Caroline Robinson v Air Compressors & Tool Limited & Ors

This is the reserved judgment following a hearing on 19 December 2024 at which the Claimant’s solicitors Tilly Bailey & Irvine [“the respondent firm”] were required to show cause why they should not pay the costs wasted by the Second and Third Defendants in defending a claim as was dismissed against both of them on 22 May 2024 with the consent of the Claimant.

In her capacity as Administratrix of the estate of her late father, Stanley Faulkner, the Claimant issued a Claim Form on 21 April 2021 against three defendants, Air Compressors & Tool Limited (i), Lansing Bagnall Limited (ii) and Lansing Linde Limited (iii) in respect of alleged asbestos exposure to the Deceased during his lifetime. The exposure alleged against all three defendants concerned the same manufacturing site in Basingstoke. Details of both exposure, the nature of the Deceased’s employment and by whom were and remain pleaded in very general terms. The plain concept presented, and indeed endorsed by the respondent firm in its witness evidence, is that the position is complex but a plain and cogent case on liability presents itself.

None of the three defendants sued agreed with this proposition.

In a joint Application dated 24 February 2023, the Second and Third Defendants had sought either to strike out the claim or for summary judgment on the basis that, first, the documentary evidenced sequence of their respective corporate history established that neither company could have employed the Deceased (“the corporate identity point”) and, secondly, the generality of the alleged case on exposure was such that it had no reasonable prospect of success.

On 22 May 2023, the First Defendant issued a similar claim on these questions. Both applications were listed before me on 25 July 2023.

On 17 July 2023, and so only a week before the hearing, the Claimant CE Filed an application both to add or substitute a party. The Claimant’s application more side stepped than acknowledged the Defendants’ applications on the corporate identity point. Indeed, it could fairly be described as having sought to keep the Claimant’s options as open as possible. This said, the Claimant’s application plainly intended to diffuse the corporate identity point. However, the application had by the date of the hearing merely been CE filed. It had not been administratively accepted by the KBD staff and still less served on the Defendants as an issued Application. Accordingly, it had not been listed and so was not before the court on 25 July 2023.

The hearing on 25 July 2023 therefore proceeded to consider the First Defendant’s Application in its entirety and the claim against the Second and Third Defendants on exposure. The Claimant’s Application to add or substitute a new party should be properly listed and heard alongside that part of the Second and Third Defendant’s application on the corporate identity point.

I concluded during the hearing that the First Defendant’s application could and should be decided in its favour. The Claimant had incorrectly sued the First Defendant and her claim against it was dismissed.

In a reserved judgment, I decided that the exposure alleged was not amenable to summary disposal in the Second and Third Defendants’ favour, despite there being clear evidential difficulties in the Claimant’s case. The remaining corporate identity point was adjourned off and came to be listed before Master Eastman on 22 May 2024.

The reason for the delay in the matter coming back before Master Eastman is not clear but, either way, it provided – or rather ought to have provided – the Claimant with additional time in which to consider her position and clarify matters in response to the Second and Third Defendants’ Applications that, for the reasons that follow, I am entirely satisfied very clearly called out for her attention and consideration.

Despite this time interval, it appears nothing was really done by the Claimant or the respondent firm. Instead, at court and shortly before the hearing before Master Eastman, the Claimant agreed that the claims against the Second and Third Defendants could be dismissed in exchange for a new party being added. Respective counsel for the parties agreed terms as were approved and drawn into an Order sealed on 6 June 2024.

Briefly summarised, those terms were that:

Counsel for the Second and Third Defendant submitted to Master Eastman that the facts and chronology of events in suing these companies from April 2021, only to see consent for the dismissal of the claims against them very shortly before the restored hearing on the corporate identity point over three years later should see a wasted costs order being made against the Claimant’s solicitors. Master Eastman, being satisfied that there seemed at least prima facie evidence in support of such a submission, directed that the Claimant’s solicitors should by 19 June 2024 “make such representations in writing as it wishes to make” about a wasted costs order being made, in accordance with Para 5.5 of PD 46.

