REUTERS | Hannah Mckay

The year of the e-bill: a reflection on the introduction of the electronic bill of costs in 2018 and a look forward to the automated future of legal costs

After a voluntary pilot period and a delayed implementation date, the electronic bill of costs was formally introduced in April 2018. With it came a general confusion and steep learning curve that we have not experienced in the legal costs profession since the 2013 Jackson reforms. As a so-called “millennial” and recently qualified costs lawyer, there was certainly pressure to get on the e-bill train and champion the new systems and technology-based approach. However, as with most things, the reality is that change still takes time.

Electronic bill preparation

At my firm, we were fortunate in that the J-code time-recording system was introduced a few years ago, meaning that we were more prepared for the transition to the “task and activity” style of phasing required for the e-bill. We have found that exporting time-recording data directly into the billing software has significantly increased the efficiency of bill set-up, but there is still a level of manual input required. The change to this new approach initially resulted in some setbacks to speed, as costs professionals adapted to new ways of working.

After quite a lot of debate and some pilots, we decided to prepare “hybrid” bills; we utilised the “old style” bill for costs up to 6 April 2018 and the Precedent S e-bill for the costs thereafter, as accounted for under Practice Direction 46. This decision was predominately made to avoid incurring additional costs of retrospective J-coding (although J-coding was introduced a few years ago, many of our files considerably pre-date this). However, the “hybrid” method came with its own challenges. We quickly realised that we would also need to include a composite summary of both bills to outline the total figures and a template had to be created.

Throughout the year, some little difficulties were identified and solutions had to be found as we went along. The Precedent S and Association of Costs Lawyers (ACL) bill also underwent updates during the course of the year. Our statistics show that towards the end of 2018, preparation of hybrid e-bills was becoming as quick as traditional billing. This indicates that change was being successfully implemented. Owing to its efficiency, some members of our team even started to favour the “full e-bill” approach as opposed to the hybrid approach. Initial trials suggested that e-billing could create significant time savings and, as we progress through 2019, I think e-billing will begin to surpass traditional billing in terms of speed and efficiency.

Electronic bill assessment

Although the e-bill was introduced in April 2018, we have still to see any major costs decisions made on the basis of an e-bill assessment. In fact, relatively few e-bills have yet to be assessed at all. In November 2018, my firm held an in-house mock assessment of an e-bill as part of training, with counsel stepping into the role of the costs judge and claimant, and defendant advocates. This mock hearing, whilst insightful, uncovered some potential issues with the new electronic method of assessment.

The assessment felt much slower. It is clear that the speed of the assessment will be dictated by the level of the Excel skills possessed by the judge and advocates. A lot of time was spent ensuring that all parties had the same figures on their version of the spreadsheet and reminding the parties to refresh the spreadsheet to apply changes. These issues are bound to get better with time and practise. For now, though, we are potentially looking at longer listings for detailed assessments. This will result in higher costs of assessment for the parties, or delays during hearings. If hearings become more daunting, this poses the question of whether parties may become dissuaded from attending court assessments and look to agree more “commercial” settlements. This may not always be in the clients’ best interests.

With longer assessments, the associated costs could become disproportionate. How will judges deal with assessing these costs, as well as increased billing costs as a result of retrospective J-coding? At the ACL conference in November 2018, Master Gordon-Saker recognised that billing would take parties “longer at the moment”, but he did add that provisional assessment costs would remain capped at £1,500. It will be interesting to see what approach the judiciary will take in practice.

E-points of dispute/replies?

In our mock assessment, the parties prepared their points of dispute and replies in the e-bill spreadsheet. This is not compulsory, but it is favoured by the ACL. As we move forward with e-bill assessments, a decision will likely have to be made as to whether the CPR Practice Directions should be amended to make e-points of dispute/replies compulsory. There are pros and cons to both methods. Inclusion of the points of dispute and replies in the e-bill format is beneficial for filing documents at court as everything is in one spreadsheet. However, it can also be argued that this can lead to one huge, complicated spreadsheet which leaves the parties constantly scrolling through the columns to read the arguments, and then scrolling back to find the corresponding figure. Another issue is that the inclusion of lengthy points of principle in the Excel format increases the size of the rows, leading to yet more scrolling. A potential answer to this is to serve points of principle as a separate document with disputed document time laid out in the body of the e-bill.

Electronic filing/service

Procedure calls for service and filing of the e-bill in physical, as well as electronic, format when serving the bill with notice of commencement and filing assessment bundles. If the introduction of the e-bill is to be successful at bringing our profession up to date and to assist with cutting down on paper waste, then we need to get to a stage where all service and filling is electronic, thereby dispensing with paper service. The question remains, how far away are we from being able to have a fully electronic method of filing and service? This was hinted at during the questions panel at the ACL conference, but will the Senior Courts Costs Office (SCCO) be prepared for this in 2019?

What does 2019 hold for electronic costs?

It is undeniable that it will take time for the profession to adapt to change. For example, we are still seeing the implications of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) creating live issues some five years on. It follows then, that we are left to consider whether we are looking at another five years before all issues with e-billing and e-assessment are rectified. Rupert Jackson himself was quoted as saying:

“I predict that in three years from now people will be amazed that we had put up with the old paper-based bill for so long.”

With time, new processes will become learned behaviours and the process of preparing e-bills will become quicker. Furthermore, with the increase in amount of e-bill assessments being heard in 2019, some of the technical issues discussed above should start to dissipate.

The new electronic statement of costs will be introduced as a voluntary pilot from 1 April 2019 with the aim of better aligning the document with the e-bill. Costs budgeting guidance also looks set to get updated for consistency with the electronic bill this year.

Despite the initial period of adjustment, I think that what Rupert Jackson set out to achieve stands true. A move to electronic billing and semi-paperless data will save time and costs in the end. We are no longer in the era of pen and paper, and our systems must move towards automation if our profession is to stay relevant. 2018 was the year of the e-bill and sparked a step towards a more efficient future for costs processes, one which we must continue to pioneer in 2019 to help iron out the potential pitfalls and make the system a success.

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