What is the Assessment of Costs?

A summary assessment of costs is undertaken to evaluate the total reimbursement owed to a receiving party following the conclusion of a legal case. It is a general rule that the losing party in a civil litigation case pays the costs of the winning party, known as the “costs follow the event” rule. However, this can change depending on circumstances which may influence the court’s decision.

It is the receiving party’s duty to file a Bill of Costs outlining any legal work which the receiving party invested in to solve the case and extensive disbursements. Under the courts discretionary power, a bill of costs is sometimes brought to court if an interparty dispute has led to winning and losing parties disagreeing on the reasoning and amount of costs owed to the winning party.

Points of dispute are to be submitted to the receiving party within 21 days, and the receiving party’s Points of reply can respond to such. If an agreement on costs can not be reached, it may be necessary for a receiving party to consult a costs judge and proceed with a Detailed assessment of costs. Under the Solicitors Act 1974, This process can also occur between a solicitor and a client if the client challenges the solicitor’s bill.

How did a costs dispute arise? – St Francis Group v Kelly & Anor

The case of St Francis Group 1 Ltd & Ors v Kelly & Anor [2025] EWCH 125 is significant in the context of cost recovery as it highlights the importance of justifiable Points of dispute which have been prepared in an optimal way to ensure that a court can easily adjudicate.

Supported by Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178, It was decided by the high court that within the dispute proceedings, the paying parties’ points of dispute lacked sufficient value and were not substantially particular enough to support the approval of the claims.

The case of St Francis Group 1 Ltd & Ors v Kelly & Anor involved a management buy-out (MBO) of two separate companies as per a Sale and Purchase Agreement. In 2020, legal proceedings began on the basis that Mr. Baker and Mr. Braid of St Francis Group had committed fraud, and a breach of fiduciary duty had occurred during the MBO process. A claim waiver had been signed by Mr. Kelly during the sale of the businesses and Mr. Kelly’s claim received a dismissal as a result.

The claimants sought indemnity for costs incurred during the process. A costs order had been established and paid to the claimants amounting to £93,185.20. However, a continuing dispute arose regarding unresolved matters listed on the bill of costs.

The Courts Approach to an Assessment of Costs

The cost process typically follows a certain schedule and mainly includes the following steps:

• Bill of costs – After a case has ended, a bill of costs is prepared by the winning party, listing all work completed by the solicitor, along with a Notice of commencement.
• Points of Dispute – The paying party then has 21 days to gather any Points of Dispute. If the paying party does not respond in this time, the receiving party can request for a Default Costs certificate to be issued, requiring full payment.
• Points of Reply – This can be prepared if points of dispute are provided by the paying party. Again, the 21-day response time applies, though there is no penalty for missing this deadline.
• Alternative Dispute Resolution (ADR) – Before bringing the dispute Infront of the court, parties should attempt ADR in the form of mediation and arbitration to settle the dispute. This is encouraged by the court, and refusal may result in penalties such as the losing party bearing the winning party’s court fees on an indemnity basis.
• Detailed Assessment Hearing – If ADR is not successful, a costs judge will assess the payable costs. In the case the dispute totals over £75,000, a Detailed Assessment Hearing will take place.

When a detailed assessment of costs is presented to the courts, there are specific principles that a cost judge will follow to ensure that final cost claims are justified and applicable to the matter of the case. The court will consider the following

• The conduct of the parties involved.
• If the resolution of the matter was attempted prior to court proceedings.
• The complexity of the case
• Duration of proceedings
• The successes and losses regarding different issues of both parties involved.
• The use of Part 36 offers (a formal settlement order)

For this particular case, it was determined that although costs may have been reasonable and proportionate, it was justifiable to criticise the grounds on which the defendant presented points of dispute due to inadequate particularisation. The cost judge found an issue in interpretation and application of the claim waver.

Consideration was given to whether the defendant’s Points of Dispute regarding the claimant’s bill of costs were adequately specified, and the Senior Courts Cost office found that when examining the costs, it was difficult to establish the reasonability of the costs and whether they were properly incurred.

Due to the recurrent standard of inadequate particularisation, Costs Judge Leonard struck out preliminary points 1, 6, 7, 8, 9, and 11 due to the lack of focus on their specific intent. It was decided that the duty of parties to prepare clear and detailed points of dispute was neglected, and this led to inefficient proceedings that were unnecessary and complex.

The Relevancy of Ainsworth v Stewarts Law

In Ainsworth v Stewarts [2020] EWCA Civ 178, Mr Ainsworth challenged the fees charged by his former solicitors, Stewarts Law, following the end of their legal partnership. In this case, it was determined that the points of dispute brought up in the solicitor-client costs assessment were inadequately prepared, lacked depth, and did not support the reasons for the contestation of the dispute.

Ainsworth v Stewart’s law holds relevancy in the St Francis Group case in the regard that both involve a court focus on the proper preparation of Points of Dispute. Although the substantive nature of the fees involved differed from case to case, the core principle between both cases is that procedural clarity can be critical for the resolution of cost disputes.

Ainsworth v Stewarts Law emphasised the need for transparency when criticising legal fees, as it directly influences how court approach costs disagreements and examination of whether fees align with legal work carried out; the St Francis Group 1 Ltd & Ors v Kelly & Anor case provided a pressing reminder for this.

Key Takeaways from St Francis Group Ltd v Kelly & Anor – Implications for Future Costs Assessments

The dissatisfaction from court officials regarding the behaviour of disputing parties when it came to disputing submitted points of dispute in the case of St Francis Group Ltd v Kelly and Anor, and even referring back to Ainsworth v Stewarts,  has sparked conversation surrounding how responsible parties are for the clarity and assessment of desired compensation for legal costs.

It is clear when reviewing such cases that Points of Dispute must be specific and focused; reference can be made to Practice Direction 47 Para 8.2, which further refers to Precedent G, which states the Points of Dispute format to be expected of any paying party challenging costs claimed against them.

The conclusion of the St Francis Group Ltd v Kelly & Anor case further cements the takeaways from Ainsworth v Stewarts’ law. In respect of points of dispute and reply, clients will benefit immeasurable with the support of a Costs law professional in providing comprehensive details for any objections they may have to the bill of costs, allowing district judges to conduct a fair judiciary process without undesirable complexity.

How can Greener Costs assist with the Assessment of Costs?

At Greener Costs, our expert team of cost law professionals can assist you in a variety of cost matters related to a detailed assessment of costs. This includes the preparation of Bills of Costs, Points of Dispute and Points of Reply. We work on a 5-day turnaround basis, ensuring that your case is swiftly processed and efficiently resolved.

Throughout every step of the Detailed Assessment process, we can provide you with regular updates on the status of your matter. Therefore, you can be confident that your legal costs are in safe hands.

Please contact us using the form below to find out more.