Practice and Procedure


PUBLISHED November 5, 2003

Where a solicitors' firm missed a time limit relating to the bringing of proceedings then absent special circumstances it could not be said that by the "negligent" act the firm was in breach of any duty to the court. Therefore the court did not have the jurisdiction to make a wasted costs order against the firm under s.51(7) Supreme court Act 1981.Appeal by the defendant solicitors ('R') from an order of 3 March 2003 that R pay the costs of its former client, the first claimant ('C'), and of the second claimant, Westminster City Council ('the council'), under s.51(6) Supreme Court Act 1981, as substituted by s.4 Courts and Legal Services Act 1990. On 21 August 2002 C instructed R to act for him following an adverse decision by the council concerning C's housing needs. R applied for a review of that decision, which review, on 15 October 2002, was rejected. Under s.204(2) Housing Act 1996 C had 21 days to appeal the decision. R was instructed to act for C but failed to issue an appeal on C's behalf within the requisite time period. Section 204(2A) of the 1996 Act empowered the court to give permission to appeal out of time where the court was satisfied that there was good reason for failure to meet the time limits. R's application for an extension of time was rejected and R ceased to act for C. The judge found that C's application for an extension of time was necessitated by R's negligence and therefore R should pay both C's and the council's costs on an indemnity basis.HELD: (1) Unless an applicant for a wasted costs order against a legal representative could establish that representative had acted in a way that was not only "improper, unreasonable or negligent" but was also in some way in breach of any duty to the court, there was no way the court could make a wasted costs order. Ridehalgh v Horsfield (1994) 3 WLR 462 and Medcalf v Mardel (2002) UKHL 27 considered. (2) The court should not have made a wasted costs order against R as although R was guilty of a "negligent" act, the act occurred at a time when there were no legal proceedings on foot and therefore there could be no question of such negligence representing any sort of breach of any duty to the court. (3) The decision in Byrne v Sefton Health Authority (2002) EWCA Civ 1904 represented the normal situation that solicitors could not be liable for wasted costs as a result of actions before litigation had started, especially where the actions were no more than negligent and the solicitors never acted in the litigation once it started. The grounds for distinguishing Byrne (supra) advanced by the judge were not sound.Appeal allowed.

[2003] EWHC 3180 (Ch)