A consumer rights firm’s failure to take heed of a defendant's insistence that its case had no legal basis has led to a costs order for unreasonable behaviour.

Consumer Rights Solicitors (CRS) acted for Steven Orton, who sought just over £2,750 from Barclays Bank under the Consumer Credit Act 1974 alleging non-disclosure of commission over the purchase of PPI.

However in Steven Orton v Barclays Bank UK plc, Barclays alleged the claimant owed £4,440.17 in premiums and interest and had not made any repayments for over two years. Simmons & Simmons LLP, for the bank, said ‘the evidence clearly shows that the debt has not been paid’ and thus Orton’s claim was ‘unsustainable’ and should be discontinued immediately’.

On 19 December 2023, CRS began acting for Orton - who had previously been represented by a different firm - but failed to engage with Barclays’ prior correspondence dating back to 30 August 2023.

Instead, CRS emailed the defendant on 22 March last year to make an offer of settlement of £3,250, which it lowered to £1,990 in a further email on 7 May and £1,690 on 20 May.

Barclays’ solicitors emailed CRS on 22 May, asking for ‘the legal basis for claiming sums that your client has not paid’, putting the firm on notice it would seek costs and provided a deadline of 31 May, after which it would instruct counsel.

On 7 June, CRS served a notice of discontinuance, but stated: ‘Our client’s claim had merit. The claim was discontinued for commercial reasons only.’ 

A district judge first hearing the case awarded £2,132.88 in costs against Orton for unreasonable behaviour. In the same county court, His Honour Judge Robinson dismissed an appeal against the costs order.

Robinson said CRS had failed ‘to grasp the nettle and respond in any meaningful way to the issues raised by the defendant’s solicitors in open correspondence prior to 22 May’.

‘The claimant’s solicitors’ explanation for discontinuing on 7 June for “commercial reasons” is a commercial decision which could, and indeed should, have been taken significantly earlier, and the claimant’s solicitors were repeatedly invited to do so’, Robinson said. ‘A further opportunity was provided by the defendant’s solicitors’ email of 22 May, which was in the clearest of terms. Failing to take heed of the position at any point between 22 May and 31 May against the factual backdrop has no reasonable explanation.’

A spokesperson added: 'The finding of unreasonableness was against the party, being the claimant himself, in accordance with CPR 27.14(2)(g). It was not a wasted costs order against his representative.

'Given that the caselaw sets a high bar to reach a finding of unreasonableness for the purpose of CPR 27.14(2)(g), we consider the judgment of HHJ Robinson does not reflect this and itself sets a dangerous precedent in circumstances where there is a clear inequality of arms. We are considering all options on behalf of the claimant, including an application for permission to appeal to the Court of Appeal.'