Late Service Of Bill Does Not Obviate Need To Serve Points Of Dispute

Willis v GWB Harthills LLP and Others concerned an application by Mr Willis to set aside a default costs certificate issued against him in favor of his former law firm, GWB Harthills LLP, and two of its partners.

The key events leading up to this application were:

• On 16 December 2022, an Employment Tribunal awarded GWB Harthills costs relating to a claim brought against them by Mr Willis. The costs were capped at £210,000 and were ordered to be assessed in the County Court.
• On 19 October 2023, GWB Harthills served a Notice of Commencement and bill of costs on Mr Willis, starting the detailed assessment proceedings.
• Mr Willis did not serve any points of dispute. On 14 November 2023, the last date for doing so, he argued the Notice was served late.
• On 18 December 2023, GWB Harthills obtained a default costs certificate from the SCCO for £210,151.
• In January 2024, Mr Willis applied to set aside the default costs certificate.

The issues for the Costs Judge were:

1. Whether the Notice of Commencement was validly served out of time
2. If so, whether there was good reason to set aside the default costs certificate

Mr Willis argued:

• The Notice was served over 8 months late, so should be set aside. This meant he was under no obligation to serve points of dispute.
• There were issues over “double counting” of costs as between Claim 1 and Claim 2.
• The format of GWB Harthills’ bill was unsatisfactory.
• His appeal against the substantive decision had reasonable prospects, so assessment should await the outcome.

GWB Harthills argued the certificate was properly obtained and should stand.

Decision

Costs Judge Leonard found that the Notice of Commencement served by GWB Harthills was valid, despite being served outside the 3-month timeframe under CPR 47.7. Late service does not invalidate the Notice or remove the obligation on Mr Willis to serve points of dispute:

“The provisions of CPR 47.8 make it clear that late service of a Notice of Commencement can be penalised by the disallowance of any part of the costs claimed only where the paying party has obtained an order requiring the receiving party to commence detailed assessment proceedings and the receiving party does not comply. No such order has been applied for, much less made, in this case. Accordingly, once the Respondents’ Notice of Commencement had been served upon him it was incumbent upon the Applicant, in accordance with CPR 47.9, to serve points of dispute if he wanted to avoid the issue of a final costs certificate. He was expressly warned of that at the time of service.” [66-67].

The judge found there was no good reason to set aside the default costs certificate obtained by GWB Harthills. Mr Willis had not established a reasonable prospect of achieving a 28.5% reduction in costs, which would be necessary to bring the figure below the £210,000 cap set by the Tribunal. His arguments about “double counting” between Claim 1 and Claim 2 costs and regarding the format of GWB Harthills’ bill did not give reason to suppose the costs were materially excessive. Neither did his proposed appeal against the Tribunal’s substantive decision have any bearing on the assessment proceedings:

“My conclusion, for those reasons, is that the Applicant has not discharged the burden of demonstrating that there is good reason why a detailed assessment should continue.” [73].

“As to whether the timing of the Notice of Commencement put the Applicant at a disadvantage, I am aware that, as at 20 October, the Claim 1 costs hearing was less than two weeks away, on 1 November. He could however have prepared points of dispute after that hearing.” [82].

The judge found there was no good reason for Mr Willis’ failure to serve points of dispute. His arguments that he should not have had to do were misconceived. He was clearly warned about the consequences of not doing so:

“As for whether there was good reason for the Applicant’s default, plainly there was not. As I have observed, the Applicant wrongly took the position that was not incumbent upon him to produce points of dispute. That cannot be a good reason.” [81].

Taking all the circumstances into account, the judge determined the default costs certificate should stand:

“Taking all of this into account, it seems to me entirely clear that the default costs certificate should not simply be set aside.” [89].

The judge ordered Mr Willis to pay £2,750 towards GWB Harthills’ costs of the application.