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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> CMCS Common Market Commercial Services AVV v Taylor [2011] EWHC 324 (Ch) (23 February 2011) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2011/324.html Cite as: [2011] EWHC 324 (Ch), [2011] PNLR 17

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		23/02/2011

Mr Justice Briggs :

INTRODUCTION

1. This is an application by Ms Samantha Anne Taylor for a wasted costs order against DWF LLP ("DWF") the solicitors for CMCS Common Market Commercial Services AVV ("CMCS") and Mr Roland Jakober, Ms Taylor's unsuccessful opponents in litigation about the beneficial ownership of property known as Wicklands Farm, Ockley Road, Forest Green, Dorking, Surrey ("Wicklands Farm"). Prior to her separation from a Mr Terence Stoutt in February 2008 it had been their matrimonial home.
2. The litigation as to the beneficial ownership of Wicklands Farm came on for trial before Henderson J on 11^th October 2010, shortly after both CMCS and Mr Jakober had been debarred from defending her claim, and from adducing evidence in the proceedings, due to their failure to comply with an unless order made by Roth J on 16^th September 2010 requiring production of certain relevant documents. Henderson J made an indemnity costs order against both CMCS and Mr Jakober. He said:

"I cannot avoid the conclusion that [Mr Jakober], both in person and through CMCS, decided to embark upon this litigation in a situation where he must have known from the outset that he would not be in a position to give the indispensable disclosure that the English court would require in order to reach a conclusion on the source of the relevant [purchase] monies. To proceed with litigation on that basis, and in the hope that the court would somehow agree to proceed with the matter without that critical information, seems to me irresponsible and improper conduct on the part of a litigant, and it is something that has to be laid at the door of Mr Jakober and nobody else, unless indeed there is somebody else involved, namely, Mr Stoutt who, of course, Ms Taylor submits and suggests is the real party who was at all stages behind the transaction.

Whether that is so or not, the litigation, it seems to me, was always doomed to break down on the issue of disclosure. Nothing which I have seen or heard leads me to depart from that view. I have already mentioned the disquieting fact that Mr Jakober himself made the very extensive redactions to the documents that actually had been disclosed, thus involving possible breaches both by him and by his solicitors of their duties relating to disclosure."

3. Neither CMCS nor Mr Jakober have paid anything on account of that costs order and, emboldened by Henderson J's observations, quoted above, about possible breaches of duty by Mr Jakober's solicitors, Ms Taylor has brought this application on the ground that DWF's breach of its duty to the court in relation to disclosure has caused her to incur costs which she would otherwise not have incurred. The essence of her case is that if DWF had discharged its duty to supervise the production of documents by Mr Jakober, his refusal to give proper production of un-redacted documents would have caused DWF to come off the record (or even not to go on the record in the first place), thereby leading to CMCS and Mr Jakober abandoning their case sooner than would otherwise have occurred, and at less cost to her.
4. Rather than proceed in two stages, as is normal for applications of this type, Ms Taylor's application has been listed, apparently by mutual consent, as a single hearing for which, now separately represented, DWF have, subject to one matter, had full opportunity to prepare. Again, contrary to the ordinary practice, it has been listed for hearing before me rather than before the trial judge. Nonetheless, since the matter was undefended before Henderson J, and contested only as to costs, he did not have that unique advantage of having tried the matter fully, sufficient to make it appropriate for me to cause the parties further delay and expense by adjourning it to be heard by him.
5. The one respect in which DWF have been hampered in defending this application is, as frequently occurs in wasted costs applications against solicitors, that despite request Mr Jakober and CMCS have declined to waive privilege. The result is that DWF is unable to put before the court any privileged matters which arose in the conduct of its retainer in the litigation, which might otherwise have been available as an answer to the allegations of misconduct, or even as matters relevant (for example by way of mitigation) to the question whether the court should exercise its discretion to make, or not to make, a wasted costs order.
6. In Medcalf v. Mardell [2003] 1 AC 120, at 135-6, Lord Bingham set out the principles to be applied in the context of a wasted costs application against solicitors whose client has declined to waive privilege. He cited with approval the following passage from the judgment of the Court of Appeal in Ridehalgh v. Horsefield [1994] Ch 205, at 237:

"Judges who are invited to make or contemplate making a wasted costs order must make full allowance for the inability of respondent lawyers to tell the whole story. Where there is room for doubt, the respondent lawyers are entitled to the benefit of it. It is again only when, with all allowances made, a lawyer's conduct of proceedings is quite plainly unjustifiable that it can be appropriate to make a wasted costs order."

He then cited, also with approval, the following extract from the judgment of George Laurence QC sitting as a Deputy High Court Judge in Drums and Packaging Ltd. V. Freeman (unrep) 6^th August 1999 at paragraph 43:

"As it happens, privilege having been waived, the whole story has been told. I cannot help wondering whether I would have arrived at the same conclusion had privilege not been waived. It would not have been particularly easy, in that event, to make the necessary full allowance for the firm's inability to tell the whole story."

Lord Bingham concluded:

"Even if the court were able properly to be sure that the practitioner could have no answer to the substantive complaint, it could not fairly make an order unless satisfied that nothing could be said to influence the exercise of its discretion. Only exceptionally could these exacting conditions be satisfied. Where a wasted costs order is sought against a practitioner precluded by legal professional privilege from giving his full answer to the application, the court should not make an order unless, proceeding with extreme care, it is (a) satisfied that there is nothing the practitioner could say, if unconstrained, to resist the order and (b) that it is in all the circumstances fair to make the order."

7. Lord Bingham then referred to the following dictum of the Privy Council in Harley v. McDonald [2001] 2 AC 678, at 703:

"As a general rule allegations of breach of duty relating to the conduct of the case by a barrister or solicitor with a view to the making of a costs order should be confined strictly to questions which are apt for summary disposal by the court. Failures to appear, conduct which leads to an otherwise avoidable step in the proceedings or the prolongation of a hearing by gross repetition or extreme slowness in the presentation of evidence or argument are typical examples."

Lord Bingham continued:

"Save in the clearest case, applications against the lawyers acting for an opposing party are unlikely to be apt for summary determination, since any hearing to investigate the conduct of a complex action is itself likely to be expensive and time-consuming. The desirability of compensating litigating parties who have been put to unnecessary expense by the unjustified conduct of their opponents' lawyers is, without doubt, an important public interest, but it is, as the Court of Appeal pointed out in Ridehalgh v. Horsefield at p.226, only one of the public interests which have to be considered."

