COST BITES 155: HOW PARTICULAR SHOULD POINTS OF DISPUTE BE? AINSWORTH PRINCIPLES APPLY TO INTERPARTES ASSESSMENTS

In Wazen v Khan [2024] EWHC 1083 (SCCO) Deputy Costs Judge Roy KC considered the question of how detailed and particularised points of dispute have to be. In particular whether the principles in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178;  [2020] 1 WLR 2664  apply to inter partes assessments. The judge held that they did, albeit with some modifications to reflect the fact that a paying party would not have access to the file.

“… less particularity will almost inevitably be required in inter partes points of dispute than solicitor-client points of dispute.”

THE CASE

The judge was considering points raised on an inter partes assessment.  There was a preliminary issue as to whether the points of dispute were compliant, in particular whether the principles in Ainsworth applied to an inter partes assessment.  The judge held that, in general terms they did. There was an obligation on the paying party to give sufficient reasons for their objections.  However some modification was needed because, unlike a solicitor and own client assessment, in an inter partes assessment the paying party will not have access to the file.

1. 1. That leaves exclusion of settlement negotiations. The primary question I need to answer is whether Ainsworth applies to inter partes, as opposed purely to solicitor-client assessments, given that this is of course common ground in the context of that case was a solicitor-client assessment.

1. 1. It is clear to me that it does. Paragraph 29 refers to CPR 47. I pause there to say CPR 47 undoubtedly applies to inter partes assessments. Lady Justice Asplin, giving the lead judgment which the balance of court agreed, cites PD 47 8.3:

“Points of dispute must be concise and to the point. They must follow Precedent G in the schedule of cost precedents annexed to this practice direction. As far as practicable, they must (a) identify the general points or matters of principle which require a decision before the individual items in the bill are addressed and (b) identify specific pointes stating concisely the nature or ground of dispute.

Once a point has been identified it should not be repeated but the item numbers where the point arises should be inserted in the left-hand box as shown in Precedent G.”

I pause there to say I attach some significance to the reference there to “item numbers”, especially when the text of that practice direction is read in conjunction with the Precedent G itself, which provides a column for the paying party to identify the item numbers of specific items being challenged.

1. 1. A further point in that regard is found, in my view, in the rules themselves — CPR 47.14(6) — which states:

“Only items specified in the points of dispute may be raised at the hearing, unless the court gives permission”.

The word “specified”, in my view, dovetails with practice direction and Precedent G in indicating in respect of specific items, as opposed to general challenges, the paying party is, to a degree at least, required to specify, be it by number or filtering, which particular items are under challenge.

1. 1. Reverting to the judgment in Ainsworth, paragraph 29 is in my view clearly dealing with the requirement of points of dispute in general, and not just those in solicitor and client assessments. That is obvious because the rules and the practice direction are primarily directed towards inter partes assessments.

1. 1. Paragraph 31 of Ainsworth again discusses Precedent G, which I have already referred to. Precedent G is clearly directed at inter partes assessments, which again to my mind confirms that this part of the judgment is focused primarily on requirements for PODs in general, not just those in solicitor-client assessments.

1. 1. Skipping ahead Lady Justice Asplin’s conclusions are contained in the section starting at paragraph 36. She held in terms CPR Part 47 applied to solicitor-client assessments. That of course is not to say that it does not also apply to inter partes assessments. It clearly does. She then refers again to the practice direction. Importantly in paragraph 38 says this:

“Common sense dictates that the points of dispute must be drafted in a way which enables the parties and the court to determine precisely –“

Interposing, I place some emphasis on “precisely”. Continuing:

“– what is in dispute and why. That is the very purpose of such a document. It is necessary in order to enable the receiving party, the solicitor in this case –“

Pausing again, “in this case” flags up that in other cases it may not be solicitors, but rather the opposing party. Continuing again.

“– 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.”

1. 1. Pausing there, that seems to me to be the ratio, at least one of the rationes of the case. It seems to me to be the nub and thrust of the entire judgment. It is clear on my reading of it that applies to both inter partes and solicitor-client assessments.

1. 1. Paragraph 39 discusses, as Mr Carlisle very correctly points out, particular requirements for solicitor-client assessments with reference to presumptions contained at 46.9(3). However, in my judgment, that in no way dilutes the general guidance and ratio at paragraph 38. Rather it provides secondary ratio as to additional requirements for solicitor-client assessments. These apply in addition to the general requirements which will apply to all points of dispute, be they solicitor-client or inter partes.

1. 1. Looking at the other points Mr Carlisle makes in support of his position, there are I think three of these.

1. 1. First of all he makes the point that on the standard basis assessment the burden is on the paying party to justify and prove that costs incurred are reasonable and proportionate and recoverable, and that at least to a significant degree relieves the paying party of the need to provide any particularity from the points of dispute.

1. 1. I do not accept that for two reasons.

1. 1. First of all, neither Part 47 nor the practice direction draw any distinction between assessment on the indemnity or the standard basis. Of course inter partes assessment can also be on the indemnity basis. So the rules and the guidance in Ainsworth, it is my view, are both, with appropriate modifications, intended to apply to all types of assessment on whatever basis.

1. 1. Secondly, Mr Carlise’s argument in my view proves far too much. Taken to its logical conclusion it would entitle the paying party to say, “We consider all these costs excessive. We therefore require the receiving party to prove that they are reasonable and recoverable”, and provide no more particularity than that. That cannot be right. On any view, there has got to be some degree of particularity. It is question of how much is one to which I will return.

1. 1. Mr Carlisle also indicated in his submission that there is limit to the degree of particularity required. He points to the fact that one can plead in points of dispute entirely legitimately general points, such as regards proportionality or disallowance under CPR 44.11, and so forth. That is undoubtedly correct in my view. However, in my view it does not advance Mr Carlisle’s argument.

