The judge had been entitled to conclude that a law firm had been negligent in failing to conclude that no contract of employment existed to found a claim for breach of contract and had, therefore, been entitled to make a wasted costs order against the firm.Appeal from the decision of Deputy District Judge Payne on 26 February 2003 making a wasted costs order against the appellant law firm ('Isaacs'). Isaacs had acted for a claimant ('C') in an action against the respondent ('J') for damages for breach of his employment contract. J repeatedly denied the existence of a contract between C and J. At the time of commencing the action, neither C nor Isaacs was in possession of a copy of C's contract of employment. J obtained and disclosed the written employment contract between C and another company and subsequently obtained summary judgment against C. The judge decided that Isaacs had acted negligently because any legal adviser exercising a reasonable level of competence would not have concluded that an employment contract existed between C and J. Accordingly, under s.51 Supreme Court Act 1981 and CPR 48.7, he ordered Isaacs to pay 75 per cent of J's costs of the action.HELD: (1) The judge had been entitled to conclude that Isaac's conduct was plainly unjustifiable and negligent. He had not erred in law or in its application. (2) This had not been the mere prosecution of a hopeless case on instructions; Isaacs had itself been negligent in failing to address the relevant test for the existence of a contract of employment to which J's legal representatives had drawn its attention. The judge had properly followed Ridehalgh v Horsefield (1994) Ch 205 on the meaning of "negligence". The judge's finding had been sufficient for the making of a wasted costs order. (3) There had been nothing in the documents available to Isaacs to support the commencement of proceedings against J, and much that indicated that any such claim was hopeless. (4) In the circumstances, any reasonably competent solicitor would have been expected to advice C in clear terms that, on the material available, he had no claim against J,. Isaacs could not explain or excuse its conduct by reference to C's instructions. (5) The involvement of counsel did not absolve Isaacs. (6) The judge had been entitled to conclude that a wasted costs order could be made notwithstanding considerations arising from the fact that C was publicly funded.Appeal dismissed.

[2003] EWHC 2539 (QB)