Pleading fraud and wasted costs

In an article in the Solicitors Journal of 25 January Guy Mansfield QC, Derrick Dale and John Bennett commented on the impact of the judgment of Mr Justice Neuberger in Brown v Bennett (21/LL p6). They considered the hazards of pleading, or not pleading fraud, the extent to which counsel can rely on the instructions of the lay client, the respective liability of solicitors and counsel and the test for conduct giving rise to a wasted costs order. The decision confirmed that the test was ‘whether, on the balance of probabilities, the applicant would have incurred the costs which he claims from the legal representatives if they had not acted or advised as they did’. The authors concluded that the application highlights the dangers faced by aggrieved parties who, having received a strong judgment in their favour, containing at least implicit criticism of the other side’s lawyers, initiate an application for a wasted costs order, premised on the basis that the action should never have been brought in the first place. At first blush the application in this case must have seemed attractive to its makers. In fact they faced insuperable hurdles. They had ended up with large additional costs liabilities. Indeed, the judge awarded costs on the indemnity basis against the applicants soon after the date that the respondents’ evidence was served.