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Appeal court ruling gives guidance on solicitor-client costs disputes

By Jemma Slingo  >>

An attempt to challenge ‘excessive’ fees charged by London litigation specialist Stewarts Law for interview preparation and document work has been dismissed by the Court of Appeal.

Stewarts Law LLP was instructed by Kjerulf Ainsworth in 2017 to handle financial claims and allegations arising from the breakdown of his relationship with a former partner. Ainsworth terminated the retainer the following month and demanded to see a detailed breakdown of the firm’s invoices. Stewarts Law subsequently served a breakdown of costs.

In the points of dispute filed with the court, Ainsworth claimed that invoices showed ‘significant duplication between fee earners’, ‘wholly excessive time expended by fee earners reviewing documentation’, ‘too much time claimed generally in relation to preparation’ and ‘unnecessary inter-fee earner discussions’, among other things.

However, at a detailed assessment hearing, senior costs judge Chief Master Gordon-Saker said one point of dispute – which related to over half the entire costs bill – was ‘broad brush’ and ‘put the court in a difficult position’. He said: ‘As pleaded, the points of dispute, it seems to me, do not raise a proper challenge to the document items and certainly do not raise a challenge which can be properly answered by the defendant without a considerable amount of time being spent in looking at the papers.’ As a result, ‘Points of Dispute 10’ was dismissed on the basis that it was not properly pleaded.

Ainsworth appealed the costs judge’s decision on the grounds that under section 70 of the Solicitors Act 1974 he was entitled to be heard, and the point of dispute contained more detail than required by law. However, the Court of Appeal dismissed the claim, ruling that Ainsworth did not have an absolute right to be heard and rejecting the submission that Gordon-Saker could have dealt with matters at the hearing differently.

Lord Justice Lewison, Lord Justice Peter Jackson and Lady Justice Asplin wrote in judgment: ‘In effect, [Ainsworth’s barrister] said that he intended to pick out items as he went along, without having warned Stewarts Law of the ones he intended to choose, or the specific reason for choosing them, and then to ask the Chief Master to adopt a broad-brush reduction of the costs claimed.

‘In those circumstances….the Chief Master was entitled to form the value judgment he did and to dismiss the assessment in relation to Points of Dispute 10.’ They added that Ainsworth had been warned five months ago to amend the points of dispute.

In court today, Ainsworth was ordered to pay £13,000 in costs to Stewarts Law within 14 days.

Stewarts Law’s barrister Robin Dunne, of Hardwicke, said the Court of Appeal’s decision is ‘important for any professional involved in solicitor and client disputes’. In a blog post about the judgment, Dunne wrote: ‘The judgment is another example of the senior courts being willing to uphold robust case management decisions of first instance judges…In addition, the court gave general guidance regarding points of dispute that will be relevant not only to these cases but also to between the parties detailed assessments.’

(Courtesy: Law Gazette Society)