Case No : B2/2009/0262
Neutral Citation Number: [2010] EWCA Civ 443
IN THE COURT OF APPEAL (CIVIL DIVISION )
ON APPEAL FROM LEICESTER COUNTRY COURT
(HER HONOUR JUDGE HAMPTON)

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday 23rd March 2010

Before:

LORD JUSTICE RIX
LORD JUSTICE LONGMORE
and 
LORD JUSTICE JACOB
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Between:

	Patel	
Appellant	
	- and -		
	
Air India Limited and Another	

Respondent	

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Mr G Mansfield QC and Ms A Savage (instructed by Howells LLP) appeared on behalf of the Appellant.
Mr N Mendoza (instructed by Royds Solicitors) appeared on behalf of the Respondent.
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Judgment
Lord Justice Longmore:

1.	This is another appeal by a firm of solicitors against a wasted costs order made pursuant to section 51(6) and (7) of what we now call the Senior Courts Act 1981.  The order was made by HHJ Hampton in the Leicester County Court on 12 January 2009 after a trial of a disability discrimination claim which took place on 2 and 3 September 2008 and resulted in a handed down judgment on 29 October.  Once again, what was intended to be a summary procedure in plain and obvious cases has not proved at all summary.  The judge herself commented that the application had generated five loose-leaf files of documents and five hours of arguments spreading over two separate and disconnected days.  The dangers of the wasted costs procedures forming satellite litigation are once again obvious.

2.	The underlying claim was brought by Mrs P Patel alleging that Air India had discriminated against her as a disabled person when, contrary to its agreement to provide a wheelchair for her at Heathrow when she returned from India on 18 February 2006, she was forced to walk from the aircraft docking gate to the baggage reclaim area.  She was accompanied on the flight by her daughter and son-in-law but, since no wheelchair had been provided at the time of disembarkation, they preceded her to the baggage claim area where they later met her, being accompanied by two members of the public.  Mrs P Patel suffered from a degree of senile dementia and had no real recollection of the incident.  

3.	Air India produced a docket from their subcontractor One Complete Solution Limited, which showed that a buggy rather than a wheelchair had been provided for Mrs P Patel on that day.  That buggy took Mrs P Patel to the immigration point where she went through immigration.  What happened between the immigration point and the baggage reclaim area is unclear, and the judge declined to speculate, but there is no doubt that, when Mr and Mrs Patel junior were reunited with Mrs P Patel, she was not in the wheelchair, but had fallen and had been assisted by two members of the public.

4.	The judge held that, although only six persons on the flight had booked assistance on arrival in advance, 18 persons in fact needed such assistance. That created a degree of confusion on arrival, with those needing assistance being asked to wait on what was called "the jetty area" while matters were sorted out and in due course the buggy arrived.  After being reunited, the family got a pre-booked taxi back to the Midlands where they lived.

5.	Proceedings were issued on Mrs P Patel's behalf by the Leicester Law Centre on 17 August 2006 pursuant to a Certificate of Public Funding granted to the claimant.  The Law Centre closed down on 31 March 2008, and the public funding certificate was transferred to Howells, who became Mrs P Patel's solicitors.  Mrs P Patel herself sadly died on 23 May 2008 and on 25 June  a new funding certificate was issued to her daughter, Mrs Urmilaben Patel, who thereafter carried on the proceedings on behalf of her deceased mother.

6.	In the course of her first judgment HHJ Hampton was critical of the use made of Mrs P Patel's statement of 30 June 2007 and she did not, in the event, accord any weight to it, because medical documents exhibited to her statement described Mrs P Patel as suffering from "senile dementia" and "a failing medical state".  Dr Hutson, a jointly instructed expert, examined Mrs P Patel on 20 July 2007 and recorded that he had been informed that she had no recollection of the incident.  He said that he was satisfied that she had suffered a significant degree of cognitive deterioration over recent years.  The judge concluded that the information in the witness statement and in the answer provided to a request for information made by Air India pursuant to CPR Part 18 had not been provided by Mrs P Patel but by others and, in particular, her son-in-law.

