There is now less than a month to go until the electronic bill of costs becomes mandatory on 6 April 2018. The new bill of costs must be used for all Part 7 multi-track claims, except for cases in which the proceedings are subject to fixed costs or scale costs cases in which the receiving party is unrepresented where the court has otherwise ordered.
Whilst the rules provide that the electronic format need only be used for costs recoverable after 6 April 2018 with all work undertaken before that date being capable of being set out in a traditional paper bill (CPR 47.6 PD 5.A4), the senior costs judge, Master Gordon-Saker, had this to say when speaking at the Law Society Commercial Litigation Conference on 16 October 2017:
“Frankly we’re working possibly on the false assumption that if you’ve got to prepare an electronic bill you’re probably going to do it for the whole case rather than just a bit of it.”
We have been working on the same assumption.
The idea of conducting assessment proceedings on the basis of two distinctly different bills of costs seems impractical, from both a receiving and paying party’s perspective, and would surely lead to an otherwise avoidable increase in costs.
Electronic bills may be in either Precedent S format or any other spreadsheet format which—
(a) reports and aggregates costs based on the phases, tasks, activities and expenses defined in Schedule 2 to this Practice Direction;
(b) reports summary totals in a form comparable to Precedent S;
(c) allows the user to identify, in chronological order, the detail of all the work undertaken in each phase;
(d) automatically recalculates intermediate and overall summary totals if input data is changed;
(e) contains all calculations and reference formulae in a transparent manner so as to make its full functionality available to the court and all other parties.
(CPR 47.6 PD 5.A2)
Precedent S has been criticised by some for being over engineered and needlessly complex. Understandably perhaps, solicitors and costs professionals alike have been slow to embrace the change. Here at TMC however we have been routinely preparing electronic bills of costs since March 2017 under the old pilot scheme (PD 51L). In that time we have prepared 100s of these bills. We have identified and ironed out a range of issues and in doing so have significantly developed and tweaked the Association of Costs Lawyers’ original version of the electronic bill. This fully complies with PD 5.A2 and now caters for cases funded by legal aid, a notable omission from Precedent S. This advanced version has now been adopted by the ACL as their precedent electronic bill.
How we can help
The theory behind the electronic bill is that it should be capable of being prepared directly from a firm’s case management system with minimal effort. This is an understandable aim. However, the reality is somewhat different. Some firms of solicitors are more prepared than others for “e-day” with sophisticated systems already in place for recording work by phase, task and activity. Others continue to work with traditional paper files. In all cases, the ability to generate a bill of costs directly from a case management system is some way off. Issues such as client privilege, interlocutory costs orders and apportionments, among others, are likely to mean that it remains so for some time.
If you have any questions regarding the new bill, or would like any assistance with developing your in-house systems please get in touch. Our highly experienced costs lawyers are willing, able and ready to assist.
“Change is the law of life and those who look only to the past or present are certain to miss the future”
John F. Kennedy