Kjerulf Ainsworth – v – Stewarts Law LLP (2019) – The devil’s in the detail

Dominic Woodhouse, National Training Manager

If you attend court for long enough, at some point you will suffer the dreaded ambush, despite your best efforts and strenuous protestations to the judge to not allow your opponent to take without warning some previously un-raised and (dread the thought) unanticipated point.

Some of us are unlucky enough to have it happen on our very first outing, souring and slightly diminishing an otherwise outright victory. The outcome on that occasion may well have been the same with more than five minutes to consider the opponent’s last-minute skeleton argument, but at the time that didn’t really seem like the point, and it probably wasn’t.

CPR 47.14(6) states that ‘[o]nly items specified in the points of dispute may be raised at the hearing’, though within the same rule is confirmation that the Court retains the power to grant permission for other issues to be raised. So far so unhelpful.

What then, of the requirement for articulation of objections within the points of dispute, an issue considered in the recent case of Kjerulf Ainsworth – v – Stewarts Law LLP (2019), an appeal from the decision of Master Gordon Saker dealing with an assessment under the Solicitors Act 1974?

Paragraph 8.2 of the practice direction to CPR 47.9 provides that points of dispute must be short and to the point, must identify any general points or matters of principle which require decision before the individual items in the bill are addressed, and identify specific points, stating concisely the nature and grounds of dispute.

Parties are also however mandated to follow precedent G so far as practicable, which can be the bane of any costs draftsman’s life, which, refencing an objection to work done on documents, provides the following example:

‘The total claim for work done on documents by the assistant solicitor is excessive. A reasonable allowance in respect of documents concerning court and counsel is 8 hours, for documents concerning witnesses and the expert witness 6.5 hours, for work done on arithmetic 2.25 hours and for other documents 5.5 hours. Reduce to 22.25 hours.”

A claim for work done on documents may be extensive and amount to a few hundred hours of work over several years. It used to be common for parties to articulate objections to documents time taking each chronological entry in turn, but that is certainly not the approach adopted in Precedent G.

The rules indicate that objections are addressed to items. Per paragraph 5.12 of the practice direction, a bill contains items under various headings, including, for example, work on documents. Per paragraph 5.15, each item must be consecutively numbered, and per paragraph 5.18, if the number of attendances and communications other than routine communications is twenty or more, the main body of the bill should only reference the total, and should refer to a schedule in which the full record of dates and details is set out. Each ‘entry’ is not therefore an ‘item’ and per precedent G, it would appear in order to reference only the totals of the work done in points of dispute.

Many opponents preparing points of dispute will follow rather too slavishly the precedent G guidance, raising various objections simply on the common basis of their being ‘excessive’. As tediously generic as it may be, raised in relation to the number of routine letters claimed to a medical expert, say, it is manageable and perhaps can be applauded for admirable concision. The simple refrain that time is excessive in relation to a documents ‘item’ possibly running to hundreds of hours over a number of years is more problematic, though it is not something that the authors of Precedent G would appear to be troubled by.

In Kjerulf Ainsworth – v – Stewarts Law LLP (2019) Mr Ainsworth instructed Stewarts Law LLP in relation to complex financial claims and allegations arising out of the breakdown of his relationship with his former partner. The retainer was terminated only a few weeks later and he sought a detailed assessment of his former solicitor’s bill under the Solicitors Act 1974. Directions were given for the respondent firm to produce a breakdown of its fees, for the service of points of dispute and points of reply and for Mr Ainsworth to be entitled to inspect the file. He instructed a costs draftsman who produced points of dispute after attending the respondent’s offices and inspecting the file.

The breakdown produced by the respondent contained three schedules for work done on documents, which listed the dates on which work was done, the nature of the work, which fee earner had undertaken the work and the time claimed. The appellant’s points of dispute said that the amount of time expended could not be justified and that all the entries were disputed on various grounds, including that excessive time had been spent and that there was duplication between fee earners, and reserved the appellant’s position in respect of challenging the amounts claimed at the detailed assessment hearing. It appears that the points of dispute sought to reduce the claim to nil, not entirely consistent with time being ‘excessive’.

The senior costs judge apparently expressed surprise that every item in the schedules of work done on documents was challenged, since it was unlikely that they should all be reduced to nil. He further stated that the fact that the points of dispute did not state why any particular item was disputed caused a problem for the respondent. He held that the points of dispute did not raise a proper challenge to the time spent on documents and could not properly be answered by the respondent, and therefore dismissed the objection. His decision was upheld on appeal.

Master Gordon-Saker is a very pragmatic judge; attempts to persuade him that an opponent’s points of dispute don’t pass muster has not in the past succeeded with him to the extent of effectively striking the objections out, though in such situations the objections then made were treated perhaps with greater circumspection than might otherwise have been the case. Certainly he is not a judge that will not grant a party latitude in ‘exploring’ their objections. The decision in Ainsworth then is not that of a judge prone to insisting that a party plead their objections to costs in excessive detail or rigid application of the practice direction.

The key point here, and what we may surmise provoked what can’t be far removed from the ultimate sanction of dismissing the objections to documents time entirely, are the specifics of the pleadings and the context in which they were made, such as we can discern from the summary of the matter. This was a solicitor and own client assessment, the file had been inspected by the paying party’s costs draftsman, and the objection to documents time was that it was in its entirety excessive and contained duplication between fee earners. There was apparently no offer made for any of the work done in the points of dispute, with every single entry within the documents schedules subject to challenge. Absent some over-arching point of principle, it seems difficult to entertain the idea that every single item would be disallowed.

This then is a reminder of the need to ensure clarity and sense in points of dispute, but is unlikely to be a bandwagon that could carry a party any great distance in an ordinary inter partes assessment where the receiving party is aggrieved (quite possibly with some justification) at the paucity of justification for reductions sought or a lack of certainty as to exactly which entries within a documents schedule are objected to. Some element of ambush is, like it or not, likely to be permitted in most cases.

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Dominic Woodhouse – National Training Manager – Partners in Costs