The Cost of Change – New Electronic Bill of Costs to be Delayed

IT hold ups will mean the introduction of the New Electronic Bill of Costs will now be delayed until April 2018.

Initially, the bill was due to come into play in October 2017.  The Civil Procedure Rules Committee stated the delay was due to the need to ensure the IT infrastructure at the County Courts can handle bills filed electronically.

There has been plenty of criticism aimed at the new electronic bill of costs, with solicitors stating that it requires them to spend longer recording their time and preparing the document.  However, the Association of Costs Lawyers (ACL) have extolled the virtues of the new bill, alleging it can offer “significant’ benefits to parties, judges and lawyers alike.”  Writing in the New Law Journal, Steven Davies, an ACL council member, stated:

“The mandatory introduction of the electronic bill could lead to significant long-term benefits to practitioners and costs professionals despite the possible short-term downsides that apply with any change in procedure. It should enable a better integration with solicitors’ time recording systems and allow importing of information.

In the longer term, it could lead to the more efficient production of bills, arguably at a reduced cost, which is what Jackson LJ always envisaged. It should also increase the transparency between the bill of costs and any approved costs budget, which could be lost in versions of the transitional “phased” bill some current forms used, notwithstanding the introduction of Precedent Q.”

In October 2015, the Senior Courts Costs Office (SCCO) introduced a pilot scheme to introduce a version of the electronic bill of costs as contained within the Civil Procedure Rules PD 51L.  This scheme was intended to apply to cases which proceeded in the SCCO where a notice of commencement was filed after October 2015 and whereby a party may file a new format bill.

There was low take-up of the pilot, and the ACL have acknowledged there has been little data collected about the success of the trial overall.

The background to the New Electronic Bill of Costs

 Prior to the introduction of costs budgeting, Lord Justice Jackson made the following recommendations:

  1. a new format of the bill of costs needed to be created which provided more information and could obtain data from different levels of generality; and
  2. software should be developed which would:
  3. be used for time recording and capturing relevant information and
  4. automatically generate schedules for summary determination of bills for detailed assessment as and when required.

In October 2011 the ACL report entitled ‘Modernising Bills of Costs’ recommended considering whether a Uniform Task-Based Management System (UTBMS) could be modified and used to create the new format Bill of Costs.

A working group, the Jackson Review EW-UTBMS Development Steering Committee (the Committee), was set up under the Chairmanship of Jeremy Hunt QC to consider the prospect of utilising the UTBMS system.

The Committee, which comprised of cost lawyers, IT experts and costs draftsman, recommended the use of UTMBS as adapted for use in the English and Welsh legal market; referred to as EW-UTBMS or ‘J-Codes’.  The codes were to be developed to ensure compliance with the essential aspect in Jackson’s final report – that the codes be used for time recording.

The J-codes were based on the sequencing of the work undertaken by litigators and are aligned to the phases of the litigation set out in Precedent H.

Following the limited uptake of the use of the New Bill of Costs pilot scheme, Lord Justice Jackson in a lecture at the Law Society in April 2016 entitled ‘The New Form Bill of Costs’, acknowledged that J-Codes bore the brunt of most of the criticism levelled at the new electronic costs scheme.

He therefore recommended references to J-Codes be removed from the bill.

Where are we now in relation to the new electronic bill of costs?

 The New Electronic Bill of Costs is in spreadsheet form, utilising, within its analysis, a system to identify the work undertaken by importing the solicitor’s time-recording.  If a firm has no time recording system in place, the time recording will have to be done manually.

The use of J-Codes has been superseded by phases, tasks, activities, and expenses as defined in CPR PD 47, Sch 1.  The intention is that the New Electronic Bill of Costs will be much easier to produce than the existing method for producing a bill of costs.  Although the goal is that the new system will be more user-friendly and transparent, many solicitors believe that it will add considerable time and pressure to their already excessive workloads.

The announcement of the delay in implementing the changes due to challenges in getting the IT systems ready is further adding to the legal profession’s jitters, alongside the fact that there is very little positive evidence gleaned from the pilot that the Bill will deliver on what is being promised.

There are also still significant challenges facing the creators of the system.  For example, how to deal with complex circumstances such as partial costs orders, multiple party litigation and interim statute bills, still needs to be decided.

But a far bigger challenge will be getting the profession on board with the changes.  Many simply see the project as a massive expense being used to fix something that was not broken in the first place.

The ACL needs to use the six-month delay period to collate data from the trial and use the information to make improvements where required.  Because without the support of the profession, the introduction of the New Electronic Bill of Costs could further reduce the morale of litigation teams already grappling with large workloads, increased admin and long hours.

R Costings is a leading firm of Costs Lawyers, Law Costs Draftsmen and Legal Costs Consultants, based near Cambridge.  For advice and/or information about the new electronic bill of costs, please call us on 01480 463499. Any of our team of costs experts will be only too happy to assist.