HL Deb 24 October 1990 vol 522 cc1342-4

4 Clause 4, page 6, line 35, after legal' insert 'or other'.

5 Page 6, line 41, at end insert:

'(5A) In any proceedings mentioned in subsection (I), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court.

(5B) In subsection (5A), "wasted costs" means any costs incurred by a party—

  1. (a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or
  2. (b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.'.

6 Page 7, line 26, after 'legal' insert 'or other'.

7 Page 7, line 29, at end insert:

'(2) In section 52 of that Act (costs in Crown Court) the following subsection shall be inserted after subsection (2)—

"(2A) Subsection (5A) of section 5i applies in relation to any civil proceedings in the Crown Court as it applies in relation to any proceedings mentioned in subsection (1) of that section".'.

The Lord Chancellor

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 4 to 7 en bloc. I shall speak also to Amendments Nos. 153, 154, 155, 156, 157, 158 and 159.

The amendments establish in primary legislation an identical power and identical test for its exercise in each court whereby legal and other representatives may be ordered to compensate others for costs resulting from the representative's fault. In so doing, the amendments clear up existing confusion in the law about the applicable test in such cases in the Supreme Court. Following earlier debate in this House the Government are in no doubt that the applicable test ought to be one of simple negligence and that the test needs to be clearly established in primary legislation. In plain terms, justice surely demands that all the courts have power to shift the loss from an innocent party to the representative whose negligence has caused it.

Amendment No. 5 establishes the simple negligence test for the High Court and the Court of Appeal Civil Division as a gloss on the general costs power in Section 51 of the Supreme Court Act 1981. Amendment No. 7 achieves the same result for civil cases in the Crown Court through Section 52 of the same Act. Amendment No. 154 brings Clause 86 into line for the magistrates' civil jurisdiction and Amendment No. 153 does the same for criminal proceedings in the Crown Court and magistrates' courts by means of a new section in the Prosecution of Offences Act 1985. During debate on Report in another place the Government accepted an amendment to provide an appeal from the Crown Court to the Court of Appeal. Amendments Nos. 4, 6, 155 and 157 apply the power to representatives who are not lawyers.

Amendment No. 159 and subsection (2) of Amendment No. 153 provide the important new safeguard of an appeal from the magistrates to the Crown Court. Amendments Nos. 156 and 158 are purely consequential on the other amendments.

Finally, I should be clear about the relationship between these amendments and the inherent jurisdiction of the Supreme Court. Wherever costs are incurred through the fault of a representative, the power which is the subject of these amendments will be available. It will not be affected in any way by the inherent disciplinary power of the Supreme Court. Conversely, the latter remains intact and the negligence test applicable under these amendments in no way affects any stricter test applying under the inherent jurisdiction.

Moved, That the House do agree with the Commons in their Amendments Nos. 4 to 7.—(The Lord Chancellor.)

Lord Mishcon

My Lords, the House will appreciate that in the midst of subsection (5B) of Amendment No. 5 there appears the word "unreasonable". It is necessary to say a few words about that and I wish to ask the noble and learned Lord to confirm my view. It is important to realise that this is a provision in regard to wasted costs which can be made against a professional man, a solicitor. The word "unreasonable" needs a little attention.

It may be that as regards one's opponent in a case one may be deemed to be unreasonable and the court may believe that to be so. However, if there is no breach of any rule a professional man handling the case of his client has no duty whatever to his opponent except to act in accordance with the normal laws of professional etiquette and in accordance with the rules of court. That should be made clear so that judicially— I say this with deep respect—no doubt exists as to the meaning of the word "unreasonable".

I wish to make one other point. There is an appeal procedure from the Crown Court where such an order has been made. Your Lordships will appreciate that if a lawyer has such an order made by a court it is equal to a stern disciplinary rebuke which affects his reputation. Therefore, it is absolutely correct that there should be a right of appeal. However, as the noble and learned Lord the Lord Chief Justice pointed out in recent cases, when the appeal is successful it is not possible for the Court of Appeal to award costs to the appellant out of common funds.

That appears to me to be entirely wrong. The professional man has appealed in order to save his reputation. He has succeeded and he is left to bear the costs. That is not analogous with the ordinary case where one says, "There was a judicial error and there it is. You cannot expect the state to pay for judicial errors when an appeal is successful. You can expect the other party in a civil appeal to have to pay them but not in the kind of case to which I have referred".

I cannot, and do not intend to, move an amend rent relating to that today but I hope that, in confirming my view about the word "unreasonable", the noble and learned Lord will also consider for the future the right of the successful appellant in these circumstances to have his costs paid by the state.

Lord Morris

My Lords, I believe that the noble Lord is becoming unreasonably excited about the inclusion of the word "unreasonable", bearing in mind that in the Commons amendment it is sandwiched between the words "any improper" and "or negligent act or omission". I believe that only exceptionally unreasonable circumstances would apply in this case. That would be something which the courts could handle very easily.

3.30 p.m.

The Lord Chancellor

My Lords, I am grateful to the noble Lord, Lord Mishcon, and to my noble friend for their comments on this amendment. The standard to be applied by the court in this matter will be the standard of the legal adviser for the party in question. Merely because the other side does not like it will not mean that the conduct is unreasonable. It is conduct which is unreasonable viewed from the standpoint of a legal representative in the position of the person whose conduct is in question. The courts know how to judge standards of reasonableness and I should have thought that the factors mentioned by the noble Lord, Lord Mishcon, would be the principal factors in deciding that.

As regards costs from public funds, as I see it this is a matter not of discipline—I have mentioned that already: this is a matter of dealing with what are described as wasted costs. I believe that the rule is and should be that initial decisions are the responsibility of the judiciary and are to be carefully taken. If a decision is successfully appealed, the costs must be dealt with in accordance with the powers of the court as between parties. I hope that your Lordships will agree to these amendments.

On Question, Motion agreed to.