New Bill of Costs – But many questions still unanswered

 

It has been reported, following the May meeting of the Civil Procedure Rule Committee, that the use of the electronic bill of costs will become compulsory in the Senior Courts Costs Office from 1st October 2017. Changes to the CPR will be included in the next scheduled update in July.

As practitioners are aware, a voluntary pilot of the original electronic bill, Precedent AA (the ‘Hutton Bill’) began in October 2015. Amendments were made to this precedent, resulting in the new Precedent AB, ­and the new pilot scheme under Practice Direction 51L enabled users to create their own versions of the electronic bill – provided the information contained with the Bill of Costs met the basic requirements of PD51L.

To date, despite some form of the electronic bill format being sanctioned since October 2015, no electronic bill has made it to the SCCO for assessment.

It is clear that the Rules Committee believe that the only way for uptake of the electronic bill to be increased is to make it compulsory, however, as Practice Direction 51L currently stands, there are still a number of issues which require clarification.

Firstly, the Practice Direction gives no indication as to whether the new electronic bill applies to cases where no costs budget was prepared and/or where no costs management order was made. Costs budgeting currently applies to cases with values not exceeding £10million so are cases with values above this amount to be caught by the new practice direction in July? And what about the type of claim, for which costs budgeting generally does not apply, such as Court of Protection matters and costs arising from cases involving a minor or a person with a shortened life expectancy? No clarification is given on the format of the bill for Solicitor Act Assessments.

Is the new bill of costs, and therefore the ‘phasing’ of costs, required for these cases or is the intention simply to have an electronic bill but without the phasing? Or can we avoid an electronic bill altogether?

We also await clarification as to whether work done prior to the 1st October 2017 will be required to be provided in the electronic format, or whether the SCCO will be happy to assess pre October work in the ‘old style’ bill, with post October work in the electronic format. The scenario of having both a paper based assessment and electronic assessment in the same hearing is not ideal but if solicitors are required to produce an electronic ‘budget phased’ bill of costs in a substantial case that commenced some years prior to the mandatory requirement, it presents a problem.

One may hope that the new directions will deal with these issues in clear terms by providing that the directions only apply to cases that were subject to a costs management order or only apply to work done on or after 1st October 2017 and where no costs management order is made, the bill need not be in phases.

The failure of the pilot scheme has shown that unless they are forced to do so, parties will avoid using the electronic bill of costs, most likely due to the time and expense of producing the bill and due to its complex structure. Whilst the “Hutton Bill” may be viewed as overly complex, the Association of Costs Lawyers have produced their own, simpler, version. However this document has not been tested by any Court and no one knows whether it will hold up to a forensic assessment. Similarly, if parties are allowed to produce their own version of an electronic bill of costs this is likely to lead to preliminary arguments that they do not meet all of the requirements of the practice direction. The correct approach is, of course, to make the use of the electronic bill mandatory. However the Rule Committee must ensure that all issues are addressed prior to roll-out.

Any practitioner involved in costs will watch this space with bated breath.

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