Dempsey v Johnstone

On the 27^th January 2003, HHJ George made a wasted costs order against the appellants in favour of the remaining defendant, the respondent, in an action in the Liverpool County Court which had been brought by Mr Dempsey, the claimant, for whom the appellants had acted. The order related to the respondent’s costs between the 22^nd February 2002 and the 11^th March 2002 on which date the judge struck out the claimant’s claim. The judge made the costs order on the grounds that the appellant’s negligence had caused the respondent to incur the costs after the 22^nd February 2002.

The claim arose out of the business relationship between the claimant and the respondent which was intended to exploit a closed circuit television system as a home security system, linked to a domestic television set, which was to be known as “Domineye”. This system was manufactured and marketed in the first instance through the medium of the 2^nd defendants to the claim, a company in which the claimant’s wife held 48% of the shares, and a company controlled by the respondent the remainder. The claimant was employed by the 2^nd defendants and remunerated by way of salary and commission. He was ultimately dismissed by the 2^nd defendants. The 2^nd defendants were themselves placed into liquidation and their assets transferred to the 3^rd defendants which was again a company controlled by the respondent, and in which the claimant had no interest directly or indirectly and by whom he was not employed. That company has itself now been placed in liquidation.

The claimant’s claim was for damages and injunctive relief. The statement of claim, which was settled by leading counsel, essentially made the claim on two bases. First, the claimant asserted that he was the inventor and developer of “Domineye” and was the proprietor of trade secrets and confidential information relating to the system. He asserted that his dismissal by the 2^nd defendants amounted to a repudiation of any agreement entitling the respondent, or the 2^nd or 3^rd defendants to exploit that intellectual property and claimed consequential relief. The second claim was for damages for breaches of that underlying agreement between the claimant and the respondent and the 2^nd defendant which was described as a joint venture agreement entitling him to 10% of the profits of the exploitation of the system.

By his amended defence, the respondent denied that the exploitation of the system involved the use of any intellectual property of which the claimant was proprietor and asserted that any agreement between the claimant and the respondent had been performed by the formation of the 2^nd defendant and the claimant’s employment by the 2^nd defendant which entitled him to remuneration, including a 5% commission. By his reply, the claimant joined issue with the defence, and, in particular re-asserted that the joint venture agreement was between him and the respondent and entitled him to a commission of 10%.

The proceedings were protracted. The writ was issued with the benefit of legal aid in February 1997. On the 5^th March 1997 the claimant was adjudicated bankrupt. The trustee assigned the right to the proceedings to him in May 1997; and the statement of claim was served in the same month. The respondent’s then solicitors made unsuccessful representations to the Legal Service Commission in June 1997 in relation to the continuation of legal aid. His present solicitors repeated those representations, again unsuccessfully, in October 2000. The final pleading, the reply to the Amended Defence, was dated the 2^nd September 2001. Thereafter the trial was fixed for the 11^th March 2002. On the 18^th February 2002, the claimant had a conference with counsel and the appellants in which it can be inferred that advice was given to the effect that there were insufficient prospects of success in the intellectual property claim to justify the continuation of legal aid to pursue that claim; written advice was provided by counsel on the 19^th February 2002. On the 20^th February 2002 the appellants wrote to the respondent’s solicitors stating the intellectual property claim was to be withdrawn.

On the 22^nd February 2002 the respondent’s solicitors wrote a long letter to the appellants setting out what was to form the basis of the application for a wasted costs order. It was faxed to the appellants on the same day, which explains the date chosen by the judge as the date from which he would ultimately make the order for costs. In this letter, the respondent’s solicitors asserted that the withdrawal of the intellectual property claim essentially meant that the claimant had no prospects of success in the remainder of this claim, and that pursuing it with the benefit of legal aid would amount to an abuse of the process of the court. On the 26^th February an application was made under CPR 24 to strike out the claim, supported by a witness statement from Mr Shammah, the respondent’s solicitor, setting out in more detail the respondent’s arguments which were essentially to the effect the claim based upon the remaining allegation of the joint venture agreement had no reasonable prospects of success. The appellants replied by letter dated the 27^th February 2002, which was approved by counsel, in which they asserted that there had been an agreement between the claimant and the respondent as to commission of which the respondent was in breach in that the claimant had not been paid a commission to which he was entitled and that:

