High Court upholds wasted costs order against law firm

Spencer: Wasted costs proceedings in the public interest

A circuit judge was entitled to make a wasted costs order against a firm of solicitors that failed to translate their client’s statement and pleadings for use at trial, the High Court has ruled.

Mr Justice Martin Spencer held that His Honour Judge Monty was “fully entitled to conclude” that Essex firm Rainer Hughes had been negligent and breached its duty to the court.

HHJ Monty found that it was clear from the outset that the Turkish-speaking client would need a translator and Rainer Hughes “negligently failed to deal” with the language issue.

There was “a proliferation of red flags here which should have led Rainer Hughes to realise that without properly translated statements, this was a disaster waiting to happen”, he said.

Last year, HHJ Monty struck out the underlying road traffic accident claim in the absence of a proper explanation for the failure to pay the trial fee and because of the language issue.

He ordered the firm to pay £3,000 in wasted costs in relation to the latter, plus £13,500 for the costs of the wasted costs application on the indemnity basis because the firm had attempted “to defend the indefensible”.

On appeal, Spencer J reject suggestions that HHJ Monty erred either procedurally or substantively in allowing the wasted costs application to proceed on the grounds of proportionality, saying there was “a public interest” in such matters.

“Firstly, this encourages lawyers to comply with the rules of the court. Secondly, it immediately relieves the costs burden from the solicitor’s client who would otherwise potentially need to take negligence proceedings against the solicitors with all the additional costs that would incur.

“For these reasons, an appeal court will be very slow to find that a judge misapplied his discretion in allowing a wasted costs order to proceed.”

HHJ Monty was also entitled to consider whether Sanjay Panesar, Rainer Hughes’ senior partner, had set out sufficient basis for the assertions about what happened made in his witness statement for the wasted costs hearing.

“The contemporaneous evidence plainly contradicted what he considered to be the main thrust of Mr Panesar’s evidence,” Spencer J recounted.

The High Court judge continued: “Thus, at paragraph 7 of his statement, referring to [the client] having an in-person meeting with representatives of the firm in September 2020, Mr Panesar said: ‘At this meeting it was clear that [the client] had a good grasp of English.’

“What was the basis for that assertion? Mr Panesar did not suggest that he was at the meeting: if he had been, he would surely have said so. There is no attendance note suggesting he attended the meeting.

“If he did not, then he could only properly make that assertion on the basis of what someone else had told him. However, the source of his knowledge is not stated even though, at paragraph 3 of the statement, he states: ‘Where I refer to facts and matters outside my own knowledge, I identify the source of those facts and matters.’”

Spencer J rejected too the argument that the court could infer Mr Panesar was at the meeting. “Where it is so straightforward a matter for Mr Panesar to state, if it is the case, that he personally heard [the client] speaking and was present at the meeting, he would be expected to say so. The absence of such evidence is in the nature of a deafening silence.”

He said that HHJ Monty was “fully entitled to conclude that Rainer Hughes had been negligent in the sense identified in Ridehalgh and that it was a breach of the firm’s duty to the court… and also a breach of the overriding objective…

“The identified negligence of the solicitors was a breach of the duty on a legal representative to assist the court in promoting the overriding objective.”

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