England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr A Temple QC
(sitting as a deputy High Court judge))

		Royal Courts of Justice Strand London WC2 Wednesday 10th October, 2001

1. LORD JUSTICE CHADWICK: I will invite Sir Murray Stuart-Smith to give the first judgment.
2. SIR MURRAY STUART-SMITH: This an appeal from a decision of Mr Anthony Temple QC, sitting as a deputy judge of the Queen's Bench Division, by which he dismissed an appeal from the costs judge who had disallowed any costs other than disbursements of the applicant solicitors in relation to a case brought by their one-time client, Mr Snowden, against the Ministry of Defence.
3. The applicants are a firm of solicitors who had acted for Mr Snowden in those proceedings for a considerable time. It was an action for damages for personal injury while he was a soldier. The action had been conducted on behalf of the defendant firm by a Mr Kidd under the supervision of a Mr Burton. In due course both those gentlemen went off and Mr Burton became the sole proprietor, I think, of another firm in the West Country. Mr Kidd joined him and Mr Snowden transferred his business to that firm from the defendant firm.
4. Shortly after that the action was struck out for want of prosecution on the application of the defendant, the Ministry of Defence. The application to strike out was resisted but it was accepted that therefore had been inordinate and inexcusable delay, and it is hardly surprising I think in the circumstances that the action was struck out.
5. In any event it was and the usual order in relation to costs was made, including an order for assessment of the claimant's legal aid costs. That matter came before the costs judge and he disallowed all the applicant's costs other than disbursements, acting under the provisions of regulation 109 of the Civil Legal Aid (General) Regulations 1989.
6. The reason for the appeal is first of all that the applicants did not attend the hearing before the costs judge. That arose in this way - and I read the relevant part of Mr Hoskin's affidavit in relation to the hearing of the assessment before the costs judge. At paragraph 35 he says this:

"I had various conversations with Mr Sprengers of the Supreme Court Taxing Office who had suggested that the assessment be dealt with in Exeter by Deputy Judge Hine who had had some connection with Exeter (I think that he lives nearby). It would of course be a far more convenient venue for both firms of Solicitors involved."

7. I pause there to say the other firm were the firm of Jewill Hill and Bennett, Mr Burton's firm.
8. The affidavit goes on:

"Additionally, my own Costs Draftsman lives in Devon. On the 27th July I wrote to my Costs Draftsman informing him that I had still not received the file, but confirming the Taxation appointment of the 10th August 1999 to him.

36. On the 2nd August we received a telephone call from Mr Hine the Deputy Costs Judge asking for the boxes of papers to be sent to Solicitors in Exeter from whom he would then be able to collect them. I had to explain that I had no papers. Deputy Costs Judge Hine stated that the Supreme Court Taxing Office had sent a letter to Messrs Jewill Hill and Bennett on the 23rd March 1999 explaining what was needed and that they (Jewill Hill and Bennett) should send the papers to Mr Hine.

...

38. On the 2nd August 1999 we heard from Mr May of the Supreme Court Taxing Office that Messrs Jewill Hill and Bennett had written saying that the Eclipse was on the 10th August and that they could not seats on the train to get to Exeter and had asked for a postponement. I was told that Deputy Master Hine had agreed. I also agreed to the adjournment. The Supreme Court Taxing Office said that they would come back to us with another appointment and I should wait for information. I told my Costs Draftsman of the situation. I have to emphasise that it was clear in my mind that any adjourned hearing would, for the convenience of the Deputy Costs Judge and the parties, take place in Exeter.

39. I received a Notice on the 17th day of November 1999 informing me that the taxation had been given a new appointment at London on the 3rd day of December 1999. On the 17th November I rang the Clerk to Deputy Master Pollard who said that he would look into transferring the appointment to Exeter.

40. On the 24th November I spoke to Mr Sprengers also of the Supreme Court Taxing Office who suggested possible dates at Exeter of the 13th, 14th, 15th, 16th or 20th December. He said that when the date was agreed he would check with the Court. I checked the situation with my Costs Draftsman who said that he could attend on any of those dates and I informed Mr Sprengers accordingly.

41. On the 24th November Mr Sprengers informed me that there was no space at Exeter on any of those dates and that he would come back to me.