8. Where privilege has not been waived, it is incumbent upon the court to consider what, but for privilege, might have been said on behalf of the respondent firm, both to defend and if necessary to mitigate alleged misconduct. In Brown v. Bennett (No 2) [2002] 1 WLR 713, at paragraphs 131-132, Neuberger J addressed this problem as follows:

"… it is difficult for counsel for a respondent in a wasted costs application, where privilege is claimed by a respondent's former client, to give sensible examples of what might have been available but has not been disclosed. Either they have seen privileged material, in which case they cannot fairly give examples knowing them to be true, because they thereby risk breaching the privilege with a nod and a wink, or they have to give examples which they know are not true, in which case they could be misleading the court. Normally, as here, counsel representing the respondents will very sensibly have not looked at the privileged material, in which case they will be in the dark as to what evidence, facts and expectations might have been available to the respondents at various times before and during the progress of the action.

Accordingly, I must take a reasonably robust approach, and consider whether there is no real possibility of there having been further facts, inferences arguments or expectations before counsel which may justify the course they adopted, which course could not, solely on the basis of evidence actually available to the court, be justified."

In the present case, Mr Charles Phipps, counsel for DWF, sensibly chose to adopt the course commended by Neuberger J of not looking at the privileged material.

THE FACTS

9. Wicklands Farm was acquired and at all material times held in the name of CMCS. It has now been established by Henderson J that its purchase was funded by Mr Stoutt and that he was at all times its sole beneficial owner. After Mr Stoutt and Ms Taylor's separation, she continued to occupy Wicklands Farm.
10. In November 2008 CMCS issued a possession claim against Ms Taylor and others in the Reigate County Court, claiming that after the termination of a lease to Mr Stoutt, she and the other defendants continued in occupation as trespassers.
11. Ms Taylor's response was that Wicklands Farm was beneficially owned either by herself and Mr Stoutt as tenants in common, or alternatively solely by Mr Stoutt, and by proceedings in the Family Division she sought a transfer of Wicklands Farm to her by way of property adjustment order in connection with her divorce from Mr Stoutt. By October 2009 the possession proceedings had been transferred to the Chancery Division of the High Court, and CMCS had, in its Reply, pleaded that the beneficial owner of Wicklands Farm was Mr Jakober, he having "purchased the Farm with funds personal to him". Certain limited disclosure of documents had by then already taken place in March 2009, when CMCS were represented by Laytons. Certain documents had been produced for inspection in redacted form.
12. In August 2009 Halliwells LLP replaced Laytons as solicitors for CMCS and Mr Jakober. He had, following his identification by CMCS as the alleged beneficial owner of Wicklands Farm, been joined as a respondent to Ms Taylor's ancillary relief proceedings. The case was handled within Halliwells by Mr Stephen Morris, a member of the LLP.
13. On 1^st October 2009 both proceedings came before Charles J in the Family Division for case management. He directed that the ancillary relief proceedings be transferred to the Chancery Division, to be heard with the possession proceedings for the purposes of determining all issues relevant to the beneficial ownership of Wicklands Farm and CMCS. There was a vigorous debate at the hearing about production of documents, against the background that CMCS (a Netherlands Antilles bearer share company) was said to be owned or at least controlled by Mr Jakober, who was a Swiss national residing in Geneva, carrying on the business of providing "discrete" offshore asset/company management services, in part through EBS Management Services ("EBS"), and that production of documents by CMCS and by himself might infringe the Article 8 privacy rights of his clients.
14. At the end of the hearing Charles J made a standard form disclosure order in the possession proceedings, affecting CMCS, and a specific production order against Mr Jakober as third respondent in the ancillary relief proceedings. That order ("the Charles J Order") provided, at paragraph 7(a) that Mr Jakober should by 27^th November 2009 provide details of all accounts from which the purchase price of Wicklands Farm was paid and serve on Ms Taylor's solicitors a complete run of copy bank statements in respect of all such accounts for the four month period prior to payment. By paragraph 8 Mr Jakober was required by the same date to provide all documents in his custody power and control evidencing the source to the money applied to the purchase of Wicklands Farm.
15. Although this does not appear from the Charles J Order, it is clear that, by the end of the hearing, Charles J had been persuaded by counsel for CMCS (and I assume, Mr Jakober, although the record does not so show), that Mr Jakober was not at that stage prohibited from seeking to preserve the privacy rights of his alleged clients by redacting names from relevant documents, upon the basis that the legitimacy or otherwise of those redactions would thereafter be dealt with by the court on Ms Taylor's further application. The question whether those redactions would then be allowed to stand, or whether disclosure of the redacted names would be ordered at or before trial on some restricted basis, was left unresolved. As Charles J put it to counsel for Ms Taylor (I am quoting from the transcript):

"… so what you will get there is those accounts for that period and they will do their redacting as they think appropriate."

16. CMCS and Mr Jakober provided a further list of documents on 30^th November 2009. Nothing now turns on the adequacy or otherwise of that list. On 4^th December Speechly Bircham, Ms Taylor's solicitors, notified Halliwells that Ms Taylor was, from then on, funded with the benefit of a conditional fee agreement.
17. After an extension of the disclosure deadline in the Charles J Order, Halliwells wrote on 16^th December 2009 to Speechly Bircham making disclosure on behalf of Mr Jakober pursuant to paragraph 7(a) of that Order. The letter ("the December 2009 letter") enclosed a statement from the Banque Commerce et de Placements for the account name Executive Business Services for the period 1^st February 2000 to 12^th April 2001 ("the BCP bank statement").
18. The December 2009 letter explained that Mr Jakober had carried out as thorough a search as he could pursuant to paragraph 7(a) of the Charles J Order, and ascertained that the purchase price for Wicklands Farm had been paid from two bank accounts, the second of which was the BCP bank account. Halliwells said that Mr Jakober had been unable to find or obtain any copy bank statements relating to the first account (at UBS). In relation to the BCP bank statement, the letter continued as follows:

"We enclose the statement from 1 February 2000. Our client has redacted this statement for reasons of client confidentiality, as, we are informed, if this client confidentiality were breached, it would constitute a breach of Swiss law. Our client has confirmed to us, however, and will confirm again at the trial of this action that none of the redactions concern companies owned by Mr Stoutt (this account is a business account and no funds are received from private individuals) and nor have any funds been received from Monaco as Mrs Taylor alleges."

The relevant section of the letter concluded by stating that, in each case, the monies had been paid to an identified account at ABN/Amro Bank NV to the credit of an account in the name of Stichting Beheer Derdengelden Zarf Trust Corporation ("the Zarf account").

