“It is a truth universally acknowledged, that a [Judge] in possession of a good [imagination], must be in want of a [solution]”.

Lord Justice Jackson’s solution to controlling what was seen as the excessive costs of litigation included a call to “ …harmonise the procedures and systems which we use for costs budgeting, costs management, summary assessment and detailed assessment”.

Following the publication of Jackson LJ’s final report, the Association of Costs Lawyers (ACL) set up a working party to look into how this might be achieved. Their report in October 2011 recommended that, in the first instance, an England/Wales version of the UTBMS codes be created as a pre-cursor to any bill of costs being devised.

The committee was then “taken over” by Jeremy Morgan QC and thereafter, comprised a mixture of Costs Lawyers, Solicitors, in-house Counsel, e-billing experts and legal software suppliers. Following two years of hard work by this committee their recommendations were approved by the judiciary and were then put forward for approval by what is known as the LEDES Oversight Committee (LOC). The letter of recommendation and the document containing the codes that were subsequently approved are available to view on the ACL website.

It should be noted that the codes were approved over a year ago and it is therefore somewhat surprising that there is still so little awareness of them amongst the legal community. This was brought home to me forcefully at the recent Law Society Commercial Section Conference when only c20% of the attendees said that they had heard of them before that day!

This is of as much concern as it is of bemusement. A new format bill of costs has now been devised by the Committee (now known as the Hutton Committee).  The Civil Procedure Rule Committee, at its July meeting, endorsed the adoption of this new format bill along with a pilot scheme for its implementation.  

What are they?

They are a set of codes that “define” all work done by way of an assigned task and activity. For those who want a brief overview of these task and activity codes, I recommended reading pages 44-49 of the document referred to above].  The means to do this will have to be supplied by firms’ case and practice management software systems. Representatives of the Legal Software Suppliers Association (LSSA) sat on the Hutton Committee throughout the last three to four years.

Who needs to use them?

This is effectively a litigation code set so all litigators – and costs specialists – should be aware of the J-Codes and should learn about them as soon as possible. Initially they are only intended to apply to matters which are or will be budgeted and which will go through the SCCO. The J-Codes are not intended to be compulsory but it will be very difficult to prepare the new format bill of costs without their use.

When will they be necessary?

The pilot scheme will only apply to cases where the eventual costs fail to be assessed in the SCCO. The voluntary pilot has already commenced but a compulsory pilot will follow.  This was originally intended to apply to all cases where the order for costs was made on or after 1st April 2016 but this has bee  put back to 1st October 2016 (and could be even later). 

How are we supposed to use them?

Whilst it will, without doubt, be a steep learning curve for the majority of lawyers, they will become familiar with use. However, what would be of assistance both in the short and longer terms is to use the expertise of Costs Lawyers. The ACL’s J-Codes and new format bill working party will be setting up a series of training road-shows for ACL members who will then be able to assist their solicitor clients through training seminars and by assisting with/checking the correct “coding” of work done (in the same way as they are – or should be – assisting with “phasing” of work). 

I was more than a little surprised to learn – at the Law Society Conference mentioned above – that of c80 Solicitor attendees in the room, only two had availed themselves of costs expertise for the preparation of budgets. Bearing in mind that most firms of solicitors would probably prepare no more than 10 budgets in a year, the failure to engage the expertise of a costs expert who will probably have done at least ten times that number, was somewhat mystifying.

Why shoud we bother?

The J-Codes are not going to go away and I predict that their use will become the ‘norm’ for firms over the coming years.  Software suppliers will have to update their systems to accommodate them and practitioners would be well advised to get to grips with them during this ‘pilot period’ so that they are prepared for the future.

Further information can be found in two excellent articles by costs lawyer and Hutton Committee member Derek Boyd in the July and August issues of Costs Lawyer (contact enquiries@costslawyer.co.uk)

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08 Jun 2016

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