Defective costs certification did not invalidate bill of costs: Court of Appeal in Duffy v Birmingham City Council

In Duffy v Birmingham City Council [2026] EWCA Civ 146, the Court of Appeal gave important guidance on the consequences of defects in a bill of costs. The court held that a bill signed by a solicitor was not rendered invalid, nor ineffective to commence detailed assessment proceedings, merely because the solicitor had failed expressly to tick the Precedent F box certifying compliance with the indemnity principle. The decision is of practical importance in costs litigation because it rejects an over-technical nullity argument and confirms that not every failure to comply with a mandatory requirement in Practice Direction 47 invalidates the process.

Background

The underlying proceedings were housing disrepair proceedings brought by the claimant tenant against Birmingham City Council. Those proceedings were compromised in October 2022, with the Council agreeing to pay the claimant’s costs, to be assessed if not agreed. The claimant then served a notice of commencement and a bill of costs totalling £26,809.60. The bill was signed by a solicitor, but the box expressly certifying that the costs claimed did not exceed the costs which the receiving party was liable to pay her solicitors was left unticked. The Council did not serve points of dispute within 21 days, and the claimant obtained a default costs certificate.

The Council later sought to set aside the certificate. Before HHJ Najib, however, the Council had pursued a different point relating to service and had conceded that the defect in the bill did not render the detailed assessment process a nullity. On appeal, the Court of Appeal permitted the Council to withdraw that concession and take the new point because it was a pure point of law, the claimant was well prepared to meet it, and any prejudice could be compensated in costs. The appeal nonetheless failed.

The issue before the Court of Appeal

The central question was whether a bill of costs is invalid, and therefore ineffective to commence detailed assessment proceedings under CPR 47.6, where the bill is signed by a solicitor but does not also contain the express Precedent F certification confirming compliance with the indemnity principle.

That issue mattered because, if the bill were a nullity, the claimant would never have been entitled to the default costs certificate and the Council would have been entitled to have it set aside as of right. If, by contrast, the omission rendered the bill defective rather than void, the paying party should have engaged with the process by serving points of dispute and raising the objection in the ordinary way.

The Court of Appeal’s reasoning

The court rejected the Council’s argument. It accepted that paragraph 5.21 of Practice Direction 47, read with Precedent F, uses mandatory language and requires the appropriate certificates to be included in the bill. But the court drew a clear distinction between a mandatory requirement and a defect so fundamental that it renders the bill a nullity. Not every breach of a mandatory rule has that consequence.

The court placed substantial weight on earlier authority concerning the effect of a solicitor’s signature on a bill. Drawing on Bailey v IBC Vehicles Ltd [1998] 2 Costs LR 46, it emphasised that solicitors, as officers of the court, are trusted not to mislead the court, and that the signature on the bill is no empty formality. The signature carries substantive significance. In principle, it amounts to implicit certification that the bill does not offend the indemnity principle. The omission of a separate express tick-box certification was therefore a defect, but not a fatal one.

The court accordingly held that, while the omission was a breach of a mandatory requirement, it did not invalidate the bill or prevent the commencement of detailed assessment proceedings. The proper course for a paying party faced with such a defect is not simply to ignore the bill and allow time to expire. The defect may justify challenge, but it does not justify non-service of points of dispute.

CPR 3.10 and the rejection of nullity arguments

The reasoning was reinforced by CPR 3.10, which provides that an error of procedure does not invalidate a step taken in proceedings unless the court so orders. The Court of Appeal held that CPR 3.10 applies with full force in the CPR 47 context. That was an important part of the reason why a defective bill should not readily be treated as a nullity.

The court also approved the reasoning in Choudhury v Islam (Central London County Court, 21 April 2021, unreported). It endorsed that analysis as correct as a matter of principle, procedure and practicality, and applied it to the failure to tick the indemnity principle box just as much as to any other defect in a bill of costs.

The Court of Appeal distinguished the AKC litigation. Those were cases in which a bill was struck out and replacement ordered. That was materially different from holding that a bill was invalid from the outset. The court repeated Newey LJ’s observation in the earlier AKC appeal that it is “very far from the case” that a bill of costs which fails fully to comply with the rules should invariably be struck out, still less treated as a nullity. Typically, a defect will, at most, warrant a lesser sanction.

The outcome

It followed that the claimant’s bill of costs was valid and effective to commence detailed assessment proceedings, and that she had been entitled to a default costs certificate when the Council failed to serve points of dispute. The Council remained entitled to pursue its alternative application for discretionary relief under CPR 47.12(2), but the Court of Appeal said nothing about the merits of any such application.

Why the decision matters

The decision will be welcomed by receiving parties and costs practitioners. It confirms that the court will not lightly allow technical defects in bills of costs to be used as a route to mandatory set-aside where the paying party has failed to engage with the process in time. The emphasis is on substance, procedural discipline and proportionality rather than opportunistic point-taking.

For practitioners, the message is twofold. First, bills of costs should still be prepared carefully and in full compliance with Practice Direction 47. A defect may not be fatal, but it may still prompt challenge, further evidence, adverse comment or some lesser sanction. Secondly, for paying parties, the case is a reminder that an apparent defect in a bill does not justify silence. If the form or content of the bill is disputed, the paying party should ordinarily serve points of dispute and raise the complaint procedurally.

The concluding observations in the judgment are also striking. The Court of Appeal noted that the Council’s attempt to revive its challenge to a bill for £26,809.60 had already involved three hearings and two unsuccessful challenges, and that its own appeal costs exceeded £45,000, before even considering adverse costs and the earlier £7,000 costs order. The court observed that whether this had been a good use of public funds must be open to debate. That final passage underlines the court’s broader concern with proportionality and litigation economy.

Conclusion

Duffy is an important modern authority on the distinction between procedural defect and nullity in costs litigation. It confirms that the omission of an express indemnity principle certificate from a solicitor-signed bill of costs does not, without more, invalidate the bill or the commencement of detailed assessment proceedings. The decision is likely to be cited in future disputes where one party seeks to transform a curable or challengeable procedural defect into a complete collapse of the process. On the Court of Appeal’s analysis, that is not how CPR 47 should operate.

Further reading

Further reading on the Carruthers Law website may include:

• Guide to Bringing a Professional Negligence Claim
• Professional Negligence Pre-Action Protocol
• Key Solicitor Negligence Cases: A Comprehensive Review
• Typical Litigation Claim Process in England & Wales