Costs experts say a decision from the Court of Appeal on non-compliance with rules has left a lingering uncertainty in the profession.

In Ward v Rai Lady Justice Falk ruled that the original costs judge had been entitled to show discretion within a ‘generous ambit’ to refuse to strike out a defendant’s point of dispute.

Parties are required under the ‘Ainsworth‘ principle and in the practice directions to identify specific points of dispute in a costs bill so the parties can determine exactly what is being argued. But the claimant in Ward complained there were no specific challenges, no bill entries identified, and neither the nature nor grounds of the dispute were present. The defendant had also been on notice for seven months that the point of dispute was not compliant but took no steps to remedy it until two working days before the costs hearing.

The court heard that Deputy Costs Judge Friston had allowed a ‘fairly broad brush’ assessment of the claimant’s strike-out request. He had accepted the defendant had taken no steps to provide further detail until very close to the hearing, but the claimant had also done nothing to chase it. Thus both parties were 'significantly at fault for having failed to comply with the overriding objective and to assist the court by essentially "getting their act together" earlier’.

On first appeal, the High Court found the point of dispute had been non-compliant by failing to identify specific items in dispute or why they were disputed.

The Court of Appeal appeared to support this view, with Lady Justice Falk saying the point had been ‘obviously incomplete because it referred to a non-existent annotated schedule’. But the appeal judges said the costs judge had non-compliance in mind when he made his decision and he had been entitled not to strike out the point of dispute. It was well-established, the court noted, that appellate courts should not interfere with case management decisions simply because they disagree with them.

Nick McDonnell, director and costs lawyer with costs firm Kain Knight, said the ruling was significant, not so much in the outcome itself, but in the uncertainty it creates for costs practitioners. He added: ‘It tells practitioners that compliance is mandatory whilst permitting admitted non-compliance to succeed. It reaffirms procedural discipline whilst rescuing significant procedural default. It emphasises certainty whilst leaving almost every future case to individual judicial discretion.'

‘No doubt the court intended to preserve flexibility, but, it has instead introduced greater uncertainty that only future litigation will answer.’

John Meehan, barrister at King’s Chambers, said paying parties should not expect a lenient approach to non-compliance based on the decision in Ward.

‘The decision is, in principle, a reminder of the significant discretion afforded to judges, particularly as to costs and case management and the willingness of the Court of Appeal to uphold such decisions even where many judges would have reached a different conclusion,’ he said.