19. The copy of the BCP bank statement which accompanied the December 2009 letter disclosed in full three entries recording debits in favour of the Zarf account, in the aggregate sum of £158,170.23 on 12^th, 22^nd and 31^st May 2000 respectively, leaving a net balance of £6,398.77 in credit. The statement revealed that the account had been at zero on 1^st February 2000, and that there had only been three credits, one before each of the debits in favour of Zarf, on 9^th, 17^th and 26^th May respectively, in amounts and from sources which had all been redacted. It is nonetheless possible to ascertain from simple arithmetic and by the disclosure of account balances that the three incoming payments were each slightly larger than the three outgoing payments, and amounted in aggregate to £164,569. All remaining entries on the account after 31^st May were redacted both as to name and amounts. EBS was identified as the account holder.
20. On its face the BCP bank statement had been redacted in a manner which went beyond what Charles J had been prepared to contemplate during the hearing on 1^st October 2009, since it redacted both amounts and source names. In substance however, in relation to the three entries recording the crediting to the account of the amounts used for the purchase of Wicklands Farm, it redacted only the source names, since the redacted amounts can simply be calculated by reference to un-redacted balances.
21. Mr Morris was the writer of the December 2009 letter. Notwithstanding privilege, it is possible with the benefit of Mr Morris's evidence in response to this application, and from inferences from subsequent events, to make the following findings of fact about the redaction and production of the BCP bank statement. First, as the December 2009 letter makes clear, the redactions were all carried out by Mr Jakober himself, rather than by Halliwells. Secondly, Mr Jakober had informed Halliwells that his redactions had been carried out so as to avoid a breach of client confidentiality under Swiss law. Thirdly, Halliwells had itself obtained for Mr Jakober Swiss legal advice before writing the December 2009 letter. The content of that advice remains privileged. Fourthly, Mr Jakober had carried out the redaction process on the original BCP bank statement in his possession. He had neither retained a clean copy of it himself, nor did Halliwells either see or thereafter retain a clean copy of it.
22. The evidence does not show whether in December 2009 Halliwells knew that Mr Jakober had redacted the original statement without keeping a clean copy of it, or what (if any) advice Halliwells gave Mr Jakober about the obligations of litigants in English proceedings in relation to the disclosure, production, redaction and safekeeping of relevant documents. It is however clear (and not in dispute) that Halliwells did not supervise Mr Jakober's redaction of the BCP bank statement nor, a fortiori, carry out that redaction process itself.
23. As will appear, it is not known, even now, what the BCP bank statement recorded about the names of the persons from whom or from which the three incoming payments which funded the purchase of Wicklands Farm had been received. It is, in particular, not known whether the BCP bank statement would, before redaction, have included names which, on their face, directly or indirectly identified Mr Stoutt as the ultimate provider of that money. Mr Morris's evidence is that he did not expect his client's redaction of that document to pass without challenge from Ms Taylor.
24. In fact it took some eight months before Speechly Bircham for Ms Taylor made any complaint about the redactions made to the BCP bank statement. There was some desultory party and party correspondence, in part about disclosure and inspection. I was told by Mr Nigel Hood for Ms Taylor that notwithstanding the contingency fee agreement of which Halliwells had been notified in December 2009, further funding difficulties continued to stand in the way of any serious pursuit of disclosure issues during the first half of 2010. Ms Taylor has confirmed this in evidence, but it is not suggested that Mr Morris knew that.
25. Mr Morris decided to leave Halliwells and joined DWF in July 2010, shortly before Halliwells went into insolvent administration. DWF went on the record as solicitors for CMCS and Mr Jakober in early August. In the meantime the two combined cases had been listed for trial of the issues as to beneficial ownership of Wicklands Farm in October 2010.
26. By letter to DWF dated 13^th August 2010 Speechly Bircham for Ms Taylor brought disclosure and production issues back to vigorous life. A seven page schedule listed numerous alleged breaches of the Charles J Order, of which two paragraphs challenged Mr Jakober's redaction of the BCP bank statement. They included the assertion that:

"Unusually, this redaction exercise was carried out by Mr Jakober himself, rather than by his solicitors"

This demonstrates that Speechly Bircham well understood that Mr Morris had not complied with the ordinary duty of solicitors in relation to the disclosure process.

27. Other schedules included detailed requests for further information, requests for further disclosure and requirements to prove documents at trial. All in all, the letter and its enclosures consisted of twenty pages of detailed criticism and request, and concluded with a threatened application to court in the absence of a satisfactory response. Speechly Bircham's letter ("the August 2010 letter") coincided with the final stages of the parties' preparation of witness statements.
28. Mr Morris took Mr Jakober's instructions on a visit to him in Switzerland at the end of August, while complaining to Speechly Bircham meanwhile about the lateness of the challenge to a disclosure process which had been substantially completed by the previous January. On 8^th September Ms Taylor issued an application seeking an unless order for compliance with the Charles J Order, together with specific disclosure and the provision of further information pursuant to CPR Part 18, supported by her witness statement made on 6^th September. It was heard by Roth J as vacation judge on 16^th September.
29. Among other matters, attention came to be focused upon the BCP bank statement as one of three or more documents which it was alleged that Mr Jakober had improperly redacted. The judge was told that Mr Jakober was still seeking advice in Switzerland as to the extent to which he could reveal the information covered by his redactions, pursuant to an order of an English court, without a breach of Swiss law.
30. Roth J concluded that the only arguably confidential material in the BCP bank statement was the names of the persons transferring money to or receiving money from the account. By his order made on the same day ("the Roth J Order") he directed that Mr Jakober and CMCS be debarred from defending Ms Taylor's claim or from adducing evidence in either proceeding, unless (inter alia):

i) the BCP bank statement was produced, redacted only as to those names, by 21^st September; and

ii) a complete and un-redacted version of the BCP bank statement was provided to Ms Taylor's legal advisers by 30^th September, on their undertaking not without Mr Jakober's permission to disclose it to their client or to make any further use of it, without the further permission of the court.

31. On 22^nd September, one day after the first of the deadlines in the Roth J Order, DWF produced on Mr Jakober's behalf a further version of the BCP bank statement, this time redacted only as to names. It had by then become apparent to DWF that Mr Jakober had not retained an original clean version of the BCP bank statement. He had in the meantime obtained a further copy from BCP itself and, again without supervision or assistance from his solicitors, redacted it in the more limited manner permitted by the Roth J Order.
32. Roth J summarily assessed Ms Taylor's costs of the application before him at £16,000. It was paid in full by Mr Jakober, in part by way of a £5,000 set-off against an earlier costs order in his favour. Speechly Bircham provided the undertakings against which Roth J had ordered production of a complete un-redacted version of the BCP bank statement but, in the meantime, asserted that Mr Jakober and CMCS had by late delivery of documents on 22^nd September already become debarred.
33. Mr Jakober did not deliver a fully un-redacted version of the BCP bank statement either to his own solicitors or to Ms Taylor's solicitors as directed by Roth J. Nor did he or CMCS apply for relief from sanctions. On the contrary, on 30^th September CMCS served notice of discontinuance of the possession claim. On 8^th October Mr Jakober made a witness statement seeking to explain why, in relation to that and other documents, he had found it impossible to obtain consent from clients for whom he acted in Switzerland as a fiduciary, regarded it as impracticable to obtain a Swiss court order requiring them to consent, and had concluded that to provide the information sought would destroy his reputation for the conduct of fiduciary business in Switzerland. That statement was before Henderson J at the hearing which concluded with his judgment against Mr Jakober and CMCS for indemnity costs, and which included the passage cited at the beginning of this judgment.

