Judges have come under fire for making the wasted costs system an expensive and often time wasting operation
A report by 4 New Square barrister Hugh Evans describes the controversial system as "flawed" and full of procedural complexities and faults that may include a breach of the Human Rights Act and natural justice. Among the damning conclusions of the report, entitled 'The Wasted Costs Jurisdiction', is the profound lack of economic sense in pursuing such claims. Evans found that between 1994 and 1998, the Bar Mutual Indemnity Fund (BMIF) paid out £568,748 in wasted costs claims at a cost of £848,868 in lawyers' expenses. This amounts to a ratio of £1.49 in expenses for every £1 recovered. However, this is small fry compared with the imbalance between payouts and expenses in cases initiated by judges. For every £1 recouped in these cases, a massive £21.34 is spent on expenses, an incredible 1,400 per cent higher than the ratio for all cases. These figures are based on a total of 49 judge-initiated wasted costs inquiries, of which only six resulted in an order for payment. This represents a 12 per cent success rate against a 24 per cent success rate for the wasted costs jurisdiction as a whole. Evans said: "It is all too common for the time and costs of the wasted costs inquiry to be wholly disproportionate to the quantum of the wasted costs." One wasted costs application he referred to cost parties £150,000 - more than the trial costs and far more than the costs that the court determined had been wasted. Judges were targeted in the report because of their role in bringing wasted costs applications and coming to a conclusion on their merits. Evans, who said that this could be a breach of the right to a fair trial, stated: "It is, in principle, wrong that our courts should be forced to act in a way which is arguably in breach of natural justice." Courts are also failing to follow the correct wasted costs procedures. In a list of examples of errors, he cites a failure to specify the amount awarded; a case in which solicitors were denied an opportunity to defend a wasted costs application; and a case in which a judge had failed to address causation.