What is a Bill of Costs?

A Bill of Costs is a detailed document that sets out all the legal work undertaken by a solicitor or law firm in connection with a case, along with the associated time, disbursements, and hourly rates. It forms the basis for recovering legal costs from the paying party after a successful case or costs order.

The Bill allows the paying party (usually the losing party) to scrutinise the reasonableness and proportionality of the costs claimed before payment or assessment by the Court.

When is a Bill of Costs Needed?

A Bill of Costs is required when a costs order for detailed assessment of costs is made, typically at the conclusion of litigation.

In particular:

• When a court order states that the paying party must pay the successful party’s costs, and the amount cannot be agreed between the parties.
• In Multi-Track cases, where costs claimed are post 6 April 2018, an Electronic Bill of Costs must be used in accordance with CPR 47 and Practice Direction 47.

How to Prepare a Bill of Costs

To prepare a Bill of Costs, a Costs Draftsman will:

1. Obtain your complete case file (digitally or in paper form).
2. Review all time records, correspondence, pleadings, and disbursements.
3. Itemise every piece of work done, including time spent and by whom.
4. Draft a Bill in the appropriate format (traditional or electronic).
5. Ensure compliance with CPR 47, Practice Directions, and any relevant case law.

The process requires precision, as any discrepancies or excessive claims can lead to significant reductions upon detailed assessment. That’s why instructing an experienced Law Costs Draftsman is essential.

Who Prepares a Bill of Costs?

A Costs Draftsman or Costs Lawyer is usually instructed to prepare the Bill. They specialise in drafting and negotiating costs and ensure that only recoverable items are included, maximising recovery for the receiving party while ensuring compliance with procedural rules.

When is an Electronic Bill of Costs Required, and What Special Rules Apply?

In Multi-Track cases where costs are claimed for work undertaken after 6 April 2018, the Electronic Bill of Costs (Precedent S) must be used.

This format:

• Is presented in an Excel spreadsheet;
• Allows filtering by budget phase, task, and activity;
• Must reflect the Costs Budget (if a Costs Management Order was made);
• Must include a Precedent Q, comparing budgeted and incurred costs.

Service requirements:

When serving an Electronic Bill, a hard copy must be sent to the paying party, and a digital Excel version must also be emailed. If the Bill is filed for detailed assessment, a digital version must be e-filed with the Court.

What Information is Needed to Prepare a Bill of Costs?

To prepare a Bill, we will require:

• Access to your full case file (paper or digital);
• All time recording information;
• Details of disbursements (such as expert fees, counsel’s fees, or court fees).

This information ensures every recoverable item is accurately reflected. Any missing documentation may delay the process or reduce the recovery amount.

What Items Should Not Be Claimed in a Bill of Costs?

Under CPR 47 PD 5.12 and case law, certain costs are not recoverable. These include:

• Funding costs (e.g. setting up retainers) – Motto & Ors v Trafigura Ltd [2011] EWCA Civ 1150
• Inter-fee earner discussions except in complex cases – TUI UK Ltd v Tickell & Others [2016] EWHC 2741 (QB)
• Estimated or unrecorded time without supporting evidence

Careful drafting ensures such items are excluded to avoid unnecessary disputes or reductions on assessment.

What is the Expected Recovery on a Bill of Costs?

Recovery depends on the type of costs order and the case circumstances:

• Standard Basis: typically between 70–80% of the total Bill.
• Indemnity Basis: usually higher, with fewer reductions.
• Costs Managed Cases: where the Costs Budget has been adhered to, recovery is often 80–90%.

Factors such as proportionality, hourly rates, and disbursement reasonableness also influence the outcome.

How Long Does It Take to Prepare a Bill of Costs?

At ARC Costs, we prepare most Bills within 5 working days of receiving the full file. Negotiations typically conclude within one month of service, often without the need for Points of Dispute or Replies.

What is the Difference Between Detailed Assessment and Summary Assessment?

A summary assessment is a procedure where the Court assesses the amount of costs immediately at the conclusion of a hearing, usually lasting less than one day. It is common in interim applications and shorter hearings.

A detailed assessment, by contrast, takes place after the conclusion of proceedings when the costs cannot be agreed. This is where a full Bill of Costs must be prepared and served for review by the paying party and, if necessary, the Court.

In Court of Appeal proceedings, the Court may order either summary or detailed assessment, depending on the nature and duration of the appeal.

Why Instruct ARC Costs to Prepare Your Bill of Costs?

Our team of expert Costs Draftsmen and Costs Lawyers consistently achieve high recoveries for clients.

Our service includes:

• Bills drafted and reviewed by two senior members of staff for accuracy;
• 5 working day turnaround as standard;
• Weekly progress reviews to ensure swift resolution;
• A 72% average recovery rate, achieved in most cases within one month;
• Advocacy support for any detailed assessment hearing;
• Transparent advice on all offers and settlement options;
• Fixed and reliable timescales for all litigation steps, including Part 8 proceedings and Points of Reply.

We combine accuracy, speed, and strategic negotiation to ensure you achieve the best possible recovery.

Contact ARC Costs

For expert assistance in drafting or negotiating your Bill of Costs, contact ARC Costs today.

Our experienced team will ensure your Bill is prepared accurately, efficiently, and in full compliance with CPR 47 and relevant case law.

Should you require any assistance or free initial advice, please call us on 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.