BREACH OF DUTY

34. Ms Taylor's case of breach of duty is in substance against Mr Morris. Nonetheless Mr Hood has not suggested that Mr Morris incurred liability for a wasted costs order against himself personally. Rather the claim is made against his firm DWF (an LLP of which he is a member), and would have been made against his previous firm Halliwells LLP, had it not gone into insolvent administration with uncertainties as to the adequacy of its professional indemnity insurance.
35. Ms Taylor's case may be summarised as follows:

i) Mr Morris's duty to the court required him personally to conduct or at least supervise any redaction of relevant documents before production.

ii) He should have insisted that Mr Jakober provide him with a clean copy of the BCP bank statement, so that he could perform that duty with knowledge of its contents.

iii) If Mr Jakober had refused to do so, Mr Morris should have taken Halliwells off the record as Mr Jakober's solicitors.

iv) Halliwells were therefore wrong to have continued to act for Mr Jakober until August 2010.

v) Since Mr Morris had transferred in his own head all Halliwells' relevant knowledge about its retainer by Mr Jakober to DWF when he moved to his new firm, DWF should either have refused to go on the record for Mr Jakober, or have come off the record if, after an immediate demand for the original un-redacted BCP bank statement, Mr Jakober had refused to provide it.

vi) It was therefore improper for DWF to go on the record as acting for Mr Jakober or, alternatively, to remain on the record once in receipt of the August 2010 Letter from Speechly Bircham.

vii) Since Mr Jakober was never going to produce a clean copy of the BCP bank statement disclosing the names of the persons transferring funds into that account for the purchase of Wicklands Farm, then if DWF had acted in accordance with its duty, Mr Jakober would have realised that the game was up, and discontinued in mid August 2010, rather than at the end of September.

36. A useful starting point in the analysis of the extent of Mr Morris's duty is the recent summary provided by Ward LJ in Hedrich & anr v. Standard Bank London Ltd [2008] EWCA Civ 905, at paragraphs 14 to 16, citing with approval (and the apparent assent of the parties) passages from Matthews and Malek on Disclosure and from Myers v. Elman [1940] AC 282:

"14. … It seemed to be common ground between the parties that the duties of solicitors was correctly stated in chapter 14 of the third edition of Matthews and Malek on Disclosure.

"14.02 A solicitor's duty is to investigate the position carefully and to ensure so far as is possible that full and proper disclosure of all relevant documents is made. [Myers v Elman[1940] A.C. 282.] This duty owed to the court is "one on which the administration of justice very greatly [depends], and there [is] no question on which solicitors, in the exercise of their duty to assist the court, ought to search their consciences more" [citing Practice Note [1944] W.N. 49 and the Solicitors' Practice Rules 1990 R.1 (F)].

14.03 The solicitor's duty extends to explaining to his client the existence and precise scope of the disclosure obligation and the need to preserve documents . …

14.07 The solicitor has an overall responsibility of careful investigation and supervision in the disclosure process and he cannot simply leave this task to his client [Myers v Elman [1940] A.C. 282, at 322, 325, 338.] The best way for the solicitor to fulfil his own duty and to ensure that his client's duty is fulfilled too is to take possession of all the original documents as early as possible. The client should not be allowed to decide relevance – or even potential relevance – for himself, so either the client must send all the files to the solicitor or the solicitor must visit the client to review the files or take the relevant documents into his possession. It is then for the solicitor to decide which documents are relevant and disclosable. … Again where the solicitor knows that his client has concealed relevant documents with a view to their not being disclosed, the solicitor must not act so as to suggest that full disclosure has been or will be given, and this may lead to his ceasing to act. …

14.09 Once the documents have been produced by the client, the solicitor should carefully go through the documents disclosed to make sure, so far as is possible, that no documents subject to the disclosure obligation are omitted from the list. … A solicitor must not necessarily be satisfied by the statement of his client that he has no documents or no more documents than he chooses to disclose. If he has reasonable grounds for suspecting that there are others, then he must investigate the matter further, but he need not go beyond taking reasonable steps to ascertain the truth. He is not the ultimate judge and if he has decided on reasonable grounds to believe his client, criticism cannot be directed at him. …

14.10 If a solicitor is or becomes aware that the list of documents or any verifying affidavit or statement of truth is inadequate and omits relevant documents or is wrong or misleading, he is under a duty to put the matter right at the earliest opportunity and should not wait till a further order of the court. His duty is to notify his client that he must inform the other side of the omitted documents, and if this course is not assented to he must cease to act for the client. If the client is not prepared to give full disclosure, then the solicitor's duty to the court is to withdraw from the case."

15. Myers v. Elman [1940] A.C. 282 is to the point. Lord Atkin said at p.304:

"What is the duty of the solicitor? He is at the early stage of the proceedings engaged in putting before the court on the oath of his client information which may afford evidence at the trial. Obviously he must explain to his client what is the meaning of relevance: and equally obviously he must not necessarily be satisfied by the statement of his client that he has no documents or not more than he chooses to disclose. If he has reasonable ground for supposing that that there are others, he must investigate the matter; but he need not go beyond taking reasonable steps to ascertain the truth."

16. Rule 1(f) of the Solicitors' Practice Rules 1990 emphasises that a solicitor should not do anything in the course of practising as a solicitor which compromises his duty to the court. This is stressed in the Guide to the Professional Conduct of Solicitors 1999 at 21.01 to the effect that solicitors who act in litigation, whilst under a duty to do their best for their client, must never deceive or mislead the court."

37. In Myers v. Elman, a solicitor had allowed one of his clients partially to seal up a bank passbook when giving disclosure by affidavit of the rest of it, on the basis of the client's assertion, which the solicitor did not check, that the sealed up part was irrelevant. A later specific discovery application led to the un-sealing of the passbook, and the discovery that its previously sealed up contents were highly relevant, and damaging to the client's case. The solicitor was ordered to pay the opposing party's wasted costs incurred during the intervening period. It is worth noting what followed in Lord Atkin's speech after the citation in paragraph 15 of Hedrich:

"He is not the ultimate judge, and if he reasonably decides to believe his client, criticism cannot be directed at him. But I may add that the duty is especially incumbent on the solicitor where there is a charge of fraud; for a wilful omission to perform his duty in such a case may well amount to conduct which is aiding and abetting a criminal in concealing his crime, and in preventing restitution."