When the matter came before HHJ George on the 11^th March 2002, the skeleton argument on behalf of the respondent reiterated the arguments contained in the letter of the 22^nd February 2002, and Mr Shammah’s witness statement of the 26^th February 2002 and argued that, as has been pleaded, such joint venture agreement as had been reached between the claimant and the respondent had been performed by the formation of the second defendants and the arrangements for share holding, remuneration and commission which were made between the parties at that time. In the skeleton argument prepared on behalf of the claimant by counsel, it was said, on the contrary, the agreement was in the terms pleaded in the statement of claim and in the reply, and in particular said:

At the hearing, counsel acting for the respondent handed to the judge and to counsel for the claimant a transcript of the judgments in the unreported case of this court of Patel –v- Patel in which judgment was given on the 30^th January 1996 which, it was said, demonstrated that the claimant’s case was unarguable. I will return to the judgments in this case later. Counsel acting for the claimant considered these judgments during the short adjournment and obtained instructions from the claimant, who had been unable due to ill health to be present at the hearing, to withdraw the claim. Nonetheless counsel for the respondent pressed the judge for a judgment. The judge accordingly considered the merits of the application, concluded that the claim had no arguable prospect of success and dismissed it.

On the 30^th April 2002, the respondent made his application for a wasted costs order against the appellants. After the first day of the hearing on the 18^th October 2002 when the matter was part heard, the appellants made an unsuccessful application to HHJ Kershaw on the 25^th November 2002 to join counsel. Essentially the judge considered that the application had been made too late. Thereafter the respondent’s application was dealt with by HHJ George in two stages. At the first conclusion of the part heard hearing on the 6^th December 2002, he determined that it was a case in which the court could make a wasted costs order; and after the second hearing on the 20^th January 2003, he reserved judgment and on the 27^th January 2003 he made the order itself. The appeal is directed to both decisions.

For the purposes of the hearing on the 6^th December 2002, the judge had before him all the trial documentation, a witness statement from Mr Shammah, the respondent’s solicitor of the 30^th April 2002, a witness statement of David Jackson, a partner in the appellants dated the 15^th October 2002 and a witness statement of Paula Jefferson, a solicitor employed by the appellants dated the 4^th October 2002. David Jackson made a further witness statement on the 16^th January 2003 for the purposes of the final hearing.

The application made on behalf of the respondent was for a wasted costs order of a much wider scope than that which was ultimately ordered by the judge. Mr Shammah’s witness statement accordingly dealt in some detail with the history of the action setting out the reasons why it was said on behalf of the respondent that the action generally had been pursued without regard for the real prospects of success and that the claim should not have been made, or at least should have been withdrawn at a much earlier stage. As to the remaining part of the claim, he essentially repeated the submissions that had been made by counsel on behalf of the respondent in his skeleton argument for the hearing of the 11^th March 2002, and the argument deployed at the hearing which included reference to the case of Patel –v- Patel. The thrust of the argument was that, as pleaded in the defence, the joint venture agreement was performed by the formation of the 2^nd defendants, and did not survive therefore the incorporation of that company and the employment of the claimant.

Paula Jefferson’s witness statement dealt with the attempts which had been made to persuade the claimant to waive privilege so as to permit David Jackson to refer to the contents of advice given both in conference and in writing by counsel, and the details of conversations with and advice given to the claimant by the appellants themselves. Dealing with the matters which are relevant to the wasted costs order that was ultimately made, David Jackson in his witness statement detailed the various dates at which steps were taken from the 18^th February 2002, which I have already related. He then explained the circumstances in which it was decided to advise the claimant not to continue to oppose the respondent’s application on the 11^th March 2002. He did so in the following terms:

The amended defence did not detail the principles specified in Patel; nor did any correspondence produced by SN set out the defence in the terms contained in Patel –v- Patel. It is clear that the mere assertion as appeared in the amended defence that there was no JV agreement falls far short of the ratio identified in Patel –v- Patel.

I would therefore dispute the allegation that it was obviously and glaringly wrong to contend that there was a JV, and I maintain that this was not a hopeless case to pursue.

With regards to the production of the case of Patel –v- Patel this was, as I have noted above, an unreported case, which involved a member of Mr Freedman’s chambers. I presume that Mr Freedman was aware of the case before the day of the trial, it seems by 7 Mar 2002 at the latest. Had he produced the same, or instructed his instructing solicitors to do so, advice could have been taken at that time. At the very least then the costs of the strike out application of the first day of the trial, which were incurred by all parties, could have been avoided. The decision to abandon the claimant’s case was made following receipt of the decision in Patel –v- Patel, as was manifest to all present at the hearing.

