A court challenge to solicitors’ costs should have been dismissed because it failed to set out exactly what items were in dispute, the High Court has ruled.

His Honour Judge Gosnell, sitting as a judge of the High Court, accepted that his decision in O’Sullivan v Holmes and Hills LLP was a ‘rather draconian’ outcome - but said the former client had ‘ample opportunity’ to amend the points of dispute in appropriate detail.

Claimant Danny O’Sullivan had instructed East Anglia firm Holmes and Hills in a personal injury case involving his employer. The defendant paid £80,000 compensation through the firm on O’Sullivan’s behalf: the firm negotiated £45,000 of its costs from the defendant’s insurers and  sought to recover the remaining £17,000 from O’Sullivan’s damages.

Through his new representatives JG Solicitors, O’Sullivan issued proceedings against the firm for an order for an assessment. The district judge found in O’Sullivan’s favour on two points of dispute, prompting the firm to appeal.

The firm argued on appeal that points of dispute were supposed to explain ‘exactly what is objected to and why’ so the solicitor could reply to the complaint and justify the time they  claimed.

It was submitted that the points of dispute as presented had been ‘wholly generic’ and contained insufficient detail. The former client argued that the district judge had exercised ‘a discretion which was wide in nature’.

Ruling on the appeal, Gosnell accepted that the district judge had been concerned about a return to the ‘bad old days’ when costs were not properly scrutinised.

‘The decision by the paying party in this case to challenge the whole of both parts of the documents section was likely to produce a disproportionately long and complex detailed assessment,’ he added.

‘This is no doubt why [O’Sullivan’s] costs lawyers suggested a “broad brush” approach. This would have meant much less work for them having to actually justify grounds for objection and tactically might well have produced a better result.’

The judge suggested that parties challenging costs should produce a counter-schedule of document time and annotate individual schedules with specific objections attached to the points of dispute.

Kain Knight director and costs lawyer Nick McDonnell, who represented the successful firm, hailed the decision as further success in the continuing litigation over solicitor and client costs.

He said: ‘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. ‘