It pays to be particular!
Case Title: St Francis Group 1 Ltd & Others v Kelly & Anor [2025] EWHC 125 (SCCO) (23 January 2025)
This case highlights the importance of a Defendant providing precise and properly particularised Points of Dispute when challenging a Bill of Costs, with any objections supported by specific references to items in the Bill, as opposed to blanket rebuttals. Failure to do so could result in your Points of Dispute being struck out at an assessment of costs.
The case of St Francis Group v Kelly involves a detailed assessment of costs payable by the defendant, Mr. John Thomas Kelly, to the claimants following an unsuccessful fraud claim. The judgment focuses on the interpretation of a Claim Waiver, which granted the claimants an indemnity for costs incurred due to the legal dispute, and content and format of Points of Dispute.
The dispute originates from the 2017 management buyout (MBO) of companies owned by the Kelly family for over £100 million. Mr. Kelly later alleged that the MBO was not disclosed to him and that key individuals had breached their fiduciary duties, leading to a fraud claim. The fraud claim was dismissed in July 2022, and the defendants were ordered to indemnify the claimants for legal costs, as per the Claim Waiver signed in 2017. Further litigation arose regarding the assessment of these costs, with disputes over the scope of recoverable costs and the proportionality of fees.
The Claimants’ bill of costs totalled £468,687.15.
The Defendants filed Points of Dispute and the matter was listed for a Detailed Assessment hearing. The Points of Dispute contained twelve preliminary points, although some of these points cross-referred to more specific, item-by-item points, but without any clarity. Further, the Claimant’s Precedent S Bill of Costs contained a total of 1103 items, each and every one painstakingly objected to by the Defendants in their Points of Dispute.
The Defendants sought to argue that a Detailed Assessment hearing could not take place until the Court had dealt with the first four of their Preliminary Points (which largely concerned arguments surrounding the indemnity principle).
The Claimants’ Replies to Points of Dispute cited Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 and O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB) and maintained that the Points of Dispute were inadequately particularised and should be dismissed.
In considering the Defendants’ Points of Dispute, the Court at Detailed Assessment reminded themselves of the provisions of CPR 47.14(6) and paragraph 8.2 of Practice Direction 47, in which it states, crucially, that:
“Points of dispute must be short and to the point. They must follow Precedent G in the Schedule of Costs Precedents annexed to this Practice Direction, so far as practicable. They must:
(a) identify any general points or matters of principle which require decision before the individual items in the bill are addressed; and
(b) identify specific points, stating concisely the nature and grounds of dispute.”
The First Defendant had raised the same six Preliminary Points against every single timed item in the Claimants’ Bill of Costs. A broad brush wrapped in a blanket. As such, the Court found that the First Defendant had failed to achieve a satisfactory standard of particularity (the standard defined by HHJ Gosnell in O’Sullivan v Holmes and Hills LLP).
Costs Judge Leonard went on to state that the First Defendant had made no effort to identify the specific items in the Claimants’ Bill of Costs to which each of the six Preliminary Points actually referred to. To put it another way, Mr Leonard opined that the Court and the Claimants were in no better position than if the First Defendant had made no comments on Tab 14 of the Claimants’ Precedent S Bill of Costs (the Bill Detail column showing specific item details) whatsoever.
In the end, nine of the Defendants’ twelve Preliminary Points were struck out by the Court for being inadequately particularised. Similarly, the identical item by item objections raised against every item of the Bill were said by Mr Leonard to “refer back to a series of preliminary objections whilst making no attempt to identify the items to which each objection is said to apply. In consequence they add nothing to the preliminary points and are in effect meaningless”.
It is commonplace for Points of Dispute to brand the work in Bills of Costs with meaningless labels: excessive, non-progressive, administrative, duplicative, delegation.
These are vague assertions that should not hold much sway with the Courts. Put simply, if you are a Defendant and you are drafting Points of Dispute, you must have in mind the CPR 47.14(6) factors and you must make specific objections, referring to particular items in the Bill of Costs, with adequate justifications, and avoid blanket challenges.
And, if you are a Claimant, and you have a well drafted Bill of Costs and a professionally put-together set of Replies, you are already in the driving seat en route to that Provisional or Detailed Assessment. It pays to be particular!
How can PIC assist?
With expertise in costs law, PIC can help law firms respond effectively to objections and navigate detailed assessments. PIC can also provide guidance on best practices for recording time, drafting coherent replies to deal with compliant points of dispute, and managing legal costs efficiently.
Mike Hollin, Costs Consultant
13.02.2025