The pleaded issues relevant to the corporate identity point

Evidence in respect of the wasted costs application

The witness statement of the respondent firm’s solicitor Mr Mark Harry Ellis, dated 19.06.24, ought to have provided the Defendants and court with a full and comprehensive response to the show cause application. Despite this, the statement fails directly to address the centrality of the criticisms levelled against his firm on the corporate identity point. The statement makes a general confirmation that there has been no waiver of privilege [2] and claims [4] that his firm had not been fully apprised of the fundamental allegations being made. Mr Ellis suggests that his understanding of the “allegations” instead had to be derived from Counsel’s attendance note of the hearing. In the context of such portrayed lack of specificity, Mr Ellis describes how “the Claimant has sued the wrong legal entities in the form of D2 and D3, a matter which was recognised in our application 19^th July 2023”. Much of his commentary that follows is derived from discussion in Friston on Costs 3^rd Edition about the principles of wasted costs orders and their consideration. It does not even come close to volunteering an explanation how and why suing the Second and Third Defendants was justified yet why a decision was taken three years on to discontinue.

I am quite satisfied that the central nature of the complaint must have been entirely clear between counsel and before the court at the May 2024 hearing. The Claimant had agreed to discontinue against the Second and Third Defendants only just before the hearing and yet had provided no prior notice or concession that this was the case. The 19 July 2023 amendment application did not “recognise” the criticisms. I repeat, it sought instead to side step or obfuscate them. Irrespective of matters of legal privilege, I am quite satisfied that that no solicitors acting for the Claimant could have been in any doubt as to the contrasts between the Defendants’ challenges as pleaded, the less than clear procedural analysis underlying the July 2023 Application and the Claimant’s very late change of position on the Defendants’ applications. Paragraph 11 of the May 2024 Order recorded how “the Court being satisfied that it had before it evidence which, if unanswered, would be likely to lead to a wasted costs order being made against the Claimant’s solicitor”.

In the circumstances, there seems no justification for Mr Ellis to portray himself as somehow handicapped in his ability to understand and hence respond to the show cause application.

That is not merely a gratuitous observation. I agree with the submission at the hearing of Mr McNamara that the expected response would have been to work from the plain and obvious starting point that the Claimant had, by her own election, abandoned her claims against the Defendants. That, therefore, called for explanation. Hence the show cause hearing as listed.

In terms of the obviously required commentary and response, the closest Mr Ellis offers is to refer to the HMRC schedule and suggest that the “evidence demonstrates clearly that the (C)ompany Lansing Bagnall had a complex corporate history…it would appear from the HMRC schedule that both D2, D3 and Linde Material Handling (UK) Ltd have essentially swapped names over that employment period”. He suggests that incidence of the Second Defendant having a registered office in the same location means it “was therefore possible that the two did employ the Deceased”. The corporate sequence represents “ strong match between the Defendants and the evidence in the HMRC schedule”.

Mr Ellis cross refers to and relies upon the statement he prepared in support of the July 2023 amendment application. That statement, I find, tends to confuse more than it clarifies. Mr Ellis resorts to references in “Wikipedia” for a general reference to the “the Company” “Lansing Bagnall” as a forklift truck manufacturer and refers to 1952 ariel photographs to illustrate where the deceased worked and hence the general location of the addresses used by the various companies. This very general style of observation served only to illustrate that, before the decision to discontinue, the Claimant in objective terms really appeared to be wanting to add more parties rather than substitute, working within a very generalised concept of general association and possibility. Accordingly, the July 2023 procedural stance would have been difficult to follow had the matter proceeded to a hearing, principally because of the obvious requirement on an amendment to substitute (as distinct from add) is to clarify whether the substitution is as to the name of the same entity or the substitution of a new entity. The clear and obvious point of the Defences was that there was no basis for retaining the existing corporate entities as sued. Hence, they should be removed from the claim.

Given the Claimant ultimately (if lately) conceded the Second and Third Defendant’s corporate identity point, it is unnecessary overly to dwell upon how the Claimant’s July 2023 Application might have been pursued. For the purpose of the wasted costs application, however, it needs to be observed that this statement fails clearly and succinctly to rebut the clear reasoning in the respective Defences how and why there was no reasonable case that the Second and Third Defendants employed the Deceased. In other words, that the claims against them had no prospects of success rather than weak prospects.

