To start, let me introduce some familiar characters. First, an impecunious claimant who has the benefit of after the event (ATE) insurance, but the disadvantage of an incompetent solicitor. Second, a successful defendant with the benefit of a costs order and a final costs certificate, but the disadvantage of a slippery ATE insurer who has avoided the claimant’s ATE policy because of failures by the aforesaid incompetent solicitor. Different ways around this problem have been tried, and generally failed. Applications for non-party costs orders against the insurer tend to founder on the requirement to establish that the insurer was the “real party” to the litigation (Heron v TNT (UK) Ltd), and reliance on the Third Parties (Rights against Insurers) Acts is only available where the costs have been quantified and the unsuccessful claimant bankrupted first. Even then, the successful party is in no better position than the insured claimant, and therefore bound by the very negligence of which they complain (IHC v Amtrust Europe Ltd). The purpose of this article is to examine whether the wasted costs jurisdiction can come to the aid of the receiving party, allowing them to enforce the otherwise irrecoverable costs against the claimant’s negligent solicitor. Continue reading
