Wasted costs orders

Wasted costs is a procedure under a statutory power (under section 51(6) of the Senior Courts Act 1981), by which a solicitor, barrister or other representative whose conduct in proceedings can be shown to have been improper, unreasonable or negligent can be ordered by the court to pay the costs incurred by his own client or another party as a result of that conduct.

against the firm

Pod Principals have discretion as to how they (and their Pod) conduct their matters, subject only to modest limitations set out in our contractual arrangements. At the time of writing, there has never been a wasted costs order against Keystone and if you ever have a fear that one might be on the cards, you should contact the General Counsel who will help you avoid it. While it should never come to pass, you should note that with the freedom to practise comes the responsibility for that choice. Or, in other words, wasted costs are for the account of the relevant Pod. In the unfortunate event that you get a wasted costs order awarded against the firm, you must notify the General Counsel immediately.

It is a regulatory requirement that you must not get your client to pay any wasted costs ordered against the firm.

against others

You should also think carefully before embarking on an application for a wasted costs order against another party bearing in mind your regulatory duty to "only make assertions or put forward statements, representations or submissions to the court or others which are properly arguable".

The case law indicates that wasted costs orders should be confined to a small number of specific instances where there had been a mistake or error which has had significant consequences in terms of time and cost. It is appropriate to make a wasted costs order against a legal representative only if the following three-elements test is met:

• The legal representative or other representative has acted improperly, unreasonably or negligently.
• Their conduct has caused a party to incur unnecessary costs or has meant that costs incurred by a party prior to the improper, unreasonable or negligent act or omission have been wasted.
• It is just, in all the circumstances, to order the legal representative to compensate that party for the whole or part of those costs.

If the court refuses an application for wasted costs, it can order indemnity costs for the application to be paid by the applicant to express its displeasure at the application being made. Before making an application for wasted costs please notify the General Counsel.

PLC has a detailed note on applying for a wasted costs order.

Wasted costs can also be ordered by the employment tribunal. See Rule 80 of the Employment Tribunals Rules of Procedure for further details.