A wasted costs order is one of the most serious costs sanctions that can be imposed on a legal representative. Unlike most costs orders, which are made between the parties to litigation, a wasted costs order is directed personally against a solicitor, barrister, or other legal representative whose conduct has caused unnecessary costs to be incurred.

Although wasted costs applications remain relatively uncommon, they serve as an important reminder that legal representatives owe duties not only to their clients but also to the court and the wider administration of justice.

From a legal costs perspective, understanding when a wasted costs order may arise is essential, particularly in cases involving allegations of unreasonable conduct, professional negligence, or procedural failings.

 

What is a Wasted Costs Order?

The court’s power to make a wasted costs order arises under section 51 of the Senior Courts Act 1981.

A wasted costs order allows the court to order a legal representative to personally pay costs that have been wasted as a result of their conduct. The purpose of the jurisdiction is not to punish the representative, but to compensate a party who has incurred unnecessary costs as a result of improper conduct.

The leading authority remains Ridehalgh v Horsefield [1994] Ch 205, which continues to provide the framework for determining whether wasted costs proceedings are justified.

 

When Can a Wasted Costs Order Be Made?

The court may consider a wasted costs application where a legal representative has:

• Acted improperly
• Acted unreasonably
• Acted negligently

The conduct must have caused the opposing party to incur unnecessary costs or otherwise led to costs being wasted.

Importantly, the court must be satisfied that there is a direct link between the conduct complained of and the costs claimed.

Not every mistake or unsuccessful argument will justify a wasted costs order. Litigation is inherently uncertain, and courts recognise that legal representatives must be free to advance their client’s case without fear that every adverse outcome will result in personal liability.

 

The Ridehalgh Test

In Ridehalgh v Horsefield [1994] Ch 205, the Court of Appeal established the principles that continue to govern wasted costs proceedings.

The court explained that:

• “improper” conduct involves a significant breach of professional standards
• “unreasonable” conduct means conduct that no reasonable legal representative would regard as acceptable
• “negligent” conduct refers to a failure to act with the competence reasonably expected of a legal professional

The court also emphasised that the jurisdiction should be exercised with caution.

A wasted costs order is not intended to become a routine method of challenging litigation decisions or tactical judgements made during proceedings.

 

The Two-Stage Approach

Before making a wasted costs order, the court will generally consider two questions.

First, the court will determine whether the conduct complained of was improper, unreasonable, or negligent.

Secondly, the court will determine whether that conduct caused costs to be incurred unnecessarily and whether it is appropriate to order the legal representative to compensate the affected party.

This reflects the requirement that wasted costs proceedings should only be pursued where there is a genuine causal connection between the conduct and the costs claimed.

 

Examples of Conduct That May Lead to a Wasted Costs Order

Although each case will depend on its facts, courts have identified a number of situations that may justify consideration of a wasted costs order.

Examples include:

• Pursuing hopeless applications with no realistic prospect of success
• Failing to comply with court orders without good reason
• Causing avoidable adjournments
• Serious procedural failures
• Advancing claims or arguments known to be unsustainable
• Significant failures in case preparation

In more serious cases, conduct amounting to professional negligence may also lead to a wasted costs application.

However, negligence alone will not automatically justify a wasted costs order. The court must still consider whether the costs proceedings are justified and whether the conduct directly caused unnecessary costs to be incurred.

 

Procedural Safeguards

Because a wasted costs order is directed personally against a legal representative, the court must adopt a fair procedure.

A representative facing a wasted costs application must be given:

• Notice of allegations
• An opportunity to make representations
• A fair opportunity to respond to the evidence relied upon

The court is generally cautious about determining disputed factual issues without allowing the representative to properly address the allegations.

This reflects the potentially serious professional consequences associated with wasted costs proceedings.

 

The Court’s Cautious Approach

Courts have consistently emphasised that wasted costs jurisdiction should be exercised sparingly.

As recognised in various authorities and reflected in CPR guidance, the court must consider whether wasted costs proceedings are justified notwithstanding the likely cost of pursuing the application itself.

In other words, the court will not automatically allow extensive satellite litigation over relatively modest sums. This ties into a wider juridical concern regarding proportionality and procedural efficiency.

 

Wasted Costs and Professional Standards

Wasted costs applications often raise wider questions regarding professional conduct.

Legal representatives are expected to maintain appropriate standards of competence, case management, and procedural compliance. Where conduct falls significantly below those standards, the court may be prepared to consider personal costs consequences.

However, there remains an important distinction between:

• Aggressive but legitimate litigation tactics
• Genuine errors of judgement
• Conduct that crosses the threshold of being improper, unreasonable, or negligent

The wasted costs jurisdiction is aimed at the third category.

 

Practical Considerations

From a costs lawyer’s perspective, wasted costs applications should never be viewed as routine.

Before pursuing such an application, parties should carefully consider:

• Whether the conduct satisfies the Ridehalgh test
• Whether unnecessary costs can be clearly identified
• Whether there is sufficient evidence to support the allegations
• Whether the likely recovery justifies the expense of the application

In many cases, the threshold for success will be significantly higher than parties initially assume.

 

How Greener Costs Can Assist

Wasted costs orders involve a complex interaction between costs law, professional conduct, and litigation strategy.

Greener Costs provides specialist advice on all aspects of costs disputes, including wasted costs applications, detailed assessment proceedings, and strategic costs recovery.

Our team can assist in assessing whether a wasted costs application is likely to succeed, quantifying the costs claimed, and advising on the proportionality of pursuing such proceedings.

If you require assistance, contact Greener Costs today:

📞 01204 263047
📧 info@greenercosts.co.uk