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P11: Wasted costs orders


(1) The Tribunal may only make an order in respect of costs (or, in Scotland, expenses)--
(a) under section 29(4) of the 2007 Act (wasted costs) and costs incurred in applying for such costs;” (FTT Rules, r.10(1)(a)).


“In any proceedings mentioned in subsection (1), the relevant Tribunal may– 
(a) disallow, or
(b) (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 Tribunal Procedure Rules.” (TCEA 2007, s.29(4))


Wasted costs

(5)     In subsection (4) “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 relevant Tribunal considers it is unreasonable to expect that party to pay." (TCEA 2007, s.29(5))

Wasted costs

Legal or other representative


"(6)     In this section “legal or other representative”, in relation to a party to proceedings, means any person exercising a right of audience or right to conduct the proceedings on his behalf." (TCEA 2007, s.29(6))

Presenting officer for HMRC is a representative


“I am inclined to think that such an officer is to be viewed as a “person exercising a … right to conduct the proceedings on [HMRC’s] behalf” in relation to the particular proceedings in question and, hence, a “legal or other representative” for the purposes of section 29 in that context.” (Bedale Gold Club Limited v. HMRC [2014] UKUT 99 (TCC), §28, Newey J).


But not every officer who has been involved in the case


“On the other hand, it cannot, as it seems to me, be the case that every officer of HMRC who has been involved with a dispute that ends up before the FTT is a “legal or other representative” even though all of them could have been (but were not) asked by HMRC to conduct the appeal proceedings.” (Bedale Gold Club Limited v. HMRC [2014] UKUT 99 (TCC), §28, Newey J).

Only persons who a right of audience or the right to conduct proceedings

"[126] The only persons who may be subject to a wasted costs order under Section 29 of the 2007 Act are those persons who have a right of audience or the right to conduct proceedings.  That is consistent with a wasted costs order being possible only where a person has acted in breach of their duty to the court or tribunal, as explained in Ridehalgh v Horsefield [1994] Ch 205, the leading authority on wasted costs.  This point was also emphasised by the House of Lords in Medcalf..." (Owen v. HMRC [2022] UKFTT 121 (TC), Judge Bailey)

Must be a member of a legal professional body

"[130] Those comments in Bedale Golf Club are obiter and so I am not bound by them.  It is clear that Newey J did not need to, and did not, consider in any depth the issue of which HMRC officers were within Section 29(6) and which were not.  I conclude that the in-depth analysis of the House of Lords in Medcalf and of the Tribunal in Awuah is of far more assistance in this regard.  Therefore, while I agree that not every HMRC officer can be a “legal or other representative” within the meaning of Subsection 29(6), I conclude that the dividing line must be drawn according to whether the HMRC officer in question is a member of a legal professional body and so, by reason of that membership, is entitled to exercise a right of audience or the right to conduct litigation, and so also under a professional duty to the tribunal.  I conclude that the only persons who can be liable for an order for wasted costs are those who are under a professional duty to the tribunal because - as the House of Lords made clear in Medcalf - an order for wasted costs can be made only in respect of a breach of such a professional duty.  Whether an HMRC officer is under such a professional duty will be a question of fact in each case.  All HMRC officers can be asked, in their capacity as an HMRC employee, to assist HMRC in the preparation of appeals to which HMRC is a party.  It is only where an HMRC officer who is asked to assist is also a member of a legal professional body that they will owe a professional duty to the Tribunal, and it will be possible for a wasted costs order to be made against them if they are found to be in breach of that professional duty.  Where an HMRC officer is not under a professional duty to the Tribunal, it follows that there can be no breach of that duty, and there can be no order for wasted costs." (Owen v. HMRC [2022] UKFTT 121 (TC), Judge Bailey)

Legal or other representative

Improper, unreasonable or negligent act or omission




“ “improper” “covers any significant breach of a substantial duty imposed by a relevant code of professional conduct” and extends to conduct “which would be regarded as improper according to the consensus of professional (including judicial) opinion … whether or not it violates the letter of a professional code”” (Bedale Gold Club Limited v. HMRC [2014] UKUT 99 (TCC), §27(i), Newey J quoting Ridehalgh v Horsefield [1994] Ch 205)




