'Overly convoluted' costs bill not needed, say costs lawyers

A lack of enthusiasm among lawyers for the new electronic format of the bill of costs has led the Association of Costs Lawyers to launch a 'more workable' version for solicitors and judges.

There has been virtually no take-up of precedent AA since a pilot began in the Senior Courts Costs Office in October 2015, according to the ACL. One year on, the Civil Procedure Rule Committee amended the piloted electronic bill, which included dropping a requirement that users apply J-Codes to record time, and said the final version '“ precedent AB '“ should become mandatory from October 2017.

However, a new ACL survey has found half of costs lawyers believe the new format is not needed, with 28 per cent saying it would likely make things worse. Just 9 per cent said they were getting used to the bill, while a pessimistic 34 per cent reckoned solicitors were not interested in change. Moreover, 57 per cent said next October was too soon for the bill to become compulsory.

Just one in ten expected the J-Codes change to improve the situation, while nearly half thought them dead in the water. One-third predicted J-Codes would still be used, but that other approaches would be just as effective.

The ACL's bill of costs takes into account comments made about the pilot, which in broad terms indicated that precedent AA was 'overly convoluted'. Iain Stark, the ACL chairman, explained that, having analysed what is required under the practice direction, the ACL bill is intended to be 'a more workable solution for a claim for costs' and was intentionally far less rigid than precedent AB.

'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,' said Stark. 'With such a focus on modernising civil justice, some form of electronic bill of costs is inevitable. Done properly, it can offer significant benefits to parties, judges, and lawyers alike.'

The ACL's new Excel bill comes following the findings that solicitors don't stick to costs budgets. Just 2 per cent of costs lawyers have worked with solicitors who stuck to their budgets, while 72 per cent said solicitors 'sometimes' went over their budgets. Some 22 per cent, however, said solicitors always exceeded their budgets.

Moreover, just over half of costs lawyers said costs budgeting should not be held at the first case management conference as the course of litigation was less clear at that stage. Solicitors were advised to keep their budgets updated as cases progressed; however, judges have often complained that this rarely happens. One-third of costs lawyers agreed, explaining they had never seen an application to update a budget. Only 18 per cent reported an increase.

Asked how costs management is working in practice, 32 per cent of respondents said 'judicial inconsistency is killing' costs management. A further 62 per cent agreed 'it depends on which judge you're before', while 10 per cent thought judges were finally getting the hang of costs management.

The survey also uncovered concern about the Court of Appeal ruling in Sarpd Oil International Ltd v Addax Energy SA, which suggested that the first CCMC was the place to contest the reasonableness and proportionality of costs that have already been incurred '“ rather than just those to be incurred in the future.

Four in ten respondents said the ruling had made the first conference much more contested and significantly increased the amount of preparatory work as a result.

'We are more than three years into costs budgeting and the reality is that '“ while it has been of benefit in some instances '“ it has not delivered in the way that was hoped,' said Stark. 'This is, at least in part, because many solicitors have still not properly engaged with the process, even though they risk court sanctions as a result.

'The alternative, as laid out starkly by the senior judiciary recently, is fixed costs for cases worth up to £250,000 '“ a figure that covers the vast majority of litigation in England and Wales. Maybe this is the shock solicitors need to get serious about costs budgeting.'