38. There are powerful similarities between the underlying facts in Myers v. Elman and the present case. Both cases involved the partial covering up by the client, without the solicitor's supervision, of relevant parts of a relevant document. Both cases involved allegations tantamount to fraud, in the sense that, in the present case, Ms Taylor maintained from the outset that Mr Jakober was knowingly party to a dishonest concealment by her former husband of his beneficial ownership of Wicklands Farm.
39. Nonetheless Mr Phipps sought to rely upon the following points of distinction. First, it appears at least from passages in Lord Porter's speech on page 331, that the courts in Myers v. Elman were not constrained from getting at the full truth of the matter by any question of privilege. Lord Porter recites evidence as to the advice which the solicitor gave his client. Secondly, the case was about a breach of the disclosure duty, rather than (as here) the duty which arises in connection with the production of relevant disclosed documents for inspection. In Myers v. Elman the effect of sealing up the passbook and exhibiting it to an affidavit of disclosure was that the sealed up part was understood to be irrelevant. In the present case, as is clear from the transcript of the hearing before Charles J, the redactions on the BCP bank statement were sought to be justified by reference to the privacy rights of Mr Jakober's clients under Swiss law, rather than on grounds of irrelevance. Finally Mr Phipps pointed out that, whereas in Myers v. Elman the opposing party was entitled to assume that Nathaniel Rothfield's solicitor had carried out or supervised the sealing up of the passbook, in the present case Mr Morris was at pains to emphasise in his December 2009 letter that the redaction of the BCP bank statement had been carried out by Mr Jakober himself, and that Mr Morris had relied upon his client's instructions as to the lack of any connection between the redacted names and Mr Stoutt.
40. In my judgment there is no difference in principle between the ambit of the solicitor's duty, on the one hand, in the conduct and supervision of disclosure and, on the other hand, in the conduct and supervision of any redaction of disclosable documents before they are offered for inspection. Listing documents for the purposes of disclosure and making them available for inspection are both parts of the process more generally called disclosure, and the court is heavily reliant upon the solicitor's duty to carry out or at least personally to supervise both tasks, for the reasons set out in Matthews and Malek, Hedrich and Myers v. Elman. Furthermore, I consider that the opposing party (i.e. the recipient of disclosure) is entitled to assume, and ordinarily will assume, that his opponent's solicitors will have carried out and/or supervised the whole of the disclosure process in the manner set out both in the standard text books and in well known authority.
41. Redaction of a disclosed document before production for inspection may be carried out on (at least) four different grounds. The first is where the redacted material is irrelevant: see GE Capital Group Ltd v. Bankers Trust Co [1995] 1 WLR 172, at 175-6. Redaction for that purpose performs the same function as did the sealing up of a document at the time of Myers v. Elman. The second ground is where the redacted material is both privileged, and properly severable from the rest of the document: see Great Atlantic Insurance Co v. Home Insurance Co [1981] 1 WLR 529. In such a case the party giving disclosure has a right to withhold inspection of the redacted part, within the meaning of CPR 31.3(1)(b).
42. The third ground is where a party has a duty to withhold inspection of the redacted part, also within the meaning of CPR 31.3(1)(b). In such case the person who wishes to claim that he has such a duty, in relation to a document or part of a document, must so state in writing, either in his list of documents, or to the person wishing to inspect it, leaving it to the person wishing to inspect it to apply to the court to decide whether that claim should be upheld: see CPR 31.19(3) to (5). In such a case the court can require the document to be produced to the court: see CPR 31.19(6)(a).
43. In Morris v. Banque Arabe et Internationale d'Investissement SA [2000] CP Rep 65 Neuberger J held that a right or duty to withhold inspection could cover a right or duty arising under a foreign jurisdiction and that, if such a right or duty was asserted, it was a matter for the court's discretion whether to give effect to it by refusing to order inspection. In English law, duties of confidentiality generally give way to a disclosure obligation in civil litigation. But foreign law may provide otherwise, particularly in countries with less developed systems for disclosure in litigation.
44. The fourth ground for refusing to permit inspection of a disclosed document is where the party giving disclosure asserts that it would be disproportionate for him to have to do so, even though the document satisfied the relevance test under CPR 31.6(b). In such a case, the party giving disclosure must, again, state in his disclosure statement that inspection will not be permitted on that ground: see CPR 31.3(2). In such a case the court will, on the application of the opposing party, exercise its discretion whether or not to order inspection. Generally speaking, inspection will be ordered only if it is necessary for the just disposal of the proceedings.
45. The provisions of the CPR which I have summarised reflect an important distinction between the first of the four grounds for redaction and the other three. In the first example, the opposing party is simply being told that the redacted part is irrelevant to the issues in the proceedings. He may challenge that assertion of irrelevance only on very limited grounds, since the court will be reluctant to go behind a statement as to relevance either in an affidavit or (now) in a disclosure statement. It is precisely for that reason that the court places such reliance on the solicitor's duty to supervise disclosure.
46. In the remaining three cases by contrast, the party giving disclosure is revealing that he holds a relevant document or (in the case of a redaction) that the redacted part is relevant, but resisting inspection of it on grounds which he is required to identify. In each of those three cases the rules provide a mechanism which enables the opposing party to challenge the grounds for the redaction. The court will, again, be slow to go behind an assertion of privilege: see West London Pipeline v. Total UK [2008] 2 CLC 258, at paragraphs 86 to 91. Nonetheless the court may, in an appropriate case, inspect the document, or redacted part, and form its own view as to whether privilege has been properly claimed. If it has been, there is no discretion to order inspection of the redacted part. By contrast, in cases three and four the court will readily entertain a challenge to a refusal to permit inspection of the redacted part, and will exercise a broad necessity-based discretion in so doing.
47. An assertion of privilege is still very much a matter for a party's solicitors rather than the party's own unaided judgment. But neither the court nor the opposing party is as reliant on the solicitor's duties in relation to disclosure, where inspection is resisted on grounds three or four (duty or proportionality) as it is in relation to grounds one or two. In particular, a breach of duty by the solicitor does not in cases three and four expose the opposing party to the same risk of being wrongly denied inspection and use of a relevant and helpful document, or part of a document, without being aware of it, or able to do anything about it.
48. I have dwelt upon these distinctions because it is clear from the December 2009 letter, read in the context of the exchange which had taken place before Charles J in October, that Mr Morris was asserting on Mr Jakober's behalf a duty to withhold inspection of the names on the BCP bank statement, arising from his Swiss law obligations of confidence to his clients, in the manner prescribed by CPR 31.19(4)(b). It was therefore a ground three claim to be entitled or permitted to redact those names, which Ms Taylor was entitled to challenge under CPR 31.19(5) and which, indeed, Mr Morris fully expected her to challenge. Furthermore, the redactions did nothing to conceal from Ms Taylor or her solicitors the obvious fact that the redacted names of the payers of the first three amounts recorded in that statement, which plainly formed the source for a substantial part of the monies used to purchase Wicklands Farm, were of the highest relevance to the proceedings. The most cursory reading of the December 2009 letter and enclosed BCP bank statement made that crystal clear. In that respect, the present case differs markedly from what happened in Myers v. Elman.
49. I must at this stage set out Mr Phipps' submission as to what Mr Morris and DWF might have been able to say in their defence, if unconstrained by privilege, in the context of an apparent failure by Mr Morris personally to supervise Mr Jakober's redaction of the BCP bank statement, or to obtain, review and preserve a clean copy in his firm's possession. The necessarily hypothetical case runs as follows:

i) Mr Jakober asserted to Mr Morris a Swiss law obligation to his clients to keep their identities confidential, notwithstanding the English proceedings.

