NEWS AND ARTICLES
Electronic Bill of Costs
Who, What, When, Where and Why…. And How)?
Author: Ryan Bradford Costs Lawyer
WHO is responsible for the new electronic bill of costs
In January 2010, Lord Justice Jackson presented his final report following a review of civil litigation costs in England and Wales. The 557-page report observed that, amongst many other things, bills were expensive, cumbersome to draw and not easy to digest. Furthermore, in his view, bills did not contain all of the necessary information and there were often mismatches between recorded time and the bills that were produced for assessment.
To solve this problem LJ Jackson recommended that a new format bill of costs should be devised with the ultimate aim that if all practitioners followed a universal time recording system, that in the future, bills could be automatically generated using compatible computer software.
In light of LJ Jackson’s report, the “Hutton Committee” was formed in 2012 and was responsible for devising the new bill format and universal time recording system.
The first stage of this process was to develop a uniform series of litigation task costs codes to enable courts to assess the costs to be awarded in litigation cases. A working group, the Jackson Steering Committee, was set up to consider this prospect.
The Jackson Steering Committee subsequently recommended the use of Uniform Task-based Management System (UTBMS) as adapted for use in the English and Welsh legal market; referred to as EW-UTBMS or ‘J-Codes’. This was endorsed by LEDES, an international e-billing body providing a common e-billing standard.
The Hutton Committee thereafter published its final report on the New Electronic Bill and J-Codes in July 2015. Shortly after, in October 2015, the Senior Courts Costs Office (SCCO) launched a pilot scheme to introduce a version of the electronic bill of costs as contained within the Civil Procedure Rules PD 51L.
However, following the limited uptake of the use of the New Bill of Costs pilot scheme, Lord Justice Jackson, in a lecture at the Law Society in April 2016 entitled ‘The New Form Bill of Costs’, acknowledged that J-Codes bore the brunt of most of the criticism levelled at the new electronic costs scheme. This was largely because the new electronic bill reportedly increased the time taken to prepare a bill by more than double, which was perhaps mainly due to the requirement to retrospectively apply J-codes to historic work.
He therefore recommended references to J-Codes be removed from the bill and in October 2016 the pilot scheme was amended accordingly. The pilot scheme was then extended by a year, with a view to the electronic bill of costs being mandatory in October 2017.
Fast forward to October 2017 however, and reportedly only three electronic bills had been filed at the SCCO up to this point, despite the pilot running for nearly two years. Due to the poor uptake, the Rule Committee decided that the only way to get the practitioners to engage with the electronic bill of costs was to make the new bill compulsory.
WHAT is the new format bill?
The Hutton Committee has now developed a new format bill of costs known as Precedent S, which is entirely in electronic format. They have also devised a time recording system which records costs with reference to a set phase, task, activity or expense and is to be used in conjunction with the new electronic bill. If you are familiar with Precedent H (Costs Budget) then you are likely to already be accustomed to the main phases in which costs will be divided into.
WHEN do I need to start using the new electronic bill?
Amendments to the Civil Procedure Rules under Rule 47 and the corresponding practice direction came into effect from 1st October 2017, however the electronic bill is only mandatory for all work undertaken after 6th April 2018, the “transition date”. For any work carried out prior to 6th April 2018 you will have the option to file a traditional paper bill, compliant with paragraphs 5.7 to 5.21 of PD 47, or a new style electronic bill.
WHERE can I find details of the new electronic bill or Precedent S?
A model of the electronic bill in pdf format can be found annexed to Practice Direction 47 and, as mentioned above, is known as ‘Precedent S’. The explanations and definitions of the various phases, tasks, activities and expenses are located within Schedule 2 to PD 47.
WHY do I need to know this?
Simply because if you want to recover inter -partes costs for work done in Part 7 multi-track claims, after 6th April 2018, then you will have no choice but to submit a bill of costs in an electronic spreadsheet format.
At the moment, the only exceptions within Part 7 claims are cases in which the proceedings are subject to fixed or scale costs or if the receiving party is a Litigant in Person. Although it appears that fast-track or non-issued cases are excluded, as the Court retains full discretion as to what it can order in respect of costs it seems likely that such cases will also require an electronic bill to be filed.
And… HOW do I prepare a new electronic bill of costs?
Most providers of Practice Management Systems are already adapting their software to accommodate the new categories of costs. This should enable Solicitors to record their time in a manner that is consistent with the way in which it needs to be shown in the electronic bill.
You can still prepare an electronic bill yourself and as the Precedent S is not mandatory, you can devise your own spreadsheet if you prefer. However, if you do prepare your own electronic bill of costs it will need to be presented in a format compliant with PD 47 5.A2 which -
- 1. Reports and aggregates costs based on the phases, tasks, activities and expenses defined in Schedule to this Practice Direction;
- 2. Reports summary totals in a form comparable to Precedent S;
- 3. Allows the user to identify, in chronological order, the detail of all the work undertaken in each phase;
- 4. Automatically recalculates intermediate and overall summary totals if input data is changed;
- 5. Contains all calculations and reference formulae in a transparent manner so as to make its full functionality available to the court and all other parties.
Our firm is at the forefront of adapting to these changes and if you need any assistance with any aspects of this new regime, please get in touch.
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