The Court of Appeal (Civil Division)’s decision in Ward v Rai [2026] EWCA Civ 816 restores a Costs Judge’s refusal to strike out non-compliant Points of Dispute and warns paying parties that paragraph 8.2 of PD 47 requires an Ainsworth compliant approach.
Background
Ward v Rai arose from a road traffic accident on 18 September 2019. Mr Paul Ward brought proceedings against Mr Gagandeep Rai, who admitted liability subject to issues of causation and quantum. The underlying claim settled in January 2023 by acceptance of a Part 36 offer in the sum of £546,984.
Detailed assessment proceedings were commenced by the claimant on 3 August 2023. Item 39 of the bill of costs claimed 134.1 hours for work done on documents, supported by a 24-page schedule, at a cost of £38,819.50 plus VAT. Of that time, 126.7 hours were attributed to a Grade A fee earner, with the balance at Grade D. Work on documents represented approximately half of the total profit costs claimed. The total bill, including counsel’s fees and disbursements, came to £129,196.50 including VAT.
The defendant served points of dispute on 30 August 2023. Point 23 of those points of dispute challenged item 39, raising a series of general criticisms about the document time claimed and indicating that the defendant would rely on an annotated documents schedule to support those challenges. No such schedule was served at that stage. The claimant replied on 4 January 2024, taking issue with the adequacy of Point 23 and relying on Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 in support of an argument that the point lacked the specificity required by paragraph 8.2(b) of Practice Direction 47. The claimant nonetheless responded to the general points raised and indicated a willingness to accept a total of 130 hours.
A two-day detailed assessment hearing was requested on 26 March 2024 and listed for 5 and 6 August 2024. At around 4.45pm on 31 July 2024, after hours in service terms, the defendant filed and served the annotated documents schedule that had been referenced in Point 23. This was the first time individual items in dispute were identified. The schedule offered 58.5 hours as a primary case and 58.8 hours as a fallback, divided into eight categories that did not correspond to the eight points listed in Point 23.
At the hearing, Point 23 was not reached until the latter part of the second day. The claimant applied to Deputy Costs Judge Friston to strike out Point 23 as non-compliant with Ainsworth and to refuse permission to rely on the annotated schedule. In an ex tempore judgment, the Costs Judge declined to do either and adjourned the detailed assessment to a third day.
The adjourned hearing took place on 8 November 2024. The Costs Judge conducted a line-by-line assessment of approximately 10% of the entries in the documents schedule, with the remainder assessed on a broadbrush basis agreed by the parties. The bill was assessed in the sum of £89,032.62 plus interest. On costs of the assessment itself, the outcome was affected by a Part 36 offer made by the defendant. The claimant had offered to settle costs at £105,000 and the defendant had offered £100,000. The assessed figure fell below the defendant’s offer, with the result that the defendant was ordered to pay the claimant’s costs of the detailed assessment up to 3 July 2024, and the claimant was ordered to pay the defendant’s costs thereafter. However, the defendant’s costs were to exclude time spent on 6 August 2024 dealing with the annotated documents schedule, on the basis that part of that afternoon had been wasted. The narrow gap between the offers may provide some explanation for what might otherwise seem an uneconomic appeal.
The claimant appealed to the High Court on five grounds. Mrs Justice Hill, sitting with Costs Judge Leonard, rejected each of the individual grounds but allowed the appeal on the basis of what she described as a residual, overarching argument: that the Costs Judge’s approach was wrong and failed to give proper effect to paragraphs 8.2(b) and 13.10(2) of PD 47. The Judge set aside the order made at the adjourned hearing, struck out Point 23, and refused permission to rely on the annotated documents schedule. The matter was remitted to the Costs Judge to determine consequential issues, including proportionality.
The defendant appealed to the Court of Appeal. Permission was granted by Lewison LJ, who noted the unusual nature of the case and observed that it was well arguable that the Judge had simply disagreed with the Costs Judge, notwithstanding her acknowledgment of the limited bases on which a case management decision can be disturbed on appeal. The Court of Appeal heard the appeal on 17 June 2026 and handed down judgment on 2 July 2026. A Respondent’s Notice contended that, in deciding whether to admit variations to points of dispute, the court should first categorise whether the variation was curative of non-compliance or augmentative.
The Costs Judge’s Decision
The Costs Judge recorded that the parties had been in negotiations around the time the notice of hearing had been sent in May 2024, such that there was a real likelihood of settlement. He noted confusion about bundles and observed that the annotated schedule went beyond the general points raised in the points of dispute, or at least provided significantly greater detail.
