The way ahead for costs

It is now a little over nine months until a major shake-up in the way the courts deal with costs comes into being, and I strongly suspect that few lawyers know anything about it. In October 2017, a new format for the bill of costs is to be introduced.

This may seem sudden, but actually work has been going on since Lord Justice Jackson recommended an electronic bill of costs in his review. In October 2015, a pilot began in the Senior Courts Costs Office of the electronic bill, precedent AA, developed by a committee headed by Hailsham Chambers silk Alex Hutton. It was tied to firms’ adoption of the J-Codes, which aim to standardise the way time is recorded. However, there has been virtually no take-up since then.

But Jackson LJ has continued to beat the drum. In a speech last April, he said practitioners should be able to use the bill prepared by the Hutton committee without having to adopt 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 Civil Procedure Rule Committee responded, changing the rules in October last year to allow for exactly that. 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 formulae 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.Profession’s reservations

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 per cent said that it would actually make things worse. Just 9 per cent said that they were getting used to the new bill, while a pessimistic 34 per cent reckoned that, however good it might be, solicitors were simply not interested in changing.

Although 57 per cent of respondents said October 2017 was too soon for it to become compulsory, 28 per cent agreed that ‘it has to happen sometime, so why not then?’ One-third predicted that some will still use the J-Codes.Workable version

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.

With such a focus on modernising civil justice, some form of electronic bill of costs is inevitable. Solicitors need to embrace technology to assist them in the better management of their time and enable them to become far more commercially aware in what is effectively a service industry.

Phase, task, and activity sections provide 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 is 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.

Iain Stark is the chair of the Association of Costs Lawyers and a partner and head of costs at Weightmans

@CostsLawyers www.associationofcostslawyers.co.uk