1. 1. This is because the rules and the practice direction draw a very clear distinction, as does Precedent G, between the general points and specific points. General points, by their nature, are normally not related to specific items and therefore there will be no need to particularise and it will often not be possible to do so. But the requirements for general points and specific items are, in my view, different.

1. 1. I would add here – a theme to which I will return – that in my view this reflects the underlying practical point informing the need for particularity when challenging specific items. A lot of the time it comes down to, “Can the paying party and the court identify which documents they need to look at?”, i.e. which documents need to be pulled from the underlying file to be considered. In respect of the type of general points Mr Carlisle was referring to, that simply does not arise in most case, or at least it does not cause any difficulties if it does.

1. 1. The final point, and perhaps the one Mr Carlisle places the most weight on, is the practical difficulties a paying party faces when providing particularisation without sight of the underlying file. For reasons I will come back to, I think there is a little in this but it certainly does not, in my view, justify a complete lack of particularity. Indeed, that was made clear by Ainsworth. I say this for the following reasons.

1. 1. Firstly, of all these difficulties have always been difficulties in inter partes assessments since time in memorial. They cannot, in my view, change the contents requirements of the rules, as explained by Ainsworth. These restrictions will undoubtedly have been well in the minds of the Rules Committee when they drafted these rules. Also, in my view, it is fanciful to suggest that the Court of Appeal would not have them well in mind when giving the general guidance in Ainsworth.

1. 1. Secondly, from experience, both judicially and as an advocate, points of dispute which provide a fair degree of particularity in terms of identifying items under challenge are the norm, certainly post Ainsworth. I do not see how the defendant in this case is in any different or worse a position in terms of providing particularised points of dispute than the vast majority of such defendants. If other defendants can comply, and they clearly can, there is no reason I can see why this defendant should not be able to do so.

1. 1. That being said, as I have already indicated, I think there is something in the defence point that the restrictions a paying party inevitably face on an inter partes assessment do shape what is required in terms of compliance, which must be realistic. This is reflected at paragraph 14 of the judgment of Ainsworth. This is referring to the judgment of his Honour Judge Klein, sitting as a High Court judge, that was sitting in first appeal in Ainsworth against the decision of the Chief Master, the Court of Appeal being the second appeal. Paragraph 14 says:

“The judge also noted that: even if Practice Direction 47, para 8.2 is complied with simply by the adoption of Precedent G […] which he said it was not, it did not follow that there was no overarching obligation on the claimant [ie the paying party] to further the overriding objective; it is possible to understand why costs judges adopt a benign approach to the content of points of dispute in inter partes costs assessments where the burden […] is effectively on the receiving party and the paying party does not have access to the solicitor’s files; but even if the Chief Master might have approached the matter in that way, it does not lead to the conclusion, amongst other things, that Mr Ainsworth is relieved from furthering the overriding objective; the case is not distinguishable on the basis that the assessment was to be conducted on the indemnity basis and Mr Ainsworth had access to Stewarts Law’s files and that the Chief Master’s decision was wrong.”

1. 1. My reading of the Court of Appeal judgment is that they did not disapprove of this passage from High Court judgment. The point I take from this passage, which as a matter of common sense my view is correct, is that the requirement for particularity is going to be less demanding in an inter partes than a solicitor-client assessment. A more “benign approach”, to quote his Honour Judge Klein, is required in respect of inter partes assessments.

1. 1. So I do reject the claimant’s argument at their highest. They seem to me to seek to impose a requirement for particularity which is just unrealistic in inter partes assessments.

THE SIX KEY POINTS

1. 1. So drawing threads together, my view as to the legal position, there are six points here.

1. 1. Firstly, the clear requirements for PODs are as described at paragraph 38 of Ainsworth. That seems to me to be the touchstone. I would say that is aa practical question of fairness and justice.

1. 1. Secondly, how much particularity is required is going to be a case-specific question of fact and degree. Again, this reflects my reading of the thrust of Ainsworth being about the practical effect of any lack of particularity in terms of justice and fairness.

1. 1. Thirdly, following on for that, and for reasons I have already identified, less particularity will almost inevitably be required in inter partes points of dispute than solicitor-client points of dispute.

1. 1. Fourthly, in an inter partes points of dispute the paying party can often do no more than (a) identify which items are prima facie excessive and require the receiving party to justify them,; and (b) identifying as best it can what on the paying party’s case would be a reasonable and proportionate amounts.

1. 1. Fifthly, there is a distinction in my view as to the particularity required between two different things the PODs have to do. First of all they have got to identify what is in dispute. Secondly, they have to identify the nature of the challenge. The second of these logically entails identifying what is being conceded or offered.

1. 1. As to the first requirement, in my view that will require identifying, by reference to item numbers and/or filtering in an electronic bill, which items are under challenge. The second requirement, in my view, can be rather more broad brush. The paying party is entitled to go to say in terms, “We offer x at grade A and y at grade D”, or whatever the case may be. It does not have to, at that stage, specify precisely which items are being allowed on its case and to what extent. In many cases it will not be practical to do so. For example it might be said there is duplication, in which case there is no hard and fast formula and we just have to take the two duplicate items together and say allow x for both of them, partial duplication.

1. Sixthly, when identifying which items are under challenge, I fully accept that a degree of grouping or clumping together of items under challenge is acceptable. Again, that is clear from Precedent G itself. However, there are limits to quite how broad that type of grouping can be if it is not to fall foul of the touchstone requirements identified in paragraph 38 of Ainsworth. Again, the level of particularity required is going to be a case-specific question of fact and degree.