The Costs Judge summarised the test approved in Ainsworth as being whether there was sufficient particularity in the points of dispute for the proceedings to proceed fairly. He gave two reasons not to strike out Point 23. First, the original points of dispute would have allowed a fairly broad-brush assessment in any event and would have allowed the claimant to have known the case being made against him and to have responded to it. Secondly, and perhaps more importantly, both parties knew that there should have been a further document. The defendant had taken no steps to provide it until very close to the hearing, but the claimant had also done nothing to chase it. Thus both parties were significantly at fault for having failed to comply with the overriding objective and to assist the court by getting their act together earlier.
The Costs Judge then turned to whether to permit reliance on the annotated schedule, a question he said he had not found easy. While unacceptably late, it was not an ambush: it had been mentioned at the start and both parties were at fault for not ensuring that it was available on a timely basis. There was merit in the argument that the types of points raised would be fairly obvious to a costs practitioner, and indeed many of the points had been anticipated by the claimant. However, the assessment had also been unusual in considering items on a line-by-line basis, which gave rise to concern as to the impact of the delay.
The Costs Judge considered that paragraph 13.10 of PD 47 gave him very wide powers. He took the view that an adjournment was inevitable. It would be unfair to require the claimant to proceed on the basis that he had to respond to the annotated schedule, and even without it the claimant would still be in difficulty, without at least a breakdown from the defendant of which items were referred to in the categories in the points of dispute. Given the inevitability of an adjournment, the Costs Judge concluded that, on balance, the court would be assisted by having the annotated schedule available. Thus, and very reluctantly, the defendant would be permitted to rely on it, and an adjournment would be ordered subject to costs sanctions which would be imposed at the end of the process.
The High Court’s Decision
The Judge sat with Costs Judge Leonard. There were five grounds of appeal, namely that the Costs Judge: (1) did not give proper effect to paragraph 8.2(b) of PD 47 and wrongly applied Ainsworth; (2) wrongly concluded that a broad brush assessment was possible without the annotated schedule; (3) failed to give proper effect to CPR 1.3 (the duty of parties to help the court to further the overriding objective), misapplying Barton v Wright Hassall LLP [2018] UKSC 12; (4) wrongly allowed reliance on the annotated schedule; and (5) failed to give proper effect to paragraph 13.10 of PD 47. The first three grounds related to the refusal to strike out Point 23 and the last two related to permission to rely on the annotated schedule.
The Judge reminded herself of the basis on which an exercise of discretion may be disturbed on appeal. On ground 1, she concluded that Point 23 did not comply with paragraph 8.2(b) of PD 47 or Ainsworth. It made general assertions and failed to identify specific items in dispute or why they were disputed. However, that was insufficient because the Costs Judge had not found that Point 23 was compliant, and the question whether to strike out was a discretionary one linked to the question of whether reliance on the annotated schedule should be allowed.
Ground 2 related to the Costs Judge’s comment that a fairly broad-brush assessment would have been possible without the annotated schedule. The Judge rejected the challenge to that point, noting that the Costs Judge had recognised that it was the parties’ right to descend into further detail. Rather, the Costs Judge was saying that there was enough in Point 23 to gain a broad understanding of the challenge. This was clear from the content of the reply, the preparation of Bundle 2 and the broadbrush approach ultimately taken at the final hearing on 8 November 2024. Ground 2 was therefore dismissed.
The Judge also dismissed ground 3, which challenged the Costs Judge’s criticism of the claimant for not chasing the annotated schedule, on the basis that the challenge related to an argument that had not been raised with the Costs Judge at the relevant time. Ground 4 was dismissed for the same reason.
As to ground 5, the authorities did not support the criticism made of the Costs Judge’s comment that his powers under paragraph 13.10 were very wide, such that this aspect of ground 5 failed.
