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COSTS — Wasted costs order — Party's former solicitors — Solicitors
consulted by claimant but failing to initiate action — Proceedings later issued
out of time by other solicitors but dismissed on limitation grounds — Whether
court having jurisdiction to make wasted costs orders against former solicitors
— Supreme Court Act 1981, s 51(6) (as inserted by Courts and Legal Services Act
1990, s 4)
Byrne v Sefton Health Authority
CA: Peter
Gibson, Chadwick and Longmore LJJ: 22 November 2001
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The court had no power under s 51(6) of the Supreme Court Act 1981 to make a
wasted costs order against a litigant's former solicitors where they had neither
issued proceedings nor performed any of the ancillary functions defined as
constituting the conduct of litigation in relation to the action. The Court of
Appeal so held when allowing an appeal by Dooley & Co against a wasted costs
order made against them by Mr Recorder Braithwaite QC sitting in Liverpool
County Court on 2 November 1999, following the dismissal of a medical negligence
action brought by the plaintiff, Gerard Byrne, against the Sefton Health
Authority. The plaintiff's action concerned the alleged misdiagnosis of injuries
occurring in May 1989 following an assault. He had initially consulted Dooley
& Co in relation to an unsuccessful claim for criminal injuries
compensation. A medical negligence claim against the health authority was in
contemplation by February 1990, legal aid was obtained and two medical reports
commissioned, but no proceedings had been issued by May 1996, when Dooley &
Co ceased to advise the plaintiff. Thereafter two further firms of solicitors
were instructed, the last of whom eventually commenced proceedings against the
health authority in July 1998. The action was dismissed on limitations grounds.
The health authority thereupon applied for a wasted costs order against the
plaintiff's former solicitors, which the recorder granted against Dooley &
Co on the basis that their negligent or unreasonable failure to commence
proceedings within the limitation period had caused the costs incurred by the
health authority in having the action dismissed, and that it would be
unconscionable for them not to be liable to pay those costs. CHADWICK LJ said
that the jurisdiction to award wasted costs against "legal or other
representatives" under s 51(6) of the Supreme Court Act 1981 applied only in
relation to someone who, by virtue of the definition in s 51(13) read in
conjunction with s 119(1) of the Courts and Legal Services Act 1990, had
exercised rights of audience, issued proceedings or performed any of the
ancillary functions, such as entering an appearance, associated with the conduct
of litigation on behalf of a client. But the whole complaint about Dooley &
Co was that they had not done any of these things in relation to the plaintiff's
proceedings. The decision of Neuberger J in Brown v Bennett (No 2) The Times, 21
November 2001 could be distinguished since in that case proceedings had already
commenced when the lawyers concerned had ceased to act for the claimants. The
alternative suggestion that the recorder could have had jurisdiction to make the
order under s 51(3) of the 1981 Act faced a number of difficulties. First, he
never purported to exercise the power under s 51(3). Second, the scope of s
51(3) had hitherto been confined to cases in which the person concerned had in
some way maintained, promoted or encouraged litigation as the real protagonist
in circumstances where it would be unjust to make the order against the nominal
protagonist. Third, the court could not make an order under s 51(3), any more
than under s 51(6), unless satisfied that the conduct of the person concerned
had been causative of the costs incurred by the person seeking the order. What
had led to the costs being incurred by the health authority was not the inaction
of Dooley & Co but the decision (which was not suggested to have been
improper, negligent or unreasonable) of the plaintiff's current solicitors to
commence an action out of time. LONGMORE and PETER GIBSON LJJ agreed.
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Appearances: Tracey McLevy (Quinn Melville, Liverpool) for the appellants; James
McKeon (Hill Dickinson, Liverpool) for the health authority.
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Reported by: Paul Magrath, Barrister 