The Court of Appeal in the case of Mengiste and another v Endowment Fund for the Rehabilitation of Tigray and others  EWCA Civ 1003 has given guidance on how recusal applications should be approached and held that the High Court judge at first-instance was wrong not to recuse himself from hearing the wasted costs application.
For a summary of the decision appeals and the underlying facts, see our previous update here.
This was an appeal brought by the original Claimant’s solicitors against the decision of High Court judge Peter Smith J not to recuse himself from hearing the Respondent’s wasted costs application, and the subsequent wasted costs order made against the Appellant.
The original recusal application was made due to concerns about criticisms made by Peter Smith J against the Appellant in his judgment on a stay application. The judge had been very disapproving of the expert evidence put forward by the Appellant, and also criticised the Appellant’s apparent failure to properly advise the expert of his duties under CPR 35.
Held on Appeal
The Court of Appeal held that Peter Smith J should have recused himself from hearing the wasted costs application, and therefore his decision on the application must be set aside.
As established in the case of Porter v Magill  2 AC 357, if a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the judge was biased, the judge must recuse himself.
Arden LJ noted that although in most cases it will be appropriate for costs issues to be dealt with by the same judge as heard the substantive application (as confirmed in the decision in JSC BTA Bank v Ablyazov (Recusal)  EWCA Civ 155) there are exceptions.
Arden LJ made it clear that this was an exceptional case where the apparent bias was enough to necessitate a recusal. He focused on three points in particular:
- It was not necessary for the judge to make the findings that he did: Peter Smith J's criticisms were not necessary to enable the judge to evaluate Mr Jones' evidence. There was no need to make these criticisms without inserting an appropriate qualification that they were provisional views, or views made on the limited evidence available to him, thus being seen to leave the door open to the possibility that there might be another explanation. The fair-minded observer would ask rhetorically why that had not been done.
- The criticisms were expressed in absolute terms: Peter Smith J's failure to leave the door open for the possibility of some explanation when he had not heard evidence or submissions from the Appellant gives rise to an impression of bias because it suggests that no explanation will be considered. The impression of bias is further confirmed by the making of findings of this nature when it can be foreseen that an application for a costs order, with serious consequences for the solicitors, may result.
- Repetition, further criticism and concern to meet criticisms of the judge's conduct: There was no doubt that the criticisms made against the Appellant were of high gravity for a solicitor. That makes them extreme. Arden LJ concluded that, where material is presented in this way, the effect is that they become unbalanced.
Arden LJ concluded that Peter Smith J should have recused himself, and the decision on the wasted costs application should therefore be set aside.
However, the Appellant had failed to show that no judge should have concluded that a wasted costs order should be made. Arden LJ emphasised that this was a high hurdle to satisfy, which on the facts the Appellant had failed to meet. The appeal in respect of the wasted costs order was therefore dismissed.
This decision confirms that there may be limited circumstances where a judge’s apparent bias will cause them to be disqualified from hearing a subsequent wasted costs order. As emphasised by Arden LJ, where there is an issue of apparent bias, the test established in Porter v Magill must be “fearlessly applied”.
Again, this decision accentuates the legal principle that justice must not only be done but must be seen to be done.