Author: Farhana Mukith, 12KBW
In this blog Farhana Mukith reviews the SCCO’s decision in St Francis Group 1 Ltd & Ors v Kelly & Anor [2025] EWHC 125 (SCCO) in which Costs Judge Leonard struck out a number of Points in Dispute which did not properly identify the issues in dispute.
Summary
The detailed assessment in this matter came before Cost Judge Leonard in October 2024 following the dismissal of a fraud claim.
It was agreed between the parties on 7 August 2023 that the First Defendant would pay the Claimant’s costs on an indemnity basis and in accordance with CPR 44.5 in relation to the original fraud claim.
The Claimant’s Bill of Costs consisted of 1,103 items and came to a total of £468,687.15. An interim payment of £175,000 was made by the First Defendant towards this.
The First Defendant’s Points of Dispute raised 12 preliminary points and an objection to all 1,103 items.
The Claimant argued that the First Defendants’ item by item points, by reference to Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 and O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB), were inadequately particularised and should be dismissed or struck out.
Costs Judge Leonard agreed and struck out several of the preliminary points due to inadequate particularisation. In doing so, the Court emphasised the importance for specific and clear Points of Dispute so as to facilitate a fair and efficient assessment process.
The Ainsworth Principles
The question for Costs Judge Leonard was whether the ‘Ainsworth principles’ in relation to solicitor/client assessments were to be applied in an assessment between parties.
In determining this, he explored the following case law:
(i) Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178
Ainsworth concerned an assessment between solicitor and client under section 70 of the Solicitors Act 1974, which included an itemised schedule of time spent on documents.
The client in his Points of Dispute, stated that all the entries in the schedule were disputed and set out broad grounds of dispute, such as duplication and excessive time. However, the Points of Dispute were not itemised, in that they did not identify the entries in the schedule to which those objections were said to apply.
The solicitor complained that the client had left them unable to prepare any meaningful reply, and invited the court to dismiss the Points of Dispute in its entirety.
Senior Costs Judge Gordon-Saker agreed with the solicitor and dismissed the Points of Dispute on the basis that they had not been properly pleaded. His decision was later upheld in the Court of Appeal by Asplin LJ, who confirmed the importance of particularity required from Points of Dispute in order to ensure a fair, just and proportionate hearing [paragraph 38].
(ii) O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB)
Costs Judge Leonard then went on to consider the case of O’Sullivan which also concerned schedules of document time prepared for the purposes of a solicitor/client assessment.
Those schedules were summarised, in the body of the bill itself, under a single item number setting out the total amount of time spent by each of the fee earners.
The client objected to the whole of each schedule on the basis that the time claimed was “either unnecessarily incurred and/or unreasonable in amount”.
HHJ Gosnell held that the assertion that the time was “either unnecessarily incurred or unreasonable in amount” is an assertion of two alternative allegations which are actually completely different. To allow such generic alternative challenge to stand in relation to potentially any and all entries in the schedule is clearly unfair to the receiving party [paragraph 49].
He went on to say that if the paying party chooses to challenge every single item in the schedule, then he is the one adopting a disproportionate course of action which the receiving party has to be able to fairly respond to [paragraph 50].
(iii) Wazen v Kahn [2024] EWHC 1083 (SCCO)
Costs Judge Leonard finally turned to the decision of Deputy Costs Judge Roy KC (of 12 KBW), with whom he agreed, in which he concluded that the guidance of Asplin LJ in Ainsworth must apply to assessments between opposing parties, but that the requirement for particularity must be less demanding in an inter partes than a solicitor-client assessment.
Principles
In light of the above, Costs Judge Leonard summarised three fundamental underlying principles that are common to solicitor/client assessments and assessments between opposing parties:
- The receiving party (or solicitor) must have an adequate opportunity to understand which of the items in their bill of costs (or breakdown) have been challenged and the grounds of that challenge, so as to be able adequately to prepare a response. Points of Dispute must be prepared in a way which achieves that.
- It is not acceptable, at a detailed assessment hearing, for the parties or the court to have to spend time identifying the items in the bill of costs that are objected to, or the nature or grounds of the objection. That should be clear from the outset. There must be no element of surprise or “ambush”.
- Points of Dispute must be prepared in a way that ensures that a detailed assessment hearing can be managed in a fair, just and proportionate way. For example, it is not open to a paying party to insist that the court trawl through every item in a bill of costs to ensure that there is no objection to it. It is for the paying party to raise clear and pertinent points upon which the court can adjudicate.
Comment
This is a welcome decision which underscores the importance of procedural fairness.
It serves as a reminder of the necessity to properly plead Points of Dispute to ensure that challenges to costs are effective so that the receiving party is able to understand the issue and respond to it.
This level of clarity in identifying the issues will also assist the parties in narrowing the issues and may even lead to them settling costs without resorting to an assessment hearing.
Whilst it may at first blush seem an onerous task for the paying party to provide detailed Points of Dispute, it’s certainly more cost effective than that court sifting through each item to identify potential objections.
This decision will not only enable level the playing field but also provides the court with clarity when deciding what share of the court’s resources to allocate to the detailed assessment hearing.