42. I make no apology for the fact that the rest of this paragraph is typed in bold. It is the most important paragraph.

On 25th November 1999 a telephone message was left with a member of my staff by the Supreme Court Taxing Office saying that the assessment appointment would take place on 3rd December 1999 at 11a.m. in London. I rang Mr Sprengers' office on 25th November (the same day) and I left a message for him to ring me back. I believed that that appointment for the 3rd December would be postponed because all parties (including the Deputy Costs Judge) had agreed that the assessment hearing should take place in Exeter. Apart from leaving a message for Mr Sprengers, I took no action for the hearing fixed for the 3rd December 1999 as I was convinced that it had been made in error. As I had brought the `error' to the court's attention I assumed that it was being rectified."

9. Then he goes on to say that in fact the appointment did take place on 3rd December. He had wanted to attend, but because of the muddle and because he thought that it would not take place he had not attended.
10. The situation was somewhat bedevilled by the fact that there was clearly hostility and animosity between Mr Hoskin and the new firm, Jewill Hill and Bennett, who had taken over the action. But be that as it may, that is the situation.
11. Those solicitors did attend before the costs judge. They appear to have been awarded their costs for such of the work as they did after the case was transferred to them, but perhaps not surprisingly they made no representations on behalf of Mr Hoskin to the costs judge.
12. This is not a case therefore where Mr Hoskin, the applicant, was not informed of the hearing before the costs judge. If that had been so I am inclined to think that as a matter of justice he would be entitled to a rehearing. It is a case where he was notified of the hearing, but unfortunately he, in error, thought that it was not going to take place, for perhaps understandable reasons. In those circumstances, it seems to me that before this court should order a rehearing of the matter, it ought to be satisfied that there is material upon which the costs judge might make a different order.
13. Regulation 109 is in these terms:

"(1) Without prejudice to section 51(6) of the Supreme Court Act 1981 or the CPR rules 44.14 and 48.7, on any detailed assessment of an assisted person's costs in connection with proceedings (which are not authorised summary proceedings) any wasted costs shall be disallowed or reduced, and where the solicitor has without reason delayed putting in his bill for detailed assessment the whole of the costs may be disallowed or reduced.

(2) No costs shall be disallowed or reduced under paragraph (1) until notice has been served ...

(3) In this regulation `wasted costs' has the same meaning as in section 51(7) of the Supreme Court Act 1981."

14. That provides as follows:

"In subsection (6), `wasted costs' means any costs incurred by a party-

(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative;"

15. That, in my judgment, does not apply:

"or

(b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay."

16. That clearly, in my judgment, is the relevant subsection to which the costs judge had to apply his mind, because the negligence here was the negligence in failing to prosecute the action through delay and many of the costs had clearly been incurred before those acts of negligence occurred. If this was a dispute between a privately-funded claimant and his solicitors, his action having been struck out for want of prosecution, if the claimant could show that the action was struck out solely due to the negligence of the defendants, then he would be entitled to say, either as a matter of contract or as a matter of tort, that there had been no benefit or a total failure of consideration in that the work done by the solicitors, possibly other than the obtaining of experts' reports and other matters of disbursement of that sort, should not be paid; there was a total failure of consideration because he obtained no benefit from the work done.
17. In a dispute of that sort it would clearly be material for the tribunal to decide whether in fact the claimant himself was guilty of the delay or a substantial part of the delay and that might result in some apportionment between the parties in such proceedings.
18. Similarly, it seems to me that in a case under regulation 109 it does not follow as a matter of course, simply because an action has been struck out for want of prosecution, that the solicitor is not entitled to any costs at all. So to that extent I accept Mr Bacon's submission. I do not accept his submission that if the delay was due to the other party to the action, that is to say the defendant in this case, that that would affect the position because that would go to the question whether or not the action should have been struck out. If the solicitors for the claimant had been able to persuade the Master that the delay was attributable to the Ministry of Defence and not to them, then of course the action should not have been struck out. But if the delay is due to the claimant himself for not giving instructions, disappearing without trace or whatever, then the position might well be different.
19. The court has invited Mr Bacon to indicate what material there is which could be put before the costs judge on a rehearing which would justify a conclusion that it was not unreasonable to expect the Legal Aid Board or, if he had been a privately-funded person, the claimant, to pay part at least of the costs. Speaking for myself, I do not think that Mr Bacon has really been able to point to anything. There is nothing in the affidavit of Mr Kidd in opposition to the strike-out application which suggests that the claimant himself was culpable. There may have been some difficulty in obtaining instructions because he was away on exercises, or whatever it may have been, in the course of his duties as a soldier. But again that would have been a matter which would have been relevant to the question of whether the action should have been struck out, but is not a matter for which the claimant himself is to blame.
20. It seems to me therefore that this appeal must fail on the basis that if we were to send the matter back to the costs judge there is really no material upon which he could come to any conclusion other than that to which he did come. We do have written reasons from the costs judge as to why he disallowed the costs. I think it is only necessary to refer to paragraph 10(i) of those reasons to show that he did consider the matter on the material which was put before him. He says this:

