Ainsworth Applies To Inter Partes Detailed Assessments, Samsung Does Not

Lauren Wazen v Dr Nasir Khan involved a clinical negligence claim brought by Ms Wazen against Dr Khan. The case arose from alleged negligent medical treatment provided by Dr Khan to Ms Wazen. A second defendant was also initially involved in the claim, but no costs were ultimately sought against them.

Chronology of relevant events:

• Ms Wazen brought a clinical negligence claim against Dr Khan and a second defendant, alleging negligent medical treatment.
• Expert evidence was obtained on the issues of breach of duty and causation of injury. Six experts were instructed in total.
• The claim was of considerable significance to Ms Wazen, as the negligent treatment could have been fatal. Damages were agreed at £300,000.
• The claimant’s bill of costs claimed profit costs of £187,000.
• In the defendant’s points of dispute, challenges were made to the time claimed for disclosure and ADR phases, as well as an argument that there should be a 10% reduction to the assessed costs to reflect costs incurred against the second defendant.
• A preliminary issue arose as to whether points of dispute challenging time for disclosure and ADR phases complied with the rules as explained in Ainsworth v Stewarts Law LLP.

The points under challenge were, under POD3:

First of all disclosure:

 “The items attributed to the disclosure phases are individually and/or collectively excessive. They total 96.3 hours and they have claimed a total base profit costs of £18,513.00. They claim did not reach the procedural disclosure stage. This time represents internal identification and analysis of the medical and employment records only. The first defendant offers 35 hours at guideline rates.”

The next challenge is entitled “Settlement Negotiations”:

“The items attributed to the ADR settlement phase are individually and/or collectively excessive. They total 39.1 hours and they claim a total base profit costs of £14,250.50. However, much of the work on settlement was actually done by counsel, whose fees for the same phase are £3,354.16 plus VAT. The first defendant offers 20 hours at guideline rates.”

A third challenge to the bill drafting Point of Dispute fell away.

The Defendant also sought a 10% reduction to the bill to reflect the fact that:

“There has been no attempt it seems to apportion out the costs to the extent that they were increased by the involvement of the second defendant.”

Issues to be decided by the court:

1. Whether the principles from Ainsworth v Stewarts Law LLP regarding the required level of specificity in points of dispute apply to inter partes detailed assessment proceedings, or only to solicitor-client assessments.
2. If Ainsworth does apply to inter partes assessments, whether the defendant’s points of dispute challenging time claimed for disclosure and ADR phases comply with those requirements or should be struck out.
3. Whether a 10% reduction to the assessed costs should be made to reflect costs incurred in respect of the second defendant, against whom no costs were ultimately sought.
4. The appropriate hourly rates to allow for the claimant’s legal team.
5. The reasonable and proportionate amount of time to allow for certain specific items in the bill relating to bill drafting.

The claimant argued that the defendant’s points of dispute on disclosure and ADR did not comply with Ainsworth and should be struck out.

In particular:

1. Lack of specificity in identifying challenged items:

• • The points of dispute did not identify the specific item numbers or use filters to pinpoint which items were being challenged within the disclosure and ADR phases.
  • This left the claimant unable to discern precisely which items were disputed and which documents would need to be produced to justify the time claimed.
  • It also prevented the court from efficiently determining which items were excessive without undertaking an overly onerous and disproportionate exercise.

2. Insufficient detail in the defendant’s proposed reductions:

• • The points of dispute offered an arbitrary 35 hours for disclosure and 20 hours for ADR, without breaking down the proposed allowances between different fee earners.
  • This made it difficult for the claimant and the court to assess the reasonableness of the defendant’s position, as the appropriate time would likely vary depending on the seniority of the fee earner.

The claimant also opposed any reduction for the second defendant or departure from the claimed hourly rates.

The defendant argued that Ainsworth only applies to solicitor-client assessments, not inter partes. If it does apply, the defendant contended its points of dispute were compliant in any event. The defendant sought a 10% reduction for costs incurred against the second defendant, and also challenged the hourly rates and time claimed for bill drafting.

In a detailed judgment, Deputy Costs Judge Roy KC ruled:

• The Ainsworth principles apply to both inter partes and solicitor-client detailed assessments. Less specificity is required for inter partes points of dispute than solicitor-client, but points must still enable the parties and court to determine precisely what is in dispute and why.

“Reverting to the judgment in Ainsworth, paragraph 29 is in my view clearly dealing with the requirement of points of dispute in general, and not just those in solicitor and client assessments. That is obvious because the rules and the practice direction are primarily directed towards inter partes assessments…. [7]

“Paragraph 39 discusses, as Mr Carlisle very correctly points out, particular requirements for solicitor-client assessments with reference to presumptions contained at 46.9(3). However, in my judgment, that in no way dilutes the general guidance and ratio at paragraph 38. Rather it provides secondary ratio as to additional requirements for solicitor-client assessments. These apply in addition to the general requirements which will apply to all points of dispute, be they solicitor-client or inter partes…. [11]

“Mr Carlisle also indicated in his submission that there is limit to the degree of particularity required. He points to the fact that one can plead in points of dispute entirely legitimately general points, such as regards proportionality or disallowance under CPR 44.11, and so forth. That is undoubtedly correct in my view. However, in my view it does not advance Mr Carlisle’s argument.” [17]

