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Attention! Electronic billing: the new Bill of Costs is coming and solicitors need to be prepared

On 3 October 2016, a new Practice Direction (PD) 51L came into force. It provides for the voluntary use in the Senior Courts Costs Office of the revised new format for the parties’ bill of costs for use in civil litigation. The potential sting is in the PD at paragraph 1.1A:

“a) the Pilot Scheme in its amended form will come into effect on 3 October 2016 with a view to establishing a mandatory form of bill of costs to apply to all work done after 1 October 2017”
(b) the Rule Committee will monitor and review the Pilot Scheme and aim to fix the mandatory form of the new bill of costs at its meeting in May 2017.”

Criticisms of the current format of bill

The origins of the new bill go back to Sir Rupert Jackson’s final report on costs, published in January 2010. He drew the following conclusions regarding the current format of the bill, based as it is on a Victorian account book:

  • It is extraordinarily expensive and cumbersome to draw, because essentially a costs lawyer has to construct line by line from scratch a bill of costs from vast numbers of attendance notes and other information.
  • It does not make use of the available technology, in particular the contemporaneous time-recording data which nearly every solicitor now uses daily.
  • It is turgid to read and not easy to digest.
  • “Documents” is generally the most contentious item, upon which large sums turn. However, this amounts to a list with inadequate information. It is not divided by headings.

Jackson’s recommendations

The final report recommended three requirements of a new bill of costs:

  • More transparency.
  • User friendly synopsis of work done.
  • Inexpensive to prepare.

“In my view, modern technology provides the solution…”

The J-Codes

The J-Codes are an adaptation of an existing system (the Uniform Task Based Management System (UTBMS)) for use in England and Wales. They are simply a list of time-recording codes under which to record work done contemporaneously within the Precedent H hierarchy of phases. In accordance with Schedule 1, PD 51L, they break down as follows:

  • Phase. These are essentially the Precedent H Phases; for example, Phase Code JG00, Witness Statements.
  • Task. “What” is being done. Each phase is broken down into two, three or four tasks. That is, Witness Statements has two such tasks: Task Code JG10, “Taking, preparing and finalising witness statements” (that is, your own witness statements) and Task Code JG20, “Reviewing Other Party(s)’ witness statement(s)”.
  • Activity. “How” it is being done. For example, Activity Code A113, communicating with the witness. The list of activities has now been simplified, in response to understandable criticism previously that these were too numerous and complex. The activities are now limited to:
    • advocacy;
    • various communications with different people, for example, client, witness, expert, other side, counsel etc.;
    • travel; and
    • one activity called: “Plan, prepare, draft, review”.

All the fee earner has to do, when sitting down to work on the case, is select from a drop down menu on their time recording system on their computer (a) a Task Code (for example, JG 10) and (b) an Activity Code (for example, A113) together (the Phase code does not need to be entered as the Task code is specific to a phase). The fee earner can, and of course should, give further narrative detail of the precise work under the heading (that is, an “attendance note”).

That data can then be exported straight into:

  • A budget in relation to incurred work.
  • A summary assessment schedule.
  • A detailed bill of costs in spreadsheet form.

The new bill itself

This appears via a link in PD 51L:

  • The specification is designed primarily for electronic use but allows for a summary printed version as well: both will need to be served.
  • The printed version does not have all the columns of the full electronic version (the full version is simply not printable in full).
  • It has easy to read and useful summaries.
  • It is arranged in phases, tasks and activities with summaries at the start and more detailed costs information as you go through it.
  • One can drill down into the detail by the click of a button or two; for example, how much time did you spend on your witness statements?
  • The format can be used by those who do not have a time-recording system or any billing software but obviously some of its advantages will be lost to those who do not.
  • You do not have to use J-Codes to use the new bill (you could use similar time-recording systems) but the new bill has to accord with PD51L.
  • Whether producing Precedent H, or summary assessment or detailed assessment bills, it will always require some human intervention (weeding out privileged information, working out the effect of particular costs orders on the bill etc.), but far less (and at substantially lower cost) than at present.

What should solicitors do now?

The present plan in PD 51L is that all work done on or after 1 October 2017 will have to be presented in the new bill format. For cases which started before 1 October 2016 and go on afterwards, it may be necessary to present a bill in two parts: the old bill format for work done before that date, and the new format for work done thereafter. No after the event reconfiguration of work into J-Codes should therefore be necessary.

Everyone therefore has time to adopt J-Codes (or a similar alternative if you prefer) by that date so that work is recorded contemporaneously under those codes and the new bill format can be used. There can be no excuses for not doing so. And the reality is that the sooner this is started, the easier the task will be in the future. The intention is that the new bill format is the future. It will not go away. And in the future you/your client may simply not recover the extra costs of preparing a bill in the old way.

 

Alexander Hutton QC is Chair of the Hutton Committee. For further information, please contact alexander.huttonqc@hailshamchambers.com

Hailsham Chambers Alexander Hutton QC

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