7.	On the application for the wasted costs order, Air India relied on the judge's conclusion in relation to Mrs P Patel's witness statement and also on the docket prepared by Mr Arvi of the subcontractor, which showed that Mrs P Patel had been transported by him on a buggy from the gate to the immigration point.  Air India's contention was that Howells acted unreasonably or negligently in pursuing the claim once it was clear: 1) that Mrs P Patel had no recollection of the incident; 2) that there was no other direct evidence that wheelchair assistance had not been provided from the claimant's side of the fence; and 3) that the docket showing that Mrs P Patel had in fact been transported by buggy was going to be relied on. The judge agreed and said that Howells should, after Mrs P Patel had died in May 2008, have conducted a thorough review of the evidence to be put before the court. She said in paragraph 52 of the judgment:

"A proper review of the merits of this stage should have demonstrated that there was a less than 50% chance of success.  An objective view, properly and reasonably taken by a competent legal practitioner, would have driven one, in my judgment, to the conclusion that the potential award of damages and the prospects of succeeding in the claim were such that the size of the potential award did not merit the risk of further litigation."

8.	She had earlier said that the failure to conduct that review was both "unreasonable" and "negligent".  The judge also in paragraph 34 of her judgment had something to say about the legal aid position. She said this: 

"…I do note that in cases where there is public funding supporting one of the parties there is an on-going duty to the Legal Services Commission to consider the merits of the claim and whatever may have been said in the case of Orchard v South Eastern Electricity… and Ridehalgh [ v Horsefield] in citing that, [that is a reference to a citation made earlier on in the paragraph] there is nevertheless that duty to the Legal Services Commission as to whether or not public funding should continue to support a claim of this nature. There is also an on-going duty in my judgment to the Legal Services Commission not to put before the court claims where merits may not be overwhelming, where potential recovery may be modest and the prospects of success do not justify the risks of failure."

9.	In the event the judge ordered that Howells were personally to pay the costs of the action from 1 August 2008 to include Air India's costs at trial.  Howells now appeal.
10.	The general principles about wasted costs orders are well known. The statutory definition of wasted costs is contained in section 51(7) and the requirement is that they must be costs incurred as a result of any "improper, unreasonable or negligent" act or otherwise on the part of any legal or other representative.

11.	Mr Guy Mansfield QC for Howells submits that there was no basis on what the judge could find that Howells' conduct was unreasonable or negligent, there being no question of impropriety. The mere fact that Mrs P Patel's witness statement was eventually held not to be based on her own account does not mean, he submits, that it was unreasonable to pursue the case since the statements of her daughter and son-in-law supported it.  After the docket had been produced, the solicitors consulted counsel, who advised that the Particulars of Claim should be re-amended and the action should continue. Air India could always have applied to have the action struck out as an abuse of process of the court.  No doubt they did not do so because any such application would have been unlikely to have been successful.  If the action was not an abuse, he submits, the solicitors cannot be criticised for pursuing it.  

12.	Mr Mendoza for Air India, in support of the judgment, submitted that the case was always a hopeless case and even more hopeless once the buggy docket had been produced.  He supported the judge's reference to the legal aid position and the duties of solicitors in regard to it and he also supported her ultimate conclusion that there was unreasonable or negligent conduct on the part of Howells.  
13.	The first difficulty about Mr Mendoza's case is that the judge herself nowhere characterised the claimant's claim as hopeless.  I have already quoted paragraph 52 when she says it was less than 50%.  In paragraph 53 she said it was likely to fail.  In paragraph 56 she said there were great difficulties in establishing what happened to Mrs Patel. The underlying judgment is expressed all in the terms of the balance of probability, and in the end she says, at paragraph 58 of that judgment, that the claim had not been proved to the required standard.

14.	Thus Mr Mendoza does not have the necessary finding which is the necessary starting point for a wasted costs application.  He sought to persuade us that the claim was indeed hopeless, but I myself was not persuaded by that submission because: first the fact was that when Mrs Patel was reunited with her family in the baggage reclaim area she was not then receiving assistance whether in a buggy or wheelchair or otherwise and, secondly, the case was throughout likely to be and was in fact conducted on the basis of hearsay evidence.  Mrs Patel's own statement of course was hearsay since she was now dead.  The account of the members of the public which was given to Mr and Mrs Patel junior was of course hearsay and the buggy docket as produced was also hearsay evidence because, as it turned out, Mr Arvi as I understand it was not called.  

