New duty will require judges to report lawyers subject to wasted costs orders to regulators

Wasted costs: no consequences at the moment

Judges making wasted costs orders (WCOs) are to be placed under a duty to report the lawyers involved to their regulator in a bid to make them “consider more carefully the decisions they make in handling a case”, the government has decided.

The move was announced in yesterday’s consultation response on judicial review reform, but the Ministry of Justice (MoJ) said it would apply to all civil cases.

Only around 50 WCOs were made in judicial review cases between March 2011 and June 2013, all arising from immigration and asylum claims. In the consultation, the government asked whether they should be modified to capture a wider range of behaviours, and/or whether the WCO process could be streamlined.

It also tested the proposition that a fee should be charged to cover the costs of any oral hearing of a WCO.

However, all but 13 of the 145 respondents who answered these questions opposed reform.

Many felt that the current test for WCOs was appropriate and that there was an insufficient case for change. Some were concerned that the suggestion of a broader test failed to recognise that it was ultimately the client’s decision whether or not to bring a case.

There were also concerns about the practicalities of deciding whether to award a WCO, in particular advice covered by legal professional privilege which the court would be unable to consider without the client’s consent.

The MoJ response concluded: “At present, the government is content that the best way to improve WCOs’ effectiveness is not to amend the existing test, but instead to strengthen the implications for the legal representative where one is made.

“In many situations where a WCO is awarded, professional negligence will be at issue and, as many respondents pointed out, independent regulatory bodies should have a role in these situations. This should help encourage legal representatives to consider more carefully the decisions they make in handling a case.

“Whilst a WCO is a serious matter, there are currently no formal regulatory or contractual consequences for the legal representative who has acted improperly, unreasonably or negligently. The government intends to place a duty on the courts in legislation to consider notifying the relevant regulator and, where appropriate, the Legal Aid Agency, when a WCO is made.”

The new duty is likely to be enshrined in the Criminal Justice and Courts Bill, which was laid before Parliament yesterday.


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