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Brakes put on Proposal to Introduce Compulsory New Bill of Costs in October

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Michelle Walton Advocate Manchester

At the end of July 2015, the Hutton Committee released the new Bill and guidance as to its use to consultees. The voluntary pilot under CPR PD 51L then began on 1 October 2015, running for six months until 1 April 2016. It was then envisaged that there would be a compulsory pilot.

Despite the operation of the voluntary pilot, and despite guidance being provided on the J-Codes, it appears that very few practitioners have yet invested in them. The reasoning behind this lack of take up, the Hutton Committee believes, is largely because of the uncertainty surrounding the timing and method of the new Bill’s implementation.

Sheer Scale of the Task

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 to which this applied would already have been running for a number of years without the use of J-Codes. As such, the Codes would have to be applied retrospectively to all previous work done. The sheer scale of such a task has been cause for concern, with some estimates that retrospectively assigning recorded time to J-codes would increase Bill preparation time by in excess of 200%.

In response to receiving direct feedback from numerous individuals and organisations, the Hutton Committee held an interim consultation on the new Bill of Costs format.

Problems with Manual Preparation

It was recognised by the Committee that there was a perceived idea that implementation of the J Codes would be expensive, and that manual preparation would come with great difficulty.

The Committee therefore tasked itself with solving the problem of how to time the introduction of the new Bill of Costs so as to eliminate, or at least minimise, the very substantial transitional costs that would otherwise fall on practitioners and their clients.

The Committee’s preferred recommendation was that the new Bill of Costs be introduced, without a compulsory pilot, for all work undertaken after a given date on cases which are, or can be, subject to Costs Management Orders under the CPR. The date proposed was 1 October 2016.

The reason for this proposal was that the Hutton Committee felt the only realistic way practitioners could be expected to make the necessary investment is if there was no likelihood of the new Bill format being abandoned. In the Committee’s simple words, “practitioners need to know that the new BoC will be introduced.”

Following this recommendation, the December meeting of the Civil Procedure Rules Committee held a discussion on the proposal, concentrating on both the Interim Consultation Response of the Hutton Committee, and also a letter from the Chair of the Law Society’s Civil Justice Committee to Lord Justice Richards written in response to the proposal.

Further Consideration

Acknowledging that the proposal went beyond a pilot and had major implications for the profession, and following input from the chair of the Hutton Committee Alexander Hutton QC, and Senior Costs Judge Master Gordon-Saker, it was agreed by the CPR Committee members that the matter needed to be given further careful consideration by both the Ministry of Justice and by the Hutton Committee. Most importantly, they concluded that it was too soon for any final decision to be made on the implementation of the new Bill.

The Hutton Committee did suggest that should its preferred recommendation not be adopted, there is then a “cogent case for limiting the introduction of the new BoC to cases commenced from a date calculated to give the profession time to adopt J-Code compatible software. That will at least reduce the additional cost of transferring incompatible time records to the J-Codes”.

Only time will tell whether this alternative suggestion comes to fruition, or whether a completely new plan on how to successfully implement the new format, in a timely and costly manner, needs to be formulated.

While this uncertainty may be unsettling, the decision is a positive one; as Claire Green, the Association of Cost Lawyer’s representative on the Hutton Committee, said: “In light of […] 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.

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