How to Challenge a Bill of Costs (Detailed Assessment Guide)
- Feb 12
- 6 min read
Updated: Mar 24
Challenging a bill of costs is a central part of paying party strategy at detailed assessment. When a bill is served, paying parties must assess whether the sums claimed are reasonable and proportionate.
Solicitors, insurers and public bodies frequently instruct specialist costs lawyers to challenge bills through the detailed assessment process. Effective challenges begin with a structured review of the bill, the litigation history and the applicable costs regime, followed by the preparation of carefully drafted Points of Dispute which identify the reductions sought.
Where a bill of costs is substantial or heavily contested, the approach taken at the outset can significantly affect the level of reduction achieved.
Points of Dispute Drafting Service: https://www.sphcosts.com/pod
Paying Party Costs Dispute Services: https://www.sphcosts.com/paying-party-costs-lawyers
Common Grounds for Challenging a Bill of Costs
A bill of costs is not accepted at face value. Paying parties routinely challenge:
hourly rates and grade of fee earner
duplication of work
lack of delegation
disproportionate time claimed
work outside the scope of the claim
non-compliance with costs management orders
These issues form the foundation of Points of Dispute and shape negotiation strategy.
For a detailed guide to Points of Dispute: https://www.sphcosts.com/post/points-of-dispute-detailed-assessment
Hourly Rate and Guideline Hourly Rate Challenges
One of the most common reductions arises from hourly rate disputes. Paying parties assess whether the rates claimed exceed the Guideline Hourly Rates and whether the level of fee earner was appropriate for the work undertaken. Routine tasks carried out at senior level frequently attract reductions.
Proportionality and Delegation
Even where work was reasonably undertaken, costs may be reduced if the total is disproportionate to the value, complexity, and importance of the claim. Proper delegation to appropriate grades is central to proportionality and is a key area of challenge at assessment.
Fixed Costs Scope Arguments
Where fixed recoverable costs may apply, paying parties consider whether the claim falls within the regime and whether work claimed sits outside the permitted stages. Scope disputes often depend on the procedural history of the litigation and are aligned with fixed costs principles.
Recent Court of Appeal authority has highlighted how the timing of settlement offers can affect costs recovery. In Attersley v UK Insurance Ltd the court clarified that late acceptance of a Part 36 offer may still limit recovery to the earlier fixed costs regime.
Procedural and Conduct Challenges
Failures in procedural compliance, unnecessary applications, or unreasonable conduct may affect recoverability. Paying parties rely on these factors to argue for reductions or adverse costs consequences in line with recoverability and conduct principles.
How Much Can a Bill of Costs Be Reduced?
The level of reduction depends on the issues raised and the evidence supporting the challenge. Significant reductions often arise from hourly rate disputes, duplication of work, excessive partner involvement and failures in delegation. Where Points of Dispute clearly identify these issues, substantial reductions may be achieved through negotiation before detailed assessment.
How Long Does It Take to Challenge a Bill of Costs?
The primary mechanism for challenging a bill of costs is the service of Points of Dispute.
The time required to challenge a bill of costs depends on the complexity of the litigation and whether the dispute resolves through negotiation or proceeds to detailed assessment. After a bill of costs is served, the paying party usually has 21 days to serve Points of Dispute.
Once Points of Dispute and Replies have been exchanged, many disputes resolve through negotiation. Where agreement cannot be reached, the matter proceeds to provisional assessment or an oral detailed assessment hearing, depending on the value of the bill and the issues in dispute.
In practice, many bills are reduced significantly before a hearing where the key issues, such as hourly rates, delegation, duplication of work and proportionality, have been clearly identified in the Points of Dispute.
Strategy Before Serving Points of Dispute
Effective challenges begin with a structured review of the pleadings, budgets, complexity, and value of the claim. This allows Points of Dispute to focus on the areas most likely to produce reductions and supports commercial settlement before assessment.
When to Instruct a Costs Lawyer
Where bills involve significant sums or complex issues, specialist input can materially reduce overall costs exposure and improve the outcome of detailed assessment. Well-structured Points of Dispute often determine whether a dispute resolves through negotiation or proceeds to assessment.
See our Points of Dispute drafting service: https://www.sphcosts.com/pod
The Detailed Assessment Process
The detailed assessment process typically follows these stages:
• Service of the bill of costs
• Service of Points of Dispute by the paying party
• Replies served by the receiving party
• Negotiation between the parties
• Provisional or oral detailed assessment hearing
Most disputes resolve before the hearing stage where the issues have been clearly defined in Points of Dispute.
Reducing Exposure Before Detailed Assessment
Most costs disputes are resolved through negotiation. Clear, evidence-based Points of Dispute improve the paying party’s position and frequently result in substantial reductions prior to a hearing.
Typical Reductions at Detailed Assessment
Hourly rates exceeding Guideline Hourly Rates
Excessive time claimed for routine work
Delegation to inappropriate fee earner grades
Duplication between multiple fee earners
Disproportionate phases of work
Time Limit for Points of Dispute
Points of Dispute must normally be served within 21 days of service of the bill of costs unless the court orders otherwise. Failure to respond in time may expose the paying party to default costs consequences.
What Happens if Points of Dispute Are Not Served
If the paying party fails to serve Points of Dispute within the required time, the receiving party may apply for a default costs certificate. A default costs certificate effectively entitles the receiving party to recover the costs claimed in the bill without detailed assessment. Under CPR Part 47, the receiving party can request the certificate where the time for serving Points of Dispute has expired and no extension has been agreed. Once issued, the default costs certificate confirms the amount payable under the bill of costs.
A paying party may apply to set aside the default costs certificate, but the court will expect a proper explanation for the failure to serve Points of Dispute and evidence that there is a genuine dispute as to the amount claimed. Applications to set aside are discretionary and may expose the paying party to further costs consequences.
For this reason, early review of the bill and preparation of Points of Dispute is essential to protect the paying party’s position and avoid procedural default.
Provisional Assessment vs Oral Detailed Assessment
Many detailed assessment proceedings are initially determined through provisional assessment, a paper-based process in which a costs judge assesses the bill of costs, Points of Dispute and Replies without an oral hearing. Provisional assessment currently applies to bills of costs up to the relevant financial threshold under CPR Part 47.
Following provisional assessment, the court issues a written determination indicating the amount allowed. If either party considers that the provisional decision is incorrect, they may request an oral detailed assessment hearing, provided the applicable threshold for review is met.
At an oral hearing the parties can address the judge directly and challenge specific aspects of the provisional decision. However, there is a potential costs risk. Where the party requesting the hearing fails to improve their position beyond the required margin, the court may order that party to pay the costs of the hearing.
As a result, paying party strategy often focuses on ensuring that Points of Dispute clearly identify the strongest reduction arguments at the outset, increasing the likelihood of a favourable provisional assessment or strengthening the position if the matter proceeds to an oral hearing.
Key Takeaways for Paying Parties
Bills of costs can be challenged on hourly rates, proportionality, delegation, and scope
Guideline Hourly Rates are a starting point, not an entitlement
Fixed costs and procedural compliance can limit recovery
Structured Points of Dispute improve negotiation outcomes
Early strategy reduces exposure at detailed assessment
Well-structured challenges frequently result in substantial reductions before a matter reaches a detailed assessment hearing. Where costs exposure is significant, early specialist involvement can materially improve the outcome.
See our paying party costs dispute services: https://www.sphcosts.com/paying-party-costs-lawyers