The Judge then went on to consider what she described as the residual, overarching argument from grounds 1 and 5, to the effect that the Costs Judge’s approach was wrong and failed to give effect to paragraphs 8.2(b) and 13.10(2) of PD 47. She accepted the argument by the claimant that the adjournment was necessitated by the defendant’s conduct with regard to Point 23 and the late annotated schedule. If Point 23 had been struck out then the assessment would have concluded on 6 August 2024, without the need for an adjournment. Any issues with the bundles also related to Point 23. The defendant had been on notice since January 2024 that Point 23 was not compliant and had taken no steps to remedy that until two working days before the hearing. The reason given for not serving the schedule, namely a hope to achieve settlement, was circular because a detailed understanding would facilitate settlement. The costs and delay caused by a third day were not consistent with the overriding objective, and the unfairness to the defendant resulting from striking out was of his own making. The Judge stated that she was very conscious of the limited role of an appellant court considering an appeal against a discretionary case management decision, but nonetheless concluded that the decision not to strike out Point 23 and to allow reliance on the annotated schedule was wrong. The Costs Judge had erred in principle by failing to give sufficient weight to the requirements of paragraph 8.2(b) and Ainsworth, and failing to ensure that the power in paragraph 13.10(2) was exercised in accordance with the overriding objective.
The Court of Appeal’s Decision
Lady Justice Falk, with whom Lord Justice Jeremy Baker and Lord Justice Foxton agreed, allowed the appeal and restored the Costs Judge’s decision.
The Court of Appeal emphasised that this was a second appeal against a case management decision. It is well-established that appellate courts should not interfere with such decisions simply because they disagree with them or otherwise consider that they would have taken a different course. Rather, as Lewison LJ reiterated in Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743, case management decisions are discretionary decisions that often involve an attempt to find the least worst solution where parties have diametrically opposed interests. The discretion involved is entrusted to the first instance judge. An appellate court does not exercise the discretion for itself. It can interfere with the exercise of the discretion by a first instance judge where he has misdirected himself in law, has failed to take relevant factors into account, has taken into account irrelevant factors or has come to a decision that is plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree. The essential question is whether the decision could properly have been made.
The Judge had carefully directed herself as to these principles and reminded herself of them again later in her judgment. However, the Court of Appeal concluded that her decision nonetheless strayed beyond the limits set by them. Despite the efforts of counsel for the claimant to persuade the court otherwise, the Costs Judge’s decision disclosed no error of principle or failure to take relevant matters into account, and did not otherwise fall outside the ambit of his discretion. It should therefore not have been set aside.
Preliminary Observations
The Court of Appeal made a number of preliminary observations. First, one of the reasons why appellate courts must exercise caution when reviewing case management decisions is that it is impossible to recreate the situation before the judge. On an appeal against a case management decision an appellate court is simply not in the same position as the judge. It will not have the same perspective of the circumstances as they appeared to the judge on the ground at the time, it risks being influenced by hindsight, and it also risks being influenced by arguments that were simply not made or at least were not developed before the judge, and which have benefited from a lengthy period of gestation.
Secondly, case management decisions are frequently made under significant pressure. This case provided an excellent example. The Costs Judge had little option but to make an immediate decision at the end of the second day, with an unreserved judgment, because he had to decide whether to complete the assessment on that day or to adjourn.
Thirdly, an ex tempore judgment is just that, unreserved and lacking in the preparation that would go into a reserved judgment. It should be read as a whole, with those points and the circumstances in which it was delivered in mind, rather than picked apart in minute detail.
Fourthly, the points that had arisen in this case included an alleged lack of reasoning on the part of the Costs Judge, as well as some confusion caused by what appeared to have been a mis-recollection on his part at the adjourned hearing as to precisely what his reasoning had been at the earlier hearing. The Court of Appeal reminded the parties of what Munby LJ said in In re A (Children) [2011] EWCA Civ 1205: it is the responsibility of the advocate, whether or not invited to do so by the judge, to raise with the judge and draw to his attention any material omission in the judgment, any genuine query or ambiguity which arises on the judgment, and any perceived lack of reasons or other perceived deficiency in the judge’s reasoning process. In this case the claimant’s failure to do so was all the more marked by the fact that, by the date of the adjourned hearing on 8 November, his legal team had obtained a transcript of the judgment under appeal, but had neither shared it with the defendant nor provided a final version to the Costs Judge. Further, no permission to appeal against the decision on 6 August was sought at any stage from the Costs Judge, which might also have provided an opportunity for clarification, and (relying on CPR 47.14(7)) no appeal was filed in the High Court until after the November hearing.
Finally, the Court of Appeal observed that it does no credit to the justice system for there to be appeals on case management issues which do not, on analysis, raise material points of principle and the cost implications of which must risk outweighing the sums at stake. This reinforces the importance of parties seeking clarification, and where appropriate, reconsideration by the first instance judge. An appeal should be a last resort. This is quite apart from the fact that the very narrow gap between the final Part 36 offers should have given serious pause for thought before embarking on the hearing in the first place.
