Do you know about J-Code-Set for costs?

The Jackson Reforms Steering Committee has an objective to develop a new model-form Bill of Costs. The first stage of this process was to develop a uniform series of  litigation task costs codes to enable courts to assess the costs to be awarded in litigation cases. The LEDES Oversight Committee (LOC) has now endorsed the use of a new litigation costs coding system called EW-UTBMS J-Code-set.

The LOC recently announced its endorsement of the EW-UTBMS J-Code-set in a press release:

‘The J-Codes are a set of UTBMS codes developed by the Jackson Steering Committee, working at the behest of the Judiciary of England and Wales, and charged with developing a set of litigation task codes specifically for their own region and industry sector. In this case, the LOC assisted the Jackson Steering Committee (chaired by Alex Hutton QC and project coordinated by David Nelson who is the LOC Standards Coordinator) in developing the J-Codes, as the first stage of their objective to develop a new model-form ‘Bill-of-Costs’ for use by the courts in assessing costs to be awarded in litigation cases.

The development of the J-Codes (and the new model-form-bill-of-costs when it is developed), is a response to a review of civil litigation costs in England and Wales, conducted by Lord Justice Jackson (a very senior judge in the judiciary). The overarching purpose of these codes is to assist courts and other parties in performing analysis of costs at different levels, including the comparison of actual costs to budgeted costs.

Given the above, the primary aim of the new J-Codes is to enable the courts in England and Wales – including Judges and Costs’ Judges – to summarise and analyse time worked and costs incurred by lawyers during a litigation case. This again is a departure from the norm for the use UTBMS codes, as normally they are used in eBills supplied by the law firm to the client. It’s envisaged the J-Codes will be used extensively to analyse the Bill-of-Costs by the losing litigant, in order to minimize their costs.

In terms of implementation – law firms should liaise with their clients to receive instructions, but it is thought law firms with litigation cases being held in the jurisdiction of England and Wales will need to implement the new J-Code-set internally, so that their lawyers are able to record time using the J-Codes. This should be an improvement over the current –L-Codes which they may be using, as the J-Codes accurately reflect the litigation phases in this jurisdiction. Likewise, eBilling vendors will need to implement the new J-Codes, as the law firms will need to record them, and this will enable an easier comparison of client bills to the eventual Bill-of-Costs presented to the courts at the culmination of the case.

The request to the LOC to ratify/endorse the J-Codes was made via a formal letter to the LOC by senior judges in England and Wales, these being Lord Dyson (Master of the Rolls – the 2^nd head judge in the country), Lord Justice Jackson (Senior Judge and author of the Jackson Review report), Senior Costs Judge Peter Hurst (Senior Costs Judge in the Judiciary). This underlines the importance of using the codes in litigation cases in England and Wales.’

The request by three senior judges for the LOC to endorse the J codes is perhaps indicative of the importance the courts are placing on the new approach to dealing with costs. The issue for practitioners will be whether they should be implementing the J codes as part of their time recording process now. There is currently no mandatory requirement for lawyers to use the codes. However, this does not mean they should not be taken into account. The thought process behind publishing the J-codes now is linked with the use of the new Bill of Costs which is currently being worked on and which, it is anticipated, will be available towards the end of 2015. The Bill of Costs will take the form of a spreadsheet and is being developed by utilising the J codes within its spreadsheet analysis. For those dealing with matters for which costs issues may come before the court at the end of 2015 or later, understanding the J codes and implementing them into the firm's time recording system may well reap benefits in terms of dealing with costs issues before the courts.

Other issues to be aware of are:

1. J codes are based on a sequencing of the work undertaken by litigators during the course of the litigation
2. J codes have been aligned to the phases of the litigation set out in Precedent H - this was in fact a development constraint so as to enable the easy comparison of budgeted costs to actual incurred costs by the courts or other parties that need to compare these costs. Given this, the use of J codes, when recording time spent on a matter, should make this comparison much easier eg if seeking variation of your costs budget
3. Implementation notes are provided from page 31 of the J Code document (this covers both lawyer training and software issues)

Given these issues, a review of the J-Code report will be a must for law firms.

For access to the J-Code-Set document as well as the judiciary please click here.