O’Sullivan v Holmes & Hills LLP: Further success for Kain Knight in the continuing solicitor and client costs litigation.
Costs litigation relating to Solicitor and Client Costs disputes remains a hotly discussed topic following the important implications of Belsner v CAM Legal Services Ltd [2022]. In this latest Appeal case, O’Sullivan v Holmes & Hills LLP, further guidance has been given as to the detail required in Points of Dispute, if challenges to solicitors’ document time are to succeed.
In this piece, Kain Knight Director and Costs Lawyer, Nick McDonnell, who represented the Defendant in both cases, explains the detail of the case and why it forms another important decision in the continuing solicitor/client costs war.
The Claimant, Mr O’Sullivan, in these solicitor/client detailed assessment proceedings had previously instructed the Defendant solicitor firm to act for him in the pursuit of a personal injury claim against his employer. The Claimant’s substantive claim against his employer was successful and damages were recovered in the sum of £80,000. The Claimant’s costs came to £66,917.30 of which the employer paid £45,000. This left a balance of £21,917.30 of which the solicitor firm sought only £17,082.09 of the shortfall from the Claimant. The Claimant sought a solicitor/client detailed assessment of his fees and in particular his shortfall liability.
The Claimant disputed the Defendant’s documents schedule in its claim for costs but, instead of identifying the particular entries that were disputed, the Claimant simply took a broad-brush approach as follows:
Time claimed in respect of work done on documents – item 74
The time claimed in respect of documents is disputed as being either unnecessarily incurred and/or unreasonable amount.
(i) Partner – 11.1 hours claimed, 8 hours offered.
(ii) Solicitor – 2.3 hours claimed, 1.8 hours offered.
(iii) Executive – 4.7 hours claimed, 3.2 hours offered.
(iv) Executive – 33 hours claimed, 18 hours offered.
Time claimed in respect of work done on documents – item 106
The time claimed in respect of documents is disputed as being either unnecessarily incurred and/or unreasonable amount.
(i) Partner – 8.7 hours claimed, 7 hours offered
(ii) Executive – 8.5 hours claimed, 7.2 hours offered
(iii) Litigation Assistant – 0.2 hours claimed, agreed in full
CPR.r.47.9 PD 8.2 provides:
“8.2 Points of dispute must be short and to the point…They must
(a) identify any general points or matters of principle which require decision before the individual items in the bill are addressed; and
(b) identify specific points, stating concisely the nature and grounds of dispute. (emphasis added)
The Defendant, in its replies to points of dispute, relied upon Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 arguing that:
- “Common sense dictates that the points of dispute must be drafted in a way which enables the parties and the court to determine precisely what is in dispute and why. That is the very purposes of such a document. It is necessary in order to enable the receiving party, the solicitor in this case, to be able to reply to the complaints. It is also necessary in order to enable the court to deal with the issues raised in a manner which is fair, just and proportionate.”
The Defendant argued that the Claimant’s points of dispute did not enable it or the Court to know what was precisely in dispute.
At an assessment on the papers, and thereafter, at an oral hearing, District Judge Batchelor found in favour of the Claimant and against the solicitor firm on the basis that Ainsworth required a paying party to specify the specific “items” that are in dispute which, the District Judge said, the Claimant had done when he specified the challenges to “Item 74” and “Item 106.” The Defendant had argued, unsuccessfully before the District Judge, that reference to ‘items’ in Ainsworth included references to the ‘entries’ in the documents schedule and that the Claimant was required to identify the specific document entries that were in dispute. The District Judge allowed the Claimant’s arbitrary counter offers in respect of the Defendant’s documents schedule.
The Defendant appealed and HHJ Gosnell allowed the appeal accepting the Defendant’s argument that both the Chief Costs Judge Gordon Saker (at first instance) and Lady Justice Asplin (on second appeal), in Ainsworth, use the terms “items” and “entries” interchangeably and that both the Civil Procedure Rules and Ainsworth expect more than just correctly recording the item number in the Points of Dispute.
HHJ Gosnell said:
- “If I am wrong in this interpretation it is very difficult to explain why Mr Ainsworth did not succeed in his appeal. He had clearly identified which items were in dispute and provided a list of reasons which applied to all the items (which themselves had been very briefly expressed).”
At paragraph 50 he said:
- “I fully accept that the District Judge had an understandable concern that she did not want to go back to the “bad old days” before 2013. She was right to record Lady Justice Asplin’s remark that “This need not be a lengthy process”. But the length of the process is in the hands of the paying party. If there is a documents section as it this case where there is a schedule with 83 timed but identifiable items it is up to the paying party how many items it wishes to challenge. A sensible paying party may make a value judgment and decide to challenge only the highest and therefore more valuable entries. If the paying party chooses to challenge every single item in the schedule then he is the one adopting a disproportionate course of action which the receiving party has to be able to fairly respond to.”
Finally, at paragraph 58 he said:
- “Overall, I have concluded that the District Judge should have ruled that Points of Dispute [that related to the documents schedule] should be dismissed because they failed to adequately set out the nature and grounds of the dispute. In finding otherwise I find that she fell into error and that the appeal should be granted.”
The points of dispute insofar as they related to the document schedules, were dismissed and the time allowed in full and as claimed.
The decision of the Appeal Court in O’Sullivan v Holmes & Hills LLP is another defining case which reaffirms that a paying party must meaningfully attempt to identify not only specific “items” in bills of costs they wish to challenge, but also any specific entries in documents schedules. Failure to do so is likely to result in the point of dispute being dismissed in its entirety.
Nick McDonnell (Director & Costs Lawyer) and Mark Brighton (Costs Lawyer) acted for the successful Appellant in this appeal along with John Meehan, Barrister at Kenworthy Chambers.