Mr Ellis submits [17] that what is being criticised is “at best an error of judgment” and that even if pursuit of the Second and Third Defendants is to be seen as hopeless “such a determination could only really be one made in hindsight [18]. This paragraph adds, perhaps somewhat delphically “I again refer to the fact that the Claimant had not waived privilege in respect of advice given. I therefore cannot say whether advice was or was not given on any particular issue and (if advice was given) I am unable to say what the advice entailed”. His firm was accordingly [21] “irredeemably prejudiced by reason of legal professional privilege”.

I disagree the corporate identity point was complex and such as can only now seen to be capable of interpretation in favour of the Second and Third Defendant’s “with the benefit of hindsight”. On the basis of the analysis of the Statements of Case above, I am quite satisfied that the obvious task in this statement should have been to explain and justify why a point that was entirely capable of review and appropriate response following receipt of the respective Defences in Autumn 2021 instead saw a period of delay and hence expense being incurred by the Applicant Defendants only then to be resolved by complete retraction in May 2024.

The highest relevant application of this statement is a generalised reference to litigation privilege, the effect of which is to imply that the costs order made directly against the Claimant as a result of the respective discontinuances should stand.

Ms Suzanne Beverley prepared a witness statement dated 12.12.24 on behalf of the Second Defendant. This amplifies the procedural sequence, commencing with the Claimant first issuing her claim in the County Court Money Claims Centre. Ms Beverley refers to correspondence in March 2022 to the Claimant’s solicitors inviting comments on the corporate identity point, which saw no response from them. She comments that at a CMC in May 2022, when the case was transferred to the KBD, the District Judge remarked about the Claimant’s vulnerability to a strike-out application. She confirms, lest there be any room for doubt in the Claimant’s solicitors understanding from his counsel what had occurred before Master Eastman, that counsel for the Second and Third Defendants “had made an oral application for a Wasted Costs Order against the Claimant’s Solicitor due to their unreasonable conduct in doing nothing to address the fact they had sued the wrong Defendants for twenty-two months”.

Significantly, Ms Beverley confirms that the Claimant’s solicitors had received the full HMRC employment material (the facing and deduction cards) in January 2019 and so the Claimant through her advisors had had chance to check and investigate the corporate identity point very considerably before the point was drawn to their attention in the autumn 2021 Defences.

A witness statement from Ms Jayne Smith, dated 12.12.24, is relied upon on behalf of the Third Defendant. This follows a similar path of setting out the lengthy period of delay from the initial correspondence on the identify point, the Defences, the Claimant’s tardy July 2023 Application and then her last minute change of position in May 2024. Ms Smith concedes [31] that whilst mistakes can be made as to corporate identity in initial stages, a claimant solicitor must take prompt action to correct any mistakes. Hence, the marked continued failure to make good the “mistake” amounts to improper and/or unreasonable conduct.

Ms Smith disagrees with the assertion that the corporate history is complex [36], remarking “To the contrary, it is not unduly complex and certainly was not beyond the ability of the Claimant's experienced solicitor, a partner and Grade A fee earner, to unravel, especially one who had the deceased's HMRC Schedule of Employment to hand and was able to access free Companies House information”. Further, at [38] “ For solicitors routinely dealing with disease claims of this nature, the Third Defendant submits the corporate histories for the Second and Third Defendants were not unduly complex and had basic enquiries been made, the Claimant should have resolved the procedural issues within a prompt period following service of the Defences”.

Mr Ellis then submitted a “supplemental statement” dated 17.12.24 and so only one clear working day before the hearing on 19.12.24.

In it, Mr Ellis seeks to justify a further statement on the basis of recent receipt of the statements from Ms Beverley and Ms Smith. He suggests that until their receipt, he had “not been fully appraised (sic) as to the actual allegations against the firm”. He again asserts that there was a “complex corporate history”, refers to pre-action correspondence discussing with the insurers Zurich the proposed claim and how he had written to the insurers to ask them to “clarify the full title and correct title of the Defendants for the purpose of the issue of proceedings”. I note Mr Ellis appropriately does not go so far as to suggest that the absence of any such clarification or confirmation by Zurich pre-action somehow justifies and explains away his firm’s position in not sufficiently researching the point for themselves.

