When might it be appropriate to fix the solicitors of a fundamentally dishonest Claimant with an obligation to pay the Defendant’s costs?
We previously reported on the striking case of Kirsty Williams-Henry v Associated British Ports Holdings Ltd [2024] EWHC 806 (KB) (see here), in which the Claimant in a personal injury claim was found to have been fundamentally dishonest, the court concluding that she had been “thoroughly dishonest” in the presentation of her symptoms, lying to “clinicians, medico-legal experts and this Court about [her] health, functioning, activities of daily living and her work abilities.”
In an interesting postscript, the Defendant pursued a wasted costs order against the Claimant’s solicitors, Hugh James (HJ).
Under section 51(6) of the Senior Courts Act 1981, the court has the power to order that the legal representatives of a party be personally liable for costs, making what is known as a “wasted costs order” against them.
Those legal representatives must be shown to have acted “improperly, unreasonably or negligently”, and their conduct must have caused a party to incur unnecessary costs, or have meant that costs incurred by the party prior to such conduct have been wasted. The court must then assess whether it is just in all the circumstances to order the legal representatives to compensate the party seeking a wasted costs order for the whole or part of those costs.
Background
In July 2018, the Claimant fell from Aberavon Pier and suffered a brain injury. She brought a claim against the Defendant asserting that the injury was caused by a lack of safety railing. Liability was admitted in part, reduced by 1/3 to reflect her contributory negligence.
The court subsequently assessed the “honest” element of her damages as £895,011 on a full liability basis, so just under £600,000 applying the liability apportionment. However, the court also found that the Claimant had been fundamentally dishonest and dismissed the claim with costs awarded against her, unenforceable against the Claimant, up to the level of the assessed "honest" damages of just under £600,000.
As the Defendant was unable to recover its costs from the Claimant, it pursued a wasted costs order against her solicitors, HJ.
The Wasted Costs Application
In applying for wasted costs against HJ, the Defendant alleged negligence and unreasonable conduct in maintaining the litigation and asserted that, but for that conduct, the trial would have been avoided. The application was heard by Ritchie J on 4 September 2024.
It was alleged that HJ’s approach to disclosure was negligent, in that they failed to collect and analyse documents in the Claimant's possession that demonstrated dishonesty, such as social media posts.
Ritchie J noted that social media posts do not normally fall within standard disclosure unless dishonesty is already in issue. Furthermore, he did not consider that lawyers should be required to trawl through social media posts. In any event, the cost of doing so would likely be unreasonable. It was also noted that, when such documents were requested by the Defendant, HJ “faithfully and professionally sought and obtained them”.
The Defendant also alleged that HJ failed to advise the Claimant properly in respect of settlement and should have advised her to actively engage in ADR.
Ritchie J gave the HJ the benefit of the doubt that they had acted on instructions throughout, the Claimant having not waived privilege on her discussions with them, noting that “a lawyer is not liable for a wasted costs order for running a hopeless case on instruction”.
It was further alleged that HJ had allowed the Claimant to submit a witness statement in October 2022 which contained falsehoods, despite having information that contradicted the Claimant's assertions. The statement asserted that the Claimant had “no nights out, no holidays and no social life”, but there was information in HJ’s possession, before the statement was signed, demonstrating that she had in fact been to Benidorm.
Ritchie J considered the drafting of the statement was “poor practice and primae facie unreasonable or negligent”, noting that solicitors have a duty to check information and not mislead the court, but there was no evidence the solicitor who drafted the statement was aware of the conflict between the statement and the objective facts. If they had been, they would have been in breach of their duty to the court. Given that privilege had not been waived, it was impossible to scrutinise this further. In any event, Ritchie J was unable to see how this potential breach could have caused wasted costs. What it had done was provide the Defendant with “a large stick with which to beat the Claimant” and beat her they had, very effectively, at trial.
Finally, it was alleged that HJ ought to have terminated their retainer with the Claimant when it became clear that she had been dishonest (which they could have done under the terms of their CFA).
Ritchie J did not agree, stating that: “the fact that [HJ] was brave enough not to "dump" the Claimant speaks of the firm's humanity and bravery, not of their negligence or unreasonableness”.
He also highlighted the potentially negative impact on access to justice if solicitors were exposed to a wasted costs orders for continuing to represent clients accused of fundamental dishonesty.
Ritchie J also appears to have been unimpressed with the presentation of the Defendant’s case. The allegations were insufficiently particularised (“I do not consider that the broad allegations of negligence raised fit well within the summary wasted costs order jurisdiction”), the costs of pursuing the likely wasted costs (which the Defendant had failed to particularise) were disproportionate, and there was a basic failure to provide evidence of causation in relation to any of the accusations.
Conclusion
The court's meticulous approach to assessing the allegations against HJ illustrates the challenge any Defendant will face when seeking a wasted costs order in such circumstances. Allegations need to be focussed and evidence supporting causation will need to be adduced. Defendants will also need to have regard to proportionality when considering whether to make an application.
Ritchie J's judgment reinforces the principle that legal representatives should not be penalised for continuing to represent clients, even in challenging circumstances, provided their conduct does not cross the line into impropriety or negligence. The duty not to mislead the court ought always to be at the forefront of their minds. Although the Defendant failed in this case, it is perhaps a warning shot to Claimant’s solicitors who find themselves in possession of evidence demonstrating unequivocally that their client is lying.
The sanction for fundamental dishonesty is that the dishonest Claimant is deprived of damages and their solicitors are unable to recover costs, potentially having to pay the disbursements themselves because LEI insurers may refuse to indemnify. Attempting to go beyond that, and fix the Claimant’s solicitors with personal liability for costs, whilst not impossible, will require extremely clear and cogent evidence.
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