The applicants (R and J) made a wasted costs application against the respondent solicitors (H) in the context of proceedings known as D v R (Deputy of S) and S  EWHC 2405 (CoP), which had been heard by Henderson J in the Court of Protection concerning S. R was S’s daughter and his deputy. She had brought proceedings in the Chancery Division in S’s name to recover property S had given away to D on the basis of undue influence. S’s wish was that D should retain the property given to her. In that context, D applied for a declaration from the Court of Protection that S had litigation capacity. In those proceedings there were directions for medical evidence in respect of S’s litigation capacity and that Professor Howard, D’s expert, should provide questions to the court visitor Dr Barker and that they should have a discussion and provide a joint report concerning their areas of agreement and disagreement. However, without the court’s permission, Professor Howard was instructed to visit S and produce two further reports, which were, in the circumstances, admitted as evidence in the proceedings, but consequently R was permitted to obtain her own expert evidence from a third expert. This significantly complicated and extended the trial. During the trial it appeared that there were defects in the manner in which Professor Howard had been instructed and also flaws with his reports.
Henderson J found that S did not have litigation capacity. In a later hearing he held that D was to have her costs out of S’s estate until the time when Professor Howard was instructed to undertake his further reports; thereafter she should not have her costs from S’s estate and she was ordered to pay 75% of R’s costs and an interim costs order was made in the sum of £30,000. Following that order the proceedings in relation to the undue influence claim were settled by a Tomlin order. That Tomlin order included a provision that there would be no order as to costs which effectively meant forgiving the costs order made in the Court of Protection proceedings. The Tomlin order also provided that D was to assign all the causes of action that she might have against her then solicitors H to S. The order was approved by Henderson J. Following this S died. R and J were appointed his executors under his will. They bought an application for wasted costs against H in respect of the costs incurred by D after Professor Howard had been instructed to prepare his last two reports on the basis that (a) H had acted negligently and unreasonably or improperly in failing to seek the court’s permission before instructing Professor Howard to produce these reports and (b) H had failed to instruct Professor Howard properly and that he was not provided with the statement of case in the Chancery proceedings until he was in the witness box.
H defended this application on the basis that:
- (a) It was too late to bring a claim for wasted costs because a claim could only be made ‘at any stage in the proceedings up to and including the proceedings related to the detailed assessment of costs’ (para 53.1 of the Costs Practice Direction) and the proceedings in this case were those in the Court of Protection which had terminated when the Tomlin order was approved;
- (b) Because R had effectively forgiven the costs order in the Court of Protection proceedings in settling the Chancery proceedings and D and J could not now make a claim for wasted costs because that would constitute double recovery; and
- (c) On the merits, in circumstances where D had not waived privilege in respect of the advice given to her, H were entitled to all reasonable benefit of doubt in respect of their actions and that in the circumstances the court could not be sure that there was nothing that H would have been able to say (had privilege been waived) which would have exonerated them.
Held (dismissing the application)
- (1) The application had not been made on time because the Court of Protection proceedings had already terminated before the application was made.
- (2) R had obtained a real benefit from the compromise of the action, which effectively stripped D of her assets (save that she was entitled to keep a sum from the net proceeds of sale of one of the properties given to her by S and the surplus from any claim brought against her former solicitors), and was better for S than taking the matter to trial because had it gone to trial it would only have depleted D’s assets, which were, in any event, not sufficient to meet the claim made against her let alone a costs award. The retention was partly associated with S’s strong desire that D should be entitled to retain the gifts he had made. In the circumstances, the parties intended to leave open any recourse that R might have against third parties for her costs of D’s application and the issues of double recovery should be addressed if and when they arose but should not be treated as an immediate bar to any claim against a third party, D v H (Costs)  2 FLR 824 distinguished.
(3) In any event it was not possible for the court to say that there was nothing H could have said to counter the accusation that they had acted improperly in instructing Professor Howard in respect of his last two reports without the permission of the court or that it would have been fair to make a wasted costs order against them. Nor was this possible in respect of the allegations made against H in respect of the instructions that Professor Howard had been given.JUDGMENT MR JUSTICE HENDERSON: Introduction  This is my judgment on an application to show cause why the respondent solicitors, Hunters, should not pay the costs allegedly wasted after 8 December 2009 on an application which I heard in the Court of Protection The applicants, Ms Ragny Sharma and her solicitor Mr Paul Judkins, are …