Wasted Costs in Employment Cases

By Steven FlynnSteven Flynn
Those of us who are regularly confronted with clients who ask for advice but are unwilling to accept that their position is without merit, will be relieved to hear that the EAT has decided that wasted costs should not be awarded against us. (Ratcliffe Duce and Gammer v Binns UKEAT 0100/08).

In a concerning first instance decision, an Employment Judge awarded wasted costs against the Claimant’s solicitors for their client’s continued pursuance of a complaint that was, in her opinion, unreasonable and misconceived. The Judge said that the Claimant’s solicitors should have prevented the matter from coming before the tribunal.

Sitting alone in the EAT, Mr Justice Elias recognised a difficulty faced by lawyers throughout the country, namely that ‘Clients frequently insist on pursuing a case against the best advice of their lawyers.’ In dispelling the notion that a wasted costs order can be made against a lawyer because his client is pursuing a hopeless case, Mr Justice Elias went on to indicate that a Tribunal should apply the 3 stage test set out in Ridehalgh v Horsefield [1994] Ch 205 (CA):

  1.  Has the legal representative of whom complaint is made acted improperly, unreasonably, or negligently?
  2. If so, did such conduct cause the applicant to incur unnecessary costs?
  3. If so, is it in the circumstances just to order the legal representative to compensate the applicant for the whole or any part of the relevant costs?

 Only if the answer to each of these questions is ‘yes’ should a wasted costs order be contemplated.

This decision of the EAT ensures that lawyers can continue to act in compliance with their instructions from Claimants who insist on their day in Court, without fear of a costs order being imposed from the Bench.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
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