More on J Codes, following on from our overview of costs issues in 2015. We asked Alexander Hutton QC, chair of the committee, for an update including timings for implementation. Over to you, Alex.
One of the pieces of unfinished business from the Jackson Report was his recommendation that there be a new bill of costs for civil litigation. In 2015 that may now be nearing fruition however. The old way of preparing a bill of costs by a costs draftsman going through item by item of a file was time-consuming and hugely expensive. The essential idea of the new system is that solicitors should record time on their computers as they go along under pre-assigned codes for “phase, task, activity” where the phase equates to the Precedent H phase for budgeting (e.g. witness statements), the task is the element of the phase (e.g. own side’s witness statements or other side’s witness statements), and the activity is what is being done (e.g. communicating with the witness, drafting the witness statement, etc). Further detail on each time entry can also be entered at the same time on an “electronic attendance note”.
A committee, originally chaired by Jeremy Morgan QC and now by Alexander Hutton QC, in July 2014 recommended in this regard the “J-Codes”, where the international UTBMS system of e-billing clients (widely used in the US and in US law firms in the UK) has been adapted specifically for the UK and billing between the parties. The J-Codes were endorsed by Lord Dyson MR, Jackson LJ and Senior Costs Judge Hurst in July 2014 and approved by the LEDES Oversight Committee (responsible for the UTBMS system) shortly thereafter. See the J-Codes themselves here.
Work is now almost complete by the Committee on producing a new model bill of costs in the form of a spreadsheet which will be in electronic form (although a printable version not containing all the data in the electronic form will also exist) in which the contemporaneous time recording data is fed at the click of a button or two into a bill of costs without (as now) the need to reinvent the wheel every time to produce a bill. Some human intervention will inevitably be required to produce the final bill, but much less than is presently the case. This system can be used for a bill of costs for detailed assessment, arranged under the Precedent H phases and with an easy comparison between the last agreed/approved budget phases and the phase costs in the bill. It can also be used for summary assessment and to prepare a Precedent H form (for incurred costs). Further, at the click of a button it can tell you precisely what you have incurred on, for instance, witness statements, or even just drafting witness statements etc. The model bill will be in XML, a universal format similar to an Excel Spreadsheet and will be downloadable free from the MoJ website. This will be the basic form: no doubt costs software companies will also adapt and “improve” it, albeit for a fee for their users.
The current plan by the powers that be (subject to the Rules Committee) is that the new model bill of costs and J-Codes will be the subject of a voluntary Practice Direction to be in force from October 2015 with the new format bill becoming “mandatory” as a pilot in all Senior Court Costs Office bills for detailed assessment from April 2016. At some point it is likely the courts will not allow recovery between the parties of the substantial extra costs of preparing a bill in the old-fashioned way. You are therefore recommended to start using the J-Codes to record time as soon as possible as (a) you can then compare easily each phase of your costs with the budgeted costs as you go along and (b) it will be much easier and cost effective to use the new bill for a period when the time had been recorded contemporaneously under J-Codes. The old system is frankly indefensible but is on the way out. It is a good opportunity now to be ahead of the game!
Alexander Hutton QC is a barrister at Hailsham Chambers and is Chair of the Jackson LJ committee on the J-Codes and new bill of costs