I note that once again no application was received to strike out the JV allegations on the basis that they were an abuse of process or so hopeless that they could not succeed. Again, that is not specified in the correspondence of SN with the LSC. Most importantly, the principle expounded in the Patel case is nowhere to be found in SN’s correspondence. This includes all that correspondence which is relied upon in the Points of Claim.

In the circumstances outlined above I am unable to specify any further details concerning the information obtained or advice given or received in connection with Mr Dempsey’s claim without waiver of privilege by Mr Dempsey and, to the extent that it related to settlement, by Mr Johnstone. I maintained contact with counsel throughout. This is not a case where the contact I maintained was with the same counsel. Contact was maintained with no less than three different counsel one of whom was leading counsel all of whom were obviously prepared to act on behalf of Mr Dempsey.”

It would appear from those paragraphs that David Jackson, at least, was of the view that Patel –v- Patel was authority for a principle of law which was fatal to the claimant’s case. In fact Patel –v- Patel was a decision on its own facts, applying trite legal principles. It arose out of a joint venture to purchase, develop and sell property through the medium of a company. Each of the parties participating in the joint venture was to advance £200,000 to the company. Unhappily, the venture was not successful; the property was repossessed and sold by the mortgagee before the works had been completed. The company was then wound up and did not repay any of the monies which had been advanced by the participants. In a claim by one of the participants against the participant who was to be the builder, the judge held that the project failed because of wrongful use of project money by the builder and concluded that that involved a breach of the obligations owed by the builder to the plaintiff who was accordingly entitled to redress.

On appeal by the builder, counsel for the plaintiff conceded that the judge appeared to have based his conclusions on there being a free standing duty of care or fiduciary duty which he could not support; he could only uphold the judge’s judgment if he could establish that there was a contract between the plaintiff and the defendant, the obligations, of which continued to subsist after the company had been formed and after monies had been advanced. Leggatt LJ held that that argument was bound to fail as the judge did not find that any such contract had been made. He was of the view that the judge was right not to find any such contract, because the essence of the arrangements between the participants was that each had advanced money to the company and that accordingly once the company was formed and the money advanced the preliminary arrangements were fulfilled. He concluded therefore that as the judge had not found any continuing contractual obligation it was inevitable that the judgment could not be upheld. Peter Gibson LJ agreed that the plaintiff could only succeed if a contractual duty subsisted after formation of the company and that the judge had not made the appropriate findings.

Patel –v- Patel did not purport to formulate any proposition of law. Leggatt LJ pointed out the difficulty there may be in establishing a continuing contractual duty after the formation of a company in such circumstances, but there is nothing to suggest that the court was saying that no contractual obligation can ever survive the formation of a company in this type of situation. It clearly depends upon, as one would expect, the judge’s conclusions of fact having heard the evidence as to what each party to the agreement asserts to be the terms of the agreement. There appears to be belated recognition of this in David Jackson’s witness statement of the 16^th January 2003 where he said:

The judge, in his judgment of the 6^th December 2002, accepted the respondent’s argument that the test he had to apply, in accordance with the judgment of this court in Ridehalgh –v- Horsefield [1994] Ch 205 was whether the appellants had been negligent, in the sense that they had been prepared to continue to act after receipt of the letter of the 22^nd February 2002 when no reasonably competent solicitor could have considered that there were any prospects of success. His conclusions are set out at page 24 of the judgment as follows:

The judge reminded himself of the dangers of hindsight, he took into account the difficulties created by the fact that privilege had not been waived and that the proceedings had been supported at all times by counsel but he concluded at page 26:

At the Hearing on the 27^th January 2003, counsel for the appellants sought to re-open the issue as to whether or not the appellants had been negligent, seeking to rely, inter alia, on David Jackson’s witness statement of the 16^th January 2003. The judge held that he had already determined that issue and was only prepared to consider the question of whether or not, in the circumstances, he should exercise the jurisdiction to make a wasted costs order, and if so to what extent. He concluded that he should make an order, as I have already related, in respect of the respondents costs after the 22^nd February 2002. He rejected arguments on behalf of the appellants that their negligence, so found, had not caused those costs to be incurred bearing in mind the fact that counsel had given the advice which had resulted in the claim continuing, and that the question arose as to the stance which the Legal Service Commission would have adopted had the appellants withdrawn, and further rejected the argument that the order for costs against the appellants should be abated to reflect the position of counsel.

