STRIKING OUT POINTS OF DISPUTE BECAUSE OF LACK OF PARTICULARISATION: PARTIES HAVE TO KNOW WHAT IS IN DISPUTE AND WHY

In Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 the Court of Appeal upheld a decision striking out part of points of dispute.

“Common sense dictates that the points of dispute must be drafted in a way which enables the parties and the court to determine precisely what is in dispute and why. That is the very purposes of such a document”

THE CASE

This was an appeal from an assessment of solicitor and own-client costs.  The claimant filed points of dispute to the solicitor’s bill which were put in very general terms.  The Master Struck out the points of objection that were too vague. The claimant appealed to HHJ Klein, that appeal was unsuccessful. The Claimant then appealed to the  Court of Appeal. As we shall see the Claimant was equally unsuccessful.

THE GENERAL NATURE OF THE CLAIMANT’S OBJECTIONS

The claimant’s response to the bill of costs was put in very general terms.  HHJ Klein who heard the first appeal observed:

“… the clear purpose of the claimant’s response was to try to shift the burden of proving the reasonableness of each and every item and so their recoverability onto the defendant. In the case of sch.3 there were twenty-one items which were responded to in this way and there were many more items in schedules one and two which were responded to in this way. It is to be noted that –

1. The claimant sought to respond to the three schedules by making two broad generic complaints, namely that the time spent on each item was excessive and that work was duplicated. 2. But the claimant purported to reserve for himself the right to make whatever other or further objections to each item he wanted to make orally at the hearing.

THE DEFENDANT’S RESPONSE

The defendant’s response set out a clear warning to the claimant that the objections were too broad brush.

“The vast majority of objections are of a general broad-brush basis which does little to assist the court. Given that the claimant costs draftsman was granted access and carried out an inspection of the defendant’s papers in person prior to the service of points of dispute, this failure is surprising and does little to further the overriding objective. The defendant cannot provide any meaningful reply to this general point in the absence of itemised points of dispute being served, permission to rely on the same being a matter for the court and the defendant’s position will be reserved and the court will be asked to dismiss this point.”

THE MASTER’S JUDGMENT: NEITHER THE COURT NOR THE DEFENDANT KNOWS THE CASE IT HAS TO MEET

The Master objected to the vague points of dispute and dismissed those parts that were vaguely pleaded.

“The difficulty with that, it seems to me, is that the claimant has not set out in his points of dispute which items he wishes to challenge and why, and that does cause, as the defendant has indicated in his reply, a difficulty in respect of items which have not yet been identified. They would need to look at the attendance notes to see what work was done and why and the context in which it was done in order to seek to explain why the time claimed is reasonable, if indeed that is the objection, or why a particular fee earner was engaged in doing it and why, possibly, more than one fee earner was engaged in doing it. The purpose of points of dispute is really to prevent that work being done on the hoof in the course of a hearing. The solicitors are entitled to know specifically which items are challenged and the reasons for the challenge. Insofar as the claimant states that all entries are disputed, it seems to me that it would be beholden on him to explain why each particular entry is challenged and whether he is asserting that no time should be allowed or reduced time should be allowed or whether the work should have been done by a different grade of fee earner, but as pleaded, the points of dispute, it seems to me, do not raise a proper challenge to the documents items and certainly do not raise a challenge which can be properly asked by the defendant without a considerable amount of time being spent in looking at the papers to reply to that challenge and that, it seems to me, is a process which, if it is to be done, should be done in advance of the hearing rather than at the hearing. One can well understand why Mr. Paul is seeking to adopt the approach that he is of encouraging the court to take a broad brush, but the difficulty with that approach is that we are not going to be looking at every item. We will only be looking at particular items and presently, apart from Mr. Paul, none of us knows which items those are going to be. It seems to me that that does put the defendant in a difficult position, it also puts the court in a difficult position. I read the papers in the light of the points of dispute as they are pleaded, and I was not able to identify which particular items are challenged or why. In the circumstances, I think the only fair course is to dismiss that point of dispute on the basis that it has not been properly pleaded”

THE COURT OF APPEAL DECISION

Lady Justice Asplin considered the way in which points of dispute should be drafted.

1. It seems to me quite clear, that although CPR r46.9 and r46.10 apply in relation solicitor and own client assessments, it is necessary to look to CPR Part 47 for assistance in relation to the form which points of dispute should take. In my judgment, therefore, the notes in the White Book at 46.10.2 are accurate. They provide that the procedure in Part 47 applies to a solicitor and own client assessment subject to CPR r 46.10 itself and any contrary order of the court.

2. Accordingly, 47PD.8 para 8.2 is directly relevant. It makes it absolutely clear that points of dispute should be short and to the point and, therefore, focussed. Furthermore, sub-paragraphs (a) and (b) leave no doubt about the way in which the draftsman should proceed. General points and matters of principle which require consideration before individual items in the bill or bills are addressed, should be identified, and then specific points should be made “stating concisely the nature and grounds of dispute.” Such an approach is entirely consistent with the recommendations and observations made in the Review of Civil Litigation Costs: Final Report, 2009 to which we were referred.

