The application of Ainsworth and Samsung to inter partes assessments

In the recent matter of Wazen v Khan [2024] EWHC 1083 (SCCO) before Deputy Costs Judge Roy KC, the question arose as to how detailed and particularised points of dispute needed to be in order for the paying party to be able to pursue them at Detailed Assessment. In determining this issue, the application of Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 to inter partes assessments was considered. 

A secondary point regarding justification for claiming more than guideline rates also arose, specifically the applicability of Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor (Costs) [2022] EWCA Civ 466 in detailed assessment proceedings.

The Facts

The Claimant, Ms Wazen, brought a clinical negligence claim against, the Defendant, Dr Khan and a second defendant, alleging negligent medical treatment which was received privately.

Evidence was obtained from six disciplines in relation to breach of duty and causation and within the defence all matters were denied.

Following quantum investigation, settlement negotiations ensued, and damages were agreed at £300,000, with the Claimant discontinuing their case against the second defendant.

Costs claim

Following settlement, the Claimant sought their costs and served a bill of costs upon the Defendant totalling £187,805.17.

In response to the bill of costs, inter alia, the Defendant challenged trenches of time for specific phases, noting that the same were “…individually and/ or collectively excessive”. There was no further particularisation or filtering utilised. The phases disputed were:

• Disclosure, 351 entries totalling 96.3 hours (£18,513.00);
• ADR/ Settlement, 186 entries totalling 39.1 hours (£14,250.50 plus Counsel’s fees of £3,462.16 and consent Order fee of £108.00); and
• Costs Assessment, 5 entries totalling 71.2 hours (£16,152.50).

A preliminary issue arose as to whether such Points of Dispute complied with the rules, specifically paragraph 8.2 of Practice Direction 47 and the binding authority of Ainsworth v Stewarts Law LLP. The third aspect in relation to costs of assessment was conceded at the hearing and therefore only the Disclosure and ADR phases were pursued.

The Claimant’s position was that the Points of Dispute did not provide sufficient reasons against the general or specific items claimed within the Bill of Costs. The generic disputing of items of costs or phases without specific complaint fell far short of what was required and therefore the Points of Dispute did not follow Precedent G.

Further, where there was a failure to raise an adequate point or no point had been raised at all, CPR 47.14(6) must apply, in that only the items specified could be raised at the hearing.

The Defendant’s position was that Ainsworth could only apply to solicitor-client assessments and if it did apply to such matters, they had done all that was required within the rules and Precedent G, therefore their Points of Dispute were compliant.

Samsung:

The Defendant’s position was simply that a clear and compelling reason was required to justify an enhancement above guideline rates, seeking to apply the decision of Samsung.

The Claimant argued that Samsung had no place in detailed assessment proceedings as it was a commercial matter that was not out of the norm but further, the same went against the final report of the Civil Justice Council in their implementation of guideline rates and their comments of the same being a helpful starting point in detailed assessments.

Held

Deputy Costs Judge Roy helpfully summarised at paragraph 15 of his judgment that “…the rules and the guidance in Ainsworth, it is my view, are both, with appropriate modifications, intended to apply to all types of assessment on whatever basis.”

The judge also went on to clarify however that some modification would be required in inter partes assessments in that the approach would need to be “more benign” [see 24].

In conclusion of the approach to be adopted the court summarised matters in six clear points at [27-33]:

“Firstly, the clear requirements for PODs are as described at paragraph 38 of Ainsworth. That seems to me to be the touchstone. I would say that is aa practical question of fairness and justice.

Secondly, how much particularity is required is going to be a case-specific question of fact and degree. Again, this reflects my reading of the thrust of Ainsworth being about the practical effect of any lack of particularity in terms of justice and fairness.

Thirdly, following on for that, and for reasons I have already identified, less particularity will almost inevitably be required in inter partes points of dispute than solicitor-client points of dispute.

Fourthly, in an inter partes points of dispute the paying party can often do no more than (a) identify which items are prima facie excessive and require the receiving party to justify them,; and (b) identifying as best it can what on the paying party's case would be a reasonable and proportionate amounts.

Fifthly, there is a distinction in my view as to the particularity required between two different things the PODs have to do. First of all they have got to identify what is in dispute. Secondly, they have to identify the nature of the challenge. The second of these logically entails identifying what is being conceded or offered.

As to the first requirement, in my view that will require identifying, by reference to item numbers and/or filtering in an electronic bill, which items are under challenge. The second requirement, in my view, can be rather more broad brush. The paying party is entitled to go to say in terms, "We offer x at grade A and y at grade D", or whatever the case may be. It does not have to, at that stage, specify precisely which items are being allowed on its case and to what extent. In many cases it will not be practical to do so. For example it might be said there is duplication, in which case there is no hard and fast formula and we just have to take the two duplicate items together and say allow x for both of them, partial duplication.

Sixthly, when identifying which items are under challenge, I fully accept that a degree of grouping or clumping together of items under challenge is acceptable. Again, that is clear from Precedent G itself. However, there are limits to quite how broad that type of grouping can be if it is not to fall foul of the touchstone requirements identified in paragraph 38 of Ainsworth. Again, the level of particularity required is going to be a case-specific question of fact and degree.”

Having taken all such matters into account the judge determined at [44]:

“…the PoDs do not serve the purpose which they are required to perform. If I were to attempt the quasi-inquisitorial exercise described above, as a matter of fairness I would have to give Mr Malone the opportunity to address me on those items, the documents related to those items, which I have identified as being potentially excessive. In my view that is precisely the type of on-the-hoof exercise that Ainsworth is crystal clear should not be entertained or undertaken. Ainsworth is, in my view, equally clear that in those circumstances the only proper course is to strike out that element in the points of dispute.” The same applied to the ADR phase also.

Samsung:

The court usefully summarised at [54] that “…I do not think Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor (Costs) [2022] EWCA Civ 466 applies to detailed assessments, which is a different exercise than summary assessment. In summary assessment, when we see the need for compelling justification in adopting the guideline rates, because the court simply will not be equipped to allow any uplift or mark-up or enhancement without such material. I do not see the position being the same on detailed assessment. Also on its facts Samsung was starting with commercial rates. The relevant guideline rate was a commercial rate. It was a commercial case with nothing to take it out of the norm for commercial cases. So that again seems factually slightly different.”

Summary

The decision confirms for practitioners, especially upon a Precedent S, that particularisation of what is disputed and why is always required. Further, a grouping of a significant number of items with a single complaint does not suffice.

Also, whilst justification is required to claim hourly rates which exceed guideline rates, that justification is via the application of the trite rules found in CPR 44.4 and not the application of Samsung.

Darren Malone is an Associate Costs Technical Specialist and Advocate within the Irwin Mitchell Costs Team.

Mark Carlisle appeared on behalf of the Defendant.