What Are Points of Dispute?

When a Bill of Costs is served with a Notice of Commencement, and when the parties cannot agree to costs through negotiations, the paying party’s contentions to the Bill of Costs are written in the form of Points of Dispute. The paying party serves the Points of Dispute on the receiving party in a written format within 21 days of service of the Notice of Commencement. It is then up to the receiving party to provide Replies to the Points of Dispute justifying why their costs are reasonable.  These are optional, but it is recommended they are prepared to defend the receiving party’s position.

How Are Points of Dispute and Replies Drafted?

The format of the Points of Dispute and Replies should follow a Precedent G format. They usually start with general Points such as proportionality and hourly rates before moving to specific Points disputing items contained in the Bill of Costs.

It is important that the Points of Dispute and the Replies are ‘short and to the point’. In the case of Mead v British Airways PLC (Manchester County Court 15/01/18), the paying party had drafted a single Point of Dispute over seven pages. The Reply to this Point was two pages. The Court dismissed the Point and accepted the receiving party’s position. It is therefore important that both the Point and the Reply always stating the nature and grounds of the dispute concisely, and time spent preparing elaborate submissions will not be recoverable. It is worth considering CPR Practice Direction 47, paragraph 8.2, which states:

‘Points of dispute must be short and to the point. They must follow Precedent G in the Schedule of Costs Precedents annexed to this Practice Direction, so far as practicable. They must: 

(a) identify any general points or matters of principle which require decision before the individual items in the bill are addressed; and 

(b) identify specific points, stating concisely the nature and grounds of dispute.

Once a point has been made it should not be repeated, but the item numbers where the point arises should be inserted in the left-hand box as shown in Precedent G.’

It is also important to state the ground of dispute and the reasons why the dispute has arisen, not just the fact that the item of the Bill is disputed. It is on the parties to find a balance to ensure the point is not lengthy but that the dispute is also explained with the required details.  Failure to plead a Point properly can lead to dismissal of the same pursuant to Ainsworth v Stewarts Law LLP (2019).

In relation to the Replies only, Practice Direction 47 paragraph 12.1 states:

“A reply served by the receiving party under Rule 47.13 must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses.”

As such, any Point of Reply should not simply reject the paying party’s submission and rehearse the details contained in the Bill.  Further information should either be provided, the Point conceded, or a counter proposal made.

Either parties’ failure to prepare the Points or Replies properly can lead to the other party seeking dismissal of the submissions, or the Court may order the documents to be re-written in a more concise nature, on their own volition.

Are there any Time Limits to take into Account?

Replies to Points of Dispute are governed by CPR 47.13 whereby it is stated that the receiving party has 21 days to reply to the Points of Dispute. It is also worth noting that the Points of Dispute must also be served within 21 days of the N252 or Notice of Commencement which is enclosed with a formal Bill of Costs when proceedings have been issued. The parties can agree on extensions to these deadlines between themselves, and there is no Court application required for this extension to be agreed.

Should an agreement not be reached on the extension and the paying party serves Points of Dispute out of time, there will be costs implications. In this instance, the receiving party is entitled to apply for a Default Costs Certificate, which allows for the receiving party’s costs to be paid in full. The paying party can apply to set this judgment aside if there is ‘good reason’ however, costs consequences will apply as a result.

The same consequences do not apply for failure to serve Points of Reply in time however, the paying party can seek to disallow any detailed assessment costs associated with preparation of late served Replies pursuant to Pipe v Electrothermal Engineering Ltd (SCCO, 2014). 

What are the Steps after Points of Dispute and Replies are served?

Following service of the Points of Dispute and replies, the parties will continue negotiations. If no agreement is reached, the receiving party can apply for provisional assessment. In this instance, the Judge in question will assess costs on paper, taking into consideration the Points of Dispute and Replies. The Judge will make a decision on each point, ruling for the paying party or the receiving party or allowing what he deems reasonable for each item. He will then send back the assessment results to the parties who will calculate the total costs assessed. Provisional assessment is governed by CPR 47.15.

If either party does not agree to the assessment, they then can file for an oral hearing, which is an attended hearing, to assess the costs of any items flagged for review. The detailed assessment hearing and the process is governed by CPR 47.14.

Are Replies to Points of Dispute Important?

You must ensure that the Points of Dispute and the Replies are short and to the point, following a Precedent G format. It is important to adhere to deadlines to ensure costs of preparation of any Replies are recoverable, and if you proceed to assessment in the absence of any Points of Reply, the result is likely to be heavily skewed in favour of the paying party.

How Can ARC Costs Assist?

ARC Costs are a team of expert Costs Draftsman and Costs Lawyers. We can assist with drafting the Bill of Costs and in conducting costs proceedings from beginning to end. We hold vast experience in preparing both Points of Dispute for the paying party and Replies to the Points of Dispute for the receiving party. We can assist in negotiations, and if no agreement can be reached, we have experienced Costs Lawyers who can attend the detailed assessment hearing on your behalf to ensure maximum recovery of your costs. If you have any queries or require our assistance, please contact us on 01204 397302, or email us at info@arccosts.co.uk.

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