Save for what appears at Paragraph 16 in the statement, nothing really is added in terms of supplemental explanation, clarification or mitigation in respect of the obvious task in hand.

Paragraph 16 comments:

“The corporate history could not be assisted by the Claimant who was acting in the capacity as Executrix and could only provide evidence that the Deceased working with the Lansing Bagnall Group of Companies based at Kingsclere Road Basingstoke. No further action was taken on the defence filed beyond the replies”.

As I commented at the hearing, the ostensible meaning and application of this paragraph would appear to be to dissociate the Claimant in person with the sequence, analysis and presentation of the corporate identity point. As such, references to legal privilege would appear to be a distraction or, as Mr McNamara described by analogy, resort to a mere “fig leaf”.

The hearing and subsequent evidence

Mr McNamara summarised the criticisms in the Defendants’ witness evidence as being that the respondent firm had : issued proceedings in the wrong court against the wrong Defendants; failed to respond once the corporate identity had been raised; failed to recognise the obvious shortcomings in the Claimant’s case, concede and move on; instead continued to ignore both correspondence and the Defendants’ Application and instead making an application without any or any sufficient introduction that it was to correct and remedy matters by adding the correct party as a Fourth Defendant; conceding the Defendants’ application only at the door of the court.

The Defendants directly challenge that any aspect of legal privilege can excuse what they contend was plainly the responsibility of the respondent firm, rather than the lay Claimant, to research the relevant corporate history. Moreover, they had had at least two years in which to do this, commencing with obtaining the HMRC schedule in January 2019 and ending on issue in April 2021. This opportunity, they contend, stands in even further stark contrast to the lack of response until the eventual complete change of position in May 2024. There was nothing in the period during which the Claimant’s solicitors had to consider their position that changed or only could better be assessed in later stages. To the contrary, nothing had changed and so Mr Ellis’ proposition of the “benefit of hindsight” has no currency. The Defendants contend that this was not the pursuit of a weak case, thereby drawing upon supporting commentary in the authorities that pursuing a weak case is not (at least by itself) sufficient to justify a wasted costs order. To the contrary, this was the resolute and unjustified pursuit of a case that had no legal justification. This could not be excused away in hindsight as error of judgment : it was, quite simply, erroneous conduct.

The Defendants submit that the negligence in this case is obvious and gross. The Claimant’s intransigent stance had the effect of escalating the costs of the litigation and wasted the court’s resources, both without regard to the overriding objective. Such conduct also can be described as improper or unreasonable.

Mr Cutler on behalf of the Claimant’s solicitors initially sought to persuade that the power to make a wasted costs against a legal representative was subject to the process of it first being subject to the assessment of the costs awarded against the legal representative’s client. It should not be used as a collateral way of indemnifying the applicant in the event that the primary party against whom the costs order has been made might be unable to pay any costs as awarded. The court dismissed that submission during the hearing as a misinterpretation of the basis of the Defendants’ application. Submissions instead focused on the principle of wasted costs, drawing upon the authorities produced.

The respondent firm seeks to place blame on the Defendants for not making their position clearer during the protocol stage. Neither Defendant “assisted” the respondent firm until after issue and the respondent was obliged “to proceed cautiously” in the interests of the Claimant.

Mr Cutler adopted Mr Ellis’ submission that the corporate identity point was confusing and complex such that the conduct criticised could not be described such as that no reasonably competent legal practitioner might have adopted. Further, there are important questions as to causation even if such an order is to be made. The costs sought by the Defendants appear to comprise all of their costs in defending the claim rather than nuanced to the costs incurred by such conduct the respondent firm may be found to have shown. Mr Cutler reminded me that the Defendants already had the benefit of a costs order against the Claimant and matters should rest there.