ii) He went further and asserted that his Swiss law obligation required him even to keep those names confidential from his English lawyers, acting for him in connection with those proceedings.

iii) Mr Morris was therefore required by Mr Jakober to allow him to carry out the redactions, and was not told that, despite advice that he should do so, Mr Jakober had not kept a clean original.

iv) Conscious that he was being required by his client to depart from his ordinary duty in relation to the disclosure process, Mr Morris obtained for his client Swiss legal advice, which tended to confirm Mr Jakober's Swiss law duty to withhold client names both from disclosure in English court proceedings, and even from disclosure to his own English lawyers, at least until an English court had specifically ordered that they be revealed.

v) Mr Morris then regarded it as his duty to inform Ms Taylor's solicitors that his client rather than he had made the redactions, and that he was reliant purely on his client's instructions for his assertion in the December 2009 letter that the redacted names had no connection with Mr Stoutt.

vi) Having so informed Ms Taylor's solicitors, he reasonably concluded that neither the opposing party nor the court would be at risk of being misled into thinking that he had supervised the redaction process in any way. Accordingly, having with his client's consent, made a clean breast of his not having performed his ordinary disclosure duty, Mr Morris was not obliged to cease acting for Mr Jakober. Nor were Ms Taylor and her advisers in fact misled.

50. Mr Hood challenged that analysis on three main grounds. First, he submitted that on the evidence available, Mr Morris could not have obtained advice for Mr Jakober from a Swiss lawyer that he was prohibited even from showing the un-redacted BCP bank statement to Mr Morris. Secondly, he challenged in limine the proposition that a solicitor whose client prohibits him from performing his duty to the court can avoid having to cease acting by making a full disclosure of that fact to the opposing party. Thirdly, he submitted that Mr Morris's disclosure in the 2009 letter was in any event inadequate, although he did not suggest that his client had in fact been misled.
51. As to Mr Hood's first point, the only available material as to the relevant provisions of Swiss law consists of an opinion from a Swiss lawyer (expressed to be compliant with CPR 35 PD) contained in a letter dated 3^rd September 2010 from the Swiss law firm Pestalozzi, and used by Ms Taylor at the hearing before Roth J in September 2010. It included the following question and answer:

"2.3 Could Mr Jakober provide an un-redacted copy of the statement just to his UK lawyers without breaching any duties of discretion and confidentiality to his clients?

Answer 2.3 Yes, bearing in mind Mr Jakober's advisers are bound to professional secrecy and provided the confidential information they would be receiving is given in the context of the matter they are reviewing, this would probably not be deemed to be in breach of his confidential duties. A certain balancing act must be done there between preservation of the client's confidentiality by all means and the legitimate need for Mr Jakober to provide confidential information to his advisers (professionally bound by secrecy commitment) to act on his behalf."

52. No Swiss expert evidence to the contrary has been tendered on behalf of DWF, but Mr Phipps reminded me that the present issue is not what Swiss law actually provides, but rather what may have been contained in the opinion which Mr Morris obtained for Mr Jakober, the contents of which remain subject to Mr Jakober's privilege. Mr Phipps emphasised that the Pestalozzi opinion was caveated by the word "probably" and by the need for a balancing act to be carried out in order to ascertain the answer to the question.
53. While on the balance of probabilities I consider it unlikely that Mr Morris obtained Swiss legal advice to the effect that Mr Jakober could not reveal client names even to his English lawyers, I have concluded that Mr Morris and DWF are nonetheless entitled to the benefit of a reasonable doubt about it. I am therefore unable to conclude that Mr Morris was not presented with any plausible excuse for his client's refusal to provide him with a clean copy of the BCP bank statement, both for his perusal in supervising the redaction process and for retention thereafter.
54. Mr Hood's second point raises a more general question as to the duties of solicitors when faced with a client's refusal to permit them to carry out their ordinary duties to the court, in connection with the disclosure process. Rule 11.01 of the Solicitors Code of conduct 2007, headed 'Deceiving or misleading the court' provides (inter alia) as follows:

"(1) You must never deceive or knowingly or recklessly mislead the court or knowingly allow the court to be misled.

(2) You must draw to the court's attention:

(a) …

(b) any procedural irregularity."

55. Rule 2.01 headed 'Taking on clients' provides:

"(1) You are generally free to decide whether or not to take on a particular client. However, you must refuse to act or cease acting for a client in any of the following circumstances:

(a) when to act would involve you in a breach of the law or of a breach of the rules of professional conduct;

…

(2) You must not cease acting for a client except for good reason and on reasonable notice."

56. In Myers v. Elman at first instance, Singleton J is reported as having said this:

"A solicitor is an officer of the Court and owes a duty to the Court; he is a helper in the administration of justice. He owes a duty to his client, but if he is asked or required by his client to do something which is inconsistent with his duty to the Court, it is for him to point out that he cannot do it and, if necessary, to cease to act."

57. In Hedrich v. Standard Bank London (supra) at paragraph 14, after reviewing Myers v. Elman, Ward LJ said:

"Again, where the solicitor knows that his client has concealed relevant documents with a view to their not being disclosed, the solicitor must not act so as to suggest that full disclosure has been or will be given, and this may lead to his ceasing to act."

58. In Medcalf v. Mardell (supra) at paragraphs 51 to 56, Lord Hobhouse drew attention to what he called the "constitutional aspect" of the wasted costs jurisdiction. He said, at paragraph 51:

"It is fundamental to a just and fair judicial system that there be available to a litigant (criminal or civil), in substantial cases, competent and independent legal representation. The duty of the advocate is with proper competence to represent his lay client and promote and protect fearlessly and by all proper and lawful means his lay client's best interests. This is a duty which the advocate owes to his client but it is also in the public interest that the duty should be performed."

at paragraph 52, he continued:

"Unpopular and seemingly unmeritorious litigants must be capable of being represented without the advocate being penalised or harassed whether by the executive, the judiciary or by anyone else. Similarly, situations must be avoided where the advocate's conduct of a case is influenced not by his duty to his client but by concerns about his own self-interest."

And at paragraph 56:

"… It is not enough that the court considers that the advocate has been arguing a hopeless case. The litigant is entitled to be heard; to penalise the advocate for presenting his client's case to the court would be contrary to the constitutional principles to which I have referred. The position is different if the court considers that there has been improper time-wasting by the advocate or the advocate has knowingly lent himself to an abuse of process. However it is relevant to bear in mind that, if a party is raising issues or is taking steps which have no reasonable prospect of success or are scandalous or an abuse of process, both the aggrieved party and the court have powers to remedy the situation by invoking summary remedies – striking out – summary judgment – peremptory orders etc. The making of a wasted costs order should not be the primary remedy; by definition it only arises once the damage has been done. It is a last resort."

