as the main reason for the application, and took different stances throughout the hearing as to when the wasted costs started to accrue.

Discussion

When applying for a wasted costs order, it is incumbent on the applicant to properly particularise the allegations made and precisely identify causation of the wasted costs that followed. Failing to do so significantly reduces the prospects of success. The court may look dimly on generic widespread allegations as mere ‘belly-aching’.

A legal representative ought not to be criticised, or penalised by way of a wasted costs order, in their representation of a client, even one whose case has obvious challenges.

A claimant who does not waive privilege provides a significant shield to their solicitors and an obstacle for applicants in wasted costs applications. Before making an application, therefore, the consequence of legal privilege must be considered. It is advisable to only make wasted costs applications against solicitors based on known information; do not make a wasted costs application based on speculation or assumptions about legally privileged material. In short, solicitors should always be given the benefit of the doubt.