The Electronic Bill ACL Manchester Conference 2018 Master Leonard Costs Judge

Jackson LJ Review of Civil Litigation Costs The Paper Bill is: Expensive and cumbersome to draw. Does not make use of the available technology. Allows mismatches between recorded time and bills. Not easy to digest. Documents are usually the most contentious item, upon which large sums turn. Bills usually give insufficient information. Jackson LJ Review of Civil Litigation Costs Final Report January 2010 Chapter 45

The New Bill Should: (1) Be more transparent; (2) Offer a user-friendly synopsis of work done; (3) Be inexpensive to prepare. “…modern technology provides the solution…” The New Bill Should:

“A new format bill of costs should be devised, which will be more informative and capable of yielding information at different levels of generality… Software should be developed which will (a) be used for time recording and capturing relevant information and (b) automatically generate schedules for summary assessment or bills for detailed assessment as and when required…. The long term aim must be to harmonise the procedures and systems which will be used for costs budgeting, costs management, summary assessment and detailed assessment.” How to Achieve It:

The Essential Structure A bill should be presented in the order “phase, task, activity”. The bill is divided into “phases”: Each phase is then broken down to identify different tasks. A summary sheet lists the profit costs and disbursements in respect of each task in each phase. In the body of the bill itself, each task in each phase is set out in chronological order, with an indication of the time spent and the amount claimed. The Essential Structure

A bill in this form could easily be transmitted in electronic form Provided that all those involved had compatible IT software. If bills were to be prepared along the lines suggested, and dealt with electronically, there would potentially be large savings in time and costs. I readily accept that developing new software will be expensive. However, if successful, it will generate major savings. The huge costs of drafting bills of costs will be avoided. Cost v Benefit

The Morgan/ Hutton Committee ACL Report “Modernising Bills of Costs” October 2011 Recommended investigating the possibility of adapting international “UTBMS” standard time recording codes for litigation in the UK Jeremy Morgan QC was asked to chair a working group to move forward with the recommendations Result was the J-Codes: a comprehensive set of uniform time and expense recording codes Endorsed by Senior Judiciary September 2014 With Alex Hutton as chair: Working Group created Precedent AA An electronic bill based on the J-Codes The Morgan/ Hutton Committee

The Hutton Committee’s Precedent AA: Pilot and Consultation 2015 SCCO pilot: 3 bills received in Precedent AA format. Objections: Too prescriptive in using J-Codes Too complex to work with Time-consuming to transfer work done before J-codes into the new format Expensive to implement The Hutton Committee’s Precedent AA: Pilot and Consultation

Keynote Address to the Law Society’s Civil Litigation Conference, 21 April 2016 Complexity? Just use the codes and the parts of the bill you need Work done before the implementation date could be recorded in the old format, afterwards in the new format Re-design the bill so as to work either with J-Codes or without them It is possible to make time recording software J-Code compatible with a relatively small amount of change/cost (The Legal Software Suppliers Association) Jackson LJ’s Response

The Outcome Precedent AB piloted from November 2016 J-Codes not required Phase/Task /Activity categories are set out in the Schedule to CPR PD 51L After limited take-up, Precedent AB becomes Precedent S in November 2017 The Outcome

The New Rules CPR PD 47 Paragraphs 5.1-5.1A Costs between parties in CPR Part 7 Multitrack Claims Exceptions: Fixed/Scale Costs: LIPs: Court Order Applies to all work done after 6 April 2018 (either a paper bill or an electronic bill in respect of work done before that date) Bills of Costs must be in electronic spreadsheet format, capable of producing essential summaries and performing essential functions compatible with Precedent S The Phase/Task /Activity Codes: Schedule 2 to PD 47 The New Rules

Incorporates adjustable hourly rates, success fees, time entries From those, automatically calculates total profit costs, disbursements, counsel’s fees, success fees and VAT: Automatically generates and incorporates Precedent Q Automatically Summarises Costs: By phase By bill part By task, activity and expenses By communications. Example: the Phase Summary: Precedent S Content

Page 5 (hourly rates and counsel’s success fee): Assessing Precedent S

Assessing Precedent S Page 6: “Funding and Parts Table” Explains the extent to which the bill has been divided into parts Incorporates solicitor’s success fees: Assessing Precedent S

Page 14 (the full bill detail): Assessing Precedent S

Cutting The Detail Down to Size “Hiding” Irrelevant information “Filtering” to Find Relevant information Sub-totalling Cutting The Detail Down to Size

Cutting the Detail Down to Size: Counsel’s Fees

Cutting the Detail Down to Size: Document Time 1

Cutting the Detail Down to Size: Document Time 2

The ACL Bill Includes N252 Incorporates Room For General Findings Groups Items by Reference to Specific Points of Dispute The ACL Bill

Suggestions Precedent S Will Evolve Costs and IT professionals will devise their own e-bills In the meantime, based on (Limited) Assessments to date: Receiving Parties: Protect Your Budgeted Hourly Rates Use Subtotals Take advantage of the technology Suggestions