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Yesterday’s post on the content of replies under the new rules generated plenty of interest in the Comments Section and I therefore thought it appropriate to elaborate on this issue.
In response to the fact the new rules state replies should be limited to points of principle and concessions only one reader commented:
“An item being a matter of principle is surely a matter of interpretation. One mans principle is another mans minor issue”
“Each of those points in the model pods has a space for a reply, including those that are not under the heading ‘points of principle.’ The only change is that you cannot simply say ‘maintained.’”
To start with we need to go to the new Practice Direction 8.2 to CPR 47.9:
“Points of dispute must be short and to the point. They must follow Precedent G in the Schedule of Costs Precedents annexed to this Practice Direction, so far as practicable. They must:
(a) identify any general points or matters of principle which require decision before the individual items in the bill are addressed; and
(b) identify specific points, stating concisely the nature and grounds of dispute.
Once a point has been made it should not be repeated but the item numbers where the point arises should be inserted in the left hand box as shown in Precedent G.”
So, it is clear that “general points or matter of principle” are limited to those that “require decision before the individual items in the bill are addressed”. As such, this is generally not going to be a matter of interpretation. Disputes raised as to the reasonableness of a conference with counsel, or disputes as to document time, or disputes as to the reasonableness of a brief fee are not “matters of principle which require decision before the individual items in the bill are addressed”. They are disputes to individual items within the bill.
The new Practice Direction 12.1 to CPR 47.13 states:
“A reply served by the receiving party under Rule 47.13 must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses.”
Therefore, if a dispute is raised to any of the examples given above the box for the “Receiving Party’s Reply” should either contain a concession or be left blank.
The Practice Direction does not contain any guidance as to the distinction between a “general point” and a “point of principle”. The only assistance we have is the two examples contained within the Model Points of Dispute. This gives an example of a “point of principle” as:
“The claimant was at the time a child/protected person/insolvent and did not have the capacity to authorise the solicitors to bring these proceedings.”
I would therefore suggest examples of other points of principle would include:
- A challenge to the indemnity principle.
- A challenge to the enforceability of a CFA.
- An argument that proceedings were issued prematurely and the costs should be limited to fixed predicable costs.
Those are matters to which a reply is permitted.
The example given of a “general point” is:
“Rates claimed for the assistant solicitor and other fee earners are excessive. Reduce to £158 and £116 respectively plus VAT.”
No reply is permitted, other than a concession.
I would suggest another example would be that the costs were disproportionate. Others might say this is a point of principle. Having said that, the new proportionality test is meant to be applied at the end of the assessment, rather than the beginning, in which case it is neither a general point nor a point of principle.
Interesting issues arise. Are any of the following general points or points of principle:
- An argument defective notice was given of an additional liability.
- An argument as to the level of success fee claimed.
- An argument VAT has not been properly apportioned.
Do any of these issues need to be decided at the outset? If not, no reply is allowed, other than a concession.
I can see many receiving parties bursting if they cannot reply to these disputes.
One reader suggested that if the Points of Dispute were drafted before 1 April 2013 then surely Replies should follow the old format and are not limited to the new Practice Direction. I can see no transitional provision that deals with this. Therefore any Replies served after 1 April 2013 are subject to the new, mandatory, provisions.
Another reader asked if I would apply to have struck out non-compliant replies and another noted there is no sanction for non-compliance. In the first instance I am simply pointing out where replies are non-complaint and therefore saying they must not be lodged with the court when requesting any hearing. Applications will no doubt have to be considered if the other side does not agree. The courts will be keen to ensure the new rules are made to work (so far as possible) and it would entirely defeat the purpose of these changes if receiving parties were allowed to simply ignore the changes. In any event, the costs of non-compliant replies will inevitably be disallowed.