Failure to Comply with Court Order Grounds for Wasted Costs

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In the case of Vine v Belfield [2022] Costs LR 39, it was considered whether there were grounds for wasted costs to be awarded following the Defendant’s failure to comply with a Court Order. The case of Vine v Belfield concerns a case for defamation as well as a claim for harassment. The issue of the failure to comply with previous Court Orders arose only within the claim for defamation. To understand the significance of this case, it is important to understand the seriousness of a failure to comply with a Court Order.


Failure to Comply with Court Order

Court Orders are used in every type of legal case, from family law (for example, family Court Orders and Child Arrangement Orders) to costs law (for example legal costs orders). Enforcement proceedings can be used in all types of proceeding to enforce the Order made against your opponent. An application to the Court will be required to enforce any type of Order.

A breach of a Court Order happens when a party fails to comply with the directions set out in the Order. Parties who breach the Order provided by the Court will be found to have committed civil contempt of Court.

Although civil contempt of Court is not a crime, it is indeed punishable by the Court. In a large proportion of circumstances, the Court will impose costs sanctions for failure to comply with Court Order. Parties can mitigate their civil contempt by subsequently complying with the Court Order, by proactively applying to vary the Order, or subsequently applying for relief from sanctions after the event (subject to the Denton Test criteria).

In the case of Vine v Belfield, the failure to comply was found to be serious, and thus, sanctions were imposed.

“The court needs to make clear to litigants that non-compliance with orders will ordinarily lead to the imposition of sanctions. Where they disrupt the proper management of litigation that will almost inevitably follow. That has been the consequence of this failure to comply, and it is a serious failure to comply.”

Wasted Costs

Guidance on wasted costs provisions can be found within the Senior Courts Act 1981 at s.51(6)/(7), as guided by the key decision in Ridehalgh v Horsefield [1994] Ch 205. Provisions can also be found within the Civil Procedure Rules, PD 46 para 5.5 – 5.7. A Wasted Costs Order will be Ordered by the Court in a number of circumstances including when:

A. The relevant party has acted improperly, unreasonably or negligently (PD46 5.5(a));

B. The said act has caused costs to be wasted, including where the costs prior to the act have been ultimately wasted (PD46 5.5(b);

C. It is just in all the circumstances to order the legal representative to pay such wasted costs (PD46 5.5(c)).


Obtaining a Wasted Costs Order

There are two methods of obtaining a Wasted Costs Order

The Court can make a decision to order wasted costs, but only when proceedings have been issued.

Under Practice Direction 46 paragraph 5.4, a party to proceedings can apply for wasted costs at any stage during the proceedings. This includes, up to and including detailed assessment proceedings. We would strongly advise however, that wasted costs applications should generally be prepared after a hearing or trial, as a transcript of evidence will be available.

When seeking an application, a party can apply under Part 23 of the Civil Procedure Rules. This method usually works in two stages. Firstly, the Court will ensure that they are satisfied that an order may be suitable, and secondly, a hearing would take place to allow the parties to make submissions on the application. An oral application can also be made, and this would usually take place at the end of the Trial once all evidence in the proceedings have been heard.


Grounds for Wasted Costs: Vine v Belfield

In the case of Vine v Belfield, non compliance with Court Orders was held to have sufficient grounds for wasted costs.

“I have explained in the judgment what has happened today and why the court has taken the step it has. In summary: as a result of a failure by the defendant to comply with orders of the court, principally the order in relation to originally setting out in a written statement of case its position on the preliminary issues that were due to be determined at trial, the court has had to abort the exercise that would ordinarily have been a straightforward one. Very significant culpability in my judgment falls on the shoulders of the defendant, and it is quite right, in my judgment, that he ought to pay the costs that have been thrown away by this exercise.”

Although the claimant in this case failed to serve a statement of costs, they were awarded wasted costs.

“Notwithstanding the failure to serve the statement of costs, I am nevertheless satisfied that, as a matter of principle, the claimant is entitled to the costs of the application that was made before Kerr J, that led to his order of August 7, and also the costs of today. These costs have been wasted as a result of a failure to comply the court’s orders and directions which has led to this hearing having to be aborted.”

A payment on account of costs in the sum of £25,000 was also ordered prior to the costs case proceeding to detailed assessment.


How can ARC Costs Assist?

The ARC Costs team of Costs Draftsmen and Costs Lawyers are always happy to help with costs challenges, including those involving a failure to comply with Court Order.  We will review your case and provide expert legal advice in whether we believe you have grounds for wasted costs, or contesting an application against you. If this is believed to be the case, we will assist you in making/resisting a wasted costs application.

Whether you have been ordered to pay costs or wish to recover your costs, we can assist as independent costs experts in either minimising/maximising your recovery of costs.

Our team regularly represent Paying and Receiving Parties, to prepare or contest Bills of CostsCosts Budgets and to conduct costs negotiations (including in respect of budget variation notices) in order to recover costs, or to reduce a party’s burden to pay costs.

If your matter requires legal costs representation and advocacy services, our expert costs lawyers can assist in your case. Using their knowledge and expertise, they can give advise on novel costs situations, including in respect of any applications for wasted costs orders. Subsequent to the provision of advice, we can aid the client in preparing/contesting any application.

If you wish to get in touch, please email, or telephone 01204 397302. For more information on legal costs, please find out more about our speciality areas of expertise and our services on our legal costs page.

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