"My own reading of the working papers led me to the conclusion that Messrs Thurstan Hoskin had not prosecuted the action competently, and that blame for the delays in progressing the proceedings were attributable to them."

21. So the costs judge has had the working papers before him. It does not appear that he thought that the claimant himself was responsible for the delay. As I have said, I have failed to detect anything in any of the documents before this court to suggest that that is the case.
22. In those circumstances, in my judgment, there would be no point in sending this matter back to the costs judge and I would dismiss the appeal.
23. LORD JUSTICE CHADWICK: I agree.
24. Regulation 109 of the Civil Legal Aid (General) Regulations 1989 provides that:

"... on any detailed assessment of an assisted person's costs in connection with proceedings ... any wasted costs shall be disallowed or reduced."

25. In that context wasted costs has the same meaning as in section 51(7) of the Supreme Court Act 1981.

"... `wasted costs' means any costs incurred by a party-

(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or

(b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay."

26. It is plain from that definition of wasted costs that there are at least three situations in which costs incurred by a party may fall within it. First, where the costs incurred by a party, say A, are incurred because of some improper, unreasonable or negligent act or omission on the part of his opponent's legal or other representative. Second, where the costs incurred by A are incurred because of some improper, unreasonable or negligent act or omission on the part of his own legal or other representative. Third, where the costs by A incurred were reasonably incurred on his behalf at the time when they were incurred - so that, in principle, A would have to pay those costs to his own solicitor - but where, as a result of some act or omission by his solicitor occurring after those costs were incurred, the court considers it unreasonable to expect A to pay those costs.
27. In most, but not all, cases in which the court is asked to make a wasted costs order under section 51(6) of the Supreme Court Act 1981, the order will be sought by A against his opponent's representative; that is to say, the case will fall within the first of the categories to which I have referred. The case to which we were referred by Mr Bacon, Kilroy v Kilroy [1997] PNLR 66, is a case of that nature. The proper approach in such a case was explained by this Court in Kilroy at pages 72 and 73. But that guidance affords no assistance in a case where the court has to address the third type of case; that is to say, a case which falls within section 51(7)(b).
28. It will be cases of the second and third class which will fall to be addressed in the exercise of the obligation imposed on the court by regulation 109(1). In the context of that regulation the question is whether costs should be disallowed as between the solicitor and his client (represented for this purpose by the Legal Services Commission). In cases within the third class what the Court has to consider is whether, as a result of some omission which has taken place after the costs have been incurred, it is unreasonable to expect the Legal Services Commission to pay them. The present case provides an obvious illustration. The omission by the solicitor is the failure to prosecute the action with sufficient diligence to avoid a striking out order on the grounds of inexcusable and inordinate delay. That omission has led to the position in which costs previously incurred - and properly incurred at the time when they were incurred - have been of no benefit to the client in the context of the litigation for which they were incurred. Is it reasonable, in such a case, to expect the Commission to pay for costs which, in the event, have proved to be of no benefit to the legally assisted client?
29. In such a case it may well be relevant to investigate whether the inordinate and inexcusable delay was attributable to some omission by the client for which the solicitor cannot be held responsible. Like my Lord, if there were any suggestion in the material before us that the delay which led to the striking out of Mr Snowden's claim against the Ministry of Defence was delay for which the solicitor was not responsible, then I would think it appropriate to send the matter back to the costs judge to consider that material. But there is no such material in the papers before us. It is plain that the costs judge was satisfied that the delay was caused - and caused wholly - by inexcusable inactivity on the part of the solicitor's employees. In those circumstances, it seems to me that there is no purpose in allowing an appeal so that a further investigation by the costs judge can take place. There is no material to be investigated.
30. I, too, would dismiss this appeal.
ORDER: Appeal dismissed. (Order not part of approved judgment)