CA: Lawyers can be cross-examined in wasted costs applications

Newey: There must be safeguards

Judges have the power to direct cross-examination of a lawyer against whom a wasted costs order is sought, but it should be “very much the exception”, the Court of Appeal said yesterday.

Lord Justice Newey made the comments while deciding that both a circuit judge and a High Court judge had been wrong to order the cross-examination of a solicitor in such circumstances.

Giving the lead judgment in Hunt v Annolight Ltd & Ors [2021] EWCA Civ 1663, the judge said it was clear from CPR 32.7 that “where a lawyer against whom a wasted costs order is sought has filed a witness statement, the court must have power to direct cross-examination”.

But it must be “very much the exception rather than the rule”, he went on. In the 1994 case of Ridehalgh v Horsefield, the appeal court stressed that the procedure adopted in respect of a wasted costs application should be “as simple and summary as fairness permits”.

Newey LJ said this meant the court had to consider, for example, whether the lawyer’s client has waived privilege and whether the issues have been defined in advance by pleadings.

“The court must beware of requiring a lawyer to be cross-examined in a process lacking such safeguards. It can, in all the circumstances, only rarely be right to order cross-examination.

“For the same reasons, a judge minded to direct cross-examination should carefully consider its proper scope and whether and, if so, how the procedure can be kept both fair and relatively simple.”

A court should “beware of sanctioning a fishing expedition”, he added.

In the case before the Court of Appeal, there were flaws in the decision by His Honour Judge Godsmark QC in Nottingham – and upheld on first appeal by Mr Justice Saini – to order Abid Sarwar, supervising partner and director of Blackburn firm Walker Prestons, to attend the hearing of a number of wasted costs applications in order to be cross-examined.

The firm represented John Hunt in a noise-induced hearing loss claim that was discontinued after he had falsely stated in his part 18 response that he had not been a director of one of the defendants at the material time – Mr Hunt said he did not sign the response, but the firm said he did.

In relation to another of the defendants, Mr Hunt put forward a “confused and contradictory” position over whether he had been provided with ear protection.

The defendants sought to disapply qualified one-way costs shifting and/or for the wasted costs of the proceedings to be paid by Walker Prestons.

In a further hearing, Mr Hunt “effectively” threw the firm “under the bus”, blaming it for what had happened, Saini J recorded.

The firm had argued that there was no power to require the attendance of a legal representative in these circumstances, but HHJ Godsmark and Saini J disagreed, with the latter holding it was a proper exercise of discretion to require Mr Sarwar’s attendance.

Newey LJ expressed sympathy with Judge Godsmark, who he said was “doubtless attempting to devise a way forward which would result in the issues raised by the defendants’ applications being resolved efficiently and without disproportionate cost”.

Further, Walker Prestons’ then counsel did not object to Mr Sarwar’s cross-examination.

However, Newey LJ said it had not been “appropriate” for either judge to order cross-examination for several reasons, including that the allegations against Walker Prestons had not been adequately defined, there was not enough in Mr Sarwar’s witness statement to justify cross-examination, and issues as to legal professional privilege remained to be addressed.

Agreeing, Lord Justice Arnold noted how the case demonstrated “the need for careful case management of wasted costs applications, which must start with identifying the issues raised by the application”.

Lord Justice Warby added that he too had “some sympathy” with HHJ Godsmark.

“As I read it, he was attempting to fashion a procedural regime to allow the defendants’ applications to be resolved without disproportionate cost.

“That said, this was an unusual, complex, and sensitive situation. The issues were ill-defined, the evidence incomplete, and the question of whether privilege had been or would be waived was unresolved.

“The circumstances plainly did not justify the exceptional course of directing a solicitor to attend for cross-examination. It was also wrong in principle, I would add, to do this in the informal way adopted here.

“Any requirement for a solicitor to attend for cross-examination about the conduct of a case should be formulated with precision and reduced to writing in a formal order of the court.”

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