Judge warns, however, that paying parties “should be under no illusion” of need to comply
Paying parties “should be under no illusion” that paragraph 8.2 of PD 47 on points of dispute (PoDs) “requires an Ainsworth compliant approach”, the Court of Appeal has warned.
It made the comment after restoring a decision of Deputy Costs Judge (DCJ) Friston not to strike out a point of dispute that was challenged for being too vague and to allow reliance on a more detailed schedule that was only served two days before the detailed assessment.
Last year, Mrs Justice Hill, sitting with Costs Judge Leonard as assessor, held that DCJ Friston failed to give sufficient weight to the requirements of paragraph 8.2(b) of PD 47 and the Court of Appeal ruling in Ainsworth.
But in Ward v Rai [2026] EWCA Civ 816, Lady Justice Falk – giving the unanimous ruling of the court – said the High Court was wrong to interfere with DCJ Friston’s case management decision.
The successful claimant commenced detailed assessment proceedings and the £129,000 claim for costs included a claim for 134.1 hours of document time. The schedule of document work was 24 pages long, comprising of 418 individual entries, and described the date of the work, its nature, the person who had carried it out and the time spent on it.
The defendant’s PoDs, served in August 2023, made some general objections to the reasonableness and proportionality of the document time and offered 68.2 hours. The defendant also said he would rely on an annotated documents schedule of specific objections in support of the points of dispute.
In response in January 2024, the claimant argued that in the absence of any specific areas of reductions identified at this point, the document PoD (point 23) fell foul of Ainsworth and so should be struck out.
The schedule eventually arrived just two working days before the hearing, setting out the defendant’s specific objections to individual document time entries and made a lower offer of 58 hours. The bundle had already been prepared based on the original PoD.
At the hearing in early August 2024, DCJ Friston declined to strike out point 23, saying the original version “would have allowed there to have been a fairly broad-brush assessment in any event”.
He continued that, “perhaps more importantly”, both parties knew that there should have been a schedule but the defendant took no steps to serve it until just before the hearing, while the claimant had not chased it. He was “profoundly disappointed” by this.
DCJ Friston said: “In those circumstances, I think that both parties are significantly at fault for having failed to comply with the overriding objective and to assist the court by essentially ‘getting their act together’ earlier.”
This meant that the schedule, though served “unacceptably late”, was not an “ambush” and so should not be struck out.
The hearing resumed three months later, at which DCJ Friston assessed the bill at £89,000 plus with £8,235 in interest. This failed to beat a £100,000 part 36 offer and so the claimant was awarded his costs of assessment up to 3 July 2024, the expiry of the relevant period, and the defendant his costs thereafter.
On appeal, Hill J held that DCJ Friston failed to give “proper effect” to paragraphs 8.2(b) and 13.10(2) of PD 47. Detailed assessment “is intended to be a streamlined process to assist the parties in negotiating an agreed sum in settlement of a claim for costs, underpinned by mandatory requirements such as those in paragraph 8.2(b)”, she stressed.
Had the PoD been struck out, the assessment would have concluded on 6 August, she said, and the fact it went into a third day was not consistent with the overriding objective.
On appeal, Falk LJ stressed that appellate courts must exercise caution when reviewing case management decisions.
She gave several reasons, including that “it does no credit to the justice system for there to be appeals on case management issues which do not, on analysis, raise material points of principle and the cost implications of which must risk outweighing the sums at stake”.
She added: “This reinforces the importance of parties seeking clarification, and where appropriate, reconsideration by the first instance judge. An appeal should be a last resort. This is quite apart from the fact that the very narrow gap between the final part 36 offers should have given serious pause for thought before embarking on the hearing in the first place.”
On the substance of the appeal, Falk LJ said it was uncontroversial that point 23 would have been compliant had it been accompanied by the annotated schedule when the PoDs were first served, and it was clear a three-day hearing would then have been required.
“So the real question was not whether a third day was required because of the default (because it would have been needed without a default), but what other costs or difficulties arose from the default.
“Those would have included the fact that the claimant did not have the benefit of the annotated schedule when replying to the points of dispute or when preparing for the hearing (subject of course to the point that it did not chase for the schedule, as it could have done), as well as the inconvenience and some inevitable increase in costs in having a hearing split by an adjournment, rather than being completed over consecutive days.
“However, there is more than one answer to that. Most obviously, it would have been a very good reason to chase for the annotated schedule. Alternatively, the claimant could have sought to protect its position in other ways, including through the terms of any part 36 offer that it made thereafter.”
“It was open to him to impose a costs sanction instead, as he made clear that he would. As it turned out, the costs sanction actually imposed at the 8 November hearing was very limited, but there is no appeal against that decision.
“However, questions of weight are pre-eminently ones for the first instance judge, and for the reasons already given I am not persuaded that the costs judge failed to have proper regard to the overriding objective,” Falk LJ said.
“Those who do not comply on a timely basis risk non-compliant elements of their points of dispute being struck out or, as a minimum, cost sanctions. Similarly, late variations by either party under paragraph 13.10 of PD 47 risk being disallowed or permitted only on conditions, including as to costs.”
Andrew Lyons (instructed by Kennedys Law) for the appellant/defendant. Erica Bedford and Thomas Mason (instructed by Ralli Solicitors) for the respondent/claimant.