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There has been a certain amount of twaddle written in the Comments section of this blog recently implying that the new J-Codes based bill of costs format is a conspiracy of the few (ie those with a financial interest in costs drafting/costs budgeting software) at the expense of the many (ie by introducing automated bills that will significantly reduce the work of costs draftsmen/costs lawyers).
The starting point to remember is that a new software based bill of costs format was a recommendation contained in Lord Justice Jackson’s Final Report:
“Bill of costs
The three requirements
There are three requirements which have to be satisfied:
The bill must provide more transparent explanation than is currently provided, about what work was done in the various time periods and why.
The bill must provide a user-friendly synopsis of the work done, how long it took and why. This is in contrast to bills in the present format, which are turgid to read and present no clear overall picture.
The bill must be inexpensive to prepare. This is in contrast to the present bills, which typically cost many thousands of pounds to assemble.
How to meet those requirements
In my view, modern technology provides the solution. Time recording systems must capture relevant information as work proceeds. The bill format must be compatible with existing time recording systems, so that at any given point in a piece of litigation a bill of costs can be generated automatically. Such a bill of costs must contain the necessary explanatory material, which is currently lacking from the bills prepared for detailed assessment. Crucially, the costs software must be capable of presenting the bill at different levels of generality. This will enable the solicitor to provide either (a) a user-friendly synopsis or (b) a detailed bill with all the information and explanation needed for a detailed assessment or (c) an intermediate document somewhere between (a) and (b). The software must provide for work which is not chargeable or work which is written off to be allocated to a separate file.
Armed with such a software system, solicitors should be able to produce up-to-date costs information for the client or schedules of costs for summary assessment at whatever level of generality may be required. Also, at the end of the case, the solicitors will be able to produce a detailed bill of costs, which can be used either for negotiating costs with the other side or for a detailed assessment hearing.
I therefore recommend that work should be put in hand to develop existing software systems, so that they can (a) capture relevant information as work proceeds and (b) automatically generate bills of costs at whatever level of generality may be required. Two of my assessors, Senior Costs Judge Peter Hurst and Jeremy Morgan QC, have discussed the possibility of such software being developed with a firm of law costs consultants. The current proposals are that a bill should be presented in the order “phase, task, activity”. According to these proposals, the bill is divided into five “phases”: (1) case assessment, advice and administration; (2) pleadings and interim applications; (3) disclosure; (4) trial preparation and trial; and (5) detailed assessment. Each phase is then broken down to identify different tasks. A summary sheet lists the profit costs and disbursements in respect of each task in each phase. In the body of the bill itself, each task in each phase is set out in chronological order, with an indication of the time spent and the amount claimed. A bill in this form could easily be transmitted in electronic form, provided that all those involved had compatible IT software. If bills were to be prepared along the lines suggested, and dealt with electronically, there would potentially be large savings in time and costs. One advantage of the proposed system is that costs information can be extracted at different levels of generality. The electronic formatting of bills should, in principle, provide greater transparency.
I readily accept that developing new software will be expensive. However, if successful, it will generate major savings. The huge costs of drafting bills of costs will be avoided. The suggestion made by the Association of Her Majesty’s District Judges (viz that a print out of the solicitors’ time record be used for detailed assessment) will not be adopted directly, but my proposal is a variant of that suggestion. The resulting bills will be easy to read and digest, thus meeting many of the concerns expressed during Phase 2. The work done on documents (often the largest item in any bill) will become intelligible. This will give effect to the very sensible advice given by the working group. Furthermore the software will be able to generate (a) simple schedules of costs for the purpose of summary assessment or (b) detailed bills for the purposes of negotiation or detailed assessment at the end of a case. The court must have IT systems capable of receiving bills in electronic format.”
My understanding is the Association of Costs Lawyers, together with other interested parties, proceeded to set up a working party to try to put forward proposals for putting these recommendations into practice.
Unsurprisingly, this working party included a number who already produced costs drafting software. If is doubtful that others would have had the necessary technical expertise or knowledge of the traditional requirements of bill drafting. My understanding is that those who volunteered for the working party have not been remunerated for their time. Certainly from the perspective of the Association of Costs Lawyers, the motivation for being involved in the process was to help ensure the final model bill was a workable alternative to the current format. One can only dread to think what the Rules Committee might have produced if they had been left to develop this.
Whether the model bill produced for the new pilot scheme is actually workable or produces any of the advantages envisaged by Lord Justice Jackson is a matter for debate.
A more legitimate criticism of those who have been involved in the process, is to ask what would have happened if they had not offered up their services. Is there really the slightest prospect that without their input the Rules Committee or Ministry of Justice would have had the expertise or resources to produce a new bill of costs format? It appears more likely that this would have been left indefinitely on the shelf (for good or bad).
As to whether the new bill of costs format will enable bills to be “automatically” generated, there seems no prospect of this happening any time soon. Looking at the new pilot model bill of costs, one wonders whether this is in fact a clever conspiracy to ensure bill drafting remains far too complex for anyone not working in costs law full time to ever attempt.