Lords overturns appeal ruling on wasted costs

A landmark House of Lords judgment that sheds new light on the law of privilege has overturned a wasted costs order against two senior barristers.
It overrules a Court of Appeal decision to impose the order for around £30,000 against Bernard Weatherill QC of Enterprise Chambers and Josephine Hayes of Gough Square Chambers.
The order was imposed after they made fraudulent allegations against Roger Medcalf, the writer of TV game show Big Break. The Court of Appeal decided that the claims, part of a trial brought by Medcalf against fellow writers Terry Mardell and Michael Kemp, were unfounded. The fraud allegations included tampering with transcripts of evidence given at the trial and forging a signature on a witness statement.
The Court of Appeal ruled that the barristers “should have reasonably credible evidence of fraud to establish a prima facie case of fraud before drafting such an allegation”. The court found no such evidence. It also granted a wasted costs order against Weatherill and Hayes for bringing the claim.
Last Thursday they successfully appealed this ruling before the Lords, which accepted their claim that they could not defend themselves properly against the wasted costs order because their client had not waived privilege; therefore, they did not have access to documents they needed to draw on.
Nicholas Davidson QC of Four New Square for the barristers said: “In such cases [in which privilege had not been waived], the court should not make [a wasted costs] order unless – proceeding with extreme care – it is satisfied that there is nothing the practitioner could say, if unconstrained to resist the order.
“In the light of this decision, it seems very difficult to proceed with applications if privilege is not waived.”
William Flenley, a barrister at 4 Paper Buildings, said there may be exceptions to this, such as “where it's obvious the other side's lawyer's conduct was negligent – for example, if counsel fails to appear at a hearing due to oversleeping with his mistress. But cases like that will be rare.”
The Lords also overruled the appeal decision that evidence has to be admissible. Davidson said: “The Lords said it's a question of what material can be accessible.”