The Court of Appeal case of AKC v Barking, Havering & Redbridge University Hospitals NHS Trust [2021] EWHC 2607 (QB) (referred to as ‘Barking’) has significant implications for the preparation and scrutiny of bills of costs and the status of fee earners, and is a must-know common law decision to ensure the correct preparation of a compliant bill of costs.

AKC v Barking: Background of the case

In this case, the Claimant, AKC, brought an action against Barking, Havering & Redbridge University Hospitals NHS Trust (the Trust) for clinical negligence.

Following the settlement of the case, the bill of costs that was filed was part paper bill of costs and part electronic bill of costs. This was to address any pre/post 6 April 2018 work respectively, as permissible under PD 47 para 5.1. 

The primary issue before the Court was the appropriate method for preparing and scrutinising bills of costs. It specifically concerned the identification and status of fee earners involved in the case.

Contents of Bills of Costs

 

A bill of costs is a detailed statement of the legal costs incurred by a party in litigation, which is submitted for assessment by the court. It includes various elements such as:

• Professional fees: Charges for work done by solicitors and other legal professionals.
• Disbursements: Out-of-pocket expenses incurred during the litigation.
• Counsel’s fees: Charges for work done by barristers.

The case of Barking brought to light several critical issues regarding the preparation of these bills, particularly in terms of transparency and accuracy.

AKC v Barking: Key Issues Addressed

Identification of fee earners:

The Court emphasised the importance of clearly identifying each fee earner in the bill of costs. This includes providing relevant fee earner information, specifying their roles, qualifications, and experience levels. The goal is to ensure that the costs claimed are reasonable and proportionate to the complexity and nature of the work performed.

Detailed descriptions:

The Court highlighted the need for detailed descriptions of the work done by each fee earner. Vague or generic descriptions were deemed insufficient. This level of detail is necessary to allow for a proper assessment of the reasonableness of the costs claimed.

Accuracy and Consistency:

Ensuring that the bill of costs is accurate and consistent with the supporting documentation was another critical point. Discrepancies between the bill of costs and the underlying records could lead to challenges and reductions during the assessment process.

The Status of Fee Earners

 

The status of fee earners, including their qualifications, experience and grade, plays a crucial role in determining the reasonableness of the costs claimed. In Barking, the Court provided guidance on how the status of fee earners should be presented in a bill of costs.

Key Points from the Court’s Decision

Transparency:

The Court stressed the need for transparency in identifying the status of each fee earner. This includes clearly stating their job titles, qualifications, and relevant experience. Transparency ensures that the court can assess whether the work performed justifies the costs claimed.

At the Court of Appeal, Mr Browne stated that Steyn J was right in his position that a paper bill must state any professional qualification of a fee earner and unless the SCCO grade is given, the number of years of post-qualification experience.

He further stated:

“The upshot is that, in my 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.

Appropriate Rates:

The court reiterated that the rates claimed for each fee earner should reflect their status and experience. Higher rates for junior or unqualified staff were deemed inappropriate. The court emphasised the importance of aligning the rates with the market standards for similar work.

Proportionality:

The principle of proportionality was central to the Court’s decision. The costs claimed should be proportionate to the nature, importance, and complexity of the case. Overstated costs, particularly for work done by less experienced fee earners, were likely to be reduced.

Certification:

It was a core part of the lower High Court decision that the signatory to the Bill of Costs must be identifiable by name, and also that they were suitably qualified/regulated to sign off the Bill document as accurate.

 

Implications of the Decision

 

The decision in Barking has several significant implications for legal practitioners and cost assessors:

Enhanced Scrutiny:

Bills of costs will be subject to enhanced scrutiny, with a focus on the clarity and accuracy of the information provided. Practitioners must ensure that their bills are meticulously prepared to withstand such scrutiny.

Training and Documentation:

Legal firms may need to invest in additional training for their staff to ensure compliance with the court’s requirements. Maintaining comprehensive and accurate records of work done and the qualifications of fee earners will be essential.

Cost Management:

Effective cost management practices will be crucial to ensure that the costs claimed are reasonable and proportionate. Firms may need to review their billing practices to align with the court’s guidance.

Approval Process:

A Bill can only be signed off by a suitably qualified and experienced staff member, such as a Solicitor or CILEX, and it cannot be an unqualified/unregulated individual, even if they are a Partner.

How Can ARC Costs Assist?

ARC Costs are a team of legal costs experts consisting of experienced Costs Draftsmen and Costs Lawyers. We regularly represent both paying and receiving parties in costs disputes, and ensure that the best outcome is always achieved for our client.

As an independent party, we bring objectivity to any costs dispute we encounter, and we can handle all aspects of costs queries/disputes. Whether it be providing advice on your initial retainer/conditional fee agreement, settling a Costs Budget or Bill of Costs, conducting negotiations/Points of Dispute or providing advocacy services in relation to a CCMC or detailed assessment hearing, one of our adept team members will be available to facilitate the best outcome possible.

We have extensive experience handling County Court, High Court and Tribunal disputes, therefore do not hesitate to get in touch regarding any costs query. Examples of our work, including specific issues such as recovery of success fees, securing payments on account, disputing of Default Costs Certificates, and other examples can be found on our case studies page.

To contact one of the team, call 01204 397302 or send instructions to info@arccosts.co.uk.