Aside of conduct observations, reliance upon legal privilege featured. Initially in general terms but then more specifically. Mr Ellis’ witness statements clearly raised and sought to rely upon legal privilege but without in any way narrowing or focusing the issue (or issues) to which privilege was claimed. Mr McNamara submitted that the facts and chronology obviously pointed to the hands of the Claimant’s solicitors rather than the Claimant in person. Therefore, it was objectively quite unclear how privilege could be relevant on these facts.

The respondent firm had sought to develop legal privilege in more specific detail, rather than the more generalised reference in Mr Ellis’ witness statements, by way of Mr Cutler’s skeleton argument. In the context of submitting that it is not negligent to pursue a claim, even a hopeless one, Mr Cutler continued “if so instructed by his client unless he has given negligent advice as to the merits. As submitted above, TBI are unable to disclose privileged correspondence between themselves and the Claimant. It is submitted that the court must assume that TBI had instructions to continue to conduct the claim on the basis of proper advice”.

It was put to Mr Cutler that this notion seemed to penetrate the general reference and instead voluntarily introduce a binary concept. Either (i) the decision to pursue and continue to pursue the wrong Defendants was the respondent firm’s, and the Claimant accepted their legal advice and decision; or (ii) the respondent firm had given the Claimant advice that it was inappropriate to continue with the chosen path, given the obvious siren warnings in the respective Defences, but the Claimant had directly instructed the claim still to continue until it was ultimately withdrawn. Mr Cutler’s submissions seemed to be hinting that it was the second scenario.

Therefore, whilst it was for neither the applicant Defendants nor the court to seek to interrogate the respondent firm, because to do so would be an attempt to penetrate legal privilege, this rather lately raised focus raises the possibility of a conflict of interest between the respondent firm and their client.

I remained concerned as to this possibility following conclusion of the hearing. In an email to the parties on 03.01.25, I asked that the Claimant have drawn to her attention the respective submissions from the parties (my summary of which was not challenged) and remarked that it was important for the court to know both that the Claimant understood the consequence of the respondent firm’s submissions; in effect, that the existing costs order should remain intact because the lay Claimant was claiming privilege in respect of the issues and implications of the respondent’s firm’s submissions. As I remarked in the email “Claiming privilege in respect of an explanation (or explanations) that are called for is not entirely the same as stating as a general observation that a client has not waived privilege. This distinction can certainly be made in this case because Mr Ellis (Paragraph 18) does not even confirm any advice had in fact been given. His reference to legal privilege therefore remains a general (though technically correct) observation”.

My email concluded:

“I therefore invite written clarification directly from the Claimant (preferably by sworn Witness Statement) that she:

a.

Has had this email drawn to her attention;

b.

Has been informed of the possibility of taking independent legal advice in

respect of the potential consequences of the court deciding not to grant the Defendants’ application owing to the emphasis upon legal privilege on her behalf; and

c.

Whether or not she claims legal privilege in respect of advice received and/or

instructions given during the period between service of the Second and Third Defendant’s Defences and the decision expressed by her counsel on 22 May 2024 to discontinue her claims against the Second and Third Defendants, as led to the inevitable costs order against her in consequence”.

Although no timescale was directed for the Claimant to assist the court with this information, her witness statement dated 26.02.25 was emailed to the court (only) on 28 February 2025 but not the Second or Third Defendants, who only came to be aware of the same when my clerk sent an email to the parties on 10.03.25 asking how the parties wanted to proceed in the light of the statement.

The Claimant’s statement is brief. It confirms receipt of the relevant materials in the application. Drawing upon a summary in a letter to her from the firm dated 24.02.25, the Claimant confirms that she understood she had been given the opportunity to consider taking independent legal advice but did not wish to do so and that she does not wish to provide “any information that stands as privileged between myself and my solicitor and the instructions that I have provided them to date”. She confirms that she is aware of the costs consequences of her discontinued claims and how these fall to be “dealt with by the Estate”.

Neither party requested restoration of the hearing to make further submissions, hence this reserved judgment.

Discussion and conclusion

Aside of the wasted costs question, I have no hesitation in concluding that the continuance of the claims between filing of the Defences and the May 2024 discontinuance unnecessarily increased the Second and Third Defendant’s costs. The question is whether the Defendants’ entitlement to those costs directly from the Claimant should be otherwise displaced.

