Ainsworth revisted
The approach taken to the preparation of Points of Dispute once again examined by the Court in St Francis Group 1 Ltd & Ors v Kelly & Anor [2025] EWHC
In the realm of legal cost assessments, the precision and detail of Points of Dispute are paramount. The recent case of St Francis Group 1 Ltd & Ors v Kelly & Anor [2025] EWHC revisited the principles established in Ainsworth v Stewarts Law LLP, emphasizing the necessity for specificity in challenging claims for costs. This article delves into the intricacies of cases, exploring how the courts have navigated the complexities of the disputes and the implications for future cases.
In Ainsworth v Stewarts Law LLP Aspin LJ (with whom all the Court agreed) set out the circumstances of the appeal:
“It raises the question of how detailed Points of Dispute must be on solicitor and client assessments, particularly where a challenge is made to all the items in an invoice, on a number of grounds.”
The grounds in the Claimant’s Points of Dispute were:
- Significant duplication between fee earners
- Wholly excessive time expended by fee earner reviewing documentation provided by the Claimant
- Too much time claimed generally in preparation
- An excessive time in relation to drafting comms
- Unnecessary fee earner discussions arising due to duplication
- Excessive time spent collating documents
- Significant preparation time claimed in relation to meetings with the Claimant.
The list was said not to be exhaustive but a general overview as to the reason why the time claimed was unusual in nature and/or amount. The Claimant reserved his position generally.
The Defendant said, in their Replies, that they could not provide any meaningful response to these general points, and in the absence of itemised Points of Dispute, the Court was invited to dismiss the Points.
No further, itemised Points were forthcoming, with no specific Points raised.
At the hearing before the Senior Costs Judge, the Claimant wanted to take the Court through some examples, and a broad-brush approach was requested.
The Defendant objected on the basis that they would not know what was being objected to, and there was no time to go through everything in the remaining one day.
Master Gordon Saker asked “How can a Defendant prepare for a Detailed Assessment when they don’t know what is being alleged against them?”
The Judge dismissed the Points of Dispute because the Claimant had not set out what he sought to challenge and why. This approach would cause the Defendant difficulties because they are entitled to know that information; they would need to look at attendance notes to see what work was done and why, consider the context and why a particular fee earner undertook that work, so as to justify the time.
The purpose of the Points of Dispute is to prevent work having to be done ‘on the hoof’ at a hearing.
Where a client is challenging each and every item it is beholden to him to explain why and whether each item should be disallowed, or work should have been done by another fee earner.
Master Gordon Saker’s decision was upheld by HHJ Klein (sitting as a High Court Judge) on the basis that it was a permissible case management decision which furthered the overriding objective. The Appeal was dismissed.
Mr Ainsworth went on to say the Judge was obliged to assess the costs pursuant to section 70 of the Solicitors Act 1974.
The Court said there is no absolute right to assessment but rather that right is subject to the rules of the Court. If the paying party acts in such a way to frustrate the overriding objective, the Court is entitled to refuse to allow him to be heard under its case management powers.
In the more recent case of St Francis Group 1 Ltd & Ors v Kelly & Anor [2025] EWHC the issue of multitudinous but vague Points of Dispute arose again.
The Facts
The Claimant and First Defendant were engaged in a Management Buy Out of two companies, Demolition Services Midlands Group Holdings and St Francis Group pursuant to a Sale and Purchase Agreement of 17 March 2017.
Contrary to a Claim Waiver, in 2020, the Defendants initiated proceedings against a Mr Baker and a Mr Braid alleging fraud, breach of fiduciary duty, and claiming losses of £37 million.
The fraud claim was dismissed by Cockerill J on 19 July 2022. The Counterclaim brought by Messrs Baker and Braid succeeded.
The Defendants paid £93,185.20 towards costs pursuant to a previous Order of Jacob J dated 19 February 2022. However, the remaining costs were hotly in dispute.
The Issues to be Considered.
Firstly, the Court had to consider the issue of the indemnity costs owed by the First Defendant to the Claimants in respect of the fraud claim which had been dismissed by Cockerill J.
Secondly, the Court was to consider the adequacy and specificity of the First Defendant’s Points of Dispute relating to the Claimant’s Bill of Costs.
Thirdly, whether the costs claimed by the Claimant, including those attributed to a Mr Kennedy, were reasonable and properly incurred.
The Arguments
The Claimants argued that they were entitled to indemnity for all reasonable costs incurred in relation to the fraud clam as established by Master Pester’s Order.
The First Defendant contended that the Claimant’s Bill of Costs was not particularised adequately in that they argued Mr Kennedys costs should have been categorised as legal costs rather than disbursements. They also contended that excessive and duplicative charges existed in the Bill of Costs.
The Courts Judgment
Master Pester found the First Defendant’s Points of Dispute failed to meet the requirement of specificity and clarity as mandated in the Court of Appeal in Ainsworth.
Preliminary Point 1 was dismissed, allowing the Claimants to recover most Mr Kennedy’s claimed costs.
Preliminary Points 6 to 9 and 11 were struck out by the Court as they lacked particularity, and they failed to state what items were contested and why.
The Court made it clear that a challenge to costs must be a proper challenge with sufficient detail to allow for a fair assessment and so that the receiving party knows what argument it has to meet. The Court will not sort through every item looking for potential objections, and the paying party should not expect it to do so.
The Result
The Claimants were entitled to recover their reasonable fraud claim costs and the Defendant’s objections were mostly dismissed because of the lack of specificity.
Whether paying or receiving party it pays to keep in mind what the Court of Appeal said in Ainsworth as it will be followed.
In short, the receiving party is entitled to know the argument it is to meet and the paying party, if challenging items must explain why each and every item is challenged and whether he is asserting that no time should be allowed, or work should have been one by a different fee earner or whatever the specific objection is. The whole point of Points of Dispute is to avoid work being done ‘on the hoof’ at a hearing.
It is well worth considering Judgments as to the level of detail required in both the Ainsworth and St Francis Group Judgments before you set upon your next Points of Dispute or Replies.