“This is because the rules and the practice direction draw a very clear distinction, as does Precedent G, between the general points and specific points. General points, by their nature, are normally not related to specific items and therefore there will be no need to particularise and it will often not be possible to do so. But the requirements for general points and specific items are, in my view, different… [18]

“The final point, and perhaps the one Mr Carlisle places the most weight on, is the practical difficulties a paying party faces when providing particularisation without sight of the underlying file. For reasons I will come back to, I think there is a little in this but it certainly does not, in my view, justify a complete lack of particularity. Indeed, that was made clear by Ainsworth. I say this for the following reasons. [20]

“Firstly, of all these difficulties have always been difficulties in inter partes assessments since time in memorial. They cannot, in my view, change the contents requirements of the rules, as explained by Ainsworth. These restrictions will undoubtedly have been well in the minds of the Rules Committee when they drafted these rules. Also, in my view, it is fanciful to suggest that the Court of Appeal would not have them well in mind when giving the general guidance in Ainsworth. [21]

“Secondly, from experience, both judicially and as an advocate, points of dispute which provide a fair degree of particularity in terms of identifying items under challenge are the norm, certainly post Ainsworth. I do not see how the defendant in this case is in any different or worse a position in terms of providing particularised points of dispute than the vast majority of such defendants. If other defendants can comply, and they clearly can, there is no reason I can see why this defendant should not be able to do so.” [22]

He set out the requirements for Points of Dispute on an inter partes assessment:

1. 1. 1. Firstly, the clear requirements for PODs are as described at paragraph 38 of Ainsworth. That seems to me to be the touchstone. I would say that is aa practical question of fairness and justice.

1. 1. 1. Secondly, how much particularity is required is going to be a case-specific question of fact and degree. Again, this reflects my reading of the thrust of Ainsworth being about the practical effect of any lack of particularity in terms of justice and fairness.

1. 1. 1. Thirdly, following on for that, and for reasons I have already identified, less particularity will almost inevitably be required in inter partes points of dispute than solicitor-client points of dispute.

1. 1. 1. Fourthly, in an inter partes points of dispute the paying party can often do no more than (a) identify which items are prima facie excessive and require the receiving party to justify them,; and (b) identifying as best it can what on the paying party’s case would be a reasonable and proportionate amounts.

1. 1. 1. Fifthly, there is a distinction in my view as to the particularity required between two different things the PODs have to do. First of all they have got to identify what is in dispute. Secondly, they have to identify the nature of the challenge. The second of these logically entails identifying what is being conceded or offered.

1. 1. 1. As to the first requirement, in my view that will require identifying, by reference to item numbers and/or filtering in an electronic bill, which items are under challenge. The second requirement, in my view, can be rather more broad brush. The paying party is entitled to go to say in terms, “We offer x at grade A and y at grade D”, or whatever the case may be. It does not have to, at that stage, specify precisely which items are being allowed on its case and to what extent. In many cases it will not be practical to do so. For example it might be said there is duplication, in which case there is no hard and fast formula and we just have to take the two duplicate items together and say allow x for both of them, partial duplication.

1. 1. 1. Sixthly, when identifying which items are under challenge, I fully accept that a degree of grouping or clumping together of items under challenge is acceptable. Again, that is clear from Precedent G itself. However, there are limits to quite how broad that type of grouping can be if it is not to fall foul of the touchstone requirements identified in paragraph 38 of Ainsworth. Again, the level of particularity required is going to be a case-specific question of fact and degree.

Applying these principles to POD3 he concluded:

The Judge went on to consider the 10% reduction sought, rejecting the same.

“In my view, the asserted 10 per cent reduction is not properly founded. Its basis is not properly articulated in the point of dispute. It is just too general and broad brush. It is invited me to make an arbitrary reduction, I have no proper, principled, empirical or logical basis to do that. It would involve a risk of double jeopardy, given that some apportionment has been applied already. Again, there needs to be more particularity to be identified which items are said should have been apportioned and have not been, or should have been apportioned differently. [50]

“I recognise and sympathise with the difficulty a paying party has on this issue, which is maybe even more acute in relation to generic challenges. Again, however, rules prescribe the requirements. It is not an unusual point to crop up and paying parties do deal with it. It would have been open to the paying party for example to raise Part 18 questions as to how the apportionment exercise has been carried out, and so forth. That either would have provided more detail, enabling further particularity in the points of dispute, enabling a challenge to be made or, if the responses by the claimant have not been satisfactory, adverse inferences could have been drawn, bearing in mind where the benefit of the doubt and the burden of proof lies. [51]

“But I am afraid, even making every possible allowance, it is just too broad brush. Again, it is more of a summary assessment submission than a proper point of dispute for detailed assessment.” [52]

He then dealt with hourly rates. Firstly, addressing a common objection based on the Court of Appeal decision in Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor (Costs) [2022] EWCA Civ 466:

He ultimately allowed uplifts for the Grade A fee earner to £400 (from £373), for Grade B to £340 (from £289), and for Grade C to a blended rate of £265 (from £244), having regard to the value, complexity and importance of the case. No increase was allowed for Grade D.

The time claimed for bill drafting by the Grade C (27 hours) and Grade B (2 hours) was allowed as reasonable.

The use of Grade A (who did not have day to day conduct of the case) was not justified for signing the bill.

The reasonable costs of assessment were summarily assessed at £12,000 plus VAT and the court fee.

The defendant’s application for permission to appeal on the striking out of its points of dispute and the hourly rate decision was refused, as there was no real prospect of success on appeal.