Is a client entitled to Inspection after the service of Points of Dispute – the SCCO says, “Yes”!

Diagnostics.AI Limited v Dentons UK & Middle East LLP [2025] EWHC 2071 (SCCO)

Summary:

This case concerns a solicitor-client costs dispute between Diagnostics.AI Limited (Claimant) and Dentons UK & Middle East LLP (Defendant), heard before Costs Judge Nagalingam in the Senior Courts Costs Office. The Claimant sought an order for inspection of the Defendant’s files relating to work described in the bills of costs, which exceed £2 million even after a substantial credit note.

The dispute arose after the Defendant failed to respond item-by-item to the Claimant’s 72-page Points of Dispute, replying only with a brief 4-page document addressing preliminary issues. The Claimant argued that this lack of engagement hindered negotiations and necessitated inspection to narrow issues ahead of a detailed assessment hearing.

The Defendant opposed the application, arguing it was procedurally defective and overly broad, and that the court lacked jurisdiction to order inspection in these circumstances. They also raised concerns about confidentiality, privilege, and the cost of preparing files for inspection. However, Judge Nagalingam found these objections unpersuasive, noting that the Defendant had not shown willingness to engage constructively and had adopted an obstructive stance.

The judge emphasised that inspection was limited to work described in the bills and did not seek privileged or irrelevant documents. He cited relevant case law, including Edwards v Slater & Gordon UK Ltd and Hanley v JC&A, affirming the court’s authority under CPR Part 31 and CPR r.3.1(2)(p) to order inspection in solicitor-client assessments under the Solicitors Act 1974.

Costs Judge Nagalingam rejected the Defendant’s argument that inspection should be limited to issues raised in the Points of Dispute, noting that the Defendant’s failure to provide substantive replies justified broader inspection. He also dismissed the notion that the application was tactical or premature, highlighting the parties’ prolonged but unsuccessful negotiations.

The judgment concluded that inspection would either assist in settlement or streamline the assessment hearing. The judge ordered the Defendant to provide facilities for inspection, with costs of isolating documents already in the Claimant’s possession to be borne by the Claimant. All other inspection costs would be costs in the assessment.

Finally, the judge ordered the Defendant to pay the Claimant’s costs of the application, subject to summary assessment if not agreed.