Civil Case Law Update written by Billy Torbett

Wasted Costs Against Solicitors

Williams-Henry v Associated British Ports Holdings Ltd [2024] EWHC 2415 (KB)

This case concerned a wasted costs application against the claimant’s solicitors due to unstipulated allegations made which did not particularise how, why and when the ‘wasted’ costs arose. The claimant declined to waive privilege leaving some allegations to be decided in favour of the claimant’s solicitors as respondent wasted costs application. However, as a result, the application for wasted costs was dismissed.

The Claimant was represented by way of a Conditional Fee Agreement (CFA). The case involved a high value brain injury where liability was partially admitted. The defendant however put the claimant to proof in respect of causation and suggested that the claimant had been fundamentally dishonest. At trial, the claimant was found fundamentally dishonest, partially on the basis of video evidence served by the defendant in July 2023 and the trial commenced in March 2024.

Multiple offers to settle were made by the defendant in the months after the surveillance evidence was disclosure, including after the trial had started. As a result, the defendant applied for a wasted costs order against the claimant’s legal representatives. The basis of this application was essentially that they had advanced a ‘hopeless case’ and the retainer should have been terminated despite copious amounts of allegations made.

In order to achieve a wasted costs order, the Applicant must show that the legal representatives had acted in an inappropriate, unreasonable or negligent manner. This is pursuant to s.51(6) Senior Courts Act 1981. This case should serve as a reminder to practitioners that only the client can waive legal privilege, even as a respondent to a wasted costs application, it is not for the legal representative to waive privilege.

The application was dismissed, and the following points were made:

• It was alleged that the respondent had negligently collected social media posts showing the claimant’s dishonesty. Ritchie J concluded it would be unreasonable to expect a solicitor to search through hundreds of posts from multiple sources especially when dishonesty was not originally in issue.

• The respondent was able to terminate the CFA agreement it had with the claimant although it was not e necessity, and this was the choice of the respondent. The potential implications of dropping a claimant accused of fundamental dishonesty were highlighted.

• In respect of the allegation of failing to advise the claimant in respect of settlement offers made it was found that “a lawyer is not liable for a wasted costs order for running a hopeless case on instruction.”

• Furthermore, the statement made by the claimant of “no nights out, no holidays and no social life” was an inconsistency that offered a “large stick with which to beat the claimant” with in cross-examination.

• Finally, the application failed to particularise what they alleged was the primary reason for the application and took different positions as to when the wasted costs started to accrue.

Finally, when applying for a wasted costs order, it is essential that the application properly particularises the allegations that are made and precisely outline the cause of such wasted costs that followed as a result of causation. In the applicant fails to do this then the merits and prospects of success are significantly reduced. A legal representation should not be criticised or penalised by way of a costs order for simply representing their client despite their case having issues. A claimant who declines to waive privilege provides protection to their solicitors and a significant obstacle for the applicants and therefore before making such an application, legal privilege must be considered. A wasted costs application should be made on known information as opposed to assumptions or speculation.

Illegality in Credit Hire

Ali v HSF Logistics Polska SP. Zo.o [2024] EWCA Civ 1479

The Court of Appeal in this case was asked to consider whether a claim for credit hire made against a UK insurer but acting as a claims handler for a Polish insured, should have been dismissed due to the hire customer’s own vehicle failing to have a valid MOT at the material time that it was damaged in contravention of s.47(1) of the Road Traffic Act 1988.

The vehicle’s MOT had expired some four and a half months before the accident which prompted the customer to enter into the credit hire agreement. Additionally, the evidence before the court demonstrated that whilst the hire customer’s vehicle had otherwise not been at fault for the accident, the customer had not intended to obtain a new MOT certificate straightaway yet continued using the vehicle.

The issue on appeal was whether the court was right to disallow the head of loss based on a failure to establish legal causation: but for the accident, the customer’s vehicle would have remained without a valid MOT for the whole period of hire, was the court right to decide that no loss of use claim for credit hire could be sustained because the customer’s won vehicle could not lawfully have been driven on the road. This premise is as per Agbalaya v London Ambulance Service [2022] 2 WLUK 545 and Hewison v Meridian Shipping [2002] EWCA Civ 1821.

If this position was upheld then the hire customer could not establish that the accident had caused any loss because they would have lost the ability to drive a non-roadworthy vehicle, which they would have been not legally entitled to use.

The Court of Appeal handed down judgment on 4^th December 2024 and found in favour of the hire customer and credit hire company and applied and revisited the case of Hewison which held that “an English court should not deprive a claimant of part of the damage to which he would otherwise be entitled because of the defendant’s negligence or breach of duty by reason only of some collateral illegality or unlawful act.” It was found that the customer had committed a summary only criminal offence of driving a motor vehicle on a road without a valid MOT certificate and therefore were liable to pay a maximum penalty of £1,000.

This is a relatively minor criminal offence and the Court of Appeal expressed clear concerns about how far the doctrine of illegality could and should extend. The court also refuted the assertion that the customer had suffered no loss as a result of collision and instead was satisfied that the customer had been deprived of the use of their vehicle as per Beechwood Birmingham Ltd v Hoyer Group UK Ltd [2010] EWCA Civ 647. The fact a vehicle did not have a valid MOT certificate was not capable of changing this fact. However, it was found that “there may be relevant arguments to be had in other cases in relation to the issue of reduction of damages to reflect the chance of criminal prosecution and/or fine and disqualification.”