CPR PD 47 Para 8.2 | Costs Judge's "Hands Tied" By Non-Compliant Points Of Dispute

Generic points of dispute that fail to identify specific grounds for challenging individual bill items may prevent a costs judge from making reductions, even where the judge considers reductions warranted. Compliance with CPR PD 47 para 8.2 remains essential.

CPR PD 47 para 8.2 points of dispute compliance detailed assessment

AEREAL BANK AG V LUMINEAU & SCHNEIDER [2025] EWHC 3299 (SCCO)

In Aareal Bank AG v Lumineau & Anor [2025] EWHC 3299 (SCCO), Deputy Costs Judge Lightman conducted a detailed assessment of costs. On solicitors’ hourly rates, the judge found the case sufficiently unusual to justify modest departures from the London 2 guideline rates, allowing £410 for a partner (claimed £433.50; guideline £398) and £275 for an associate. On leading counsel, prior involvement justified his instruction, but not his full rates throughout; specific items were reduced to junior counsel levels. The paying party’s points of dispute failed to comply with CPR PD 47 para 8.2 as interpreted in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178: while general points were identified, no concise grounds were stated for individual items. The judge, expressing frustration that his “hands are tied”, allowed several challenged items in full, including junior counsel’s reading-in fees and solicitors’ hearing attendance.
Link to judgment on Bailii

They do not actually say anything about reading in, and it should have been obvious that the fee notes and the bill were indicating that this junior counsel was reading in... This should have been picked up in the points of dispute, and it was not, and it is left open now. We are going into the realms as I have said already today, I am not supposed to go into. I am not supposed to put in the point that should be made, the specific point as opposed to the general generic point... Ainsworth is crystal clear on this and he knows, and everyone else knows that I am not happy on this... I am afraid I repeat, my hands are tied. I do not like it. However, I feel it is incumbent on me to allow item 15 in full and item 16 in full.

Citations

Samsung Electronics Co. Ltd & Ors v LG Display Co Ltd & Anor [2022] EWCA Civ 423 A clear and compelling justification was required for hourly rates that exceeded SCCO guideline rates, with caution advised when departing from those guidelines. Coram v DR Dunthorn & Son Ltd [2024] EWHC 672 (KB) The involvement of leading counsel was considered an extravagance not recoverable on a standard basis where the complexity of the application did not justify it. Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 The Court of Appeal upheld that points of dispute must specify both the general principles and specific reasons for disputing particular items, enabling the receiving party to respond substantively.  
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Key Points

  • The instruction of leading counsel may be reasonable where counsel has substantial prior involvement in the matter, even if the application itself might otherwise have been capable of being handled by a less senior advocate. Continuity and accumulated knowledge are legitimate factors supporting recovery.

  • A conclusion that leading counsel was reasonably instructed does not require the court to accept that leading counsel’s rate was justified throughout. However, the court will assess this on a granular basis, rather than disallowing the instruction wholesale.

  • Where both leading and junior counsel are instructed, the court will scrutinise whether their respective roles were justified, but will recognise situations where junior counsel’s involvement was appropriate to ensure continuity, cover absences, or assist with preparation under time pressure.

  • Deficiencies in the paying party’s Points of Dispute can materially protect a receiving party’s recovery. Generic objections that fail to engage with individual items may leave the court constrained from making reductions, even where the judge has reservations.

  • The court will not reconstruct or improve defective objections for the paying party. If item-specific challenges are not properly articulated in the Points of Dispute, the receiving party is entitled to rely on that failure and recover costs that might otherwise have been vulnerable.

"It is clear to me that Mr Fisher has been involved in this matter in the past. It is not unreasonable, I make it quite clear, that if someone has been involved in this case, with all the knowledge, to go to him straightaway. Whether he should be charging leading counsel's rates or a lower rate because of his previous involvement is another matter. It is not unusual if someone has been involved in the case, and during the course of that time involved in that case, he is promoted to leading counsel... Leading counsel, as I have said, Mr Fisher was involved in the case, certainly up to several years ago, and I think I am right in saying before he was made a leader in 2020, if my memory serves me right, and he continued with the case. We therefore have that situation."

