The Court of Appeal has provided an important judgment on the treatment of non-compliant Points of Dispute and late amendments in detailed assessment proceedings. The decision reinforces both the requirement for parties to comply with PD 47 and Ainsworth v Stewarts Law LLP, whilst emphasising the broad discretion available to Costs Judges when determining appropriate sanctions for procedural failures.
Background
The matter arose from a Detailed Assessment following the settlement of a high value road traffic accident claim. The Claimant’s bill included a substantial claim for document work, including a particular item totalling 134.1 hours / £38,819.50. The Defendant challenged this item in the Points of Dispute, at Point 23, indicating that an annotated schedule identifying objections would follow. However, that schedule was not served until just before the detailed assessment hearing.
The Claimant argued that Point 23 failed to comply with PD 47 and the Court of Appeal’s decision in Ainsworth (which emphasised the necessity for specificity in challenging claims for costs), as it did not adequately identify the specific items being challenged or the grounds of those challenges. The Claimant therefore sought to strike out the Point and exclude reliance upon the late served schedule.
The Costs Judge’s decision
At first instance, Deputy Costs Judge Friston refused to strike out Point 23 and permitted the Defendant to rely upon the annotated schedule, albeit with considerable reluctance. The Costs Judge found that the original Point gave the Claimant sufficient notice of the nature of the challenge as both parties bore responsibility for the position that had arisen, given that both knew a further schedule was intended but neither took steps to address its absence before the hearing.
The Costs Judge concluded that, although the schedule had been served very late, the court would ultimately be assisted by having the detailed objections available and that costs sanctions were a more appropriate remedy than strike-out.
High Court appeal
The Claimant successfully appealed to the High Court. Mrs Justice Hill held that the Costs Judge had failed to give sufficient weight to the requirements of PD 47 paragraph 8.2 and Ainsworth and had failed properly to exercise the discretion under PD 47 paragraph 13.10. Point 23 was consequently struck out and permission to rely on the annotated schedule was refused.
Court of Appeal decision
The Court of Appeal then allowed the Defendant’s appeal and restored Deputy Costs Judge Friston’s original decision. Lady Justice Falk reiterated the well-established principle that appellate courts should be slow to interfere with discretionary case management decisions unless there has been an error of principle or the decision falls outside the generous ambit within which reasonable judges may disagree.
Whilst accepting that Point 23 was non-compliant and that the annotated schedule had been served very late, the Court held that these factors did not automatically require strike out. The Costs Judge had considered the relevant circumstances, including the parties’ conduct and the overriding objective, and was entitled to conclude that a costs sanction rather than strike out was the appropriate response.
Of note, in her concluding remarks, Lady Justice Falk made clear that others “should not assume that a lenient approach will be taken if they take a similar approach.” Non-compliance still therefore risks strike out of parts of Points of Dispute, disallowance of late variations and costs sanctions.
Bethany Collings is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.