Non-party costs order against solicitors refused (Court of Appeal)

Practical Law UK Legal Update Case Report 6-527-7486 (Approx. 3 pages)

Non-party costs order against solicitors refused (Court of Appeal)

by PLC Dispute Resolution

In Heron v TNT (UK) Ltd and another [2013] EWCA Civ 469, the Court of Appeal considered whether to permit a non-party costs order to be made against a firm of solicitors. (free access)

The Court of Appeal has upheld a decision to refuse a non-party costs order against a firm of solicitors.

The firm acted for Mr Heron, who was injured at work, in his claim against his employer (TNT). Mr Heron instructed the firm under a conditional fee agreement, but after the event (ATE) insurance was never obtained. At one stage, TNT made a Part 36 offer of £44,500, but subsequently withdrew it. Mr Heron was awarded £3,000 at trial.

TNT sought a non-party costs order against the firm alleging:

Its failures caused Mr Heron to incur adverse costs liability which, without ATE insurance, it knew Mr Heron could not afford to pay.
It failed to admit to Mr Heron the resulting conflict of interest.
The case-handler had promoted and controlled the litigation against that backdrop with a direct financial interest in concealing his negligence and getting his firm's costs paid.

It was held that non-party costs orders against solicitors are exceptional. The key question is whether it is just to make them. Each case is fact-specific. Here, the failure to obtain ATE insurance and subsequent events did not mean that the firm was seeking access to justice for its own purposes. It was not evident that those matters caused TNT to incur needless costs.

Distinguishing Adris and others v The Royal Bank of Scotland plc [2010] EWHC 941, Leveson LJ stated that, if the firm's failure to obtain ATE insurance and to admit that fact were sufficient to make the firm into the person with the principal interest in the litigation:

"...every act of negligence by a solicitor in the conduct of the litigation which meant that an opposing party incurs costs which might not otherwise have been incurred would be sufficient".

Case: Heron v TNT (UK) Ltd and another [2013] EWCA Civ 469 (2 May 2013).

End of Document

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Resource ID 6-527-7486

Published on 08-May-2013

Resource Type Legal update: case report

Jurisdictions

England
Wales