In this appeal, the appellants submit that the judge applied the wrong test when he determined on the 6^th December 2002 that it was appropriate to make a wasted costs order, that mere negligence was not sufficient as a basis for such an order. It is submitted that such an order would only have been appropriate had the judge found that the appellants had acted in a way which amounted to an abuse of process. Alternatively it is submitted that the judge was wrong to conclude that the appellants were negligent. It is further submitted that even if the judge was correct to conclude that a wasted costs order could be made, he was wrong on the 27^th January 2003 to find that the appellants caused those costs to be wasted, alternatively was wrong not to hold that the order should be abated by reason of the involvement of counsel.

The judge was exercising the court’s jurisdiction under section 51 of the Supreme Court Act 1981 which was substituted by the Courts and Legal Services Act 1990. The relevant provisions are as follows:

In sub-section (6), “wasted costs” means any costs incurred by a party –

as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or

which in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.”

Both parties to the appeal agree that the main authority on the meaning to be given to these provisions is the decision of this court in Ridehalgh –v- Horsefield in which the judgment of the court was handed down by Sir Thomas Bingham MR. The court reviewed the history of the court’s jurisdiction to make orders for costs against legal representatives and then considered, in the light of that history, the proper meaning to be given to the words “improper unreasonable or negligent”. Having said that the words “improper” and “unreasonable” had clear meanings to be gleaned from that history, the Court concluded at page 232 as follows:

It is submitted on behalf of the respondents that this passage, in particular the passage dealing with the meaning to be given to the word “negligent” fully justifies the judge’s approach in the present case. The appellants, on the other hand, submit that this statement of principle has to be approached with some caution, and that this was recognised by Lord Hobhouse in Medcalf –v- Mardell[2003] 1AC 120 whose opinion was expressly approved by Lord Bingham in the same case, and that the true principle, at least in cases where the legal representative is accused of pursuing a hopeless case, was identified by Peter Gibson LJ in Persaud –v- Persaud Neutral Citation Number [2003 EWCA Civ 394] where he said at paragraph 27 that in such a case:

The passage upon which the appellants rely in the speech of Lord Hobhouse in Medcalf –v- Mardell, which it is said supports the statement of the law by Peter Gibson LJ in Persaud reads as follows:

There are, it seems to me, a number of difficulties in accepting that these passages modify in anyway the meaning to be given to the word “negligent” in the section as interpreted by this court in Ridehalgh –v- Horsefield. First, Lord Bingham expressly affirmed that decision in his speech in Medcalf –v- Mardell at paragraph 13, and his speech was expressly approved by Lord Steyn at paragraph 45, Lord Hoffman at paragraph 46 and Lord Rodger at paragraph 75. Second, although Lord Bingham expressed himself as being ”in full agreement” with the opinion of Lord Hobhouse at paragraph 26, it is not clear that this was intended to refer to the passage in question which was obiter in a sense that it dealt with an issue which was not an issue in that appeal. Third, Lord Hobhouse appears to have expressly disagreed with the analysis of the Court of Appeal in Ridehalgh –v- Horsefield when he concluded that the word “negligent” is directed primarily to the jurisdiction as between the legal representative and his own client. I think that the court should be cautious about concluding, as submitted by the appellants, that the meaning to be given the word “negligent” has been modified by the approval given to the opinion by Lord Bingham and, it is said, by inference from their agreement with Lord Bingham’s speech, by the remainder of their Lordship’s House.

I do, however, consider that the passage in Lord Hobhouse’s speech in question is useful in sounding a cautionary warning about the way in which the court should approach cases such as the present. The essence of the complaint against the appellants is that they pursued a hopeless case when reasonably competent solicitors should have appreciated that it was bound to fail and taken appropriate action, it is said by withdrawing from the proceedings and giving appropriate advice to the Legal Service Commission. It falls therefore into the category which the Court of Appeal itself identified in Ridehalgh –v- Horsefield as requiring the court to have particular regard to the conflicting interests that are involved. Persaud –v- Persaud provides a good example of the problems which arise. In that case the claimants were the sons of the defendant who were asserting a contract of which they said that their father was in breach. The judge having heard the evidence, disbelieved the sons’ account, but continued:

He further held that other arguments based upon constructive trust and proprietary estoppel were of no avail and that there was no other proper means of obtaining relief from the father. In other words, the judge held, as the judge did in the present case, that even if the facts pleaded were accepted by the court, the claim could not succeed as a matter of law.

