Ward v Rai: The Uncertain Future of Non-Compliant Points of Dispute
Written by Nick McDonnell, Director and Costs Lawyer, Kain Knight Manchester.
The Court of Appeal’s decision in Ward v Rai will undoubtedly become one of the most significant costs decisions of 2026. Yet its significance lies not so much in the outcome itself, but in the uncertainty it creates for costs practitioners.
At one level, the judgment is entirely orthodox. Lady Justice Falk, with whom Lord Justice Jeremy Baker and Lord Justice Foxton agreed, applies the well-established principles governing appeals of discretionary case management decisions. The Court repeatedly reminds practitioners that appellate courts do not interfere merely because they would have exercised the discretion differently.
No criticism can properly be made of those principles. The concern lies elsewhere.
In striving to preserve the breadth of a Costs Judge’s discretion, the Court seems to have undermined something equally fundamental to modern civil litigation: procedural certainty.
The result is a judgment that tells practitioners one thing whilst demonstrating another. It emphatically reaffirms the importance of compliance with Practice Direction 47 and Ainsworth v Stewarts Law LLP, yet ultimately permits perhaps one of the clearest examples of non-compliance that practitioners are likely to encounter. In doing so, the Court has left costs lawyers asking an uncomfortable question: If these Points of Dispute survive, what will it take for them not to?
You can view the full judgment by clicking here.
The background
The appeal arose from detailed assessment proceedings following settlement of a substantial personal injury claim.
The paying party challenged approximately half of the receiving party’s profit costs claimed for work on documents. Rather than identifying the individual entries under challenge, however, the Points of Dispute merely stated that an annotated schedule would be relied upon in due course.
That schedule, the very document identifying the specific disputes required by paragraph 8.2(b) of Practice Direction 47, was not served until immediately before the assessment hearing.
The receiving party argued that the Points of Dispute were fundamentally defective. They failed to identify the specific challenges being advanced and therefore fell squarely within the principles established by the Court of Appeal in Ainsworth, which makes clear that receiving parties must know precisely the case they have to meet.
The Costs Judge declined to strike out the Points of Dispute. Instead, he permitted reliance upon the late schedule and addressed the procedural failings by way of limited costs sanctions.
Mrs Justice Hill overturned that decision, concluding that insufficient weight had been given to the mandatory requirements of PD47 and Ainsworth.
The Court of Appeal has now restored the original decision.
The Court’s reasoning
Lady Justice Falk repeatedly emphasises that appellate courts are not entitled to substitute their own view simply because they would have exercised the discretion differently. Another judge may well have struck out the defective Points of Dispute. That, however, was not the question.
The real question was whether the Costs Judge’s decision fell within the generous ambit of reasonable discretionary decisions. The Court concluded that it did.
Whilst that reasoning is difficult to criticise as a matter of principle, what is much harder to reconcile is the practical consequence.
A judgment of contrasting messages
Throughout the judgment, the Court repeatedly reinforces a message procedural compliance. It accepts that the Points of Dispute were not compliant. It accepts that Ainsworth remains authoritative. It reiterates the importance of paragraph 8.2 of Practice Direction 47. It expressly warns paying parties that they should not expect similar indulgence in future.
Yet, having said all of those things, it nevertheless allows these very Points of Dispute to survive.
That is the central difficulty with the judgment. The Court says procedural compliance matters. The outcome suggests it may not matter nearly as much as practitioners had previously understood. This is not merely an academic inconsistency. It has real consequences for every solicitor and costs lawyer conducting detailed assessment proceedings.
What has happened to Ainsworth?
Before Ward v Rai, Ainsworth was widely understood as establishing a clear procedural discipline. Points of Dispute define the issues. They enable meaningful Replies. They facilitate sensible Part 36 negotiations. They narrow disputes before judicial resources become engaged. Most importantly, they prevent trial by ambush and that procedural certainty benefits both parties.
Following Ward v Rai, the position is considerably less clear.
The Court insists that Ainsworth remains good law, and yet the practical message is inconsistent with that.
Even where Points of Dispute are admittedly non-compliant, and even where the defect is not cured until immediately before the hearing, the proceedings may nevertheless continue. That inevitably weakens the certainty which Ainsworth was intended to achieve.
