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18.3
Satellite litigation on wasted costs
The risk of disproportionate satellite litigation being spawned by the wasted costs
jurisdiction is real. In Ridehalgh v Horsefield, the English Court of Appeal noted that
the number and value of wasted costs orders applied for, and the costs of litigating
them, had risen sharply, warning that "the remedy should not grow unchecked to
become more damaging than the disease."
Eight years later, in Medcalf v Mardell [2002] 1 AC 120, when in the House of Lords,
Lord Bingham lamented that :-
"...... the clear warnings given in that [1994] case have not proved sufficient to deter parties
from incurring large and disproportionate sums of costs in pursuing protracted claims for
wasted costs, many of which have proved unsuccessful."
Research cited by the House of Lords showed that some wasted costs hearings lasted
much longer than the original litigation and ran up costs overshadowing the costs said
to have been wasted. It was also found that most wasted costs applications failed and
that those that succeeded often involved disproportionate costs.
Two principles laid down in the case-law to guide the court's exercise of discretion are
important in this context and provide the basis for procedural enhancements to address
the risk of disproportionate satellite litigation.
Notes
[1994] Ch 205 at 225-6.
At 129 §13.
Hugh Evans, "The Wasted Costs Jurisdiction" (2001) 64 MLR 51.
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