In this case, following on from a judgment and a costs order nisi in favour of the defendant, the defendant made an application for a wasted costs order under ss 52A(4) to (7) of the High Court Ordinance (Cap.4), being provisions incorporated as part of the Civil Justice Reform.

The provisions confer on the court the power to make a wasted costs order on the whole or any part of any costs incurred by a party as a result of an improper or unreasonable act or omission; or any undue delay or other misconduct or default, on the part of any legal representative conducting litigation on behalf of a party. Sub-section 52A(5) expressly provides that the court shall, in addition to all other relevant circumstances, take into account the interest that there be fearless advocacy under the adversarial system of justice.

A two-stage process is involved in such an application. At the first stage the applicant has to satisfy the court that it has evidence before it which, if unanswered, would be likely to lead to a wasted costs order being made; and that the wasted costs order proceedings are justified notwithstanding the likely costs involved. It was alleged that the plaintiff’s solicitors were at fault in continuing to prosecute the action once it should have been obvious to them that it was bound to fail.

While accepting that there was a prima facie case that the solicitors were negligent or incompetent in the conduct of the proceedings, the Honourable Mr Justice Harris held that it was not a sufficient ground to make a wasted costs order, absent something that went beyond the presentation of a hopeless case and involved lending assistance to an abuse of process or improper time wasting.

Contrary to the English counterpart provision, the definition of “wasted costs” in the Hong Kong provisions does not include costs incurred by a party as a result of any negligent act on the part of the legal representative. It was held that the omission of negligence from the Hong Kong provisions was not inadvertent, and that conduct which could generally be described as unreasonable did not automatically engage the wasted costs section. It was also ruled that advancing a hopeless case did not justify the imposition of a wasted costs order. The assessment of what amounts to unreasonable conduct in the context of wasted costs orders requires a consideration of how the courts have characterised such behaviour in the past.

In dismissing the defendant’s application, the Honourable Mr Justice Harris concluded that:

“An error of judgment by solicitors or failure to apply any judgment at all to a case for which they are responsible, which renders a weak case hopeless is in my view not the type of conduct, which section 52A address.”

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This article is available in [2009] 20 CJRA.