Home / Insight / Landmark Judgment for transparency of bills of costs

Landmark Judgment for transparency of bills of costs

29/09/2021

AKC (a protected party by litigation friend MCK) v Barking, Havering and Redbridge University Hospitals NHS Trust. (High Court – Steyn J – 29 September 2021)

The High Court decided that receiving parties can no longer withhold basic information as to who has done the work claimed within a bill of costs.

The rules require information as to the identity, grade, professional qualification and post qualification experience to be provided in relation to the work done and hourly rate claimed within a bill of costs.

Circumstances

The claimant served a bill of costs of £1,040,412 in which the following issues were identified:

  1. The identity of the signatory to the certificate to the bill had not been provided;
  2. The identity of each fee earner for whom work was claimed, their grade, qualification and number of years post qualification experience had not been provided contrary to PD 5.11(2) to CPR 47; and
  3. Failure to provide the identity of each fee earner for whom work is claimed, their grade, qualification and number of years post qualification experience in accordance with PD 5.A2 to CPR 47.

The defendant served points of dispute raising objection by way of preliminary issues requesting the information be provided within 14 days, failing which the defendant would apply for an order that the bill of costs do stand struck out for non-compliance to the extent to which it is not otherwise sensibly remediable other than by redrafting the bill.

The claimant rejected the objections and refused to provide the information requested saying that there was no requirement under the rules to provide the information requested.

Application

The defendant applied for an order for the bill of costs to be struck out and for an order that the claimant should serve bill of costs compliant with the CPR.

At first instance, Master Nagalingam dismissed the application finding:

  • Certification – There was no requirement in rules or Precedent F that the person certifying the bill be named.
  • Paper bill – PD 5.11(2) of CPR 47 PD does not expressly require that fee earners be named and rejected the contention that such a requirement may be inferred.
  • Electronic bill – An electronic bill must have the same functionality as Precedent S, but it is not required to mimic precisely the format of Precedent S. He considered that “the rules and practice directions do not impose a procedure requirement to name fee earners”.

The defendant appealed on the basis that the Master was wrong in law.

Appeal

Judgment on appeal

In a reserved judgment handed down on 29 September 2021, Mrs Justice Steyn allowed the appeal on all three issues as follows:

  1. Do the rules require the identity of the certificate signatory to be provided in the bill of costs?

The court held that the identity of the signatory must be disclosed saying:

  1. …it is implicit that the solicitor who signs the certificates must be readily identifiable on the face of those certificates. It is inherent in the concept of certifying or attesting to a matter before a court of law, at least in circumstances where the CPR requires (as it does here) that a matter is certified or attested by an individual, that the signatory should disclose their identity to the court.
  2. Does PD 5.11(2) require the name, professional qualification and post qualification experience of each fee earner to be provided in the bill?

The court held the identity must be provided. Whilst it does not require the grade of each fee earner to be provided, if it is not then any professional qualification and post qualification experience must be given. Mrs Justice Steyn said:

  1. In my judgment, paragraph 5.11(2) requires both the status and the hourly rate to be given on an individual basis, rather than by reference to categories of fee earners, and it follows that each fee earner should be named in the bill.
  2. While it is good practice to specify each fee earner’s SCCO grade – and, if it is not given, a paying party may request such information and the court may order its provision – I do not consider that the rules and practice direction require fee earners’ SCCO grades to be specified in a paper bill of costs.

At paragraph 101 the court dealt with what further information must be included in the status of an individual as follows:

  1. …in my judgment, to comply with paragraph 5.11(2) the description of each fee earner’s status should encompass their professional qualification (if any) and (if the SCCO grade is not given) their number of years of post-qualification experience.
  2. Does PD 5.A2 to CPR 47 require the name and grade of fee earner to be provided?

The court held that the name and grade of fee earner must be provided as they form part of the “detail” of all of the work undertaken. Mrs Justice Steyn held:

  1. The practice direction does not require parties to use any particular proprietary format. But whichever spreadsheet format is used, the electronic bill must, amongst other requirements, allow the user to identify “the detail” of all the work undertaken in each phase, in chronological order and must contain all calculations and reference formulae in a “transparent manner”.
  2. In my judgment, the respondent’s electronic bill of costs failed to provide the detail of all the work undertaken in each phase and failed to provide the reference formulae in a transparent manner. The respondent’s electronic bill of costs does not meet the “full functionality” requirement. I have reached this conclusion for the following reasons.
  3. First, the respondent’s electronic bill does not include the names (or initials) of fee earners. This is part of the “detail” which must be provided whether the Precedent S spreadsheet format or another spreadsheet format is used. Who has undertaken each item of work is a key part of the detail and, without it, the bill is opaque. In order to be fully functional, the spreadsheet must enable the paying party and the court to see what work any particular fee earner has undertaken…
  4. Secondly, the respondent’s electronic bill does not include the grade for each (or indeed any) fee earner. In Precedent S there are columns for both status and grade, reflecting the fact that these descriptions seek different information. In this context, as I have said, the word “grade” is a term of art meaning SCCO grade.

Keoghs comment

This is an important judgment providing much needed certainty and transparency as to the information that one party must provide to another in a bill of costs.

One interpretation of the rules enabled receiving parties to withhold basic information producing bills that were opaque and potentially hid costs that were likely to be disallowed upon assessment. This limited the ability of paying parties to assess costs, delayed resolution of the claim and unnecessarily increased the costs of assessment.

All bills of costs need to provide the necessary detail (name, grade, professional qualification and post qualification experience) to allow the parties and the court to understand the costs in a clear, transparent and intelligible way.

Keoghs represented the defendant; if any further information is required then please contact either Howard Dean or Ben Petrecz.

Howard Dean
Author

Howard Dean
Partner
Head of Costs

LinkedIn Icon Contact

Stay informed with Keoghs

Sign-up

Our Expertise

Vr

Claims Technology Solutions

Disrupting claims management with innovation & technology

 

The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.