15.	It may be accurate to say, as the judge said, that the claim had less than a 50% chance of success but that is a long way from the claim being hopeless. But on the authorities the fact that the claim is hopeless is not itself enough.  As the leading case on this area of law, Ridehalgh v Horsefield [1994] Ch 205 makes plain at pages 233 to 234, not only must the claim be hopeless but there must be a breach of duty to the court, that being a breach by the solicitors of their duty to the court as set out at page 227C and 233A or, as it has been put in other authorities such as Persaud v Persaud [2003] EWCA Civ 394, there must be something akin to an abuse of the process of the court.  Nowhere does the judge say that there has been a breach of the solicitor's duty to the court by Messrs Howells, nor does she say that there was anything akin to an abuse of process.  Mr Mendoza submitted that the claim here was akin to an abuse of process because it was based on a lie but Messrs Howells, as Mr Mendoza readily accepted, did not know that it was based on a lie if indeed it was.  Anyway it is, in my judgment, not right to say that it was based on a lie since Mrs P Patel had only had words put into her mouth and was not sufficiently intellectually aware to know whether they were true or not and it is difficult to be sure that the son-in-law and daughter knew that what they were making her say was untrue.  

16.	The nearest the judge comes to any assertion of an abuse of process is a description of how the Legal Services Commission was not kept adequately informed, particularly after the death of Mrs P Patel, but the legal aid position is in my judgment irrelevant.  That is because section 22(4) of the Access to Justice Act 1999 states as follows:

"Except as expressly provided by regulations, any rights conferred by or by virtue of this Part on an individual for whom services are funded by the Commission as part of the Community Legal Service or Criminal Defence Service in relation to any proceedings shall not affect— 
(a) the rights or liabilities of other parties to the proceedings, or 
(b) the principles on which the discretion of any court or tribunal is normally exercised.”

17.	That of course is not a new principle, the statute then in force was referred to in Ridehalgh v Horsefield at page 234, section 31(1) of the Legal Aid Act 1988, and that was in very similar terms.  The judgment of the court in Ridehalgh v Horsefield at pages 234 to 235 explains why it is that legal position is irrelevant.

18.	So an applicant for a wasted costs order must satisfy the court that there was a breach of duty to the court and that the proceedings are akin to an abuse of the process of the court.  There are no findings on which Mr Mendoza can rely for that purpose.  The judge perhaps by implication considered, and Mr Mendoza expressly said, that the relevant solicitor in Messrs Howells had no business to sign the Statement of Truth on 21 August 2008 at the foot of the Re-Amended Particulars of Claim but in my judgment many a solicitor, on the information available to him or her in this case, would have been prepared to sign that, and it is certainly not a breach of duty to the court for that solicitor to have done so on this occasion.

19.	There is then the question of the involvement of counsel, who advised, as I have explained, that the Particulars of Claim should be re-amended and the claim should be continued after the buggy docket had been produced. Privilege has not been waived in this case, and it is in my judgment impossible to be sure that the advice given by counsel was so bad that it was negligent of the solicitors to follow.  That is an enormous burden for Mr Mendoza to assume and in my judgment he came nowhere near discharging it.

20.	There is then the yet further question of whether any unreasonable or negligent conduct, which there might have been, caused costs to be wasted.  The judge said that once the Legal Services Commission had been told of the true position, if they had been, they would have ceased to support the proceedings and the proceedings should have been discontinued, but that is impossible to know when the Patels have declined to waive their privilege. The Legal Services Commission now say after the event that they were kept fully informed at all times and have no criticism of Messrs Howells of any kind.  That cannot of course be conclusive but it is to say the least speculative that, having invested considerable funds in the case so far, the Legal Services Commission would, if they had been given different and correct information, have abandoned the Patel family shortly before the hearing when the Legal Services Commission was only at risk at that stage for a small amount of further costs.  Even if the Patel family had been left to their own devices, it is by no means clear that the proceedings would never have taken place.

21.	There is no doubt that defendants are put in great difficulty when legally assisted claimants bring their cases but there are options available such as applications to strike out and correspondence with the Legal Services Commission to highlight any doubts about a claimant's case.  Air India availed themselves of neither of those options in this case but have only sought to bring a wasted costs application after the event.  The judge may have subconsciously felt tempted to compensate for her inability to award the costs case to Air India unless she could make an order for wasted costs against the solicitors, but the inability of a defendant to recover costs from a legally aided claimant is perhaps, unfortunately, a fact of life and cannot be circumvented by wasted costs orders except in the clearest cases.  This was certainly not such a clear case and I would allow this appeal.

Lord Justice Rix:  

22.	I agree.

Lord Justice Jacob:  

23.	I also agree.

Order: Appeal allowed