DON’T FALL FOUL OF THE RULES – WASTED COSTS

In Rainer Hughes Solicitors v Liverpool Victoria Insurance Company Ltd & Ors (Rev1) [2024] EWHC 585 (KB), Mr Justice Spencer addressed various legal principles and dealt with the Court’s power to order legal representatives to pay costs which had been ‘wasted’ by their conduct.

The Claimant brought an action for personal injury damages. The Defendant was allowed to resile from an earlier admission of liability and to plead fraud and bring a counterclaim. The Claimant’s first witness statement was in Turkish and translated to English. The Claimant subsequently served a second witness statement which was written in English but not translated into Turkish. The second witness statement sought to clarify points addressed in the first witness statement particularly in relation impecuniosity. A Turkish translation of the second witness statement was never produced.

At the Pre-Trial Review, an Order was made that ‘Rainer Hughes take instructions and clarify in writing that the Claimant’s witness statements were compliant with CPR 32 and that the Statements of Truth complied with CPR 22. They should also indicate the level of the Claimant’s grasp of English’. Rainer Hughes filed evidence that the Claimant’s level of English was proficient. However, at Trial, it became clear that the Claimant was unable to properly read the witness statement or pleadings that were in English. The Claimant’s claim was struck out for non-payment of the Trial fee, and Rainer Hughes were issued with a wasted costs order of £3,000 by His Honour Judge Monty KC for failing to translate documents despite indications that the Claimant required a translator.

Rainer Hughes appealed against the order to pay wasted costs on the grounds that the Claimant’s English proficiency was adequate. This, however, clashed with the evidence presented. The case hinged on several legal principles which included:

  • Compliance with Civil Procedure Rules (CPR) and Practice Directions (PD). CPR and PD 22 and 32 regarding witness statements in ‘own language’ if not proficient in English and signature of the Statement of Truth.
  • Negligence and Misconduct. Whether professional (mis)conduct and/or breach of duty resulted in costs being incurred unnecessarily.
  • Proportionality. Are the costs of pursuing a wasted costs order disproportionate to the costs at stake. See Harrison v Harrison[2009] EWHC 428 (QB).
  • Discretion of the Court. CPR 44.2 sets out the Court’s wide-ranging discretion as to making costs orders.

Mr Justice Spencer reinforced the decisions made by HHJ Monty KC by dismissing the appeal and upholding the decision to order Rainer Hughes to pay wasted costs of £3,000.

This case underlines the importance of strict adherence to and compliance with CPR and PD by legal representatives particularly in terms of ensuring witness statements and documents are filed in a client’s ‘own language’ where necessary. Furthermore, the decision emphasised the Court’s broad discretion in granting wasted costs orders and consideration of proportionality in costs applications.

Mathew Lawton, Costs Lawyer

25.04.2024

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