In the application for a wasted costs order against counsel, the judge was provided with three advices of counsel, but not any of the instructions from which those advices were given. He concluded that counsel did not appear to have taken properly into account the Legal Aid Guidelines published by the Bar Council. He nonetheless concluded that he was concerned, not with any breaches of counsel’s duty to the Legal Services Commission or indeed to any other person, and only to a breach of counsel’s duty to the court. The question of negligence therefore had to be determined in the context of that duty. He was not satisfied that any breach of that duty had been established and accordingly dismissed the application.

The Court of Appeal approved that approach. It is therefore in the context of counsel’s duty to the court the question under section 51 has to be answered. The context is, as always, critical. In cases where the allegation is that the legal representative pursued a hopeless case, the question was correctly identified by the judge as whether no reasonably competent legal representative would have continued with the action. It is difficult to see how that question can be answered affirmatively unless it can also be said that the legal representative acted unreasonably, which is akin to establishing an abuse of process. That is the concept which seems to me to be the appropriate concept when assessing the exercise of judgment, which is essentially what the legal representative is doing in balancing the various interests which have to be balanced in such a situation. I can see, however, that negligence could be the appropriate word to describe a situation in which it is abundantly plain that the legal representative has failed to appreciate that there is a binding authority fatal to the client’s case. That may, of itself, justify making a wasted costs order, although in practice it is difficult to envisage a case in which that situation would have persisted to trial without the other party having drawn the case to the other side’s attention. It follows that I do not consider that the judge applied the wrong test; but I do consider that he came to the wrong conclusion. As the passage from his judgment which I have cited makes clear, he took the view that the facts pleaded could not support the claim made. The relevant paragraphs of the statement of claim, which, it will be remembered was settled by leading counsel, as follows:

The Plaintiff also claims damages against the 1^st Defendant then the 2^nd Defendant for breach of the Joint Venture.”

In the reply to the amended defence of the 1^st defendant, the claimant reasserted that there was a joint venture agreement which was essentially to be a 50/50 partnership, with the claimant receiving 10% commission on all sales. The claimant expressly denied the averment that any such agreement was performed by and therefore subsumed into the arrangements made in relation to the company, the 2^nd defendants. This was essentially repeated as the claimant’s case in the passage in the skeleton argument prepared by counsel for the claimant to which I have already referred in paragraph 7 of this judgment.

With respect to the judge, it seems to me that those passages from the pleadings are capable of supporting an assertion that there was an agreement which had a life independent of the arrangements made in relation to the 2^nd Defendants. Whether it did so or not was essentially a matter for evidence, as stated by counsel in her skeleton argument. It seems to me that, in that skeleton, counsel was obviously alert to the argument that the joint venture had been performed by or subsumed within the formation of the company from the first sentence to the passage to which I have referred. It follows that the judge was wrong to conclude, as he did, that this was a case in which the pleadings could not support the claim made as a matter of law. The question he should have asked was whether or not no reasonably competent legal advisor would have evaluated the chance of success in such an argument as being such as to justify continuing with the proceedings.

In determining that question, it seems to me that the judge could only come to a conclusion adverse to the appellants if he had the opportunity of seeing the privileged material. It is suggested on behalf of the respondent that it is an inevitable inference from the fact that counsel’s advice of the 19^th February 2002 resulted in the extension of legal aid for the purpose of the trial that counsel, and also inferentially the appellants, were asserting that there were good prospects of success, and that that was a judgment no reasonably competent legal advisor could have made. I do not consider that that is a permissible inference to draw on the facts of this case. Medcalf –v- Mardell makes it plain that the court should only come to such a conclusion if it is satisfied that there was nothing that the legal advisors could have said by reference to the privileged material which could counter that inference. That cannot be the position here. All that the court could properly infer is that Legal Aid was extended as a result of the advice. We cannot know in what terms the advice was couched, because we do not know what motivated the Legal Services Commission to extend the certificate on the facts of this case.