59. Medcalf v. Mardell was a case about alleged misconduct by an advocate, but I have no doubt that the constitutional aspect of the wasted costs jurisdiction explained by Lord Hobhouse is equally applicable to solicitors acting for clients in litigation. While it is impossible, and unnecessary in the present context, to lay down a comprehensive statement of the circumstances in which a solicitor is obliged to cease acting for a client, I am not persuaded that there is, as Mr Hood submitted, simply no alternative whenever the client instructs a solicitor not to perform some part of his ordinary duty to the court. Of course, the solicitor must cease to act if the client's instruction is an invitation knowingly to commit an abuse of process. In the disclosure context, as Ward LJ recognised in Hedrich v. Standard Bank London Ltd, the vice inherent in a solicitor not performing his duty to supervise the process is that, if that failure is concealed, the opposing party and the court may think that the process has been properly and professionally carried out. That is precisely what occurred in Myers v. Elman.
60. In the present case, on the hypothetical analysis propounded by Mr Phipps, Mr Morris was instructed by Mr Jakober to pursue the objective of resisting disclosure to Ms Taylor of what he said were client names on the BCP bank statement, by a process of redaction which had been flagged up to the other side at the hearing before Charles J, and to do so by a method which did not involve or permit Mr Morris reviewing the un-redacted bank statement himself, for Swiss legal reasons which imposed a confidentiality duty on Mr Jakober.
61. If the only legitimate response to that instruction was for Mr Morris to cause Halliwells to cease acting for Mr Jakober and, by implication, to prevent any other solicitors from agreeing to act for him while those instructions persisted, then Mr Jakober would have been compelled either to withdraw his case or to pursue his claim that he was duty bound to keep those names confidential without legal representation of any kind. I acknowledge at once that, having regard to the obvious relevance of those redacted names to the main issue in the litigation, an attempt to maintain confidentiality was very likely to fail. On the face of it, the suggestion that the redacted names were those of his clients was inconsistent with Mr Jakober's case that he had provided the purchase monies. The likely outcome would be an order for production, possibly (as in fact later occurred) on special terms prohibiting Ms Taylor's lawyers from revealing the names even to their own client, with a debarring or strike-out order following swiftly if the order for production on those terms was not complied with. Nothing in Henderson J's judgment nor the other materials available to the court suggests that Mr Jakober told Mr Morris, at any time between October 2009 and the end of September 2010 that, if ordered to produce the original (or a further clean copy from the bank), Mr Jakober would nonetheless refuse to do so. Henderson J's finding was only that from start to finish this probably been Mr Jakober's intention.
62. In those circumstances I do not accept that Mr Morris's only course was to cease to act. He was entitled to look for any way of continuing to represent his difficult client if he could properly do so. He could in my view continue to do so if, but only if, and with Mr Jakober's consent, he made a full disclosure to Ms Taylor or to the court of the extent to which, upon instructions, he had not complied with his ordinary duty to supervise the redaction process in relation to the BCP bank statement. I therefore reject Mr Hood's second submission.
63. That leaves the remaining question whether the December 2009 letter was a sufficient disclosure. In my judgment it fell short of that requirement, but only by a relatively short margin. While it notified Ms Taylor's solicitors that Mr Jakober rather than Halliwells had carried out the process of redacting the BCP bank statement, and explained that it was Mr Jakober's instructions, rather than Mr Morris's perusal of the document, which enabled him to state that "none of the redactions concern companies owned by Mr Stoutt" and that "this account is a business account and no funds are received from private individuals", it nonetheless failed to spell out the fact that Mr Morris had neither been given nor reviewed the un-redacted bank statement so as, for example, to satisfy himself that Mr Stoutt's name had not itself been redacted. The December 2009 letter did not rule out the possibility that Mr Morris might have seen one or more unfamiliar corporate names which had no apparent connection with Mr Stoutt.
64. The result of this long analysis is therefore that the circumstances of the disclosure of the redacted BCP bank statement in December 2009 did involve a breach of Mr Morris's and Halliwells' duty to the court, in failing to supervise the redaction of that document without either making a full disclosure of the circumstances to Ms Taylor, or ceasing to act. Since it is common ground that the disclosure process imposes continuing duties, that breach continued for the remainder of Halliwells' retainer, and the basis upon which (to Mr Morris's and therefore DWF's knowledge) DWF were then retained to act involved a continuing breach of that duty. It was only in late September or early October 2010 that it was drawn specifically to Ms Taylor's attention that Mr Morris had never been provided with a clean copy of the BCP Bank Statement or, therefore, seen what had been redacted.

