England and Wales High Court (Senior Courts Costs Office) Decisions

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URL: http://www.bailii.org/ew/cases/EWHC/Costs/2003/9044.html
Cite as: [2003] EWHC 9044 (Costs)

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This summary of a judgment has been obtained from the Supreme Court Costs Office pages on the HM Courts Service web site. The citation used by BAILII is not an officially approved citation. The full text of the judgment may have an official Neutral Citation issued by the court, and may be available elsewhere on BAILII.

 

 



No.24 of 2003

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Dempsey v Johnstone
30 July 2003
Court of Appeal (Aldous, Mance and Latham LJJ)

This was a further case on wasted costs which is factually complex, but essentially arises out of the decision of the Judge that in continuing to advise the appellant that he had a good contractual claim his solicitors had been guilty of conduct which entitled the Judge to make a wasted costs order against them in respect of some of the successful respondent’s costs which he had done.

On appeal the Court of Appeal set aside the wasted costs order re-emphasising the danger which was highlighted by the House of Lords in Medcalf v Mardell [2003] 1 AC 120 which was based on material shown to the court but which itself relied on privileged material which had not been produced to the court.

The case is important because it lays to rest a suggestion made by another Division of the Court of Appeal in the case of Persaud v Persaud [2003] EWCA Civ 394 (decided in March this year) that the classic definition of negligence for the purpose of Section 51 of the Supreme Court Act 1981 given by Sir Thomas Bingham MR in Ridehalgh v Horsefield [1994] Ch 205 at page 232, had in some way been modified or diluted by subsequent decisions, in particular what was said by Lord Hobhouse in Medcalf v Mardell at paragraph 56.

The heart of the appeal decision is to be found in paragraph 32 of Lord Justice Latham’s judgment, part of which reads:

"It seems to me that it can be inferred from counsel’s skeleton argument as I have already said that counsel was alert to the problem. The question was whether or not the facts were capable of establishing the continuing contractual obligation asserted on behalf of the claimant. The fact that Patel persuaded the appellants counsel to advise the claimant that he had no realistic prospect of success in opposing the striking-out application does not in any way establish as a necessary inference that their evaluation prior to then was in any way negligent. The decision to advise the claimant as they did was taken in the course of a hearing in which the arguments of the respondent were being deployed, and the Judge’s reaction to them will have been apparent to the appellants and counsel. The fact that David Jackson describes the decision in Patel v Patel in his witness statement as a "body blow" supports the inference that it was by then apparent to the appellants and counsel that it provided a strong peg upon which to hang the respondent’s argument; it does not provide any secure basis for an inference that the appellants’ and counsel’s judgment previously was one which no competent reasonable advisor could have made."