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Wasted Costs

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Can a wasted costs order be made without rigorous examination of the conduct in question?

No, held the EAT in Wentworth-Wood v Maritime Transport Ltd..

A firm of solicitors which had been issued with a wasted costs order admitted that its case preparation had not been ideal but argued that the tribunal had failed to identify how they had breached their duty to the tribunal. The EAT set aside the order.

The tribunal did not identify the conduct which was said to amount to behaviour that no reasonably informed and competent solicitor would indulge in. Rule 80(1) of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 requires identification of the improper, unreasonable or negligent acts or omissions. Mere allegations do not suffice.

Furthermore, the tribunal did not consider the 3-stage test derived from Ridehalgh v Horsefield. The correct approach is to:

(i) adopt a staged approach and specifically consider the conduct alleged;
(ii) assess whether the particular conduct caused unnecessary costs; and;
(iii) consider whether in all the circumstances it is just to make the order.

Wasted costs is an exceptional jurisdiction to be exercised with great care. It is a last resort.

Thanks to Karen Jackson of didlaw for preparing this case summary.