How should you draft your Points of Dispute?

Reuben Glynn – Managing Director

If you are a Civil litigator you must read the case of Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178

The Court of Appeal has answered the question of

how detailed Points of Dispute must be on a solicitor and own client assessment, particularly where a challenge is made to all of the items in an invoice on a number of grounds”

It is also relevant on between the parties costs disputes.

The Case

On 17 October 2017, the Appellant, Mr Kjerulf Ainsworth, instructed the Respondent, Stewarts Law LLP, to act for him in respect of financial claims and allegations arising out of the breakdown in his relationship with his former partner. Mr Ainsworth was not satisfied with the services Stewarts Law provided and terminated their retainer on 23 November 2017. He then applied for a detailed assessment of Stewart Law’s invoices dated 6 November 2017, 22 November 2017 and 29 November 2017, pursuant to Part III of the Solicitors Act 1974.

Directions were agreed and an order dated 5 February 2018 was made by consent. The consent order provided for service of a breakdown of the invoices, the ability of Mr Ainsworth to inspect Stewarts Law’s files and the filing of Points of Dispute and replies and that either party might apply for a hearing date no later than 4 May 2018. It was expressly stated that CPR r46.10 applied save as varied by the order.

In accordance with the consent order: Stewarts Law served a Breakdown of Costs; Mr Poole, Mr Ainsworth’s costs draftsman, inspected Stewart Law’s file on 15 March 2018 and subsequently acknowledged by email that he “got everything [he] needed by way of a feel for the case, consideration of communications with the client etc”; Points of Dispute were served on 3 April 2018; Stewarts Law served Points of Reply on 17 April 2018; and Stewarts Law applied for a hearing with an agreed time estimate of 1½ days.

The focus of this appeal was on work done on documents in the period from 17 October to 31 October 2017 andStewarts Law’s Breakdown of Costs of that work, which featured in its invoice dated 6 November 2017

Mr Ainsworth’s Points of Dispute 10 in respect of “Items 40 – 45 Documents Time” was as follows:

“The Claimant requests the court to note that over a period of 11 working days the Defendant seeks to claim 46.8 hours of work which is equivalent to approximately 4.3 hours of time every single day. It is the clear opinion of the Claimant that under any stretch of the imagination, the level of time expended can in no way be justified and against the relevant test, the time expended, and its subsequent cost must be deemed to be unusual in nature and amount”.

As with the timed attendances upon the Claimant, the Claimant is mindful of the requirements of the Civil Procedure Rules as to the need to keep Points of Dispute brief and succinct. It must therefore be stated that all entries are disputed. By way of general indication however, the Claimant can confirm the main issues with the document time are as follows:

  1. Significant duplication between fee earners
  2. Wholly excessive time expended by fee earners reviewing documentation provided by the Claimant
  3. Too much time claimed generally in relation to preparation
  4. An excessive level of time claimed in relation to drafting of communications
  5. Unnecessary inter-fee earner discussions arising due to the duplication
  6. Excessive time spent collating documentation
  7. Significant preparation time claimed in relation to meetings with the Claimant.

It can be confirmed that the above stated list is not exhaustive of the issues but provide a general overview as to the reason why the time claimed is unusual in nature and/or amount. The Claimant reserved their position generally.”

In response in Stewarts Law’s Points of Reply in relation to each of Items 40 – 45, stated:

“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), the Court will be asked to dismiss this point”

The court gave notice of the detailed assessment hearing on 19 April 2018 with the hearing listed for late September. Despite Stewart Law’s reply in relation to Items 40 – 45 in the Points of Dispute, nothing further was served on behalf of Mr Ainsworth.

At the detailed assessment hearing before Chief Master Gordon-Saker, the senior costs judge dealt with the Points of Dispute until he came to Points of Dispute 10 – Items 40 – 45. At that point, Mr Poole, Mr Ainsworth’s costs draftsman, who was representing him at the hearing, stated that general arguments had been raised and what he would like to do was to “run through some of the entries in relation to the schedule and . . . sort of consider some of those entries and then form a view as to the costs as a whole . . .” (See the transcript of the hearing at 73E.) The Chief Master described such an approach as “broad brush.” Mr Dunne, on behalf of Stewarts Law, objected to that approach because specific objections to items had not been made and consideration of a few items and a broad brush reduction would not be satisfactory because his clients did not know what had been objected to and there was not time to go through everything. (See the transcript at 73G – 74B and C-F.)

The Chief Master went on to note that: “While the claimant has indicated that all entries are disputed, it isn’t stated why any particular entry is disputed and that does cause the defendant a bit of a problem because how can they prepare for a detailed assessment when they don’t know what is being alleged against them.” Mr Poole submitted that the “general principles or general arguments” had been adopted and later accepted that the Points of Dispute did not state why any particular item was in dispute. The Chief Master also noted that ‘They [Stewarts Law] wouldn’t know which general objection relates to which point.” (See the transcript at 75B -G.) Mr Poole, on behalf of Mr Ainsworth, went on nevertheless, to submit that the items which would be referred to would inevitably be the “larger entries” which would be questioned “as to their reasonableness and appropriateness” and that it could not be suggested that the receiving party (Stewarts Law) was in the dark or that there was any unfair prejudice. (See the transcript at 77B-E.)

Having been invited to do so, the Chief Master then dismissed Point of Dispute 10 on the basis that it had not been properly pleaded.

The Grounds of Appeal and Respondent’s Notice

In summary, it was said on behalf of Mr Ainsworth that the Chief Master’s refusal to assess the costs in respect of Document Time under Items 40 – 45 at Points of Dispute 10 was wrong and the judge was wrong to uphold it because:

  1. i) The Chief Master’s decision amounted to a strike out but he was not referred to and did not consider CPR r3.4 before deciding to do so;
  2. ii) The Chief Master failed to consider Practice Direction 47 para 8.2 or Precedent G at all;

iii) The Chief Master struck out that part of the Points of Dispute, despite the fact that they were adequately and properly pleaded; and

  1. iv) even if he was correct that there was insufficient time at the hearing and that the matters were insufficiently pleaded, there were fairer courses which could have been taken, including adjourning the matter and giving directions for further, more detailed Points of Dispute.

On behalf of Stewarts Law, it was said that the Chief Master and the judge were right for the reasons they gave and, in the alternative, or in addition, the decision should be upheld because it was made on a solicitor and own client detailed assessment where Precedent G does not apply.

When granting permission to appeal Longmore LJ stated that he was persuaded that a genuine point of principle arose, namely “How detailed points of dispute should be in a case in which a challenge to a number of items is made on a number of grounds.” Having warned that there was a risk that the court would consider that the Chief Master did no more than make a case management decision with which it is not possible to interfere, Longmore LJ stated that Stewarts Law should provide three examples of points to which they say they were unable to respond.

The Court of Appeal concluded

“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.

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.

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.”

PIC’s View

This case gives great guidance on how Points of Dispute should be drafted, not only in Solicitor Act assessments but also inter partes cost disputes.

Lady Justice Asplin was clear:

“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.”

“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.”

Our cost professionals at Partner in Costs advise on Points of Dispute all the time. Please get in touch if you need and help and advice.

Reuben Glynn – Managing Director – Partners In Costs