Dianostics.AI Limited v Dentons UK & Middle East LLP

In a solicitor-own-client assessment, the court has power to order inspection of relevant documents held by the solicitors. That power is not confined to documents belonging to the client and may arise under Solicitors Act 1974 assessment jurisdiction, Civil Procedure Rules 1998 Part 31, or the court’s general case-management powers.

Inspection may be ordered after points of dispute have been served where it is sufficiently defined, justified and proportionate. Its purposes may include improving settlement prospects and narrowing the issues for detailed assessment. The order need not be confined to matters expressly raised in the points of dispute, provided that its scope is limited to the work described in the bills and excludes protected material.

The claimant and defendant were engaged in a solicitor-and-client costs dispute concerning bills exceeding £2 million. Points of dispute ran to 72 pages, but the defendant served only four pages of replies addressing preliminary matters and made no item-by-item response.

The claimant applied for facilities to inspect the defendant’s files, limited to the work described in the bills. The inspection was sought to assist settlement negotiations and preparation for detailed assessment. The defendant argued that the application was defective, that the court lacked jurisdiction to order inspection except under Civil Procedure Rules 1998 Part 31, and that the proposed order was too broad and disproportionate. The central issues were whether the court had power to order inspection and whether that discretion should be exercised.

1. The application was granted. The defendant was ordered to provide facilities for inspection on defined terms. The claimant’s application costs were payable by the defendant, subject to summary assessment if not agreed.
2. The court had jurisdiction in a solicitor-own-client assessment under the Solicitors Act 1974 to order inspection of relevant documents held by the solicitors. The power was not limited to documents belonging to the client. The court accepted the principles summarised from Swain in Hanley v JC&A and considered them sound.
3. The court also accepted that the powers in Civil Procedure Rules 1998 Part 31 could be used to order disclosure or inspection in solicitor-own-client assessments. The claimant’s failure to refer expressly to Part 31 in Form N244 was not fatal, particularly because the application sought limited inspection rather than unfettered disclosure.
4. Alternatively, Civil Procedure Rules 1998 rule 3.1(2)(p) supplied a general case-management power to make an order furthering the overriding objective. An inspection order was permissible where it was well founded and sufficiently explained.
5. The discretion should be exercised where inspection could realistically assist compromise or narrow the issues before detailed assessment. The defendant’s lack of informative replies, together with its refusal to permit inspection, made further assessment substantially more difficult and justified the order. Inspection was limited to work described in the bills. Confidentiality-protected, privileged, unrelated and internal documents were excluded. Documents already in the claimant’s possession were to be isolated at the claimant’s expense; otherwise inspection costs were costs in the assessment.