Decision postponed on proposal for new October bill of costs

Topics: Civil justice,Costs, fees and funding,Litigation

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The committee set up to decide the future of legal costs in civil litigation has recommended that a new of bill of costs based on electronic assessment should be in place from October.

But civil procedure experts have deferred a decision while the Ministry of Justice considers the impact of sweeping changes, it has emerged.

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The Hutton committee, chaired by Alexander Hutton QC, responded at the end of last year to a range of concerns raised by solicitors about the new system.

The new bill of costs would be designed for automatic generation from electronic time records incorporating J-Codes, standardised codes created in response to the recommendations of Lord Justice Jackson.

In a document presented to the Civil Procedure Rule Committee last month, the Hutton committee said doubts have been expressed about the timing, accuracy and cost of the new format.

One consultation response suggested bill preparation time could increase by more than 200%, while other lawyers said they have waited to invest in new technology because of uncertainty about timing.

The Hutton committee agreed the move from paper to electronic assessment is ‘obviously a huge change’ which will require practitioners to invest in new infrastructure.

‘It is not in fact possible to "pilot" the bill of costs in any real sense,’ said the Hutton committee. ‘Practitioners cannot be expected to make the necessary investment if there is any likelihood of the bill of costs being abandoned.’

The committee said its preferred option was to introduce the bill of costs, except for litigants in person, on 1 October to allow sufficient time to purchase the software.

But the CPR committee, in minutes published yesterday from December’s meeting, has decided it is ‘too soon’ for any decision.

The minutes added: ‘It was acknowledged that the proposal went beyond a pilot and had major implications for the profession. It was agreed that the matter needed to be given careful further consideration by the MoJ and by the committee.’

The Hutton committee sought to ease some concerns about the new system, saying it ‘confidently expected’ those familiar with the use of spreadsheets to be able to handle the technology.

The importation of time-recording data into the new bill format, the experts said, should be ‘simple and quick’ and ensure that fee-earners record their time properly in future.

Claire Green, policy officer at the Association of Costs Lawyers and a member of the Hutton Committee, said: ‘In light of the majority of responses from our members to the suggested new format bill, the complex nature of the bill and associated practical implications that swift implementation would have caused, we are pleased that further consideration will be given to such an important issue affecting the entire legal profession.’

Readers' comments (8)

  • invest in new technology to produce electronic bills of costs.
    Why ?

    A) Jackson wants everything fixed costs
    B) The Small Claims limit is raising ?

    Here is my bill £80.00 ( £66.67 Net £13.33 VAT)

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  • What could possibly go wrong? A 'government initiative', is that not self-contradictory?

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  • How about this.

    In future can all these geniuses putting forward all these new fangled idea. Give out this information with an implementation date, that is complete with a sub-clause that states

    'This date is not the real date, as we do not know what the real date IS or will BE. And so please add at least a further 2 years on to the date here given, which we again advise you is not the real date or even a date that we have a hope in hell of achieving any real prospects of meeting, much thanks love from Genius'

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  • the purpose of a bill of costs in 99% of cases is where there is a between the parties bill of costs and the parties must either agree what is reasonable or a costs judge must assess what is reasonable.

    The new bill of costs format is fairly impenetrable. It consists of 100+ codes in phases broadly in line with the those used in costs budgeting. It will be impossible for either party of the court to tell what is or is not reasonable. The system is adopted from a USA system because it works really well there in assessing between the parties costs.......... err ...hang on the system it's based on doesn't have between the parties costs orders - it's useful for solicitor own client billing not working out if costs are reasonable or not.

    Costs are presently reduced by about 30% - 35% (an average of 1000s files in last 5 yrs in my firm) this will be difficult to achieve when if costs are reasonable or otherwise cannot be identified. The upshot will be unreasonable costs will be allowed between the parties. The exact opposite of the intended consequence.

    Same unintended result with costs budgeting. Costs budget set on basis everything stays in issue to trial when only 3% of litigated cases reach trial. A few mins spent by a judge who considers costs in very broad terms largely based on proportionality top the damages claimed at that time (ie the maximum especially seeing you must now issue for that amount or abuse of process) as opposed to awarded. The case settles before the budgeted costs have been incurred and receiving party says pay because within budget you cannot deviate downwards. Or costs are clearly unreasonable but in budget and everything happened in line with assumptions so argument is unreasonable costs must be paid because in budget.

    Next problem is costs budgeted costs split a bill into at least 20 or 30 parts (30 where pre and post budget and two proportionality tests x 10 phases) so 60 letters to a party becomes 30 lots of 1- 3 letters it is impossible to assess what is reasonable.

    In summary in cases where there is a budget the bill of costs takes twice as long to draft, is 5 or 6 times as long, contains unreasonable costs that cannot be challenged because they are within an approved budget and costs that are unreasonable are so convoluted that it is impossible to tell what is or is not reasonable.

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  • That sums it up nicely anon @1.49.Has anyone looked at the J-Codes and understood them?You would spend more time deciding which code to use for which piece of work than you would doing the work itself.I read somewhwere that they have been in existence in the States for over 10 years and are used by less than 10% of lawyers because nobody other than nerds have any idea how to use them.I presumed they had been designed to put off anyone wanting to pursue a claim through the courts!

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  • And on top of this uncertainty we have the SCCO doing their own thing in BP v Cardiff? It's almost like they are trying to force people into an expensive "voluntary" scheme. You get criticised by the SCCO for not complying with the "guidance" given in BP so you have to provide an enormously complex bill which could be 20 pages but is instead 90 pages to cover all the separate phases when a Precedent Q already exists. So frustrating.

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  • How does such a system take account of the duty ensure that costs reflect the value to the client?

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  • So glad I have retired! Precedent H was bad enough (and I agree with anon@1.49pm). All that is really relevant is that in the context of possible settlement it is very useful to have some idea of the Claimant's expected costs, and what they are likely to be at various points in the future - so the Defendant can weigh the total economic consequences of making an offer. The Claimant doesn't really need to know the Defendant's likely costs (as he chose to sue in the first place) although similar limited information could be provided. The straitjacket of Precedent H is too rigid and too divorced from reality. It also takes no account of more complex litigation which is sui generis, where estimates can be little more than a finger in the air, as there is no worthwhile comparison with previous cases.

    A good idea in principle has been complicated to the point when all it does is increase costs.

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