“unreasonable” describes “conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case”, and “it makes no difference that the conduct is the product of excessive zeal and not improper motive” (Bedale Gold Club Limited v. HMRC [2014] UKUT 99 (TCC), §27(ii), Newey J quoting Ridehalgh v Horsefield [1994] Ch 205)




“negligent” is to be “understood in an untechnical way to denote failure to act with the competence reasonably to be expected of ordinary members of the profession”. The Court of Appeal said that it wished “firmly to discountenance any suggestion that an applicant for a wasted costs order under this head need prove anything less than he would have to prove in an action for negligence: ‘advice, acts or omissions in the course of their professional work which no member of the profession who was reasonably well-informed and competent would have given or done or omitted to do;’ an error ‘such as no reasonably well-informed and competent member of that profession could have made’.” (Bedale Gold Club Limited v. HMRC [2014] UKUT 99 (TCC), §27(iii), Newey J quoting Ridehalgh v Horsefield [1994] Ch 205)


Question is whether conduct permits of a reasonable explanation


“It is no answer for a solicitor who has improperly, unreasonably or negligently lent himself to such an abuse to say that he was instructed to do so; this is because the solicitor's duty to his client is always subject to his duty to the Court: Medcalf v. Mardell supra at p 142 per Lord Hobhouse. The fact that the solicitor may not, by reason of legal professional privilege, be able to explain what his instructions were or what advice he gave, means that a court should not make a wasted costs order unless satisfied that there is nothing the practitioner could say, if unconstrained, to resist the order. But privilege is not a trump card which will always preclude the making of a wasted costs order: Medcalf v. Mardell supra at p 146 per Lord Hobhouse. The acid test in all cases is whether the conduct of the solicitor permits of a reasonable explanation: seeRidehalgh at p 232 and B v. B [2001] 1 FLR 483 at para 22.” (Morris and Morris v. Roberts (HM Inspector of Taxes) 77 TC 204 at 223).

Improper, unreasonable or negligent act or omission

Examples of unreasonable behaviour


Lending assistance to proceedings that are an abuse of process


“It is, however, one thing for a legal representative to present, on instruction, a case which he regards as bound to fail; it is quite another to lend his assistance to proceedings which are an abuse of the process of the court. Whether instructed or not, a legal representative is not entitled to use litigious procedures for purposes for which they were not intended, as by issuing or pursuing proceedings for reasons unconnected with success in the litigation or pursuing a case known to be dishonest, nor is he entitled to evade rules intended to safeguard the interests of justice, as by knowingly failing to make full disclosure on ex parte application or knowingly conniving at incomplete disclosure of documents. It is not entirely easy to distinguish by definition between the hopeless case and the case which amounts to an abuse of the process, but in practice it is not hard to say which is which and if there is doubt the legal representative is entitled to the benefit of it.” (Ridehalgh v. Horsefield [1994] Ch 204 at 234).


Representative ought to have been aware of abuse is sufficient


“Actual knowledge on the part of a legal representative that the litigation he is conducting is an abuse of process is sufficient to render a legal representative liable for wasted costs…But a legal representative will also be liable to a wasted costs order if, exercising the objective professional judgment of a reasonably competent solicitor, he ought reasonably to have appreciated that the litigation in which he was acting, constituted an abuse of process.” (Morris and Morris v. Roberts (HM Inspector of Taxes) 77 TC 204 at 223).


