11 May 2022
Paper bills should include fee-earners’ names but do not strictly have to, while electronic bills must name fee-earners and give their SCCO grade and type of qualification, the Court of Appeal has ruled.
The decision is the first guidance from the court on the use of the electronic bill and has been welcomed by the ACL.
AKC v Barking, Havering and Redbridge University Hospitals NHS Trust [2022] EWCA Civ 630 was a clinical negligence case where the defendant sought to strike out the bill of costs (rather than the claim for costs) for non-compliance. This was rejected by Master Nagalingam.
On first appeal, Mrs Justice Steyn ruled that a bill was not properly certified if the signatory’s name was not identifiable, and that the paper and the electronic bill were both defective in not giving the name and status of each fee-earner, and not identifying the work they had done.
She said the claimant would have to re-serve a compliant bill. The claimant did this but nonetheless appealed the second limb of the decision.
The defendant argued that the obligation to name the fee-earners came from paragraph 5.11(2) of practice direction 47 and the requirement to set out the status and hourly rates of each person in respect of whom costs were claimed.
Newey LJ said: “On the other hand, PD 47 nowhere states in terms that fee-earners must be named in a paper bill. Had that been the intention, it would have been easy enough to say so…
“Moreover, Precedent A, which paragraph 5.1 of PD 47 identifies as one of the ‘model forms of paper bills of costs for detailed assessment’, does not name fee-earners and, in one instance, clearly refers to them as a group. Hourly rates are given, not by name, but for ‘Partner’, for ‘Assistant Solicitor’ and, most strikingly, for ‘Other fee-earners’.”
The judge noted that, in practice, fee-earners were very commonly named, even in paper bills, “and it is desirable that they should be”. He explained: “Doing so can be of help to both the paying party and the court, and it is hard to think of a good reason for withholding the identity of fee-earners.
“On balance, however, I agree with [the claimant] that a paper bill does not strictly have to include fee-earners’ names. In this particular respect, therefore, I take a different view from Steyn J. I do not think that the omission of fee-earners’ names rendered the paper bill which AKC served in August 2019 deficient.”
However, Steyn J also held that the paper bill did not comply because it failed to give the status of all fee-earners, which she said should encompass their professional qualification (if any) and – in the absence of their SCCO grade – their number of years of post-qualification experience.
Newey LJ supported this and her finding of non-compliance to the extent that the paper bill failed to confirm that the partner listed had a professional qualification or state the number of years of post-qualification experience.
The one caveat was that the receiving party “does not have to spell out the absence of any qualification or post-qualification experience”, he said.
When it came to the electronic bill, the court noted that worksheet 5 of Precedent S included columns which suggested “an expectation” that the receiving party should provide the name, status and grade of each fee-earner. But PD 47 did not expressly stipulate this – or even on Precedent S being used.
“Even so, it seems to me, on balance, that a receiving party who elects to use the Precedent S spreadsheet format must include in his bill of costs information sufficient to enable the columns of worksheet 5 to be completed,” Newey LJ said.
“When paragraph 5.A2 of PD 47 states that electronic bills ‘may be in… Precedent S spreadsheet format’, it surely cannot mean that a receiving party need complete a Precedent S only to whatever extent he chooses. It is, I think, to be inferred that a receiving party using Precedent S has to provide enough data for its worksheets to be filled in.
“It follows, given the columns comprised in worksheet 5 of Precedent S, that a bill adopting Precedent S must at least generally include, among other things, the ‘LTM Name’, ‘LTM Status’ and ‘LTM Grade’ (which must mean SCCO grade) of each fee-earner.”
He agreed with Steyn J that entering fee-earners’ SCCO grades in the ‘LTM Grade’ column may allow a receiving party “to say relatively little” in the ‘LTM Status’ column, except whether the individual was a solicitor or a legal executive.
Similar information should be included if the receiving party chose to use another spreadsheet format other than Precedent S, Newey LJ added; he agreed with the comments of Steyn J on the desirability of being able to identify the work done by specific fee-earners.
Newey LJ said: “The upshot is that, in my view, any electronic bill, whether in Precedent S spreadsheet format or any other spreadsheet format, must include the name, the SCCO grade and, in so far as it adds anything to the grade, the status of each fee-earner except possibly in so far as the receiving party’s solicitors may have outsourced work to an agency.”
This latter point came out of the model Precedent S populated with example data leaving the LTM Name column empty in the case of a medico-legal assistant.
As a result, ACK’s failure to include the name and SCCO grade of each fee-earner meant the electronic bill failed to comply with paragraph 5.A2 of PD 47.
Newey LJ concluded: “It is very far from the case that a bill of costs which fails fully to comply with the rules should invariably be struck out, let alone treated as a nullity. Typically, a defect will, at most, warrant a lesser sanction.
“In the present case, the significance of the defects in the paper and electronic bills which AKC served in August 2019 is reduced by the extra information which AKC gave about fee-earners in its points of reply to the trust’s points of dispute and in response to the trust’s part 18 request. Piecing together the bills, the points of reply and the part 18 information, it is possible to work out the names of the fee-earners who worked on the matter and the grades and status attributed to them.
“However, even with the benefit of the points of reply and part 18 information it is by no means always possible to say which of the 33 fee-earners named in response to the part 18 request is said to have carried out particular work. While, as Mr Browne [for AKC] explained, the application of filters may help to limit the possible candidates, he did not dispute that the name and grade of the specific fee-earner responsible for an item of work cannot necessarily be identified.
“In the circumstances, Steyn J was, as it seems to me, fully entitled to decide that the appropriate course in the particular circumstances was to strike out the existing bill of costs and order AKC to serve a replacement which complied with the Civil Procedure Rules.”
ACL chair Jack Ridgway said: “It is good news that the Court of Appeal recognises the need to issue guidance on bills of costs, especially as many lawyers are still getting to grips with the electronic bill. The outcome here achieves a sensible balance – providing more upfront information about the fee-earners who worked on a matter will help resolve cases more quickly without unnecessary toing and froing between the parties.”
Simon Browne QC and Matthew Waszak (instructed by Irwin Mitchell) for the appellant. Robert Marven QC (instructed by Keoghs) for the respondent.