CAUSATION

65. The wasted costs jurisdiction is compensatory rather than punitive in nature. It is therefore necessary for an applicant to establish that, if the alleged breach of duty or improper, unreasonable or negligent act of the respondent solicitors had not occurred, then on the balance of probabilities the applicant would not have incurred the costs, or some part of those costs, in respect of which the application is made: see Brown v. Bennett (No 2) [2002] 1 WLR 713 at 729 to 731. In particular, the loss of a chance to save the costs alleged to have been wasted is an insufficient basis for the application: see per Neuberger J at paragraph 54.
66. Ms Taylor's case on this application is, fairly and squarely, that compliance by Mr Morris, Halliwells and DWF with their duties to the court would inevitably have required them to cease acting for Mr Jakober, with the consequence that, shortly thereafter, he would have put up the white flag. It was no doubt for this reason that Mr Hood resisted, albeit unsuccessfully, any notion that Mr Morris had any alternative but to cease acting. I have concluded that Mr Morris did have the alternative of making a full disclosure of the circumstances, but that he failed to achieve it by a short margin. The first question therefore is whether, had he sought completely to perform his duty, full disclosure would have been given. This depends upon whether Mr Jakober would have consented to him doing so.
67. There is no reason to doubt that Mr Jakober consented to the partial disclosure made in the December 2009 letter, and I can see no reason why he should have refused a request from Mr Morris for authority to disclose that Mr Jakober had considered himself constrained even from showing the un-redacted BCP bank statement to Halliwells or, later, to DWF. On any view, the question whether Mr Jakober would have consented is not one about which I can reach a negative conclusion while Mr Jakober's privilege has to be maintained, with the requisite degree of confidence. Faced with the choice between losing professional representation and permitting Mr Morris to tell Ms Taylor's solicitors that he regarded himself as constrained from revealing the names of business clients even to his own solicitors, I consider it probable that Mr Jakober would have taken the second course.
68. In any event it does not appear that Ms Taylor and her legal team were in fact misled at all by the inadequacy of the disclosure actually made by Mr Morris in the December 2009 letter. The question to, and answer from, the Swiss law firm Pestalozzi which I have quoted above show that, in preparing the application for an unless order, they assumed or at least suspected that the un-redacted BCP bank statement had been withheld from Mr Morris.
69. Mr Hood advanced no case that his client's costs would have been saved to any material extent if the December 2009 letter had included the additional half sentence necessary to make it clear that Halliwells had not been provided with an un-redacted copy of the BCP bank statement. The evidence was that it was financial constraints which prevented Ms Taylor from advancing a challenge to the adequacy of Mr Jakober's disclosure, between December 2009 and August 2010. In paragraph 8 of her witness statement made in support of the disclosure application heard by Roth J Ms Taylor said that, although her solicitors were prepared to act on a conditional fee basis from December 2009, it was not until the summer of 2010 that she obtained the services of specialist counsel prepared to act on a conditional fee basis, and therefore not until then that substantive work on the case could resume.
70. The reality is, in my judgment, that the redactions made to the BCP bank statement in December 2009 cried out for challenge, and that a challenge was mounted, successfully in the event, as soon as Ms Taylor had found a means of funding the necessary legal representation for that purpose. Had Mr Morris made the more complete disclosure which was incumbent upon him in, or at any time after, December 2009, it would merely have marginally increased the already strong prospects of a successful challenge, but it would not have led to a challenge being mounted any sooner than in fact it was. Nor would the terms of the Roth J order in those circumstances have required compliance any sooner than was in fact required. It was Mr Jakober's decision not to comply with the order for production of a fully un-redacted copy of the BCP bank statement, and other documents, that caused or at least contributed to his decision to abandon his defence at the end of September 2010. By then he had, in any event, been debarred from defending.
71. Ms Taylor's difficulties in establishing the necessary causative link between breach of duty and wasted costs become all the more insuperable when it is borne in mind that the application is made only against DWF, which began acting for Mr Jakober only in early August 2010, a few days before receiving the August 2010 letter which was the necessary precursor to the successful disclosure application heard by Roth J. It is evident that the letter had received the careful and detailed input of the specialist counsel which Ms Taylor had previously been unable to fund. Its preparation is likely to have begun at or about the same time as DWF came on the record. I cannot envisage how a belated disclosure in early August of the full circumstances behind the redaction of the BCP bank statement in December 2009 would have made any material difference to the expenditure undertaken by Ms Taylor in the pursuit of her successful disclosure application, for the summarily assessed costs of which she was, in any event, paid in full.
72. Even if, contrary to my view as set out above, the only means whereby DWF could have complied with its duty to the court in August 2010 was either to refuse to act or, after a short period, to cease to act for Mr Jakober, it is still unlikely in my view that this would have led to any significant saving in costs by Ms Taylor. By that time the ground was already being prepared by Ms Taylor's legal team for the disclosure application which followed in September. If because of Halliwells going into administration Mr Jakober had been unrepresented, then Ms Taylor would still have needed to prove her case, and might well have been advised that a disclosure application was a ready means either of obtaining documents likely to assist her case, or a debarring order in lieu. In the meantime it would have been necessary for witness statements to be completed and, in due course, counsel to be briefed for trial.
73. Even if, at some time during that period, CMCS and Mr Jakober had discontinued, Ms Taylor was nonetheless seeking a declaration that her former husband beneficially owned Wicklands Farm, for use in pursuit of her ancillary relief proceedings, and would still have needed to prove her case. Inquiry of Mr Hood revealed that Ms Taylor's solicitors had, sensibly, avoided incurring a brief fee for him to conduct a fully contested trial until after Mr Jakober had either complied or (as occurred) not complied with the Roth J Order, so that, in the event, he was briefed for an uncontested hearing, save in relation to indemnity costs.
74. In fairness to Ms Taylor, the application was opened to me on the basis that, if liability and causation were established, quantum might conveniently be dealt with on a subsequent occasion. Nonetheless it was incumbent upon Ms Taylor to demonstrate some different course which she would probably have followed, had DWF complied with its duty to the court, sufficient to justify the further time and expense of a minute examination of the costs implications at a further hearing.
75. For all those reasons, but primarily because I have not been persuaded with the requisite degree of assurance that compliance by DWF with its duty required it to refuse or cease to act for Mr Jakober in August 2010, and because Ms Taylor was not in fact misled, it has not been shown that the breach of duty constituted by an ongoing failure on Mr Morris's part to make full disclosure of the circumstances in which the BCP bank statement was redacted caused Ms Taylor to incur any wasted costs, or other loss.

DISCRETION

76. Ms Taylor's failure to demonstrate that the breach of duty by DWF caused her to incur any wasted costs means that the question whether, as a matter of discretion, I should now order that DWF should be liable for them does not arise. Again, the inability of the respondent to rely upon privileged communications with Mr Jakober would have made that a difficult task in any event.
77. I would only say this. Giving Mr Morris and DWF the benefit of the doubt, as I am required to do, this may have been (albeit that it was not necessarily) a case in which Mr Morris chose, out of a desire to do his best for a difficult and unmeritorious client, to adopt an alternative to the relatively easy course of simply refusing to act which called for a full disclosure, with his client's consent, of the circumstances in which he had not performed the duty to supervise the disclosure process which the court expects from solicitors. It has not at any stage been suggested that Mr Morris knowingly assisted Mr Jakober in concealing material damaging to his case, or that he was even reckless as to the possibility that Mr Jakober had concealed names on the BCP bank statement which connected Mr Stoutt with the provision of the monies for the purchase of Wicklands Farm.
78. Mr Morris's failure lay in failing to make a sufficiently full disclosure of the extent to which he had departed from the duties expected of a solicitor in relation to the disclosure process. But the claim against him has never been that Ms Taylor and her advisers acted to her detriment in reliance upon any mistaken assumption as to the extent of his supervision of that process. Neither she or her advisers were in fact misled. Her case has only been that she would have benefited from an earlier departure of Mr Jakober from the litigation than otherwise occurred.
79. Misconduct by a solicitor which enables a client to pursue an abusive claim beyond the date when he would otherwise have been obliged to withdraw is a serious matter. Nonetheless the particular abuse was one which, from December 2009 onwards, it was always within the ability of Ms Taylor to bring to an end by an appropriate application for a strike out or debarring order, as eventually she did. Her inability do so sooner was caused by a lack of funds for which Mr Morris was not to blame. She received full payment of the assessed costs of obtaining the debarring order. Even if I had been persuaded that Mr Morris's conduct did improperly enable Mr Jakober to continue his abusive claim that he was the beneficial owner of Wicklands Farm beyond a date when he would otherwise have been in practice obliged to abandon it, I would have found it a difficult and finely balanced question whether a wasted costs order would have been the appropriate response, having regard in particular to Lord Hobhouse's warning that, in a case where there is an available remedy against the abusive party (which in this case was not timeously pursued), the wasted costs jurisdiction is to be treated as a last resort.