Dynamic Costs successfully obtains an indemnity wasted costs order against the defendant in a fixed costs matter.

We acted for a Defendant/Part 20 Claimant in the matter of Sehr Hamid v Mrs Shafina Bi a Post LASPO Road Traffic Accident Claim. The circumstances of the claim were that the Claimant/Part 20 Defendant’s solicitors failed to adhere to court directions including an unless order.

As a result of the non-compliance with the unless order, the Claimant/Part 20 Defendant’s claim was automatically struck out, judgement was entered in favour of the Defendant/Part 20 Claimant’s counter claim. Following on from this, the court listed the Counter Claim for a disposal hearing and directions were set for the disposal hearing.

The claim was struck out for a period of 4 months in which the Defendant/Part 20 Claimant’s solicitors fully complied with the disposal hearing directions.

Less than 4 weeks before the counterclaim disposal hearing was scheduled to start, a without notice application to re-instate the claim was made by the Claimant/Defendant’s Part 20 solicitors. The application was granted by the Court. Upon receipt of the Order from the Court stating that the claim had been re-instated and subsequently the counter claim disposal trial had been vacated; the Defendant/Part 20 Claimant made a counter application notice for the claim to be struck out. It was submitted that there was significant prejudice simply due to the fact that judgement was set aside without notice. In addition to the Claimant/Part 20 Defendant’s solicitors failure to adhere to Court Directions, the Claimant/Part 20 Defendant’s solicitors also failed to adhere to CPR 3.6(2) which requires any party seeking to set aside a judgment to make such an application within 14 days from the date of the Order. The Claimant/Part 20 Defendant’s solicitors application was very late in day and finally the opposing side should, under these circumstances, have sought relief from sanctions as opposed to simply making a without notice application to re-instate the claim.

At the application hearing on the 19th January 2017, District Judge Burrow sitting in the Oldham County Court agreed that the breaches were serious without any justifiable good reason, however the judge considered that there wasn’t significant prejudice suffered by the Defendant/Part 20 Claimant save for delay, its inconvenience and ordered that the Claimant/Part 20 Defendant should stay re-instated.

The costs of the application were awarded to the Defendant/Part 20 Claimant’s solicitors. The issue as to whether the Defendant/Part 20 Claimant should be entitled to the wasted costs incurred during the four months period in which the claim was struck out was to be determined at trial. An order was also made for the parties to file witness statements in support of their respective submissions as to the wasted costs.

The Trial for the substantive claim occurred on the 9th May 2017, the claim was dismissed and judgement was entered in favour of the counterclaim in the sum of £9,300.00. The Defendant/Part 20 Claimant’s solicitors were also awarded fixed costs which were assessed in the sum of £7,776.75. The Trial judge did not, however, have sufficient time to address the issue as to whether a wasted costs order should be made in favour of the Defendant/Part 20 Claimant and gave permission for an application to be made to the effect.

Following on from the Trial, an application was made for wasted costs pursuant to Section 4 of the Courts and Legal Services Act 1990 which provides the Courts the jurisdiction to issue a wasted costs Order against any party in proceedings where on the circumstances the Court considers that their conduct was improper, unreasonable and/or negligent and led to the other party incurring costs. CPR 44.2 also has a similar provision which provides the judges with wider discretions in making a costs order.

The Claimant/Part 20 Defendant’s solicitors strongly objected to the application and as well as the level of wasted costs claimed. It was submitted on behalf of our client that in these circumstances, the opposing solicitors were the authors of their own misfortune. They failed to adhere to Court Orders/Directions on more than one occasion, failed to comply with CPR 3.6, CPR 26 and CPR 5BPD 4.2. The Claimant/Part 20Defendant’s solicitors also made an erroneous, late and without notice application where an application for relief from sanctions should have been made. It was this conduct which led to unavoidable steps in the proceedings (applications hearings, vacation of trial) and subsequently resulted in the Defendant’s solicitors incurring significant costs in preparing for the disposal hearing.

At the hearing on the 3rd November 2017 the District Judge was very critical of the Claimant/Part 20 Defendant’s conduct and awarded costs on an indemnity basis against the Claimant/Part 20 Defendant. The wasted costs were assessed in the sum of £3,400.00.

This case shows even when a defendant is successful in their application for relief from sanctions or application to re-instate their claim, the defendant can still be liable for a wasted costs order, even in a fixed costs matter, if their conduct during the proceedings was improper and unreasonable.

As well as specialising in recovery of standard basis personal injury costs, here at Dynamic Costs we are frequently instructed to deal with issues relating to fixed costs, wasted costs and indemnity costs dispute. For a free without consultation or discussion about any case or dispute you may have feel free to contact us and we will be more than happy to help you in maximising your profits.