Points of Dispute
Points of dispute are the paying party's formal response to a bill of costs in detailed assessment proceedings. They set out, item by item, why specific costs are challenged as unreasonable or disproportionate. Getting this document right is essential to achieving a meaningful reduction in the bill.
What Are Points of Dispute?
When a receiving party commences detailed assessment proceedings by serving a bill of costs, the paying party must respond with points of dispute. This is the document that identifies which items in the bill are being challenged and explains the grounds for each challenge. Points of dispute are not simply a general complaint that the bill is too high. They must engage with the bill at a granular level, addressing specific entries, hourly rates, time periods, and disbursements.
Well-drafted points of dispute will address issues such as whether the hourly rates claimed are appropriate for the grade of fee earner and the location of the solicitor's office, whether the time spent on particular tasks was reasonable, whether work was duplicated between fee earners, whether the costs are proportionate to the value and complexity of the underlying claim, and whether disbursements such as counsel's fees and expert fees are reasonable.
The 21-Day Deadline
Under CPR 47.9, the paying party has 21 days from service of the notice of commencement to serve points of dispute. This deadline is strict and non-negotiable without either the agreement of the receiving party or a court order extending time. The 21-day period runs from the date of service, not the date of receipt, so it is important to be clear about when service was effected.
If you are a solicitor who has received a bill of costs from an opponent and the 21-day deadline is approaching, it is critical to act immediately. Instructing a costs lawyer at the earliest opportunity gives them the maximum time to review the bill and prepare comprehensive points of dispute. Leaving it to the last minute risks either missing the deadline entirely or serving points of dispute that are inadequate because they were prepared in haste.
Default Costs Certificates
The consequence of failing to serve points of dispute in time is severe. Under CPR 47.9, the receiving party can file a request for a default costs certificate. This certificate is for the full amount of the bill as drawn, plus the fixed costs of the detailed assessment proceedings. In other words, the paying party loses the right to challenge any aspect of the bill and must pay the entire amount claimed.
A default costs certificate can be set aside under CPR 47.12, but the paying party bears the burden of showing that there was good reason for the failure and that the costs dispute has merit. The court will apply the three-stage test from Denton v TH White, and there is no guarantee that relief will be granted. Prevention is far better than cure in this area.
How to Draft Effective Points of Dispute
Effective points of dispute are specific, well-reasoned, and grounded in the applicable principles of costs law. The following are some of the key areas that should be addressed:
Hourly Rates
The guideline hourly rates published by the courts provide a useful benchmark, but they are not determinative. Points of dispute should challenge hourly rates that exceed the guideline figures for the relevant band (London 1, London 2, London 3, National 1, or National 2) and grade of fee earner. The complexity of the case, the specialisation required, and the experience of the individual fee earner are all relevant factors.
Time Spent
Each entry in the bill should be scrutinised to determine whether the time claimed is reasonable for the task described. Common challenges include excessive time for routine correspondence, attendance notes that are disproportionately long, research on straightforward legal points, and duplication of work between fee earners. The points of dispute should identify specific entries where the time appears excessive and explain why.
Proportionality
On the standard basis of assessment, the overall costs must be proportionate to the matters in issue. This is a global test that applies to the bill as a whole, even if individual items are reasonable. The five factors for assessing proportionality are set out in CPR 44.3(5): the sums in issue, the value of any non-monetary relief, the complexity of the litigation, any additional work generated by the paying party's conduct, and any wider factors including reputation and public importance.
Disbursements
Points of dispute should also address disbursements such as counsel's fees, expert fees, travel expenses, and court fees. Counsel's fees should be reasonable for the seniority of counsel and the complexity of the hearing or advice. Expert fees should reflect the going rate for the relevant discipline. Travel and accommodation costs should be necessary and proportionate.
Replies to Points of Dispute
After points of dispute have been served, the receiving party has 21 days to serve optional replies. Replies allow the receiving party to respond to the specific challenges raised and to justify the costs claimed. While replies are not mandatory, they are often tactically valuable because they allow the receiving party to present their case in writing before the assessment hearing.
If you are the receiving party and have received points of dispute, a costs lawyer can prepare replies that address each point systematically, providing justification for the costs claimed and rebutting the paying party's arguments.
Why Specialist Costs Lawyers Are Better Placed
Points of dispute are a specialist document that requires detailed knowledge of costs law and practice. A general litigation solicitor may understand the underlying case perfectly well, but may not have the technical knowledge to challenge (or defend) a bill of costs effectively. Costs lawyers spend their working lives analysing bills, understanding what the court considers reasonable, and knowing which arguments succeed at assessment and which do not.
For paying parties, instructing a costs lawyer to draft points of dispute is an investment that typically pays for itself many times over through the reductions achieved. For receiving parties, instructing a costs lawyer to prepare replies ensures that the strongest possible case is presented in defence of the bill. In both cases, the specialist's fee is itself recoverable as part of the costs of the assessment proceedings.
Frequently Asked Questions
What are points of dispute?
Points of dispute are the formal document served by the paying party in detailed assessment proceedings, setting out specific objections to items in the receiving party's bill of costs. They must identify each item or category of items being challenged and explain the basis for the objection, whether that is unreasonableness, disproportionality, or some other ground. Points of dispute are governed by CPR 47.9 and Practice Direction 47, and must follow the prescribed format. They are the paying party's primary tool for achieving a reduction in the bill.
What is the 21-day rule?
Under CPR 47.9, the paying party must serve points of dispute within 21 days of being served with the notice of commencement and a copy of the bill of costs. This is a strict deadline. If the paying party fails to serve points of dispute within this period, the receiving party can file a request for a default costs certificate, which entitles them to the full amount claimed in the bill plus the fixed costs of the detailed assessment proceedings. The 21-day period can only be extended by agreement between the parties or by court order.
What happens if I miss the deadline?
If you miss the 21-day deadline for serving points of dispute, the receiving party can obtain a default costs certificate for the full amount of the bill. Once a default costs certificate is issued, the paying party can apply to have it set aside under CPR 47.12, but must show that there is good reason for the failure to serve in time and that the dispute has a real prospect of success. The court will apply the relief from sanctions principles from Denton v TH White, considering the seriousness of the breach, the reason for it, and all the circumstances. The sooner you act after missing a deadline, the better your prospects of obtaining relief.
Should I use a costs lawyer or do it myself?
While there is no legal requirement to use a costs lawyer, the detailed assessment process is highly technical and specialist. Drafting effective points of dispute requires a deep understanding of what the court considers reasonable in terms of hourly rates, time spent on particular tasks, the proportionality of the costs to the value of the claim, and the procedural rules governing the process. A general litigation solicitor may not have this specialist knowledge. A costs lawyer who works on bills of costs every day will be able to identify issues that a non-specialist would miss, and will know how to present the arguments in the way that is most likely to succeed at assessment.
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