The Arguments on Appeal
Turning to the arguments on appeal, the focus had to be on the judgment of the Costs Judge, because the question was whether he was entitled to make the decision that he did.
Counsel for the claimant submitted that the Costs Judge had erred in principle by treating the decision-making process as a singular exercise of discretion. What he should have done was, first, decide whether the original points of dispute were Ainsworth compliant, such that they met the requirements of paragraph 8.2 of PD 47. That was a binary question, as demonstrated by O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB). The correct answer to that was that they were not compliant, such that the annotated schedule, which was served very late, was curative rather than augmentative. Secondly, if they were not compliant, the Costs Judge had to decide what to do, both in relation to the points of dispute and the annotated schedule. That second stage was a discretionary decision but, importantly, the fact that the points of dispute had been found to be non-compliant informed how the discretion should be exercised, as did the reasons for the breach, the length of time that had elapsed before an attempt was made to cure it and the proximity of that attempt to the hearing.
The Court of Appeal did not accept that the Costs Judge erred in principle. Although counsel for the claimant sought to argue that he did not conclude that Point 23 was non-compliant, it was sufficiently clear that he proceeded on that basis, as indeed the Judge had also concluded. Most obviously, no question of strike-out would have arisen if Point 23 was compliant. Point 23 was obviously incomplete because it referred to a non-existent annotated schedule. The Costs Judge agreed that Ainsworth applied despite it being a solicitor and client case, and while he observed that the original points of dispute would have allowed for a fairly broad-brush assessment, he made it clear elsewhere in his judgment that it was up to the parties whether they wished to proceed on a more detailed basis (as, the Court of Appeal added, the cross-reference to a schedule indicated that the defendant wished to do). The Costs Judge proceeded to give reasons why he should not strike out Point 23, clearly implying that he considered that he had power to do so.
Further, it was unrealistic to suggest that the Costs Judge did not have the non-compliance in mind, together with the other factors relied on by counsel for the claimant, in making his decisions in respect of Point 23 and the annotated schedule. He referred to the schedule being served at an extremely late stage, leading to not a happy state of affairs, the claimant having already prepared and put together bundles on a different basis. During the course of argument, the Costs Judge asked for an explanation for the delay, and was provided with one by counsel for the defendant, namely that the parties were in discussion and it was hoped that a hearing could be avoided.
The Costs Judge must be taken to have had that explanation in mind when he made his decision very shortly afterwards. Its absence from the judgment was a point that should most appropriately have been raised with the judge at the time. Further, although counsel for the claimant criticised that explanation by arguing that the negotiations referred to were negotiations at a later stage, once the hearing date was fixed, that was far from obvious from what was available to the court. Rather, the available chronology was consistent with a more continual process of discussion, as one would expect. And an attempt to rely on an indication in the first appeal hearing that the schedule may also have been overlooked by the defendant’s solicitor suffered from the defect that there was no indication that that point was made to the Costs Judge. In any event, that would not exonerate the claimant from blame for failure to chase it.
The Judge had suggested that the explanation given to the Costs Judge was circular, because settlement would have been much more likely if the annotated schedule was available, such that the claimant understood the case against him in detail. The Court of Appeal was not convinced by that. If it was likely to make a real difference to the discussions, it would surely have been chased for or supplied much earlier. The Costs Judge’s observations about both parties being at fault and the nature of the points raised were relevant in this context.
The Court of Appeal clarified that what it had said about the explanation for the delay should not be read as endorsing it as an acceptable excuse for non-compliance. It was not a good excuse, but it was a relevant part of the circumstances that the explanation was not of an egregious nature. There was no indication of, for example, a tactical move designed to wrongfoot the claimant, which would be a strong factor against allowing relief.
Counsel for the claimant further submitted that the Costs Judge had failed to have regard to the overriding objective, including the changes made to it in 2013 when proportionality of expense and the importance of compliance with rules were prioritised. She relied on two cases relating to late amendments to statements of case under Part 17, Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) and CIP Properties (AIPT) Ltd v Galliford Try [2015] EWHC 1345 (TCC). These paragraphs recognise the significance of the new, much stricter, approach, such that it is now more readily recognised that costs sanctions for late amendments may not be adequate, and indulgence of failures to comply with procedural obligations can no longer be expected.
Counsel for the claimant submitted that the same principles should be applied to Part 47. Compliance with paragraph 8.2 of PD 47 was of manifest importance. The points of dispute inform the receiving party of the challenges being made and allow a reply to them. This enables the parties and the court to understand the full scope of the dispute, affecting both listing and preparation for the hearing, as well as the parties’ ability properly to make and assess offers.
