Non-Compliant Points of Dispute: Ward v Rai Implications

The Court of Appeal’s decision in Ward v Rai has generated considerable discussion amongst costs practitioners. Whilst the judgment does not rewrite the rules governing Points of Dispute, it highlights the broad discretion available to a Costs Judge when dealing with procedural failures during detailed assessment proceedings.

For receiving and paying parties alike, the case reinforces an important message: compliance with the Costs Practice Direction remains essential, but non-compliance will not automatically result in a Point of Dispute being struck out.

At ARC Costs, we regularly advise both receiving and paying parties on disputes concerning the adequacy of Points of Dispute. The decision is a useful reminder that whilst the rules are clear, the court’s overriding objective will often be ensuring that cases are dealt with fairly and proportionately.

Why are Points of Dispute so important?

Once a Bill of Costs has been served, the paying party generally has 21 days to serve its Points of Dispute. Those Points of Dispute define the issues that will ultimately be considered during the detailed assessment process. They enable the receiving party to understand precisely which items are challenged and why.

Without properly drafted Points of Dispute, meaningful negotiations become difficult and the court’s task at the detailed assessment hearing becomes significantly more complicated. This is why the rules require specificity rather than vague or generic objections.

What do the rules require?

The relevant provisions appear within paragraphs 8.2 of the Costs Practice Direction.

They require the paying party to:

“state concisely the nature and grounds of dispute.”

In practical terms, this means identifying:

• The individual items being challenged.
• The basis upon which they are disputed.
• The nature of the objection.
• Any alternative figures being proposed where appropriate.

Simply raising broad complaints or general points without identifying the work under challenge is unlikely to satisfy the rules.

The Ainsworth principle

The importance of properly drafted Points of Dispute was established in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178. Often referred to as the Ainsworth principle, the Court of Appeal made clear that paying parties must identify with sufficient clarity the matters they dispute.

The purpose is straightforward. Receiving parties should not be left guessing which entries in the Bill remain in issue or the reasons why those items are challenged.

Properly drafted, compliant Points promote early settlement, reduce unnecessary work and enable the court to determine disputes efficiently.

What happened in Ward v Rai?

In Ward v Rai, the claimant argued that one of the defendant’s Points of Dispute failed to comply with these requirements.

The Point referred to an annotated schedule that did not exist. It failed to identify the individual items said to be in dispute and did not adequately explain the matters of the nature and grounds of dispute.

The receiving party argued that the Point should therefore be struck out.

Complicating matters further, the paying party had been aware of the alleged defect for several months but did not seek to remedy it until shortly before the detailed assessment hearing.

The first instance decision

Deputy Costs Judge Friston accepted that the Point of Dispute was defective. However, he declined to strike it out. Instead, he adopted what was described as a “broad brush” approach.

Importantly, the judge considered that responsibility for the situation did not rest entirely with one side. Whilst the paying party had failed to remedy the defect promptly, the receiving party had also taken no meaningful steps to resolve the issue before the hearing.

In the judge’s view, both parties had failed to assist the court in dealing with the case justly and at proportionate cost, contrary to the overriding objective.

The High Court appeal

On appeal, the High Court concluded that the Point of Dispute had indeed failed to comply with the requirements established by Ainsworth v Stewarts Law.

The court found that it did not adequately identify:

• The individual entries challenged.
• The reasons those entries were disputed.
• The specific nature of the objections.

The Point was therefore non-compliant.

The Court of Appeal’s decision

The matter then reached the Court of Appeal. Lady Justice Falk agreed that the Point of Dispute was “obviously incomplete” because it referred to an annotated schedule that simply did not exist.

Nevertheless, the appeal was dismissed because the issue before the Court of Appeal was not whether the Point complied with the rules. Instead, it was whether Deputy Costs Judge Friston had been entitled to exercise his discretion as he had.

The Court of Appeal concluded that he had.

Case management decisions are afforded considerable respect on appeal. Provided the judge applied the correct legal principles, appellate courts will rarely interfere simply because another judge might have reached a different conclusion.

What does this mean for practitioners?

The decision should not be interpreted as relaxing the rules governing non-compliant Points of Dispute. The Court of Appeal did not suggest that vague or incomplete Points are acceptable.

Indeed, it expressly recognised that the Point in question failed to comply with the relevant requirements. Instead, the judgment confirms something different.

It demonstrates the breadth of judicial discretion available during detailed assessment proceedings. Where procedural failures occur, the court retains flexibility in deciding the appropriate response.

Striking out a Point of Dispute remains one option. Allowing amendments or permitting the dispute to proceed may also be appropriate depending upon the circumstances.

Compliance still matters

From a practical perspective, paying parties should continue to ensure they serve fully compliant Points. The requirements established by Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 remain unchanged. Likewise, paragraphs 8.2 continue to require parties to state concisely the nature and grounds of dispute.

The decision in Ward should not be viewed as permission to rely upon incomplete drafting. A different Costs Judge faced with different facts may have exercised discretion in an entirely different way.

Lessons for receiving parties

Receiving parties should also take note of the judgment. Where defects are identified in Points of Dispute, those issues should be raised promptly rather than left until the assessment hearing.

One factor influencing the outcome in Ward was the finding that both parties had contributed to the procedural difficulties.

The court expects all parties to assist in furthering the overriding objective, including resolving procedural issues wherever possible before the hearing.

Our commentary

The Ward decision should not be viewed as weakening the Ainsworth principle. The Court of Appeal accepted that the Point of Dispute was defective. What it confirmed was the wide discretion available to Costs Judges when deciding how to deal with procedural failures.

From a practical perspective, paying parties should continue to draft fully compliant Points of Dispute, whilst receiving parties should identify defects as early as possible. Good costs practice remains the best way to avoid unnecessary procedural arguments and focus on the substantive assessment.”

How ARC Costs can help

At ARC Costs, we regularly advise receiving and paying parties throughout detailed assessment proceedings, including:

• Drafting Bills of Costs.
• Preparing and reviewing Points of Dispute.
• Drafting Replies.
• Advising on procedural compliance.
• Negotiating costs settlements.
• Representing clients throughout the assessment process.

The decision in Ward v Rai reinforces that compliance with the Costs Practice Direction remains essential. Whilst the court retains discretion when procedural failures occur, properly drafted, compliant Points of Dispute remain fundamental to achieving a fair and efficient detailed assessment.

Whether acting for the receiving party or the paying party, obtaining specialist costs advice at an early stage can often avoid unnecessary disputes and place clients in the strongest possible position throughout the assessment process.

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