Quick Guide to the Electronic Bill of Costs
The new Electronic Bill of Costs was introduced and became mandatory from 6 April 2018 and applies to Part 7 multi-track claims.
The Civil Procedure Rules (CPR) state that any work undertaken after the 6 April 2018 must be detailed in an electronic spreadsheet format, whereas work undertaken before 5 April 2018 can be claimed in the old-style Bill of Costs, however you will end up with two separate Bills of Costs, so we prefer to do one electronic Bill in two parts thus giving just one document.
The electronic Bill of Costs was introduced:
1. To provide more transparency;
2. To be more user friendly and make it easier to alter figures;
3. Cost less to prepare; and,
4. Bring consistency to the procedures and systems used for costs budgeting, costs management, summary assessment and detailed assessment.
However, this is all totally reliant on the solicitor having the correct IT systems in place, that all fee earners are experts on recording exactly as required and that all users are experts in Excel.
There are exemptions which are set out at CPR PD 47 5.1(a):
The new electronic Bill of Costs must be used if:
(a) The case is a Part 7 multi-track claim, except:-
(i) For cases in which the proceedings are subject to fixed costs or scale costs;
(ii) Cases in which the receiving party is unrepresented; or,
(iii) Where the court has otherwise ordered.
We would go one step further to say that there are often occasions where your case has been issued and will no doubt be allocated to the multi-track, however it settles prior to allocation, in these circumstances a traditional Bill will suffice.
How should the electronic Bill be prepared:
Lord Jacksons vision was that all solicitors would have IT systems in place to allow them to simply click a button and out would pop an electronic Bill, of course this has not been the case for many firms as these systems can costs hundreds of thousands in some cases which is simply out of reach for many firms.
In reality, we would always advise that you seek the expert assistance of a Costs Specialist.
The electronic Bill requires a series of codes to be used and each and every item of work, including routine items will have their own individual entry.
For time you would need to record ‘Phase, Task and Activity’.
For disbursements you would need to record ‘Phase, Task and Expense’
Because time and disbursements have to be detailed on a line-by-line basis, it is vitally important that the solicitors’ file demonstrates all of the time which has been included, if it does not then you will be vulnerable on assessment. Waters Legal Costs will always provide a full breakdown of all missing items which have been included in the Bill to ensure your files are completely up to date.
Each Phase used in the electronic Bill will mirror those used in the Precedent H (Costs Budget) therefore we would always advise that you use the same draftsman who prepared your Budget to also prepare your electronic Bill, this will ensure consistency and will also save time and costs.
There are also some additional phases for time which fall outside of the Precedent H:
· Interim Applications and Hearings
· Budgeting including costs estimates
· Costs Assessment
What happens if you get it wrong:
We pull no punches when we say that your electronic Bill will be challenged, which is why it is vitally important that your Bill is as accurate as possible, the electronic Bill gives the paying party far more detail than before which means your costs face more forensic scrutiny.
Getting your electronic Bill wrong can:
· Cause you to lose out on otherwise recoverable costs and reduce costs recovery;
· Cause you to redraft your Bill, leading to delays in settlement, possible adverse costs and even sanctions.
We would always advise that you use a Costs Expert who will deal with everything on your behalf and here at Waters Legal Costs you can be assured of the upmost accuracy and that your Bill will be properly prepared and negotiated.
To assist we have attached some guidance form the SCC
O (Schedule 1) which sets out the relevant phases and what should and should not be included in the same.
Thank you for taking the time to read this blog, please contact us should you wish to discuss this subject further or if we can assist you with any of your matters.