Court of Appeal Guidance on Costs Bills

This blog by Dan Tobin examines the recent Court of Appeal decision of AKC in which guidance was provided as to how paper and electronic bills of costs must be framed: AKC (A Protected Party by her mother and Litigation Friend, MCK) v. Barking, Havering & Redbridge University Hospitals NHS Trust [2022] EWCA Civ 630.

Background

In 2015 the appellant (AKC) made a clinical negligence claim against the respondent. That claim was eventually settled on terms that required the Trust to pay AKC’s costs, which were to be subject to a detailed assessment in default of agreement.

AKC commenced detailed assessment proceedings in respect of her quantum costs in 2019. Her bill of costs comprised a paper bill for the period up to 5 April 2018 and an electronic bill as regards work undertaken after that date.

The Trust served points of dispute in which it raised, by way of preliminary points, objections to the effect that, first, the bill of costs was not properly certified; secondly, the paper bill failed to provide the name and status (including qualification and years of post-qualification experience) of each fee earner in respect of whom costs were claimed; and, thirdly, the electronic bill failed to provide the name, status and Senior Courts Costs Office (“SCCO”) grade of each fee earner. AKC responded in points of reply in which she disputed the Trust’s complaints, but on 18 December 2019 the Trust applied for the bill of costs AKC had served to be struck out and for her to be required to serve a new bill.

The First Instance Decision

The Trust’s application came before Costs Judge Nagalingam, who dismissed it for the reasons given in a judgment handed down on 13 August 2020. However, Steyn J, sitting with Costs Judge Brown as an assessor, allowed the Trust’s appeal. She concluded that AKC’s bill of costs was not duly certified and that neither the paper bill nor the electronic bill contained all the necessary information about fee earners. In these circumstances, Steyn J struck out the existing bill of costs and ordered AKC to serve a replacement which complied with the Civil Procedure Rules.

Proceedings in the Court of Appeal

AKC’s appeal came before the Court of Appeal (Newey, Dingemans and Lewis LJJ, sitting with Costs Judge Rowley as an assessor) on 10th May 2022. By the date of the appeal, AKC was no longer pursuing the certification issue.

Paper Bills

The first question which arose in relation to the paper bill served by AKC was whether the fee earners should have been named? The Court stated that, in practice, fee earners are very commonly named even in paper bills, and that it was desirable that they should be, for doing so can be of help to both the paying party and the Court, and it was hard to think of a good reason for withholding the identity of fee earners. However, be that as it may, the Court nevertheless held that a paper bill does not strictly have to include fee earners’ names and that the omission of fee earners’ names did not render AKC’s paper bill deficient.

Information re. fee earners status

The next question related to what information needed to be given as to the status of the fee earner? The Court held that paragraph 5.11(2) of Practice Direction 47 cannot require a receiving party to specify any qualifications or post-qualification experience of a fee earner where none is relied on. If a receiving party is not suggesting that a fee earner had a relevant qualification, nothing need be said on the subject. The receiving party does not have to spell out the absence of any qualification or post-qualification experience. As such, the Court held that Steyn J had been right to hold that a paper bill must state any professional qualification of a fee earner and, unless the SCCO grade is given, the years of post-qualification experience. It also held that Steyn J was correct in finding that the August 2019 paper bill did not fully meet the requirement to give fee earners’ status. The references in the paper bill to solicitors’ “Years Experience” could be taken to refer to post qualification experience and, on that basis, the bill had sufficiently stated the “status” of “Solicitor 1” and “Solicitor 2”. Nor did any problem arise in relation to the “Others” or “Paralegal (Special Damages, Sheffield Based Fee Earner)” who could be assumed not to have had any professional qualification. However, insofar as AKC were proceeding on the basis that a “Partner” justified a high hourly rate, without either confirming that the “Partner” had a professional qualification or stating the number of years of post-qualification experience, this fell foul of what was required by 5.11(2) of Practice Direction 47.

Electronic Bills

Turning to the electronic bill, the Court observed that Practice Direction 47 does not expressly stipulate that an electronic bill must contain the information needed to fill in the columns of worksheet 5 of Precedent S. Nor does it even insist on Precedent S being used. Having observed that certain parts of the provision relating to the information to be contained within the columns of worksheet 5 were not entirely easy to interpret, the Court nevertheless concluded that a receiving party who elects to use the Precedent S spreadsheet format must include in his bill of costs information sufficient to enable the columns of worksheet 5 to be completed. However, one exception to this was that even a bill in Precedent S format need not necessarily include anything in the “LTM Name” column of worksheet 5 in respect of work delegated to an outside agency, the present example being work done by a medico-legal assistant.

The Court also recognised that an electronic bill does not have to use Precedent S but can instead be in “any other spreadsheet format” which satisfies the requirements of sub-paragraphs (a) to (e) of paragraph 5.A2 of Practice Direction 47. However, it held that if a party chooses to use any other spreadsheet format it had to provide as much information as a duly completed Precedent S.

The upshot was that, in the Court’s view, any electronic bill, whether in Precedent S spreadsheet format or any other spreadsheet format, must include the name, the SCCO grade and, in so far as it adds anything to the grade, the status of each fee earner except possibly in so far as the receiving party’s solicitors may have outsourced work to an agency. As such it ruled that in the present case, AKC’s electronic bill should have contained as much information as a duly completed Precedent S and, in particular, the name, the SCCO grade and, where it added something, the status of each fee earner. It did not do so. It neither gave fee earners’ names nor specified their SCCO grades. On this basis, the Court agreed with Steyn J, that the electronic bill failed to comply with paragraph 5.A2 of Practice Direction 47.

Consequences of AKC’s breaches

The Court then proceeded to consider the consequences of AKC’s breaches. It observed that it is very far from the case that a bill of costs which fails fully to comply with the rules should invariably be struck out, let alone treated as a nullity. It said that, typically, a defect will, at most, warrant a lesser sanction.

In the present case, the result of AKC’s breaches was that it made it more difficult, but not impossible, for the Trust to work out the names of the fee earners who worked on the matter and the grades and status attributed to them. The Court held that Steyn J had been fully entitled to decide that the appropriate course in the particular circumstances was to strike out the existing bill of costs and order AKC to serve a replacement which complied with the Civil Procedure Rules.

Comment

This decision is to be welcomed as it clarifies the hitherto somewhat unclear position as to precisely what information was required in respect of the fee earners on a Bill of Costs. Moreover, practitioners will take some comfort from the Court’s implicit recognition that the relevant provisions are not as clear as they might be and that those falling foul of a specific requirement will not, without more, automatically stand at risk of having her bill struck out or, worse still, treated as a nullity.

Practical Takeaways

Paper Bills

  • It is good practice to include fee earners’ names (although not strictly required in a paper bill);
  • Must state any professional qualification of a fee earner and, unless the SCCO grade is given, the years of post-qualification experience.

Electronic Bills of Costs must contain:

  • the name of the fee earner;
  • their SCCO Grade; and
  • where it adds something, the status of each fee earner.
    • If you use the Precedent S spreadsheet you must include sufficient information to enable the columns of worksheet 5 to be completed (although you need not necessarily include anything in the “LTM Name” column). 


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