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Be careful what you wish for
Costs Aware Issue 3
From 1 October 2017, practitioners will be able to use a new electronic bill of costs in detailed assessment proceedings (this may become mandatory by April 2018). Howard Dean, who sat on the Civil Procedures Rules Committee working party for the implementation of the new bill of costs, outlines what this means in practice.
It has long been in the making as it was first called for by Lord Justice Jackson in his 2009 Final Report on the Review of Civil Litigation Costs. The current bills were seen as expensive to draft, opaque because of the lack of detail and hard to digest and understand.
The report called for a new bill that was more transparent, user friendly and less expensive to prepare. This could be achieved by the development of time recording software that could automatically generate bills of costs.
A set of codes for time recording (J-Codes) was developed and approved by the Master of the Rolls on 30th July 2014. Following discussions with stakeholders a slimmed down set of codes was developed (J-Codes lite) for use by practitioners to record time.
This uses a defined set of codes for the phase, task and activity being performed as follows:
- Phase - these are the phases used in costs budgeting such as “witness statements”
- Task - is “what” is actually being done such as “own witness evidence”
- Activity - is “how” it is being done such as “draft/revise”
The amount of time is then recorded and allows for further detail to be added such as “drafting defendant’s 12 page witness statement on liability.”
The new bill
The software then exports the time recording from the time recording system into the new bill of costs together with recorded disbursements.
The electronic version of the new bill will automatically provide different levels of detail from phase to task and finally to the individual items recorded. The party’s court-approved costs budget can be input into the bill to allow the comparison of the phases of the bill and the budget.
The aggregation of this raw time recording data into summaries provides the transparency for the paying party and the court. It allows you to switch from the summary to the underlying detailed time recordings at the touch of a button.
But what does it mean for compensators?
For the first time your costs lawyer will be able to forensically analyse the time recording without the need for a laborious manual process. The summaries that are automatically provided are essentially pivot tables that can be manipulated to “data mine” relevant time recordings. It will enable paying parties to identify exactly how much time has been spent on experts; an individual expert; communications with an expert; drafting and reviewing the report; and by fee earner.
The ability to identify how much document time has been spent on an individual piece of evidence in support of a minor issue will be particularly powerful especially where the amount of costs incurred upon it far outweigh its value within the proceedings.
This is likely to result in an increase in the number of successful objections as the amount of time spent is transparent.
For those seeking to maximise the recovery of costs incurred, the descriptions given by the fee earners recording time become of paramount importance. If they do not describe the time spent accurately and in sufficient detail then some or all of the time may not be allowed upon assessment.
As a result, we expect some “gaming” as the fee earner descriptions are likely to be replaced with descriptions that will maximise recoverability.
Whilst use of the new bill should lead to a saving in drafting costs, the reality is that the saving will be replaced by a claim for time for checking and amending descriptions given to individual time recordings to maximise recoverability upon assessment.
We have yet to see whether the courts will allow time spent upon correcting time recording descriptions but it seems unlikely when time should have been recorded accurately and in sufficient detail at the time it was recorded.