Gurney v Randall: Employment Appeal Tribunal clarifies wasted costs jurisdiction

The Employment Appeal Tribunal has dismissed appeals in Gurney v Randall & Ors [2025] EAT 154, reinforcing the stringent requirements for wasted costs orders against legal representatives and emphasising the importance of protecting the solicitor-client relationship.

His Honour Judge James Tayler delivered judgement on 23 October 2025, addressing whether the Employment Tribunal erred in refusing a wasted costs application against Mr Sprack, the barrister representing the claimant Ms Randall in proceedings involving multiple respondents including Merali's Limited and Fordover Services Limited.

The case centred on the three-stage test established in Ridehalgh v Horsefield [1994] Ch 205, which requires establishing: first, that a legal representative acted improperly, unreasonably or negligently; second, that such conduct caused unnecessary costs; and third, that it would be just to order compensation. However, both Ridehalgh and the subsequent House of Lords decision in Medcalf v Weatherill [2002] UKHL 27 make clear that demonstrating negligent or impugned conduct alone is insufficient. There must also be a breach of duty to the court amounting to something akin to an abuse of process.

Employment Judge Green carefully considered the relevant authorities, including Persaud v Persaud [2003] EWCA Civ 394, which emphasised that the wasted costs jurisdiction requires "something more than negligence" and conduct significantly different from the ordinary and proper use of tribunal processes. The Court of Appeal has consistently warned against interference with first-instance decisions refusing wasted costs orders, noting that trial judges are best placed to assess the conduct of legal representatives appearing before them.

Whilst the Employment Judge identified several deficiencies in Mr Sprack's service—including failure to adequately warn Ms Randall about costs risks, insufficient particularisation of an age discrimination claim, and delayed withdrawal of a claim against Merali's Limited—these shortcomings did not meet the requisite threshold. The Judge found no evidence that Mr Sprack had harassed the other side, used the tribunal process improperly, or engaged in conduct amounting to abuse of process.

The appellant's first ground challenged whether the Employment Tribunal had misdirected itself on the test for unreasonable or improper conduct, noting that only selected passages from Ridehalgh were quoted. Judge Tayler rejected this submission, observing that tribunals need only provide a summary of relevant law and that the costs application had focused predominantly on alleged negligence. The finding of no abuse of process properly disposed of the limited assertions regarding unreasonable or improper conduct.

The second ground alleged perversity, claiming Mr Sprack's conduct breached professional standards. Judge Tayler held that the high perversity threshold was not met and that arguments about the Bar Standards Code of Conduct had not been specifically raised below and could not now be introduced on appeal.

The third ground contended that the Employment Tribunal erred in finding that a representative should not be penalised merely because a client's claim was doomed to fail. Judge Tayler emphasised that even where evidence suggests a representative failed to advise adequately about prospects of success, conduct akin to abuse of process must still be established. The factual finding that no such conduct existed was decisive.

The judgement reinforces the principle articulated in Ratcliffe Duce and Gammer v Binns that legal representatives should not face wasted costs orders simply because clients pursue hopeless cases. The duty to present a client's case, even against a representative's own advice, remains paramount. The protection of legal professional privilege and the avoidance of conflicts of interest between representatives and clients continue to be fundamental considerations in the wasted costs jurisdiction.