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Wasted Costs and Jurisdiction: the necessity of steps taken is not sufficient to avoid wasted costs

View profile for Claire Winn
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The matter of Jovicic & Others v The Serbian Orthodox Church – Serbian Patriarchy v Kesar & Co [2020] EWHC 2229 (QB) involved a handful of claims for abuse by members of the clergy who belonged to the Serbian Orthodox Church. Each Claimant was either of Serbian or Croatian nationality and did not reside in the UK or have connection with the UK. The events also did not take place in the UK and the damage occurred in either Croatia, Serbia or Bosnia-Herzegovina. However proceedings were erroneously brought in the UK.

There is no dispute as to the facts themselves; the crux of this dispute related to jurisdiction. Following Master Cook’s finding that there were no grounds for issuing the claim in the UK, the Defendant applied for wasted costs. The Defendant also applied for wasted costs for the reason that the claim forms were not served in time and the application to extend the period for service was made late. Additionally, this application was never actually heard and it was found that the Defendant’s application to strike out the claims were bound to succeed. Master Cook agreed that wasted costs were appropriate in this instance and ordered that Mr Kesar of Kesar & Co pay the entirety of the Defendant’s costs on the indemnity basis from 27 December 2018.

Background

Mr Kesar was retained by the Claimants by way of a Conditional Fee Agreement. The letters of claim were sent to the London Parish, the alleged Defendant, in February and June 2018.

In each of the six actions the claim form was issued on 8 January 2019. In order to effect service, the claim forms were required to be validly served on the Defendant by 8 May 2019. However no such service took place and on 28 May 2019, Kesar & Co submitted six applications to extend the period for service of the claim form. These applications were requested to be considered on paper despite the absence of any agreed consent order. Consequently, on receipt of the application, Master Cook directed that the application be listed for a hearing on 12 July 2019. On 3 July 2019 Mr Kesar emailed the Court requesting that the hearing be vacated as the parties intended to deal with the issue by consent.

However no such consent was agreed and the Defendant subsequently made an application to strike out the claims, which was successful. On 17 January 2020 Master Cook set down directions in order to consider the grounds on which the Defendant submitted that wasted costs should be ordered. The Defendant served a witness statement containing 18 specific grounds on which it submitted that wasted costs were appropriate. On 9 March 2020 Master Cook ordered that these points would stand as the grounds on which wasted costs were sought and he directed that the matter would be set down with a time estimate of half a day. Submissions were not completed during the hearing and further submissions were provided by email following the hearing.

The relevant principles

Master Cook noted that the principles governing the making of a wasted costs order have been helpfully summarised by the Court of Appeal in Fletamentos Maritmos SA v Effjohn International BV [2003] Loyd's Rep.P.N26. He also referred to s.51 of the Senior Courts Act:

(6)In any proceedings mentioned in susbsection (1), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court.

(7)In subsection (6), “wasted costs” means any costs incurred by a party—

(a)as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or

(b)which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay.

Master Cook also considered the leading cases of Ridehalgh v Horsefield [1994] Ch 205, Tolstoy-Miloslayskv v Aldington [1996] 1 WLR 736, and Wall v Lefever [1998] 1 FCR 605. He considered the accepted level of conduct required to justify an order for wasted costs and also noted that a solicitor does not escape any professional responsibility simply by instructing Counsel.

Master Cook thereafter referred to the white book and the relevant 3 stage test:

a) Had the legal representative of whom complaint is made acted improperly unreasonably or negligently?

b) If so did such conduct cause the application to incur unnecessary costs?

c) If so, was it, in all the circumstances, just to order the legal representative to compensate the applicant for the whole or part of the relevant costs?

He considered that, in the case at hand, there were two relevant issues to consider; namely, jurisdiction and service of the claim forms.

Jurisdiction

Master Cook noted that it had been clear from the very outset that there would be an issue with jurisdiction in these claims. Neither the Defendant nor the Claimants are domiciled in the UK however Mr Kesar sought to issue these claims in the UK on the basis that the Claimants' evidence showed that there was a real risk that justice would not be obtained in the courts of Serbia or Bosnia Herzegovina because of the lack of independence, in addition to the undue influence of the Defendant and its close links with the agents of the state. It was submitted that the UK court was the Claimant's forum of necessity.

DWF were instructed on behalf of the Defendant, who made it continuously clear that they considered that the UK had no jurisdiction for these claims. DWF also attempted to seek confirmation as to whether Kesar & Co had applied for permission to serve these claims outside of the UK. DWF further noted that the Serbian Orthodox Church did not have the necessary legal persona within the UK and therefore was not capable of being sued in the UK. However Mr Kesar failed to fully respond to DWF’s requests for clarification and the issue of jurisdiction remained in dispute.

Master Cook considered that there were three core strands to the Defendant's submissions; the first being that the Defendant, the Serbian Orthodox Church Serbian Patriarchy was domiciled in Serbia, and accordingly, could not be served in England & Wales. The second being that the Claimant did not obtain (nor would it be possible to obtain) permission to serve these claims out of the jurisdiction because none of the Claimants had a good arguable case that their claims fell within any of the jurisdictional gateways in paragraph 3.1 of PD6B. The third strand was that Mr Kesar’s claims that the English court has jurisdiction as a "forum of necessity" or in "the interests of justice", were misconceived.

Master Cook concluded that “the "forum of necessity" does not exist in English law, and, unlike the position in some civil jurisdictions, there is no provision in English law for the exercise of "universal jurisdiction" by the English courts.”

Service of the claim forms

Master Cook considered the facts of the matter. He noted that the Claimant had applied late for an extension and made no attempt for this application to be heard urgently. Mr Kesar further requested that the hearing be vacated and did not seek to revive the applications at any point. In the absence of any extension to serve the claim forms, he noted that it should have been clear to any legal practitioner that service had not been effected, and consequently the issued claim forms had expired. Master Cook further noted that the Defendant’s application to strike out the claim was destined to succeed unless Mr Kesar took active steps to rectify the issues with the claim form however he did not.

Master Cook’s findings

Master Cook rejected Mr Kesar’s submissions that the failure to serve the claim forms did not result in any waster costs. He also rejected submissions from Mr Kesar that his reliance on the input of Counsel should mean that a wasted costs order is not appropriate. Master Cook noted that no responsible solicitor would have pursued this action in the Courts of England and Wales and he concluded that all costs incurred after 27 December 2018 (when the Defendant instructed DWF and the jurisdiction was disputed) were caused by the negligent and unreasonable conduct of Kesar & Co. He ordered that Mr Kesar pay the Defendant’s costs on the indemnity basis from 27 December 2018.

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