Electronic Bill of Costs Reform: Senior Costs Judge Calls for a Simpler Approach

Senior Costs Judge Rowley has called for a review of the electronic Bill of Costs, raising concerns that the current format may be unnecessarily complicated and could be slowing down detailed assessment proceedings.

Speaking ahead of the Association of Costs Lawyers Conference, the judge questioned whether the existing 55-column spreadsheet provides an effective way of presenting legal costs.

According to the Law Society Gazette, the Senior Courts Costs Office is considering alternative formats, including the simpler Form 5 Bill of Costs used by the Supreme Court.

The proposals raise important questions for Costs Lawyers, Costs Draftsmen and solicitors about the future of electronic bills and whether simplification could improve the assessment process.

Why Was the Electronic Bill of Costs Introduced?

The electronic Bill of Costs was introduced to modernise costs assessment and provide greater transparency over the work undertaken during litigation.

Under Practice Direction 47, electronic bills became mandatory for relevant inter partes costs incurred after 6 April 2018. The requirements generally apply to a Part 7 multi track claim, except where:

• The proceedings are subject to fixed costs or scale costs.
• The receiving party is unrepresented.
• The court orders otherwise.

For work undertaken before April 2018, different provisions apply, and a paper bill may still be permissible.

The electronic format was intended to make costs easier to analyse, particularly where proceedings had been subject to costs management.

However, the complexity of the system has increasingly become a point of discussion.

What is Precedent S?

Precedent S is the model electronic Bill of Costs provided under Practice Direction 47. It uses a spreadsheet format to present the costs claimed, categorising work according to the relevant phases, tasks and activities.

These categories allow the paying party and the court to examine how legal costs accumulated throughout proceedings.

For example, work may be allocated to phases such as disclosure, witness statements, expert evidence and trial preparation.

The electronic bill must also allow users to examine entries in chronological order within each phase.

Under the Practice Direction, electronic bills must provide transparent calculations and automatically recalculate relevant totals when figures are amended.

Although these functions can assist with analysing costs, they also contribute to the complexity of the spreadsheet.

Why Does Senior Costs Judge Rowley Want Reform?

The central concern is whether the current electronic Bill of Costs contains more information than is necessary for an efficient assessment. The 55-column format provides extensive detail, but this can make it difficult to identify the principal issues affecting the claim.

A paying party reviewing thousands of entries may focus on individual items rather than considering the overall reasonableness and proportionality of the costs claimed.

Similarly, the receiving party may face extensive challenges to relatively minor entries, increasing the work required to respond. The result can be a detailed assessment process that becomes more time-consuming and expensive.

The judge has also raised concerns about accessibility for litigants in person, who may struggle to understand the information presented.

A simpler format could make costs claims easier to navigate without necessarily reducing the scrutiny applied.

Costs Lawyer Insight: Is More Information Always Better?

From a costs drafting perspective, the challenge is balancing transparency with practical usability. A detailed electronic bill can be valuable where there are significant disputes over hourly rates, duplicated work or expenditure within particular litigation phases.

For example, the ability to isolate disclosure costs or examine work undertaken by a particular fee earner can help identify genuine issues affecting recoverability.

However, the volume of information can also create opportunities for disputes that have limited financial significance. The important question is whether the information assists the court in determining what is reasonable and recoverable.

A revised electronic bill should make the significant costs issues easier to identify without removing the detail needed to support or challenge individual entries.

This is particularly important in high-value litigation, where even relatively small percentage reductions can represent substantial sums.

Why Time Recording Remains Essential

One issue that any reform must address is the relationship between time recording and the preparation of Bills of Costs. Electronic bills rely heavily on the quality of the underlying time records.

Where solicitors maintain accurate, contemporaneous records, costs specialists can more readily identify the work undertaken, allocate entries to the appropriate categories and prepare a reliable bill.

Problems arise where time recording descriptions are vague, entries combine several activities or work has been allocated incorrectly.

For example, an entry described simply as “reviewing documents” may provide insufficient information to establish the purpose or necessity of the work.

Even if the electronic bill becomes simpler, poor time recording will continue to create difficulties.

Solicitors should therefore ensure that records accurately identify the nature of the work, the time spent and the relevant litigation phase.

Effective time recording also assists with costs budgeting and monitoring expenditure against approved budgets.

What Could Replace the Current Electronic Bill?

The Senior Courts Costs Office is reportedly examining the Form 5 Bill of Costs used by the Supreme Court as a possible reference point. Its simpler presentation raises the possibility of a more accessible approach to costs assessment.

However, there are important distinctions between different types of proceedings, and a format suitable for one court may not necessarily meet the requirements of complex multi-track litigation.

Any replacement must still enable the receiving party to explain the costs claimed and the paying party to challenge them effectively.

It should also allow the court to examine relevant expenditure and reach a properly informed decision.

A successful reform could reduce unnecessary administration while preserving the essential functions of electronic costs assessment.

What Would Reform Mean for Costs Lawyers and Solicitors?

Changes to the electronic Bill of Costs could affect drafting software, internal procedures and the way law firms record litigation work. Costs professionals may need to adapt how they prepare bills and present information during negotiations and detailed assessment.

For solicitors, the implications could extend to time recording systems and how costs information is transferred to external Costs Lawyers.

However, no replacement format has yet been formally introduced.

The existing requirements under Practice Direction 47 therefore remain applicable, and firms should continue preparing compliant electronic bills where required.

ARC Costs: Specialist Electronic Bills of Costs Preparation

ARC Costs assists solicitors and law firms with the preparation of Bills of Costs, including electronic bills required for detailed assessment.

Our Costs Lawyers and Costs Draftsmen also assist paying parties with reviewing costs claims, preparing Points of Dispute and negotiating settlements.

We recognise the importance of presenting costs information clearly while ensuring that claims can withstand appropriate scrutiny.

Whether the electronic bill is simplified or retains its current structure, accurate drafting, reliable time recording and a thorough understanding of the costs rules will remain essential.

Contact ARC Costs for assistance with electronic Bills of Costs, costs disputes or detailed assessment proceedings.

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