Introduction
On 23 October 2025, the Employment Appeal Tribunal (EAT) handed down its judgment in Gurney v Randall & Others [2025] EAT 154, a case that re-examines the meaning of “negligence” in the context of applications for wasted costs against legal representatives.
The decision confirms that the threshold for wasted costs remains exceptionally high and that “negligence” in this setting means something more than mere professional error – it must amount to conduct akin to an abuse of process.
As wasted costs applications become more common in employment and costs litigation, the ruling provides important reassurance for practitioners and a reminder of the care required when advising clients with weak or poorly particularised claims.
The background
The case arose from proceedings brought by Ms Randall, who claimed unfair dismissal, discrimination, and other employment-related complaints against Ms Gurney, Merali’s Ltd, and Fordover Services Ltd.
Her barrister, Mr Sprack, had represented her under a direct access retainer. The respondents sought a wasted costs order against him, alleging that he had acted negligently and unreasonably in bringing and pursuing claims that were, they said, “doomed to fail.”
The Employment Tribunal rejected the wasted costs application, finding that although there were “deficiencies” in aspects of Mr Sprack’s service, they did not meet the stringent test required. The respondents appealed.
The EAT’s analysis
His Honour Judge James Tayler upheld the Tribunal’s refusal to make a wasted costs order.
The EAT reaffirmed the three-stage test from Ridehalgh v Horsefield [1994] Ch 205:
- Has the representative acted improperly, unreasonably, or negligently?
- Did that conduct cause the applicant to incur unnecessary costs?
- Is it just, in all the circumstances, to order the representative to compensate the applicant?
Crucially, the EAT stressed that “negligent” in this context does not carry its ordinary civil meaning. Drawing on Persaud v Persaud [2003] EWCA Civ 394, the court confirmed that to engage the wasted costs jurisdiction there must be “something akin to an abuse of process” – a serious misuse of the court’s procedure, not merely sub-standard advice or judgment.
The Tribunal had found that while Mr Sprack had failed to particularise an age discrimination claim and had not fully explained settlement offers or cost risks, his conduct was not improper or abusive. The EAT agreed, holding that these shortcomings, though unsatisfactory, did not amount to negligence within the wasted costs framework.
Key points from the Judgment
- Negligence should not be confused with error of judgment
The EAT reiterated that wasted costs are not designed to punish lawyers for mistakes or misjudgements. Only conduct that no reasonably competent lawyer would consider acceptable – and which represents an abuse of the process – will suffice - Privilege and caution
The Tribunal noted the inherent difficulty of assessing counsel’s conduct when legal privilege is not waived. In such cases, the benefit of doubt should be given to the representative - Hopeless cases vs. abuse
Simply acting for a client whose case is “hopeless” is not enough. Lawyers must be free to present their client’s case, even where prospects are weak, without fear of personal cost penalties - Professional deficiencies are not enough
Administrative or advisory lapses (such as failing to explain offers or record instructions) may amount to negligence in the ordinary sense, but not in the wasted costs sense unless they cross the line into serious procedural misuse.
Craig Leigh’s commentary
Craig Leigh, Barrister and Managing Director of 8PP, observes:
“The EAT has provided timely clarification that the wasted costs jurisdiction is a remedy of last resort. The court will not penalise representatives merely for pursuing weak cases or for professional shortcomings that fall short of abuse.
“The decision reinforces that ‘negligence’ for wasted costs purposes is not the same as professional negligence. The conduct must be so serious as to amount to a misuse of the tribunal process itself.
“As wasted costs applications are becoming more prevalent, practitioners need to be alert to the procedural and ethical boundaries of their conduct – but can also take comfort that the EAT remains slow to interfere and penalise legal representatives without good cause. At 8PP, we are able to advise on and act in wasted costs applications that are being contemplated or have been brought against a legal representative. The outcome of this case underlines the importance of being advised appropriately when faced with the prospect of being held personally responsible for a wasted costs order.”
Practical takeaways
Gurney v Randall re-emphasises that wasted costs orders are exceptional. To succeed, applicants must show more than poor judgment or error – they must prove conduct “akin to an abuse of process.”
For representatives, the message is clear:
- Maintain clear records of advice and instructions
- Communicate cost risks transparently
- But do not fear wasted costs liability merely because a case ultimately fails.
The EAT’s careful reaffirmation of these principles provides welcome stability at a time when wasted costs applications are being deployed more frequently in employment and costs litigation.”