Innovating costs

We’re now more than a year into the compulsory adoption of the electronic bill of costs in most multi-track cases. Like any innovation that disrupts a long-established way of working, the early days have not always been smooth and tweaks will be needed along the way.

The Association of Costs Lawyers (ACL) recently brought together judges, costs lawyers, solicitors and barristers to discuss the progress to date. The overwhelming conclusion was that this genie is not going back into the bottle. 

The senior costs judge Andrew Gordon-Saker said his experience has been “pretty positive”, with problems caused more by lawyers than the bill itself. “It is certainly the way to go”, he said and explained that he was keen to extend its application to court of protection bills, followed by legal aid bills, solicitor and own client bills, and judicial review bills. 

Concerns included the need to improve the way fee-earners record time in the first place to feed into the bill; a lack of training for judges and practitioners in Excel (or other XML spreadsheet programs); and a willingness of some judges and lawyers to dispense with the electronic bill and use the old-style paper bill. Some old dogs really don’t want to be taught new tricks.

William Mackenzie, a costs lawyer who heads up the London costs team at DWF (which hosted the event) said: “The issue is that fee-earners do not have any interest '¨in costs. If somebody says, ‘let’s dispense with this’, any defendant fee-earner is going to think, ‘well, it doesn’t really make a difference to me. I’ll agree to that’. Any claimant that asks for it pretty much gets it.” But I think Alex Hutton QC of Hailsham Chambers, who chaired the committee that created the electronic bill, was right when he predicted that opposition would die over time in the same way that it has since cost budgeting was introduced in 2013.

There was some excitement about the significant possibilities the electronic bill opened up. Mackenzie talked about how DWF was looking to identify trends by analysing the data.

He said: “Once we have a lot of data together, we will be able to see what is going on with solicitors, where the bulk of their costs are and how we can work with our insurers to limit their exposure and litigation spend.” He added that his fee-earners estimated it was 25-30 per cent quicker to review an electronic bill, draft advice and come up with settlement parameters.

The problem with fee-earners not recording time correctly was that it increased the length of time it took to draft an electronic bill – in addition simply to parties getting used to it – so drafting fees have gone up. The courts will tolerate this for a while, but Master Jennifer James (another Senior Courts Costs Office judge) made clear: “At a certain point, we are going to be saying there has been enough time now and it is not proportionate to be charging these kinds of fees.”

Steven Green, a partner '¨and head of costs at Irwin Mitchell, stressed that costs lawyers would still have an important role: “You still have to look at your orders, write a narrative and sense check it… It is never going to be, ‘press a button, here it comes’. '¨But it should save time if properly recorded.”

Hutton concluded: “Although we have been talking about problems, I felt the amount of positivity in the room. Given the amount of opposition that we had to bringing this in, the struggle that it was and the people who said, ‘you will never bring it in and it will never work’, I find this generally encouraging.”

Francis Kendall, vice-chairman of the ACL, summed it up beautifully for me: “I love the new bill. If you asked me to draw an old-style bill now, I would probably struggle. I think they are a fantastic beast, they are the future and they have real scope for analysing the costs in a far better way than we ever did with a paper bill… I believe that, in five years’ time, we will wonder why it took so long to make this shift.”  

Claire Green is chair of the Association of Costs Lawyers associationofcostslawyers.co.uk