An uneasy fit with Denton
Perhaps the most surprising aspect of the decision is how difficult it is to reconcile with the procedural culture that has developed since Denton.
For more than a decade, civil litigators have been told that compliance with rules and practice directions is not optional. The era in which significant procedural defaults could routinely be forgiven because prejudice could be compensated by costs sanctions was said to be over.
The emphasis shifted from curing prejudice after the event to promoting compliance in the first place and that cultural shift fundamentally altered civil litigation.
Ward v Rai plainly pulls in the opposite direction.
The Court effectively concludes that significant procedural non-compliance may still be cured by permitting the defaulting party to proceed whilst compensating the opposing party through costs. That begins to resemble precisely the procedural culture which Denton sought to replace.
One cannot help wondering whether detailed assessment proceedings are now being treated differently from mainstream civil litigation. If they are, practitioners deserve to know why.
The real casualty: certainty
The greatest difficulty with the judgment is not that another conclusion could have been reached. Lady Justice Falk expressly accepts that another judge may properly have struck out the Points of Dispute. The difficulty is that practitioners are left with almost no guidance as to when strike out will actually occur.
When does non-compliance become sufficiently serious? How late is too late? When are costs sanctions sufficient? When should paragraph 13.10 rescue defective Points of Dispute? When does Ainsworth require strike out?
The judgment answers none of those questions. Instead, almost everything is left to the abyss that is judicial discretion and whilst that may preserve flexibility, it does not promote certainty.
For practising lawyers, certainty is not an abstract aspiration. It determines litigation strategy every day. Should defective Points of Dispute be challenged? Should an application to strike out be made? Should further costs be incurred preparing Replies? Should a Part 36 offer be accepted? Clients expect confident advice.
But, following Ward v Rai, that advice inevitably becomes more qualified. The unfortunate consequence is that the judgment makes costs litigation even less predictable than it was before the appeal was heard.
The risk of encouraging further satellite litigation
Ironically, the judgment may generate precisely the type of satellite litigation that procedural rules are intended to avoid. Rather than providing a clear standard, it invites future parties to argue about the precise limits of judicial discretion.
Every future dispute concerning defective Points of Dispute is now likely to involve submissions that:
- “Our case is more serious than Ward.”
- “Our default is less serious than Ward.”
- “The prejudice here is greater.”
- “The prejudice there was smaller.”
- “The judge should exercise discretion differently.”
Those arguments will inevitably consume judicial time and increase litigation costs and the certainty that practitioners hoped would emerge from this appeal has instead been replaced by a spectrum of discretionary possibilities.
That is unlikely to reduce disputes. It is far more likely to increase them.
A missed opportunity
This is perhaps the greatest disappointment.
This appeal presented the Court with an ideal opportunity to clarify the relationship between paragraph 8.2 of Practice Direction 47, paragraph 13.10, Ainsworth and the post-Denton philosophy of procedural compliance. Instead, the Court consciously declined to establish a principled framework.
The emphasis throughout is upon preserving judicial discretion. That is understandable. But procedural rules exist for a reason. They are intended to produce consistency. Consistency produces certainty. Certainty allows lawyers to advise clients with confidence. Confidence encourages settlement. Settlement reduces litigation.
By placing such heavy emphasis upon the breadth of discretion, the Court has weakened each stage of that chain.
Conclusion
Whilst the Court’s reaffirmation of Ainsworth is welcome, and its warning that practitioners should not expect procedural indulgence is undoubtedly well intentioned, the difficulty is that the judgment ultimately demonstrates the opposite proposition.
It tells practitioners that compliance is mandatory whilst permitting admitted non-compliance to succeed. It reaffirms procedural discipline whilst rescuing significant procedural default. It emphasises certainty whilst leaving almost every future case to individual judicial discretion.
No doubt the Court intended to preserve flexibility, but, it has instead introduced greater uncertainty that only future litigation will answer.
Unfortunately, one prediction can safely be made. Rather than bringing finality to this area of costs law, Ward v Rai is likely to become the starting point for a new generation of arguments about where the boundaries of judicial discretion truly lie.
For practitioners conducting detailed assessments every day, that is unlikely to be regarded as progress. It is more likely to be seen as an invitation to further procedural disputes, greater expense and increased uncertainty; precisely the outcomes that modern civil procedure has spent the last decade trying to avoid.