3. Common sense dictates that the points of dispute must be drafted in a way which enables the parties and the court to determine precisely what is in dispute and why. That is the very purposes of such a document. It is necessary in order to enable the receiving party, the solicitor in this case, to be able to reply to the complaints. It is also necessary in order to enable the court to deal with the issues raised in a manner which is fair, just and proportionate.

4. As I have already mentioned, the complaint should be short, to the point and focussed. As para 8.2(b) of 47PD.8 indicates, that requires the draftsman not only to identify general points and matters of principle but to identify specific points stating concisely the “nature and grounds of the dispute”. In the case of a solicitor and own client assessment, it seems to me, therefore, that in order to specify the nature and grounds of the dispute it is necessary to formulate specific points by reference to the presumptions contained CPR 46.9(3) which would otherwise apply, to specify the specific items in the bill to which they relate and to make clear in each case why the item is disputed. This need not be a lengthy process. Having explained the nature and grounds of dispute succinctly, the draftsman should insert the numbers of the items disputed on that ground in the relevant box. The principle is very simple. In order to deal with matters of this kind fairly, justly and proportionately, it is necessary that both the recipient and the court can tell why an item is disputed. The recipient must be placed in a position in which it can seek to justify the items which are in dispute.

5. It follows that in my judgment, the sample wording which appears in the hypothetical example at Precedent G is of no assistance to Mr Munro. Para 8.2 itself provides that Precedent G should be followed “as far as practicable”. It is only an example and is premised upon a party and party detailed assessment in which the paying party will not have had sight of the relevant documentation and the presumptions in CPR 46.9(3) do not apply. Nevertheless, it seems to me that points of dispute in a solicitor and own client assessment should adopt the format of Precedent G to the extent practicable and that the numbers attributed to the individual items to which a complaint relates should be set out in the appropriate box.

6. It follows that were it necessary to do so, I would reject Mr Dunne’s alternative submission that Precedent G does not apply at all to solicitor and own client assessments. In my judgment, it provides the form which should be adopted, the content having been explained at 47PD.8 para 8.2. Precedent G is, after all, only a simple example of the kind of challenges to items which might arise in a party and party assessment.

7. The relevance of 47PD.8 and the form of Precedent G is of no assistance to Mr Munro, therefore. Points of Dispute 10 was general in nature and stated that all items were disputed, that the list provided was not exhaustive of the issues but provided a general overview and that Mr Ainsworth reserved his position generally. It did not contain cross references to the numbers of the items disputed on particular grounds. In fact, it was accepted that it did not state why any item in the bill was disputed. In my judgment, therefore, it did not comply with 47PD.8 para 8.2, nor, for that matter, did it take the form of Precedent G.

STRIKING OUT THAT PART OF THE POINTS OF DISPUTE AND SANCTIONS

The Chief Master had struck out that part of the points of dispute that was unparticularised.   The claimant complained that this was an unfair response.   The Court of Appeal rejected the claimant’s argument on this issue.

Was it wrong to dismiss the assessment in relation to Points of Dispute 10?

1. Was the Chief Master wrong, nevertheless, to dismiss the assessment in relation to Points of Dispute 10? I have already addressed and rejected Mr Munro’s argument that because the assessment arose under section 70, Solicitors Act 1974, Mr Ainsworth had an absolute right to be heard. I also reject Mr Munro’s submissions about the way in which the Chief Master could have dealt with matters at the hearing. He sought to use the three examples which Stewarts Law had been directed to produce by Longmore LJ and the comments upon them to show that there were matters which the Chief Master had already dealt with under other heads which fed through to the work on documents, and could easily have been dealt with at the hearing. That was not the way in which Mr Poole, on behalf of Mr Ainsworth, said that he intended to proceed, however. In effect, he said that he intended to pick out items as he went along, without having warned Stewarts Law of the ones he intended to choose, or the specific reason for choosing them, and then to ask the Chief Master to adopt a broad-brush reduction of the costs claimed.

2. In those circumstances, and given the fact that Mr Ainsworth had had five months warning that the point would be taken and was entitled to amend the Points of Dispute, it seems to me that although no express reference was made at the hearing to CPR r3.4 or 47PD.8 (of which the Chief Master would have been well aware) the Chief Master was entitled to form the value judgment he did and to dismiss the assessment in relation to Points of Dispute 10. It seems to me that that decision falls within the wide ambit of the court’s discretion under CPR r3.4(2)(b) and or (c). The Chief Master was entitled to decide that it was not possible to conduct a fair hearing on the basis of Points of Dispute 10 as pleaded, the matter could not be conducted fairly “on the hoof” and was likely to take too long. Despite his very considerable experience in these matters the Chief Master himself noted that having read the papers in the light of the points of dispute as they were pleaded he was unable to identify which particular items were challenged or why and Mr Poole accepted that that was the case.

45. It follows that I consider that the judge was entitled to take the course he did which was well within the ambit of the proper exercise of his discretion and for all the reasons to which I have referred, this appeal should be dismissed.