The Wasted Costs Jurisdiction

AuthorHugh Evans
Publication Date01 Jan 2001
DOIhttp://doi.org/10.1111/1468-2230.00308
The Wasted Costs Jurisdiction
Hugh Evans*
The wasted costs jurisdiction is flawed for six reasons, based on an analysis of
all reported cases in the last nine years and five years of statistics provided by
the Bar Mutual Insurance Fund Limited, and despite the guidance laid down by
the Court of Appeal in Ridehalgh v Horsefield [1994] Ch 205. First, it is very
costly proportionate to the amount recovered. Secondly, judges can initiate a
wasted costs enquiry, which is unfair and even more disproportionately costly.
Thirdly, it is procedurally complex. Fourthly, it is unpredictable whether the
client will waive privilege, and what the consequences will be whether or not
privilege is waived. Fifthly, it is not possible for solicitors and barristers to
make contribution claims against each other. Sixthly, it is mostly used against
lawyers representing legally aided litigants from whom costs cannot be
recovered.
The summary jurisdiction to order a solicitor to pay wasted costs is an old one.1
However, the original requirement to show serious misconduct meant that it was
infrequently used.2The courts decided, after some hesitation, that the (then) new
RSC Order 62 rule 11, introduced in 1986, required the applicant to prove only that
the respondent solicitor was negligent.3Since the introduction of sections 4 and 11
of the Courts and Legal Services Act 1990 on 1st October 1991, the jurisdiction
has been expressly based, inter alia,4on a requirement to show only negligence,
and it has been extended to include barristers and other legal representatives as
well as solicitors. As a result of these developments, there have been many
judgments by the courts on applications for wasted costs, both reported and
unreported. Despite the best endeavours of the Court of Appeal, in the leading case
of Ridehalgh vHorsefield,5to place limits and safeguards on such applications, the
jurisdiction is frequently used.
This article will argue that both in practice and in principle, the wasted costs
jurisdiction is seriously flawed. Some of the reasons are theoretical, and the
practical importance of them may be difficult to judge, and some are practical. The
objections are based on an analysis of all the reported cases since the new
jurisdiction came into force nine years ago,6particularly those cases heard after
Ridehalgh. Those decisions suggest, in particular, that the costs of the wasted costs
enquiry very often far outweigh the wasted costs which are either sought or
ßThe Modern Law Review Limited 2001 (MLR 64:1, January). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA. 51
*Barrister, 4 New Square, Lincoln’s Inn.
1 For an analysis of the law, rather than critical comment on some of its aspects, see my summary in
Jackson and Powell Professional Negligence (London: Sweet & Maxwell, 4th ed, 1996) paragraphs
4–102 et seq and 5–20 et seq, and Flenley and Leech Solicitors’ Negligence (London: Butterworths,
2 As far as the inherent jurisdiction is concerned, see Myers vElman [1940] AC 282.
3 See Gupta vComer [1991] 1 All ER 289.
4 There are alternative grounds of improper or unreasonable conduct.
6 Some 68 cases in all. Section 4 of the Courts and Legal Services Act 1990, which substituted the
relevant new provisions relating to costs in s 51 of the Supreme Court Act 1981, came into force on 1
October 1991.

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