Costs News

14 January 2016
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“Too soon” for new bill of costs, says rule committee

It is “too soon” to make any decision on making the new format bill of costs (BoC) compulsory, the Civil Procedure Rule Committee has decided.

Newly released draft minutes of the committee’s meeting last month show that, after considering the interim consultation response of the Hutton Committee and a letter from the Law Society, “it was acknowledged that the proposal went beyond a pilot and had major implications for the profession”.

Both the Senior Costs Judge, Master Gordon-Saker (pictured), and Alex Hutton QC took part in the discussion, but the committee “agreed that the matter needed to be given careful further consideration by the Ministry of Justice and by the committee and that it was too soon for any decision to be taken”.

The Hutton report had called for the new BoC to be introduced from a certain date – it suggested October this year – so as to force the legal profession to get on board.

It acknowledged that few practitioners have yet invested in the J-Codes. “That is, judging by the feedback received, largely because of uncertainty about the new bill’s implementation and any future changes.”

There was particular concern that, if the compulsory pilot applied to budgeted cases in which final orders for costs were made from a certain date, many cases caught by this would have been running for a number of years without the use of J-Codes.

Applying them retrospectively would be a very sizeable task, the committee was told, with one consultee saying that a feasibility study suggested that doing this would increase bill preparation time by more than 200%.

“Similar doubts have been expressed about the ability of Costs Lawyers to reinterpret accurately, into J-Code format, time previously recorded by others.”

The report said that while Sir Rupert Jackson accepted that the introduction of automated bill production would in the short term entail unavoidable cost to the profession, “he is unlikely to have contemplated a temporary increase in the cost of bill preparation by as much as 200%”.

It continued: “The move from paper to electronic assessment is obviously a huge change. It will require from practitioners substantial investment in new infrastructure (for some, although it is clear that many have the infrastructure already) and working methods. Many have not yet made that substantial investment because they have been uncertain about the implementation of the BoC. At the same time, many of the concerns now raised about implementation arise from the very fact that practitioners have not yet made that investment.

“If this vicious circle is to be broken, practitioners need to know that the new BoC will be introduced. For that reason, we have concluded that it is not in fact possible to ‘pilot’ the BoC in any real sense. Practitioners cannot be expected to make the necessary investment if there is any likelihood of the BoC being abandoned.

“The question then is how to time the introduction of the BoC so as to eliminate, or at least minimise, the very substantial transitional costs that will otherwise fall on practitioners and their clients.”

The Hutton committee’s solution was that the BoC be introduced, without a pilot, for all work undertaken after a given date on cases which were, or could be, subject to costs management orders under the CPR.

“We propose that the 1 October 2016 might be a realistic date which would provide practitioners with sufficient time to purchase the software they need to produce the BoC automatically.

“The date reflects the fact that many practitioners already have software compatible with J-Codes (although some will need their IT team/supplier to realise this) and that, even if they don’t, the software exists now, and in any event the Legal Software Suppliers Association has confidently expressed that the software can be made available across the market to those who don’t within six months.

“At first sight this may seem to delay the implementation of the BoC, but we believe that the likely response of the profession to this arrangement is to make the investment in new software and procedures and to start producing bills in the new format as soon as possible. It will also eliminate completely the excessive (and arguably unjust) cost of transforming old, incompatible time records into new, BoC compatible records.”

ACL policy officer Claire Green, who represents the association on the Hutton committee, said: “In light of the majority of responses from our members to the suggested new format bill, the complex nature of the bill and associated practical implications that swift implementation would have caused, we are pleased that further consideration will be given to such an important issue affecting the entire legal profession.”

There will be a full report about these developments in the upcoming issue of Costs Lawyer.

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