In this blog Megan Griffiths reviews the Defendant’s failed application for wasted costs after securing a finding of fundamental dishonesty in Williams-Henry [2024] EWHC 2415.

Summary

This is a bite-sized analysis of the Defendant’s failed application for wasted costs against the Claimant’s solicitors, essentially pursued on the basis that they had allowed a hopeless case to get to a trial at which the Claimant was found to be fundamentally dishonest. Williams-Henry [2024] EWHC 2415is thought to be the first binding authority on a “hopeless case” wasted costs application against a CFA funded representative.

This short blog is a summary of key points relevant to similar fundamental dishonesty claims, of which there will be many. The judgment itself is still worth reading for a full understanding of the facts, issues, submissions and findings.

Brief background

The Claimant brought an occupier’s liability claim for personal injuries and consequential losses, after falling from a pier. She was legally represented pursuant to a CFA. It was clear “beyond argument” that she had suffered some injury. The Defendant admitted partial liability but put her to proof on causation and positively alleged fundamental dishonesty. Before trial the Defendant made offers to settle the claim which were not accepted. The Defendant also served video surveillance evidence which proved fatal to her claim. At trial, Ritchie J found that the Claimant had been fundamentally dishonest, but for which she would have been awarded around £600,000.

Following trial, the Defendant applied for a stage one wasted costs order against the Claimant’s legal representatives. The application was made pursuant to section 51(6) of the Senior Courts Act and CPR rule 46.8. The application was heard and ultimately dismissed by Ritchie J in September 2024 (who was also the trial judge).

Core findings

Below is a summary of the core findings made by Ritchie J in dismissing the application.

  1. The fact that the Respondent did not waive privilege was an effective shield to the application. It meant that doubt as to whether wrongdoing was the Respondent or the Claimant’s responsibility, was resolved in the Respondent’s failure. It was referred to by Ritchie J in relation to several of the specific allegations that were made.
  2. The following specific allegations did not amount to clearly inappropriate, unreasonable or negligent conduct on the facts of this case and the available evidence (and as legitimately capped by the Respondent retaining privilege):
    • Failure to provide disclosure of social media accounts prior to the Defendant’s disclosure of video surveillance evidence. That surveillance evidence proved fatal on fundamental dishonesty. The Respondent submitted that social media wasn’t part of standard disclosure in a brain injured claim and wouldn’t be budgeted unless justified by a particular feature of the claim. The court accepted that there was no evidence that this was generally relevant prior to disclosure of surveillance evidence, noting that a “tell tale sign” was that the Defendant hadn’t requested social media disclosure until after they had disclosed the video evidence in any event [38].
    • Failure to advise the Claimant to accept offers made by the Defendant prior to trial. The court was quick to reject this, even low prospects of defeating fundamental dishonesty at trial were prospects, if this submission were accepted it would place a “large percentage” of personal injury lawyers at risk of wasted costs if they advised against acceptance of any offer which was ultimately beaten. The court also noted the absence of a wasted costs application against counsel, and lack of any evidence of the offers being rejected without instructions or on negligent advice [39].Failure to “dump” the Claimant after fundamental dishonesty was alleged. The court described this as the Applicant’s main submission [49].
    • On the facts this was a case where liability was admitted, the Claimant had clearly suffered some injury with some consequential loss, and the Defendant was making offers whilst the claim was live. Whilst the fact that fundamental dishonesty was raised enabled A to terminate the CFA it did not require them to: the decision against terminating “was a human and commercial one for the firm, not a matter of professional regulation or a matter for the Court or the Application to comment upon or criticise” [45].
  3. Although the Defendant proved a prima facie case at stage one as a result of inconsistencies between the Claimant’s witness statement and other evidence already in the Applicant’s possession, the Defendant did not prove causation of any wasted costs. Instead, the contradictions armed the Defendant with a “large stick with which to beat the Claimant” which was done effectively in cross examination at trial. Ritchie J found that in any event “such matters are generally better dealt with in a professional negligence claim or in a regulatory disciplinary hearing than in a WCO application” [40].
  4. The application itself failed to adequately particularise the allegations giving rise to the application, including on causation. The Defendant’s case on what wasted costs were caused by the allegedly unreasonable or negligent conduct only crystallised at the hearing. This lack of particularising was taken into account by the court when deciding whether it would be just to accede to the application. Per Richie J: “[t]he Applicant in this case has made the allegations wide ranging and has completely failed to be specific about which costs are claimed as wasted (until the hearing itself) and how much they are. That is an unsatisfactory way of making the application and I take it into account” [41].
  5. To expose the representatives of a claimant with a good core claim and some (albeit low) prospect of defeating fundamental dishonesty to wasted costs may affect access to justice [56].
  6. Overall it was not proportionate or just to accede to the application, which failed to adequately particularise the wasted costs including on causation, and which had failed to establish a prima facie case on all of the allegations but one [57].

Comment

There are clearly many points of note from the wasted costs judgment in Williams-Henry. They relate both to the way in which an application is particularised, and the substantive allegations which ultimately were not sufficient for a stage one order to be made.

The witness statement point is an important one and claimants and defendants alike should remember the importance of checking information provided by a witness against other documents. If there is an inconsistency this should be put to the witness to check the reliability of their recall. If they maintain a contradictory account, their reasons for why should be incorporated into their witness statement to protect them from challenge. For example, a proof of payment for a hiking trip may exist which suggests that despite their injuries they were able to go on an active holiday, but the witness may be able to confirm and evidence that they subsequently cancelled the holiday, or transferred the ticket to a friend, because of their injuries. A wasted costs application must be sufficiently and clearly particularised from the outset, both on the allegations and the causation of wasted costs. The application must also be sufficiently evidenced on both of these points. Failure to do so may properly factor into the court’s assessment of whether overall it is just to make a threshold order.

The decision in Henry was of course reached on its’ facts but many of those facts are common to fundamental dishonesty claims irrespective of their value. In cases where liability and some measure of injury are accepted, meaning the fundamental dishonesty case is based on exaggeration, Henry suggests that there will not generally be grounds for wasted costs. Given the effectiveness of privilege as a shield, a defendant considering an application should think carefully about what they are likely to be able to prove if privilege is not waived. For example, in Henry there was no particular reference to interim or trial judgments in support of the application. But there will be many cases where interim and/or trial judgments refer to conduct that is or is likely to meet the wasted costs threshold. In those cases, a defendant is more likely to be able to avoid the problems associated with privilege being retained.

The judgment can be found here.

Megan Griffiths is a barrister at 12KBW specialising in personal injury law including costs.