When considering a wasted costs order, can a tribunal decide if representatives have breached their duty to the tribunal without considering evidence?
No, held the EAT in KL Law v Wincanton, overturning a wasted costs order.
The Claimant had not disclosed diary entries, which came to light on day 3 of a 4-day hearing. The Claimant then withdrew her claims. The Respondent sought costs against the Claimant (unsuccessfully due to her limited means) and got wasted costs against her representatives - the Appellant. The tribunal made the wasted costs order the following day, on submissions alone, with no evidence allowed.
The EAT held that the tribunal had erred in law. There was no evidence that the Claimant's representatives had breached their duty to the tribunal, it could not simply be assumed that a failure in disclosure arose from negligence by a representative or a breach of its duty to the tribunal. The Claimant had not waived privilege, there was no evidence before the tribunal to enable it to establish what advice the Claimant had been given about disclosure. The EAT also noted that with a wasted costs order, the additional costs incurred by unreasonable conduct should be calculated as far as possible, the tribunal could not have known if the Claimant had continued with the claim regardless of advice.
The EAT noted that a wasted costs order should only be made after careful consideration, it is a serious sanction for a legal professional. It would have been preferable to adjourn, to allow the representatives to resist the application, produce evidence and consider their position, as well as any possible conflict with their client.
Thanks to Ed McFarlane of Deminos HR for preparing this case summary.
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