A new format for the good old bill of costs is sneaking up on the profession with increasing speed.
In October 2015, a pilot began in the Senior Courts Costs Office (SCCO) of the electronic bill, Precedent AA, developed by the Hutton committee. It was tied to firms’ adoption of the J-Codes. However, there has been virtually no take-up since then.
But that has not stopped the Civil Procedure Rule Committee (CPRC) moving forward. Encouraged by Jackson LJ (whose report began this activity), it produced a revised bill for the pilot, Precedent AB, that does not require lawyers to record their time using J-Codes.
This reflects Jackson LJ’s call in April to allow use of the bill prepared by the Hutton committee, but without mandating use of the J-Codes. He said this would allow “greater flexibility” and promote take-up given that:
“… most, if not all, of the criticisms about the new format bill of costs are aimed at the J-Codes”.
The rules now provide that, in addition to the existing new bill format, parties can use any other spreadsheet which:
“… reports and aggregates costs based on the phases, tasks, activities and expenses defined in schedule 1 to this practice direction”.
It should also report summary totals in a form comparable to Precedent AB, automatically recalculate intermediate and overall summary totals if input data is changed, and contain all calculations and reference formulas in a transparent manner, “so as to make its full functionality available to the court and all other parties”.
Crucially, the CPRC said that the aim was for a final version to become mandatory from October 2017, with a decision on its final format to be made in the spring.
A recent survey of members of the Association of Costs Lawyers has not found much enthusiasm for the electronic bill. We polled 117 of our members after these revisions were made in October, and found that half thought the new bill format was simply not needed; 28% said that it would actually make things worse. Just 9% said that they were getting used to the new bill, while a pessimistic 34% reckoned that, however good it may be, solicitors were simply not interested in changing.
Some 57% of respondents said October 2017 was too soon for it to become compulsory, although 28% agreed that “it has to happen sometime, so why not then?”
Just one in ten costs lawyers expected the change to J-Codes to improve the situation, while nearly half (48%) thought them dead in the water. A third (32%) predicted that some will still use the J-Codes, but said that other approaches would be just as effective.
But the bill is coming, whatever the reservations of the profession. The ACL has therefore launched its own, more workable version. It takes into account comments made about the pilot version by members, SCCO masters and solicitors alike, who, in broad terms, indicated that Precedent AA was overly convoluted. It is intentionally far less rigid than Precedent AB as well.
For some members of the judiciary, costs lawyers and draftsmen, the ACL Bill will represent their introduction to the more advanced features of Excel. It allows them to hone the essential skills they will need as the civil courts continue to embrace technology to advance the services they provide.
The ACL Bill starts with high-level information summarising the costs and gives a greater level of detail as you progress through the document. Its basic features are:
- There is a traditional front-sheet.
- There is a traditional narrative, where funding arrangements are detailed (as is presently the case).
- Profit costs calculated within the body of the bill will automatically populate into the “Precedent Q” creating the traditional bill of costs summary.
- Any changes made to hourly rates in the “Fee Earner Summary” will be automatically reflected throughout the bill. With flexibility in mind, there are alternative methods as to how this may be achieved. Although this functionality is currently in place, it may be removed in final release because the formulas can be complex and create user errors.
- In the “Precedent Q”, Precedent H phased costs can be compared against total budgeted phases. However, any distinction between pre-budget (incurred) costs and post-budgeted costs will require additional input.
- The ACL Bill is not reliant upon J-Codes but can be adapted to use them if necessary.
- There is a “Phase and Activity Summary”, and separate communications and disbursement summaries. There is scope for the use of customised codes with some small changes. If the text in column B of the “Reference Data” tab is changed, the “labels” will change throughout the bill. This is not recommended because there may then be uncertainty regarding compliance with Practice Direction 51L, which governs the pilot. If this change is made it should be done before drafting is commenced.
- The document is designed to include all the information that is necessary for the assessment of costs, from the preparation of the costs claim, to the determination of the amount between the parties by agreement, or through to a provisional or detailed assessment.
With such a focus on modernising civil justice, some form of electronic bill of costs is inevitable. Solicitors need to embrace technology in order for them to assist in the better management of their time and become far more commercially aware in what is effectively a service industry.
Phase, task and activity provides those who practise efficiently with the perfect platform to showcase their respective skills. Those who hold onto the past and ignore the requirement for a greater degree of transparency simply fail to recognise, and embrace, the coming changes to the way that we as a profession are remunerated.
Customers want certainty and, in some circumstances, the ability to question. But they want to do this without the questioning being disproportionate to the costs under scrutiny. Transparency through technology will enable this to occur. Budgeting was the beginning and the new bill format in a further link in the chain.
Done properly, this can offer significant benefits to parties, judges and lawyers alike. Nobody is better placed than the ACL to take the lead on this, and we believe that the ACL Bill will smooth the path for what will be a major change in the way litigators operate.
Any comments on the ACL Bill can be sent to firstname.lastname@example.org
This article first appeared in the Practical Law Dispute Resolution blog on 19 December 2017.