The Court of Appeal agreed with all of this, but it did not mean that the decision of the Costs Judge was one that he was not entitled to make. The Costs Judge must be taken both to have been aware and to have taken into account the now well-embedded change of culture that followed the 2013 reforms. It is both unrealistic and inappropriate to expect judges to spell out aspects of the overriding objective, in the form that has now been in place for some 13 years, when they make case management decisions, not least because that would lead to a wholly disproportionate exercise in box-ticking.
The gravamen of the claimant’s complaint was that the Costs Judge failed to identify that it was the defendant’s default that had the effect of the hearing going to a third day, which among other things undermined what was intended to be a streamlined process of detailed assessment. As the Judge had observed, that would have been unnecessary if Point 23 had been struck out. But that started from the wrong place. It was uncontroversial that Point 23 would have been compliant if it had been accompanied by the annotated schedule when the points of dispute were first served. It was also apparent that, in that case, a three day hearing would have been required: there was simply insufficient time to deal with all the other matters and a detailed dispute about work on documents in two days. Indeed, the transcript of the hearing on 8 November clearly showed that this was undisputed by counsel for the claimant. So the real question was not whether a third day was required because of the default (because it would have been needed without a default), but what other costs or difficulties arose from the default. Those would have included the fact that the claimant did not have the benefit of the annotated schedule when replying to the points of dispute or when preparing for the hearing (subject of course to the point that it did not chase for the schedule, as it could have done), as well as the inconvenience and some inevitable increase in costs in having a hearing split by an adjournment, rather than being completed over consecutive days.
Potentially, the claimant was also put to a disadvantage in making or assessing offers under Part 36. However, there was more than one answer to that. Most obviously, it would have been a very good reason to chase for the annotated schedule. Alternatively, the claimant could have sought to protect its position in other ways, including through the terms of any Part 36 offer that it made thereafter.
The claimant was not assisted in relation to paragraph 13.10 by the decision in Celtic Bioenergy Ltd v Knowles Ltd [2022] EWHC 1223 (QB). In that case the lower court had refused an application made around a month before the hearing to rely on a supplemental point of dispute in relation to whether the claimant’s conditional fee agreement complied with the indemnity principle. In the course of her judgment dismissing the defendant’s appeal against the decision of Master Campbell, Foster J rejected the proposition that there was any presumption that documents will be accepted however late they are and however many new points they raise, observing that the rules confer a wide discretion to make a decision in accordance with the overriding objective and it cannot be gainsaid that there will come a time when a document will be just too late. The Court of Appeal agreed, but nothing here indicated a restriction on the scope of the discretion, rather the reverse. The point being made was that the Master was entitled to decide as he had, not that he was obliged to do so.
While it would clearly have been open to the Costs Judge to strike out Point 23 and not permit reliance on the annotated schedule, and another judge might have taken that course, he was not obliged to do so. It was open to him to impose a costs sanction instead, as he made clear that he would. As it turned out, the costs sanction actually imposed at the 8 November hearing was very limited, but there was no appeal against that decision.
The Judge’s criticisms of the Costs Judge’s decision proceeded on the basis that the adjournment was necessitated by the late schedule. The Court of Appeal had already addressed that. Beyond that, the primary objections were that insufficient weight was attributed to the importance of compliance with paragraph 8.2(b) and Ainsworth, and that the Costs Judge failed to exercise the power in paragraph 13.10(2) in accordance with the overriding objective. However, questions of weight are pre-eminently ones for the first instance judge, and for the reasons already given the Court of Appeal was not persuaded that the Costs Judge failed to have proper regard to the overriding objective.
Concluding Remarks
The Court of Appeal allowed the appeal and restored the decision of the Costs Judge. It emphasised, however, that this was on the basis that this was a decision that the Costs Judge was entitled to make within the generous ambit of his discretion. It was neither the only decision he could make, nor was it one with which other judges would necessarily agree.
Paying parties should be under no illusion that paragraph 8.2 of PD 47 requires an Ainsworth compliant approach. They should not assume that a lenient approach will be taken if they take a similar approach to the defendant in this case. Those who do not comply on a timely basis risk non-compliant elements of their points of dispute being struck out or, as a minimum, cost sanctions. Similarly, late variations by either party under paragraph 13.10 of PD 47 risk being disallowed or permitted only on conditions, including as to costs.
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