Practice and Procedure


PUBLISHED August 8, 2003

A wasted costs order against the appellant firm of solicitors was upheld since a reasonable solicitor would have assumed that the work set out in a breakdown prepared by a forensic accountant was unnecessary. Accordingly the costs incurred for such work was unreasonable.Appeal by Russell & Russell ('the appellants') against the order of HH Judge Gilmour dated 9 April 2003, whereby he made a wasted costs order against the appellants in the sum of ?5,000. The appellants represented a defendant ('H') in October 2002 at the Liverpool Crown Court. Before the jury was sworn in, H changed his plea to guilty of five offences under Food Safety Act 1990. Sentence was postponed for the preparation of reports as to H's means. The judge made an order under s.126 Powers of Criminal Courts (Sentencing) Act 2000 requiring a financial circumstances statement to be provided. The appellants instructed a forensic accountant ('T') to prepare a report on H. T's estimate of costs was £7,730. The appellants sought prior authorisation for such expenditure from the Legal Services Commission ('LSC') which gave its authority. On 31 January 2003 H was fined a total of £2,000 and ordered to pay prosecution costs of £5K. The judge put the appellants on notice of a wasted costs hearing. The judge accepted that the job of the appellants was to establish H's financial position with a high level of accuracy, and that the LSC was notified of the details of the work to be undertaken and fee charged by T. However, the judge considered that H and his accountant could have supplied the necessary information and there was no need for a forensic accountant. The appellants argued that it was not improper, unreasonable or negligent to have instructed T once the LSC had authorised the expenditure. The judge held that the appellants were negligent in instructing forensic accountants, failing to instruct T properly by telling him to limit his report, and in representing to the LSC that the estimate of T set out the nature of enquiries which were required. The judge accordingly made the wasted costs order. The appellants appealed from that decision under reg.3(c) Costs in Criminal Cases (General) Regulations 1986 SI 1986/1335.HELD: (1) It was the duty of the appellants as solicitors acting for the defendant at the LSC's costs to properly consider H's financial circumstances report so as to comply with the s.126 order. In particular, it was incumbent upon them to consider the work that T proposed to carry out and to consider whether it was necessary, and accordingly whether the estimate of fees was reasonable. (2) The judge considered that the questions to have been asked by the appellants on receipt of T's estimate of costs was what their initial reaction to that estimate was, whether the proposed investigation to be carried out by T was unreasonable or excessive, and whether the investigation and preparation of a report to comply with the s.126 order could have been carried out "in-house". The judge was entitled to conclude that the appellants had been negligent in failing to give proper consideration to those questions. (3) The estimate provided by T was a very detailed breakdown. The judge was entitled to conclude that it amounted to considerable overkill. A reasonable solicitor would have assumed that the work set out in the breakdown prepared by T was unnecessary and accordingly that the costs incurred for such work was unreasonable. The responsibility could not be passed on to the LSC which had to rely on the advice of the solicitors which it instructed. (4) In all the circumstances, the judge was fully entitled to find that the appellants were negligent and accordingly liable for the wasted costs.Appeal dismissed.