Key Findings In The Case

  • The judge found that the case was sufficiently unusual and complex to justify a modest uplift above the SCCO guideline hourly rates, particularly for partner-level time, departing cautiously from the standard rates but stopping short of allowing all claimed amounts in full [8–9].
  • The instruction of leading counsel (Mr Fisher) was held to be reasonable due to his prior involvement in the matter and expertise in insolvency, but the judge concluded that continuing to use leading counsel at full rates throughout the proceedings was not proportionate given the specific nature and complexity of the case [11, 30–31].
  • The concurrent instruction of leading and junior counsel was found not to be wholly unreasonable, especially since junior counsel was engaged partly due to leading counsel’s temporary unavailability. However, the court reduced recoverable fees to approximate what would have been reasonable for a single appropriate-level advocate to undertake the work, thereby avoiding duplication [32, 40–42].
  • The paying party’s Points of Dispute were found to be non-compliant with CPR PD 47 paragraph 8.2 in several respects. Specifically, they did not link general principles to the individual items challenged, nor did they specify whether alleged costs were unreasonable or unnecessary, resulting in the disallowance of certain objections on procedural grounds [21–23, 26, 36–37].
  • The judge confirmed that item-level reductions for counsel’s fees could be made in the detailed assessment, but final consideration of proportionality under the standard basis would be reserved until the conclusion of that process, consistent with CPR requirements to assess overall reasonableness and proportionality of the costs [6, 31].

"In my day, and we are going back three decades, back into the last century, it was not unusual for leading counsel to say, 'I will charge for the first year at a senior-junior counsel's rate, but after that, if I continue to be instructed, I would be expected to be paid at my leading counsel rate.' That is not unusual. That has been the position, as I understand it, since I started doing taxations, as they were, over 51 years ago."

The Senior Courts Costs Office’s decision in Aareal Bank AG v Lumineau [2025] EWHC 3299 (SCCO) demonstrates the practical consequences of Ainsworth-non-compliant points of dispute and provides guidance on hourly rates above guidelines and leading counsel instruction where prior involvement exists.

Background

This was a detailed assessment of costs before Deputy Costs Judge Lightman, delivered as an approved transcript. The receiving party, Aareal Bank AG, was a third party in the underlying litigation who was awarded its costs by order dated 12 September 2024 [§3]. The underlying proceedings concerned an application by the paying parties to stay a liquidation and bring the company back under their control, with a later change of position seeking the removal of directors [§19, §30]. The proceedings took place over a relatively short but intense period between June and September 2024 [§2]. The detailed assessment concerned a bill of costs submitted by Aareal, against which the paying parties, Emmanuel Lumineau and Thomas Schneider, served points of dispute. The central matters in dispute related to the level of solicitors’ hourly rates, the instruction and fees of leading counsel, and the adequacy of the paying party’s points of dispute.

Costs Issues Before the Court

The court was required to determine three principal costs issues. First, whether the hourly rates claimed by the receiving party’s solicitors were reasonable, given that some exceeded the applicable guideline rates for London 2 (Grade A £398, Grade B £308, Grade C £260, Grade D £148 from 1 January 2024) [§2]. Second, whether it was reasonable and proportionate for the receiving party to have instructed leading counsel for the application and, if so, whether the level of his fees and the work done in conjunction with junior counsel were recoverable. Third, whether the paying party’s points of dispute complied with the requirements of CPR Practice Direction 47, paragraph 8.2, and the consequences of any non-compliance, particularly in light of the Court of Appeal decision in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178.

The Parties’ Positions

The paying party contended that the solicitors’ hourly rates should be reduced to the SCCO guideline rates for London 2 effective from 1 January 2024. They relied on the principle from Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466 that a “clear and compelling justification” is needed to exceed guideline rates [§4]. On counsel’s fees, the paying party argued that instructing counsel at all was unnecessary, as a senior fee earner should have been capable of handling the work [§13]. In the alternative, they submitted that the instruction of leading counsel was an extravagance, relying on the decision in Coram v DR Dunthorn & Son Ltd [2024] EWHC 672 (KB), which the judge noted was a fact-specific decision [§15, §20]. They also challenged numerous specific items of counsel’s work and associated solicitor time.

The receiving party argued that the complexity and importance of the matter, including insolvency issues and urgent interim applications, justified rates above the guidelines [§19]. Regarding counsel, they submitted that the instruction of leading counsel was necessary due to the case’s complexity and his prior involvement in the matter dating back several years before his appointment as KC in 2020 [§11–12, §17]. They defended the concurrent instruction of junior counsel as a proportionate measure to cover whilst leading counsel was on holiday and to assist in the preparation of the skeleton argument [§31, §34]. In response to the points of dispute, the receiving party argued that they failed to comply with CPR PD 47, paragraph 8.2, as interpreted in Ainsworth, because they did not state concisely the nature and grounds of dispute for individual items, instead relying on generic objections [§21–26]. They argued that the points of dispute were non-compliant with PD 47 and should be struck out; however, the judge did not formally strike them out and instead assessed the items within the constraints identified in Ainsworth [§30, §37].

