FUNDAMENTAL DISHONESTY AND WASTED COSTS AGAINST A SOLICITOR: THE BURDEN IS ON THE APPLICANT TO PROVE CAUSATION
The judgment of Mrs Justice Lambert in Razaq v Iqbal & Ors  EWHC 3924 (QB) provides an interesting example of a failure to prove causation in a wasted costs application. A solicitor had been negligent in failing to pass on an offer of a “drop hands” settlement to the claimant, however the applicants had not established that the claimant would have acted any differently if he had been given that information.
The claimant brought an action for damages for personal injury and other losses. He instructed a firm of solicitors to act on his behalf. The defendant made a “drop hands” deal some eight months before trial the defendant offered a “drop hands” deal. The claimant’s solicitor (due to administrative error) failed to communicate that offer to the claimant. The original solicitors came off the record shortly before the trial because they were not obtaining instructions from the claimant. The claimant instructed new solicitors and the case proceeded to trial. At the trial the claimant was found to be fundamentally dishonest and ordered to pay the defendant’s costs on an indemnity basis.
THE WASTED COSTS APPLICATION
During the costs hearing it became apparent that the defendants had made a “drop hands” deal that had not been communicated to the claimant by his former solicitors. A notice to show cause was issued against the former solicitors.
THE GROUNDS OF THE WASTED COSTS APPLICATION
The basis of the application was that the claimant would have accepted the offer if he had been told about it.
“if he was informed by his solicitor that he had a weak case and that you had made an offer for our client to discontinue with the case and no order for costs our client would have accepted this as this is the first time our client has used a solicitor and did not know that his case was weak until we told him.”
THE UNSUCCESSFUL APPLICATION FOR WASTED COSTS
The Circuit Judge rejected the application on two grounds. Firstly there was no breach of duty to the court, secondly on the grounds that the claimant would have continued with the action in any event.
“The Judge also found that the application did not succeed as he was not persuaded that the conduct of Mr Brumby in failing to communicate the Offer had caused the Second Defendant to incur unnecessary costs. He noted the competing claims by the Claimant, that he would have discontinued the claim had he been advised of the Offer, and of Mr Brumby, that it would have advised continuing with the claim. As the Judge put it: “It is tempting to say with respect to both parties, that they would say that.” The Judge considered that any finding as to the content of the advice that Mr Brumby would hypothetically have given and what the Claimant would have done in response was “a matter of speculation.” He bore in mind that notwithstanding representation by a different firm, Rana & Co, the Claimant did press the claim to trial. The Judge concluded therefore that he could not be satisfied on balance that the Offer would have been accepted and the litigation costs avoided.“
THE UNSUCCESSFUL APPEAL
The appeal against this decision was unsuccessful. Mrs Justice Lambert put to one side the issue of whether the first solicitors were in breach of duty, she upheld the decision in relation to causation.
THE JUDGMENT ON THIS ISSUE
The Judge concluded that he was not satisfied on balance that the Claimant would, had he been informed of the Offer and advised on its merits, have discontinued with no order for costs. He took into account the unchallenged finding of Judge Walwik that the claim was fundamentally dishonest and that notwithstanding advice from other solicitors, Rana & Co, (who had advised the Claimant that the claim was weak) the Claimant had pressed his case to trial (although noting that, by that stage, there was no offer of settlement open to him to accept).
I remind myself that before allowing this ground of appeal I must be satisfied that the Judge was wrong in reaching his conclusion on the point. The body of case law concerning CPR 52.21(3) is replete with authority to the effect that findings of fact by the first instance judge are not to be undermined on appeal where there is an evidential basis to support the finding and the finding is not one which no reasonable judge could have reached. See for example: The Mayor and Burgesses of the London Borough of Haringey v Ahmed & Ahmed  EWCA Civ 1861.
I am unable to conclude that Judge’s decision on the issue of causation was wrong. The burden, such as it is, of establishing that costs would have been avoided but for the impugned conduct is upon the applicant and, as the Judge observed, the reliability of the Claimant’s case on the point and that of Mr Brumby were both bound to be influenced by their differing perspectives (“they would say that“). The fact that the Claimant had pursued a dishonest case to trial and done so in spite of being advised that his claim was weak were matters which the Judge was entitled to take into account. In the same position, I too would have found it impossible to be satisfied on balance that the Offer would have been accepted by the Claimant. I therefore reject this further ground of appeal.