With the courts preparing for a £350m cash injection over the next five years, much of which will hopefully go on better IT – under the deal struck by the Lord Chief Justice and Lord Chancellor a few months ago – we are finally heading to the point when the good old bill of costs needs a makeover.
Indeed, it was one of Lord Justice Jackson’s recommendations. His report said that a new format of bills of costs should be devised, “which will be more informative and capable of yielding information at different levels of generality”.
The recommendations continued: “Software should be developed which will (a) be used for time recording and capturing relevant information and (b) automatically generate schedules for summary assessment or bills for detailed assessment as and when required. The long-term aim must be to harmonise the procedures and systems which will be used for costs budgeting, costs management, summary assessment and detailed assessment.”
The work towards this began with a 2011 report by an Association of Costs Lawyers working group, Modernising Bills of Costs. From this, the then Senior Costs Judge, Peter Hurst, asked Jeremy Morgan QC to set up a steering committee – which has a wide range of members, including costs lawyers – to develop the so-called J-Codes as part of the work on the new bill.
These are standardised codes that will ultimately categorise every activity within the civil litigation process for costs assessment purposes. The committee is now chaired by Alex Hutton QC of Hailsham Chambers and its work has the full support of the senior judiciary.
This summer saw a major milestone in the committee’s work when the Legal Electronic Data Exchange Standard (LEDES) oversight committee ratified the J-Codes. LEDES’ membership largely comprises legal software vendors and large law firms – essentially, the key parties that will either develop or use the software on which the J-Codes are based.
As the new J-Codes guidance explains: “If the advantages of the electronic production of bills are to be maximised, it is important that a fee-earner’s time entries should form the basis not only of a solicitor’s bill to the client but also of any bill to be presented for assessment by the courts… Otherwise, as at present, every entry in a bill for assessment is simply a manual repetition of something that has already been inputted electronically in the firm’s time recording system.
“If this duplication of effort is to be avoided, the same underlying codes have to be used by the firm’s practice management or time-recording system as are used in the preparation of bills for assessment. Since bills for assessment will all have to be presented in the same format, it is essential to develop a common set of codes which can be used to record entries in the time-recording system and from which both solicitor and client bills and bills for assessment can be generated.”
LEDES’ approval of the proposed J-Codes is crucial in ensuring that Jackson LJ’s plans for all claims for costs to be presented to the court by reference to ‘phases, tasks and activities’ can be delivered.
Within the unified coding scheme set out in the J-Codes, specific top-level ‘phase codes’ will categorise all civil litigation work performed by its overall theme, such as disclosure or work related to the production of witness statements. More granular ‘task codes’ will then classify work by what is being done – such as reviewing the other party’s statement of case.
Finally, ‘activity codes’ will set out how the work is being undertaken – such as researching a matter or drafting a document. ‘Expense codes’ will categorise disbursements, while ‘timekeeper/lawyer grade codes’ will categorise practitioners by reference to their seniority.
Ultimately, it is planned that the J-Codes will be adopted by the legal profession on an industry-wide basis, and at every stage of the civil litigation process. However, in reality, the full scope of these changes is likely to take several years to implement. In addition, the guidelines suggest they should initially only be used in cases in which Precedent H has already been adopted. Only after piloting would the use of J-Codes be extended to other areas of litigation, such as family cases.
The committee is now working on a bill format suitable for detailed assessment, capable of being automatically generated from the information already recorded using the J-Codes, suitable for manual preparation by those who do have compatible (or any) time-recording software and workable both electronically and on paper. Once this has been finalised, there will be a consultation and then, subject to judicial approval, a pilot.
This is technical work that will in time be of great significance. It will promote consistency and efficiency, and help the courts and others to analyse costs matters more easily than now. But most lawyers, frankly, do not know this work is going on – keeping up to date with progress could give you an advantage down the line.
Claire Green is a council member of the Association of Costs Lawyers and sits on the steering committee developing the new bill format