The Court’s Decision

On the issue of solicitors’ hourly rates, the judge acknowledged his general reluctance to depart from the guidelines but found the case to be “unusual” and of sufficient complexity to justify a modest uplift [§8]. He stated that he had “seen enough to say to anyone that this is an unusual case”, warranting a modest departure, without expressly endorsing all aspects of the receiving party’s characterisation of the case’s complexity [§8]. He did not, however, allow the full rates claimed. He reduced a claimed partner rate of £433.50 to £410 (against a guideline of £398) [§9]. For the associate rate claimed at £306, he allowed £275 [§9]. Other rates at or below the guidelines were left undisturbed.

Concerning the instruction of leading counsel, the judge found it was not unreasonable to instruct Mr Fisher, given his significant prior involvement in the matter dating back several years and predating his appointment as KC in 2020 [§11–12, §17]. The judge noted that it was “not unreasonable at all to instruct Mr Fisher, who had previous experience of this case” [§12]. This represents an important distinction from the scenario in Coram, where leading counsel was newly instructed; the judge treated Coram as a fact-specific decision of no direct application [§20]. However, he questioned whether the matter was sufficiently complex to justify leading counsel charging leading counsel’s rates throughout the whole period, stating that he was “not convinced” on this point [§31]. The judge therefore approached the specific items of counsel’s work on the basis that while leading counsel’s involvement was reasonable, his fees should be moderated to reflect a more junior level for much of the work. He reduced a number of leading counsel items on an item-by-item basis, often by reference to a junior counsel rate: item 49 was reduced from £2,550 to £1,125 [§41]; item 51 from £1,195 to £862.50 [§42]; and item 53 to £1,275 [§42]. Items solely relating to junior counsel’s reading in (items 15 and 16) and initial advice (item 17) were allowed in full, as the points of dispute did not adequately challenge them on an item-by-item basis [§37–38].

On the procedural issue, the judge applied the Ainsworth principles. He held that the paying party’s points of dispute, while identifying a general point of principle (satisfying CPR PD 47 para 8.2(a)), failed to “state concisely the nature and grounds of dispute” for individual items as required by CPR PD 47 para 8.2(b) [§23, §29]. The generic objection to counsel’s fees did not specify why each challenged item was unreasonable. The judge’s frustration with the outcome was palpable: he stated that his “hands are tied” and that he “do[es] not like it” [§37]. As a matter of principle, he refused to entertain reductions based on these non-compliant objections for several items, including approximately three hours of solicitors’ attendance at the hearing [§44]. This procedural failure prevented the paying party from advancing item-specific challenges in respect of a number of entries.

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AEREAL BANK AG V LUMINEAU & SCHNEIDER [2025] EWHC 3299 (SCCO) | DEPUTY COSTS JUDGE LIGHTMAN | SAMSUNG V LG | CORAM V D R DUNTHORN & SON LTD | AINSWORTH | CPR 47 PRACTICE DIRECTION 8.2 | GUIDELINE HOURLY RATES | SCCO GUIDELINE RATES | CENTRAL LONDON RATES | LONDON 1 RATES | LONDON 2 RATES | GRADE A RATE | GRADE B RATE | GRADE C RATE | GRADE D RATE | PROPORTIONALITY | REASONABLENESS | INSTRUCTION OF LEADING COUNSEL | SENIOR-JUNIOR COUNSEL RATE | PRECEDENT G | POINTS OF DISPUTE | STRIKING OUT POINTS OF DISPUTE | INADEQUATE PARTICULARISATION | FAILURE TO COMPLY WITH PRACTICE DIRECTION | LEGITIMACY OF COUNSEL’S INVOLVEMENT | SKELETON ARGUMENT COSTS | DUPLICATION OF COUNSEL FEES | HISTORIC INVOLVEMENT OF COUNSEL | UNUSUAL LITIGATION COMPLEXITY | DEPARTURE FROM GUIDELINE RATES | INSOLVENCY SPECIALISM | COSTS ON STANDARD BASIS | COSTS ON DETAILED ASSESSMENT | COMMUNICATIONS WORK CHALLENGED | RATE REDUCTION FOR EXCESSIVE HOURLY RATE | JUSTIFICATION FOR INSTRUCTING COUNSEL | HOLIDAY COVER BY JUNIOR COUNSEL | RATE ADJUSTMENT FOR PARTNER FEES | ITEMISED ASSESSMENT OF FEE NOTES | COMPLEXITY AND IMPORTANCE OF CASE | SURPLUS IN LITIGATION | COSTS ARISING FROM CHANGE OF POSITION | WORKING TOWARDS TIGHT DEADLINES | DUPLICATIVE WORK BETWEEN COUNSEL | SEPARATION OF COMMERCIAL AND INSOLVENCY ISSUES | STRONG JUDICIAL CRITICISM OF GENERIC OBJECTIONS | CO-COUNSEL INSTRUCTED WITHOUT CLEAR JUSTIFICATION | COSTS OF ATTENDANCE BEHIND COUNSEL.