It has been an 8 year journey, but the wait is over, the future of Legal Bills of Costs has finally arrived!

 The new electronic bill is now mandatory for all work done from 6 April 2018 (the “transition date”) and unlike the failed pilot scheme, the changes are not limited to the SCCO.

Why the change?

Essentially, the electronic bill is designed to achieve Sir Rupert Jackson’s long term aim:

“…to harmonise the procedures and systems which will be used for costs budgeting, cost management, summary assessment and detailed assessment”.

And that meant replacing the traditional Victorian Account Book style paper Bill with an electronic version, fit for present purposes.

What cases?

But it won’t apply to all cases. The electronic bill must be used for work after 6 April 2018 where the case is a Part 7 Multi-Track claim except:

  • Where the proceedings are subject to fixed or scale costs;
  • Where the receiving party is unrepresented; or
  • Where the court has otherwise ordered.

Format

The requirements for an Electronic Bill are brought in by the 92ND CPR Practice Direction Amendments (PD 47.6).

Electronic bills may be in any self-calculating, self-summarising spreadsheet format which:

(a)   reports and aggregates costs based on the phases, tasks, activities and expenses defined in Schedule 2 (a simplified set of costs as an alternative to J-Codes) to the Practice Direction;

(b)   reports summary totals in a form comparable to Precedent S (the spreadsheet format attached to the online Rules);

(c)   allows the user to identify, in chronological order, the detail of all the work undertaken in each phase;

(d)   automatically recalculates intermediate and overall summary totals if input data is changed;

(e)   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.

The court will allow any spreadsheet based Bill of Costs which produces these outcomes, but essential to the efficient preparation of the electronic bill is the need for Solicitors to accurately time record by Phase, Task and Activity.

As well as the usual detail of a case narrative, a chronology of the procedural steps and a summary of the legal team and rates, the electronic bill summarises numerous components including by Phase; by Task, Activity and expense; by Part; by communications; and compares the costs in the bill with the last approved/agreed budget.

When serving or filing at Court, you must also serve and file a hard copy of the electronic bill in “manageable” paper format. The intention is however that the electronic bill and not the paper version will be the focus on assessment, enabling live changes to reflect the Court’s assessment of costs.

However, there are already concerns about the level of IT training given to the judiciary.

Although the new rules do not apply to legal aid or Solicitor Act assessments, it is envisaged that at some point in the future they would be brought within the scope of the rules.

Work carried out both before and after 6 April 2018?

 

It is still possible to commence Detailed Assessment proceedings with a paper Bill for work undertaken to 6 April 2018 but there must be an electronic bill for work from 6 April 2018. It remains to be seen how much of a take up there will be in line with Senior Costs Judge Master Gordon-Saker’s preferred approach when he said that:

“Frankly we’re working possibly on the false assumption that if you’ve got to prepare an electronic bill you’re probably going to do it for the whole case rather just a bit of it.”

Specialist Costs Lawyers would be able to translate old work into the new codes so that the entire bill is electronic.

So, will the added transparency afforded by the electronic bill assist with quicker resolution of costs assessments? And in turn, will Solicitors get paid quicker?

Quite possibly, especially in conjunction with the supposed certainty afforded by costs budgeting.

Indeed, done well, time recording and the electronic bill itself will bring about many benefits:

  • It is designed to dovetail in with the Precedent H Costs Budget and will help with monitoring spend under Phases to stay under Budget.
  • Those who are not time recording accurately under Precedent H Phases risk losing budgetary control in costs managed cases, without any early warnings.
  • If overspending, the level of detail will help management see where the overspend is occurring.
  • There is more detail in the Bill and the data is manoeuvrable by the parties and the Court.

But as always, the electronic bill will only be as accurate as the information inputted, especially as the once simple task of time recording by fee earners is now more complex and time consuming. Costs Lawyers will ensure the final electronic bill can be signed off as accurate and some Solicitors may even take a pragmatic approach to retrospective coding by their Costs Lawyers at the end of the case.

In future, Courts will deal with all matters electronically, although there are many practical and IT hurdles to overcome for the Courts to manage cases on a purely paperless basis, including the secure and usable format in which Solicitors’ electronic files of papers can be lodged at Court.

But for now, the focus is on the electronic bill and plenty of teething problems can be expected! 

Lee Evans is a Director at NWL Costs Lawyers, a firm which has specialised in Legal Costs claims for over 35 years.

E:         lee.evans@nwlcosts.com

W:        nwlcosts.com