Are electronic bills killing off detailed assessments and can paying parties get their act together?

If electronic bills are the future (and it is a prerequisite that bills of costs have to be “electronic” in all Part 7 multi-track claims) then parties on both sides need to be made to embrace them wherever possible. Regrettably paying parties seem to be more interested in opposition and obstruction despite the fact that most claims actually allocated to the multi-track by the court will have been budgeted.

There is the ‘get out of jail card’ available to both sides that disputed fixed costs claims can still be presented in the form of an “old style” bill for detailed assessment, as can costs of a litigant in person or “where the court has otherwise ordered” (see PD 5.1(a)(i)-(iii) CPR 47). In addition, electronic bills relate solely to recoverable between the parties costs so there is no need for electronic bills in Solicitors Act 1974 assessments. Clearly, the electronic bill is designed to bridge the gap between costs budgeting and detailed assessment so is unlikely to be extended to other areas where costs budgeting is not applicable.

The Association of Costs Lawyers (ACL) has produced its own format bill of costs which incorporates the N252, Points of Dispute and Replies. It is a fully CPR compliant user-friendly version which has a number of advantages over the standard Precedent S. Despite not making use of pivot tables it includes extensive guidance notes, coloured tabs and the template is regularly updated on the ACL website. Unfortunately, it would appear the ACL version is only available from its website and not yet an option for costs lawyers who rely on costs drafting software. 

The “Transition Date” (6 April 2018) is the divide between old paper and new electronic bills. Yet, in practice, the result is usually two bills, one paper and one electronic which apart from being very confusing surely can’t make sense time wise or otherwise.

Shortly after the Transition Date, there were bills of costs prepared where 99% of the work had been done pre-transition date and perhaps there were just three or four letters and half an hour of preparation time post. It seemed a ludicrous proposition to have to prepare a separate electronic bill for less an hour’s work which when printed out extended to more than 15 pages. There it was preferable and proportionate to just present a single bill of costs.

Time has moved on and where possible costs lawyer should now be presenting all costs in a single electronic bill. The additional costs are only transitional and are expected to reduce over time, albeit the time span could be several years.

Costs judges at the SCCO have indicated a willingness to allow more time for the preparation of new format bills which makes sense if it reduces the amount of time that would otherwise be spent on points, replies and the assessment itself.

Bills of costs must, of course, be accurate and carefully prepared but ideally not at the expense of cash flow due to delays in bill preparation. That isn’t as hard as it might first appear – yes the electronic bill is a wonderfully complex instrument but broken down it is actually very logical and it doesn’t take long to familiarise oneself with the various tabs and self-calculating summaries.

While electronic bills take longer to prepare, even with comprehensive costs drafting software and where available, an electronic feed from the solicitors’ time recording system has the potential to reduce some of this time. That, of course, assumes that solicitors conducting the types of case which are subject to electronic bills record every time entry description as if it was going directly into the final bill when the reality is that this just does not yet happen and costs lawyers still need to check, edit and verify every entry. The costs lawyer will always be needed to ensure the description accurately describes the item of work done and to exclude it if non-recoverable. On any take the ‘press of a button’ bill is, in the real world, an unattainable ideal.

An Excel capable paying party now has access to more detail than ever before and can view and summarise costs in different ways via the spreadsheet containing the bill data. There are still some who don’t know that if you double click on the tables on the summary tabs of Precedent S, all the detail magically appears on a new tab; the wonders of pivot tables. Sadly old habits die hard in some paying parties and analysing a paper bill survives in several quarters.

For now, too, it seems some of the judiciary prefer the paper-based approach to assessing electronic bills as we have had provisionally assessed electronic bills returned annotated on paper rather than electronically. To stand any chance of working electronically receiving parties must remember to lodge the electronic bill in accordance with PD 5.1A CPR 47, by e-mail or other electronic means. At oral hearings, advocates can then update the bill on laptops to assist the court but of course, that assistance is not available on provisional assessment.

Formerly the requirement to provide detail in respect of communications was limited to “non-routine communications” with routine communications being defined as “letters out, e-mails out and telephone calls where because of their simplicity should not be regarded as letters or e-mails of substance or telephone calls which properly amount to an attendance”. Now there is the opportunity to provide detail for all communications whether they amount to attendance or not.

In practice, we find that adding a brief narrative even for routine items whilst it may add to the time spent by the costs lawyer preparing the bill, it means the paying has a far better picture of the work done. Arguably it is a disproportionate exercise to provide such information when drafting a bill but if the time recording system records it why not include it in the interests of transparency? However, that is not an invitation for paying parties to raise even more repetitive item specific challenges in breach PD 8.2 CPR 47!

When electronic bills are served or filed at court it must also be in hard copy. Given that what used to be a seven or eight-page bill is now not uncommonly a 30-page bill can’t we move on and parties should accept electronic service, even if that is in respect of electronic bills only. If we have to go on with lodging and serving the paper version then receiving parties need to consider double-sided printing, taking care to copy both sides when making further copies. District judges have expressed understandable frustration when receiving documents where the even-numbered pages are all missing because only one side has been scanned.

The problem is compounded and matters unnecessarily complicated when paying parties append an annotated copy of the electronic bill, disputing almost every single item, to their points of dispute, Previously paying parties might simply have offered, for example, 20 routine letters against the 25 claimed in one point of dispute. Now there are 5 objections against each of the letters challenged. A bill recently prepared by a colleague in a personal injury matter totalled just over £105,000 including VAT and disbursements. It was a pre-LASPO case that had run for five years and settled just nine days before trial. The bill was prepared entirely in electronic format with the printable version amounting to 65 pages including narrative (synopsis) and certificates. The defendants’ points of dispute arrived (the day of the deadline) by fax (remember them?!) and the 298 pages took four hours to come through meaning that service was only effective the next day. Only 30 pages were actually points of dispute, the remainder was a result of a poorly reformatted version of the bill itself, appended to the points. As a formally served document, it will need to be printed for the court. What a waste of paper.

Without a doubt paying parties to have the benefit of much greater transparency. There are some paying parties who list out every single item marking them simply as excessive but many others are adopting a sensible approach, armed with the full picture, that more often than not leads to a mutually acceptable settlement. This suggests that the anecdotal lack of detailed assessments is not down to breakdowns in negotiation or courts with a backlog but rather a better way of resolving costs claims.

Parties have the chronology all in one place, rather than split as it used to be into various parts. This should assist the court when assessing bills and considering proportionality. Best of all parties can see what work was done in respect of each phase. Finally, we are in synch with budgets and while our time on detailed assessment is spent in different ways if the whole process leads to more settlements resolved between the parties that can only be a good thing. Budgeting too has undoubtedly contributed to the reduction in the number of detailed assessments. To that extent, Sir Rupert Jackson’s objective to achieve just that has been successful.