The effect of the respondent firm’s position on privilege seeks to leave open opaque the balance between their contribution of legal analysis and the Claimant’s direct instructions as a client. That said, I am satisfied that Paragraph 16 of Mr Ellis’s 17.12.24 witness statement has to be read as confirmation that the selection of the Second and Third Defendants (as distinct from instruction either to sue or continue to sue) emanated from his firm rather than the lay Claimant.

As mooted at the hearing, this logically leaves open the narrow possibility that the lay Claimant directly instructed the pursuit of the Second and Third Defendants despite the lack of any legal basis for doing so.

I repeat that this analysis does not seek to scrutinise or penetrate the likely nature of the respondent’s advice or the Claimant’s instructions in response, all which are plainly subject to legal privilege. However, an objective overview and interpretation of the events remains a necessary integral method to assess, as indeed the respondent firm invites, whether they should have the benefit of the doubt in “not being able to tell the whole story” or, to the contrary, whether despite there being “all allowances made, a lawyer's conduct of proceedings instead is quite plainly unjustifiable” (Footnote: ²). It is likewise relevant to the distinction between presenting a case which is hopeless, even utterly bound to fail, and lending assistance to proceedings which are an abuse of the process of the court. (Footnote: ³) As Bingham MR commented “It is not entirely easy to distinguish by definition between the hopeless case and the case which amounts to an abuse of the process, but in practice it is not hard to say which is which and if there is doubt the legal representative is entitled to the benefit of it”. Whilst Roch LJ in Tolstoy-Miloslavsky v Aldington [1996] 1 WLR 736 at 749H) was obviously also not seeking to provide that definition, on the facts of that particular case he described how it was “glaringly obvious to any competent legal representative that there was no basis for this second action and that the second action had no prospect of success”, all such as to amount to the claim being wholly without merit and amounting to an abuse of process.

It is for the court to judge whether solicitors are acting properly and not for solicitors to assert (Footnote: ⁴). As Ward LJ commented (Footnote: ⁵), applying benefit of the doubt and enquiry as to reasonable explanation does not oblige the court to suspend judgment entirely when judging what is reasonable by reference to what the reasonably well informed, competent member of the profession would have done had he been placed in these circumstances.

Latham LJ in Dempsey v Johnstone [2003] EWCA Civ 1134, [2004] 1 Costs LR 41 at [28] remarked that:

“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”.

The prospect that the Claimant had directly instructed the respondent firm to continue with claims they regarded as unsustainable seems highly improbable but not impossible. The pertinent question is whether the continuing receipt and implementation of such instruction was improper, unreasonable or negligent.

I am satisfied that that the respondent firm were negligent in the continuance of the claims against both Second and Third Defendants. Irrespective of what advice they may have given or what instructions they had received, no reasonable practitioner would have conducted the litigation between the filing of ineffective Replies in late 2021 through until May 2024 by doing nothing (at least in terms of the open litigation) but issue a procedurally ambiguous application in July 2023, only then to spontaneously discontinue just before the hearing of the Defendants’ strike out application. As officers of the court, seized of responsibilities to the court enunciated in the Overring Objective, they have no reasonable explanation or justification for that conduct, irrespective of instruction. It was unjustifiable and amounted to an abuse of process. If the firm had been instructed to act in the Claimant’s best interests then the procedural adjustments as eventually took place in May 2024 should have been done much earlier and so expense avoided. Conversely, if the firm was acting on inappropriately abusive instructions to still continue, then there was a conflict of interest such that they should not have remained on the record. It seems to me to come to the same thing whichever the route of explanation.

In the case of the Third Defendant, whose express denial defence did not even reserve (as distinct from the Second Defendant) the possibility of a factual counter-case being invited in the Claimants’ Reply, I go further and conclude the maintenance of the claim against the Third Defendant as improper.

For these reasons, I am satisfied that that a wasted costs order should be made against the respondent firm in respect of the costs of the Second and Third Defendants from the dates of the filing of the Replies through to, and including, the hearing before Master Eastman on 22 May 2024.