Appeal with small prospect of success may be abusive if representative knows the client cannot or will not pay costs


“in considering whether a solicitor has acted in proceedings that constitute an abuse of process in this context, it is relevant to consider the ability and/or willingness of his client to: (a) bear the costs consequences of those proceedings, and/or (b) give effect to previous orders made against him in connected litigation: (see Tolstoy-Miloslavsky v. Aldington [1996] 1 WLR 736 at pp 747F—757G per Rose L.J.); and the fact that there is some small prospect of success in proceedings or on an appeal does not preclude a finding that the proceedings are abusive and this is most particularly the case where the solicitor knows that his client ''cannot or will not pay'': see Fletamentos Maritimos SA v. Effjohn International BV [2003] Lloyd's Rep (PN) 26 at p 44 per Morritt L.J.” (Morris and Morris v. Roberts (HM Inspector of Taxes) 77 TC 204 at 222 - 223).


Proceedings simply intended to delay may be abusive


“In my judgment, the Appeal was (as the Morrises and Howell must have known) hopeless and (as they must both have known and intended) it was prosecuted for reasons unconnected with success on the appeal. The Appeal was the last of a continuing series of actions and omissions on the part of the Morrises and Howell designed to evade or delay liability for and payment of capital gains tax in respect of the Sale. Howell knew that the Morrises would have recourse to any scheme, tactic, device or subterfuge to achieve their objective (and the Appeal was one such tactic and device) and Howell were prepared to be party to them. That in my judgment is the only fair reading of the history of events in this case. Even if (contrary to my view) Howell believed that the Appeal had a small prospect of success, they knew that the Morrises would not pay any costs or penalties ordered to be paid to the Revenue. At the very least as competent solicitors they should have been aware that the Appeal was an abuse of process brought for an illegitimate collateral purpose and that their own actions were calculated to further and did further the inadmissible objectives which their clients were pursuing. Having regard to the whole history of events they were under a duty toinvestigate the motives of the Morrises in prosecuting the Appeal and such an investigation could only have led to this one conclusion. I have no doubt that Howell by their conduct occasioned the waste of the Revenue's costs of the Appeal, which the Morrises have not and plainly will not discharge, and it is just that a wasted cost order should be made against Howell.” (Morris and Morris v. Roberts (HM Inspector of Taxes) 77 TC 204, §59).


Seeking an adjournment to read a letter received two months earlier


“I pointed out that I would consider making a wasted costs order against the representatives personally if the hearing was adjourned simply to enable them to read and consider a letter which had been sent to them two months’ earlier.” (Greenish Ltd v. HMRC [2017] UKFTT 727 (TC), §17, Judge Mosedale).

Failure of representative to attend hearing or contact Tribunal despite being aware of hearing is wholly unreasonable 


“we considered the failure by [the taxpayer’s accountant] to either attend the hearing or at the very least contact the Tribunal by email or telephone to request a postponement when fully aware of the date and time for which the hearing was listed to be wholly unreasonable and considered it appropriate to make a wasted costs order.” (Environmental Practical Solutions Ltd v. HMRC [2014] UKFTT 1118 (TC), §26).

Examples of unreasonable behaviour

Examples of not unreasonable behaviour


One part of HMRC being unaware of a crucial decision that another part of HMRC was aware of


“It must be the case that one or more people from HMRC will have learned of Odhams by the end of May 2012, when the Chipping Sodbury appeal was heard, but it does not follow that anyone dealing with the Club’s appeal (in particular, Officer Dayson) knew anything about it… In the circumstances, it appears to me that Judge Demack was amply justified in taking the view that HMRC had not behaved unreasonably.” (Bedale Gold Club Limited v. HMRC [2014] UKUT 99 (TCC), §31…32, Newey J)

Examples of not unreasonable behaviour

Non-party costs against a Tribunal (flagarant instance of improper behaviour)


Query whether the UT has the same power as the High Court/Court of Appeal, Senior Courts Act 1981, s.51(1). Arguably they do, under TCEA 2007, s.29.


“The established practice of the courts was to make no order for costs against an inferior court or tribunal which did not appear before it except when there was a flagrant instance of improper behaviour or when the inferior court or tribunal unreasonably declined or neglected to sign a consent order disposing of the proceedings;” (Christine Davies (No.2) v. HM Deputy Coroner for Birmingham [2004] EWCA Civ 207, §47(1))

Non-party costs against a Tribunal (flagarant instance of improper behaviour)
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