Much play was made on behalf of the respondent of the fact that the claimant was advised not to oppose the strike out application once the case of Patel –v- Patel had been made available to the appellants and claimant’s counsel. This aspect of the case clearly impressed the judge. The inference that he drew was that neither the appellants nor counsel could have been aware of the difficulty exposed by the case of Patel –v- Patel, and had therefore failed to understand a straightforward principle of law. Again, in the absence of any waiver of privilege, I do not consider that this inference was permissible. It seems to me that it can be inferred from counsel’s skeleton argument, as I have already said, that counsel was alert to the problem. The question was whether or not the facts were capable of establishing the continuing contractual obligation asserted on behalf of the claimant. The fact that Patel –v- Patel persuaded the appellants and counsel to advise the claimant that he had no realistic prospect of success in opposing the striking out application does not in anyway establish as a necessary inference that their evaluation prior to then was in anyway negligent. The decision to advise the claimant as they did was taken in the course of a hearing in which the arguments for the respondent were being deployed, and the judge’s reaction to them will have been apparent to the appellants and counsel. The fact that David Jackson describes the decision in Patel –v- Patel in his witness statement as a “body blow” supports the inference that it was by then apparent to the appellants and counsel that it provided a strong peg upon which to hang the respondent’s argument; it does not provide any secure basis for an inference that the appellants’ and counsel’s judgment previously was one which no competent reasonable advisor could have made.

Accordingly, I do not consider that the judge was right to make an order under section 51 on the facts of the present case and would allow the appeal. In these circumstances it is not necessary to deal with the issues of causation and abatement raised by the appellants.

I agree with the reasoning and conclusions of Latham LJ, but I add some further words on the subjects of pursuit of a hopeless case and negligence. The authorities identify pursuit of a hopeless case as a head requiring separate attention. Once unsuccessful litigation has been brought to an end, hindsight is likely to encourage suggestions that the legal advisers to those who pursued or defended it should not have lent it their assistance, or should not have done so for as long as they did. In Ridehalgh v. Horsefield[1994] Ch. 205, 233F-234F Sir Thomas Bingham MR as he was, giving the judgment of the court, emphasised that a legal representative

The Master of the Rolls went on to distinguish cases where a representative lent his assistance to proceedings which were an abuse of the process of the court. The examples he gave were of clear cases, e.g. the pursuit of litigation for reasons unconnected with its success, or the pursuit of dishonest litigation; but he added that

In the passages referred to in the previous paragraphs, the court was not directly addressing the problem of negligence in the conduct of litigation. An example of negligence leading to the pursuit of litigation having no prospect of success might, however, be a legal representative pursuing a claim or a defence in ignorance of an authority at the highest level from which no-one aware of it could sensibly have thought that any future court would depart. One would not, I think, speak of the solicitor having abused the process in this context, but his or her negligence could, in my view, be relevant to an application for a wasted costs order.

The history of the wasted costs jurisdiction was considered in Ridehalgh v. Horsefield at pp.226D-232C. The court pointed out that, in considering the court’s inherent jurisdiction to make a wasted costs order against solicitors, the House of Lords held in Myers v. Elman [1940] AC 282 that

The inherent jurisdiction was regulated, but not enlarged, by a new rule of court (later RSC Ord. 62 r.8(1)), which referred to “costs … incurred improperly or without reasonable cause or … wasted by undue delay or any other misconduct or default”. However, in 1986 there was a material amendment, so that what now became Ord.62 r.11 referred to:

Finally, s.51(1) of the Supreme Court Act 1981 defined wasted costs as meaning

Ridehalgh v. Horsefield was affirmed by Lord Bingham in paragraph 13 of his speech in Medcalf v. Mardell[2002] UKHL 27; [2003] 1 AC 120, with which four other members of the House expressed their agreement. In these circumstances, I would not for my part think it consistent with those authorities to conclude that, for conduct to be “negligent” so as to open the jurisdiction to make a wasted costs order under s.51(1), “negligence on its own would not suffice, however serious the negligence might be”, or that “there must be something more than negligence” for such jurisdiction to arise (cf Persaud v. Persaud [2003] EWCA 394, paragraphs 23 and 26).

Where, as in Persaud v. Persaud, the gist of the complaint is the pursuit of a hopeless case, the approach to an application for a wasted costs order is, in the absence of any specific indication of negligence, likely to be to consider whether the conduct of the litigation amounted to an abuse of process. But, even that question may, as Latham LJ has said, resolve itself into a general enquiry into whether or not the legal representative pursued a claim or defence which no reasonably competent practitioner could have done. That invokes a test also familiar in cases where negligent conduct is alleged. I note in parenthesis that, when the court in Persaud v. Persaud came to the facts, it addressed submissions put in such terms: see e.g. paragraphs 29 and 30.

I consider, however, that although the test for establishing whether the appellant was negligent is the untechnical test, whether or not he failed to act with the competence reasonably to be expected of ordinary members of the profession, it cannot be concluded on the present facts and in the absence of any waiver of privilege that the appellant was either negligent or continued to conduct and pursue the litigation in circumstances when no reasonably competent legal representative would have continued to do so.