CJR Final Report, Section 18: Wasted costs

In the light of the responses received and for the reasons set out below, the Working

Party's view is that the threshold for making wasted costs orders should not be

lowered to include negligence not amounting to misconduct, but that the jurisdiction

should be extended to cover barristers. It recommends rejection of Proposal 33 but

adoption of Proposal 34.

It is necessary for the court to have power to make wasted costs orders against legal

representatives who, due to their misconduct in the course of proceedings, cause

unnecessary costs to be incurred. Where this happens, it would be unfair to have the

blameless client foot the bill for the costs awarded to the other party or, indeed, to

require him to pay his own lawyers for such unwanted "services". The Working Party

is therefore entirely in favour of retaining the power presently found in O 62 r 8.

However, it must be recognized that potential dangers may attend the invocation and

exercise of this power, particularly in relation to wasted costs orders sought by a party

against the lawyers acting for an opposing party in the litigation. First, as the English

courts have noted, litigation over such wasted costs has threatened in recent years to

become "a new and costly form of satellite litigation."

Secondly, there is a risk of

the wasted costs jurisdiction being misused for the purpose of putting pressure on the

other sides' legal representatives, a situation which is made more complicated where

privilege is not waived by their client. An important reason for not lowering the

threshold to embrace negligence simpliciter is that such extension of liability would be

likely to exacerbate the dangers mentioned above. It is in any event desirable, while

maintaining the O 62 r 8 regime, to consider steps which may be taken with a view to

protecting against such threats.

Recommendation 93: Proposal 33 (for including negligence not amounting to

misconduct as a ground for making a wasted costs order) should not be adopted.

Notes

Ridehalgh v Horsefield [1994] Ch 205 at 239.