Wasted Costs Order – What is it and how to apply?

A wasted costs order is a legal order that requires a party in a case to pay the wasted costs incurred due to their conduct or behavior. In other words, if a party’s actions or omissions have caused the other party to incur costs that would not have been necessary if the first party had acted reasonably. In such circumstances it is unreasonable to expect these costs to be paid and the court may make a wasted costs order against the first party.

Wasted costs orders are intended to deter parties from engaging in conduct that unnecessarily increases costs and causes delay. They are most commonly made in civil cases, but can also be made in criminal cases. The amount of costs that can be recovered through a wasted costs order is typically limited to the actual costs that have been wasted as a result of the party’s conduct.

What is a Wasted Costs Order?

According to Section 51 of the Senior Courts Act 1981, a wasted costs order is when a party incurs costs due to a result of any improper, unreasonable, or negligent act or omission on the part of a legal or other representative. Practice Direction 46 Paragraph 5.1 explains that a wasted costs order involves the legal representative paying a sum in respect of costs to a party or disallowing costs relating to a specified sum or items of work. Unlike non-party cost orders (NCPO), which can be made against anyone, wasted costs orders can only be made against legal or other representatives.

To determine whether a wasted costs order should be made, the court considers whether the legal or other representative’s action was improper, unreasonable, or negligent. If the opposing party has committed any of these actions, it is considered unreasonable for the other party to pay the consequences. This three-step action test, derived from the case of Ridehalgh v Horsefield, is now incorporated in the Practice Direction for Part 48 of the Civil Procedure Rules. The legal representative, as defined by CPR 2.3, includes a barrister, solicitor, solicitor’s employee, manager of a recognized body under Section 9 of the Administration of Justice Act 1985, or a person for the purposes of legal services authorised by the Legal Services Act 2007.

Under the Senior Courts Act 1981, the court has the full power to determine by whom and to what extent the costs are to be paid. This means that wasted costs will be ordered if the court deems it just to do so.

It is important to note that wasted costs orders are not commonly made, and are only made in exceptional circumstances where a party’s conduct is deemed to be unreasonable or improper. The decision to make a wasted costs order is at the discretion of the court and is made on a case-by-case basis.

How do you apply for a Wasted Costs Order?

A party to the proceedings wishing to make a wasted costs order must make an application to the court. The Court itself can also instigate an order, but only at the end of proceedings. The procedure for making an application for a wasted costs order can vary depending on the type of case and the court in which it is being heard, but the following general steps can be taken:

  1. Identify the legal or other representative whose conduct you believe warrants a wasted costs order. This may be your own representative or the representative of the opposing party.
  2. Gather evidence to support your application. You will need to show that the legal or other representative’s conduct was improper, unreasonable, or negligent and that you have incurred costs as a result. You may need to provide details of the specific costs that were wasted, such as the amount of time spent on a particular task or the cost of hiring an expert witness.
  3. Draft an application for a wasted costs order, setting out the facts of the case, the legal basis for the order, and the costs that you are seeking to recover. Your application should also include any supporting evidence, such as witness statements or invoices.
  4. File the application with the court and serve a copy on the representative who is the subject of the application. Depending on the court and the case, you may need to attend a hearing to present your application or the court may make a decision based on written submissions.

It is important to note that applying for a wasted costs order can be a complex and time-consuming process. It is usually advisable to seek legal advice before making an application to ensure that you have the best chance of success and to avoid incurring further wasted costs.

How can Greener Costs assist with a Wasted Costs Order?

Here at Greener Costs, our team of costs lawyers and draftsmen possess many years of experience specialising in the laws surrounding legal costing and negotiations and are able to assist clients from a range of background on a variety of cases in recovering costs, whether you are the paying party or receiving party.

We can assist law firms throughout England and Wales through the use of our remote law costing services. Our clients find increased efficiency through the use of our remote service as it provides a pragmatic approach to costing, reducing the time it would take to scan and send an abundance of files. Due to this, we can ensure quick turnaround agreements, which under most circumstances can be much more efficient than clients completing the work themselves in-house.

At Greener Costs, we are actively doing everything we can to ensure our business benefits the environment. We are doing this through carbon offsetting of our staff, becoming completely paperless and carbon offsetting through each instruction.

If you wish to speak to a member of the team here at Greener Costs then please contact us on 01204 263047info@greenercosts.co.uk or use the online form on our website below.

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