Wasted costs: Privilege did not protect law firm
A law firm that continued cases against defendants without investigating claims they were the wrong parties has been ordered to pay wasted costs.
North-East firm Tilly Bailey & Irvine (TBI) acted negligently, ruled Master Thornett, irrespective of what advice it may have given the client or what her instructions were, given that privilege had not been waived.
If acting in the claimant’s best interests, it would have discontinued the claims much earlier or, if it was acting on inappropriately abusive instructions to continue the action, “then there was a conflict of interest such that they should not have remained on the record”.
TBI was acting for Caroline Robinson as administratrix of the estate of her late father and issued a claim in April 2021 against three defendants in respect of her father’s alleged asbestos exposure at same manufacturing site in Basingstoke.
In autumn 2021, the defences of second and third defendants both said their corporate histories established that neither could have employed the deceased. TBI’s response to this was “surprisingly brief and unhelpful”.
The claim against the first defendant was struck out in July 2023 but the corporate identity issue over the other two adjourned.
The next hearing was not until May 2024 and, at the court doors, the claimant agreed that the claims could be dismissed in exchange for a new party being added.
The claimant was to pay their costs but the two defendants sought a wasted costs order against TBI.
The witness statement from TBI partner Mark Ellis “fails directly to address the centrality of the criticisms levelled against his firm”, the master said.
Mr Ellis submitted that what was being criticised was “at best an error of judgment” and that even if pursuit of the defendants was seen as hopeless, “such a determination could only really be one made in hindsight”.
The judge rejected this, and said the corporate identity point was not complex.
Mr Ellis also pointed out that Ms Robinson had not waived privilege on the advice given.
The master directed that Ms Robinson provide a witness statement, in which she confirmed that she did not want to waive privilege and understood the costs consequences of the discontinued claims.
The master concluded that the decision to continue the claim, at least from the date of their defences, was “without either expressed explanation or justification”.
A reasonable practitioner would have investigated the defences but TBI’s replies “provide no evidence or support that such research ever took place”.
The position on privilege “seeks to leave open opaque the balance between [TBI’s] contribution of legal analysis and the claimant’s direct instructions as a client”, Master Thornett went on.
But Mr Ellis’s witness statement confirmed that it was TBI that selected the two defendants, leaving open “the narrow possibility that the lay claimant directly instructed the pursuit of the second and third defendants despite the lack of any legal basis for doing so”.
This was “highly improbable but not impossible”, the master said. “The pertinent question is whether the continuing receipt and implementation of such instruction was improper, unreasonable or negligent.”
He was satisfied that that TBI was negligent in continuing the claims. “Irrespective of what advice they may have given or what instructions they had received, no reasonable practitioner would have conducted the litigation between the filing of ineffective replies in late 2021 through until May 2024 by doing nothing… only then to spontaneously discontinue just before the hearing of the defendants’ strike out application.
“As officers of the court, seized of responsibilities to the court enunciated in the overring objective, they have no reasonable explanation or justification for that conduct, irrespective of instruction. It was unjustifiable and amounted to an abuse of process.”
With the third defendant, whose express denial defence did not even reserve (unlike the second defendant) the possibility of a factual counter-case in the claimants’ reply, Master Thornett went further and concluded that maintaining the claim was “improper”.
If the firm had been acting in the claimant’s best interests, it should have discontinued the claims “much earlier”.
“Conversely, if the firm was acting on inappropriately abusive instructions to still continue, then there was a conflict of interest such that they should not have remained on the record. It seems to me to come to the same thing whichever the route of explanation.”
He ordered that TBI pay wasted costs in respect of the costs of the two defendants from the dates of their replies to the May 2024 hearing.
TBI told Legal Futures that it intends to appeal.
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