On 6th April 2018, the Electronic Bill of Costs came into force as an alternative to the traditional paper Bill of Costs, per the 92nd update to the Civil Procedure Rules.
The Electronic Bill of Costs applies to all Part 7 claims where a matter is allocated to the multi-track. In the event of a matter being a fixed costs matter, where the Court orders otherwise or the receiving party is a litigant in person, Electronic Bill of Costs are exempt.
The purpose of the Electronic Bill of Costs
The purpose of the Electronic Bill of Costs is to provide clarity in regard to the amount of costs being claimed. This should be inclusive of an account of every single item charged for during litigation, with a brief description included. Lord Justice Jackson recommended a Bill of Costs should be a transparent explanation about what work was done in the various time periods and why, a user-friendly synopsis of the work done, how long it took and why, and should ultimately be inexpensive to prepare.
However, contrary to Lord Jackson’s recommendations, the Electronic Bill of Costs differs in respect of the Defendant. In theory, it is ideal for the receiving party to be completely transparent and have to account for each item claimed. Although realistically, this means the paying party will be required to review each single and determine whether it is reasonable or disproportionate.
In respect of the Defendant, the way in which the Bill of Costs are structured has proved to be challenging and complex. The structure has resulted in the work being claimed for being split into numerous phases, multiple tasks and activities, concluding with a spreadsheet which can contain in excess of 1,000 items. As a result of this, when points of dispute are due as per CPR 47.9, objections can run into the thousands in the event that individual activities are challenged.
This can be time consuming and repetitive for the Defendant.
The Electronic Bill of Costs does not align with Lord Jackson’s recommendations. The preparation of the bill has become time consuming and expensive, and more often than not the Defendant will face claims in excess of 29 hours for preparation of the bill. It has proven to be a financial drain on the resources of the paying party.
In conclusion, the Electronic Bill of Costs requires amendments to ensure any unintentional and undesired consequences of increasing time and costs for both the receiving and paying party. Only then can it truly provide the clarity and cost transparency needed while adhering to the recommendations set out by Lord Jackson.