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Jackson proposes decoupling new bill of costs from J-Codes in bid to break “deadlock”

Jackson: greater flexibility

Jackson: greater flexibility

The new format bill of costs developed by the Hutton committee needs to be brought into use – perhaps from October 2017 – but should be decoupled from the J-Codes to make it more palatable to the profession, Lord Justice Jackson said last week in a bid to restart momentum towards one of the unfinished elements of his reforms.

It emerged in January that the Civil Procedure Rule Committee had said it was “too soon” to make the new bill compulsory, leaving the work of the Hutton committee in limbo.

But in a speech at the Law Society last week, the man whose recommendations led to the creation of the committee – originally chaired by Jeremy Morgan QC and now by Alex Hutton QC – said that while the CPRC was “right to be cautious”, there was now “a state of deadlock”.

He said: “We need practical proposals to break the deadlock and advance the discussion.”

Using the bill prepared by the committee, but without mandating use of the J-Codes, would allow “greater flexibility”, he said.

Jackson LJ said that though the J-Codes conferred “considerable advantages” on users, it was never intended to make them mandatory for the new bill of costs. “The Hutton committee took the view, correctly, that it would be beyond its remit to do so…

“Most – if not all – of the criticisms about the new format bill of costs are aimed at the J-Codes. There are strong views on both sides of the debate. As a result of the new format bill’s foundations being built on J-Codes, this has meant that the entire bill has been criticised rather than one discrete part of it.”

Instead, he said, the CPR should allow practitioners to prepare that bill in any manner of their choosing, whether with the assistance of J-Codes, automatically generated by an Excel spreadsheet or by hand.

“A digital copy of the bill should be served on the court and the paying party along with an electronic spreadsheet, which clearly and accurately details the work done in the course of litigation, following the Precedent H stages. This should be in the same format of phase/task/activity and adopt the Precedent H guidance for what work falls in a given phase.

“Time entries can either be generated automatically by time-recording software or inputted manually by those who prefer to record their work done on paper. For those using J-Codes, the Hutton Committee spreadsheet provides an excellent tool for preparing the bill.”

The judge laid out three reasons to commend this approach: “The new format bill integrates with costs budgeting and Precedent H. It can be generated automatically by time-recording software. It provides a framework for software providers to create tools for the professions.

“Secondly, it makes good use of the excellent work of the Hutton committee. Indeed, it would not be possible without it. While revising the proposals will mean that the current version of the spreadsheet and the J-Codes are not an essential part of the scheme, their value will be preserved for those who adopt J-Codes… the professions should give serious consideration to them.

“Thirdly, it sidesteps much of the criticism which gave rise to the present delays. The print version of the bill and the accompanying spreadsheet are not radical innovations. Nor do they involve significant cost. They require only a basic level of computer literacy and an understanding of how to present information clearly.”

One of the major objections to the Hutton committee’s work was the fear that retrospective application of the new format bill and of J-Codes would increase the cost of bill preparation dramatically.

Jackson LJ’s “complete solution” to this was for the CPRC to choose a future date for the implementation of the new bill, and only work done after this date would have to be done in the new format bill.

“May I suggest that the new form bill of costs should be mandatory for all work done on or after 1 October 2017? The voluntary pilot under PD 51L could be extended until that date.”

The judge also mooted fixing or capping the recoverable costs of preparing the bill.

“The receiving party should only expect to recover up to a certain amount for the preparation of the bill – possibly expressed as a percentage figure of the total value of the assessed bill.”

He also argued that the new format bill was required even if fixed costs were introduced for the multi-track.

Jackson LJ published a “possible preliminary draft of the new bill”, adding: “Regardless of whether this particular proposal is accepted or not, one thing does need to be kept in mind: the status quo is of no benefit to anyone.

“Investment decisions on time-recording software are being deferred. The work of the Hutton committee has been left to lie fallow. Most egregiously, we still have a bill of costs that was identified as being seriously deficient many years ago.”