BILL OF COSTS MUST INCLUDE THE NAME OF FEE EARNERS WHO DID THE WORK: COURT OF APPEAL DECISION TODAY

In the judgment today in AKC -v- Barking, Havering & Redbridge University Hospitals NHS Trust [2021] EWHC 2607 (QB)   the Court of Appeal upheld the point that the name of each fee earner involved must be included in the electronic bill of costs.   The judge had acted appropriately in striking out the original bill of costs and ordering the claimant (receiving party) to file a compliant bill.

“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.”

THE ORIGINAL DECISION

The court was assessing the claimant’s costs in a clinical negligence case.  The claimant filed a bill partially on paper and partially electronically (as was allowed).  The defendant applied to strike out the bill. The bill was not struck out by the costs judge. The defendant appealed –  on appeal it was held that the bill did not comply with the rules and that it should be struck out and the claimant ordered to file a new bill of costs.

THE GROUNDS FOR STRIKING OUT THE BILL

The defendant’s application was based on the fact that the signatory of the bill of costs could not be identified and the bill of costs failed to provide proper fee earner information.

THE DECISION ON APPEAL (1): THE SOLICITOR CERTIFYING THE BILL MUST BE IDENTIFIED

On appeal to the High Court judge it was held that the failure to be able to identify the person who signed the bill meant it did not comply with the rules.  The bill(s) were struck out and the claimant ordered to file compliant bills.

THE CLAIMANT’S UNSUCCESSFUL APPEAL TO THE COURT OF APPEAL

The Court of Appeal upheld the decision of the High Court judge.

THE DEFECTS IN THE PAPER BILL

The Court of Appeal first considered the paper bill.

“The paper bill

35.The first question which arises in relation to the paper bill which AKC served on 8 August 2019 is whether fee earners should have been named. Echoing Steyn J, Mr Robert Marven QC, who appeared for the Trust, argued that such an obligation emerges from paragraph 5.11(2) of Practice Direction 47. Paragraph 5.11(2) refers to the background information included in a bill of costs setting out “a statement of the status of the legal representatives’ employee in respect of whom costs are claimed and (if those costs are calculated on the basis of hourly rates) the hourly rates claimed for each such person”. The status and hourly rates of “each … person” in respect of whom costs are claimed are thus to be given and, so Mr Marven submitted, that requirement will not be satisfied if a bill merely provides the status and hourly rates of a group or category of employees. Status and hourly rates has to be supplied on an individual basis and, as part of that, with the relevant person’s name.
36.On the other hand, Practice Direction 47 nowhere states in terms that fee earners must be named in a paper bill. Had that been the intention, it would have been easy enough to say so, for example by inserting the words “name and” before “status of the legal representatives’ employee” in paragraph 5.11(2). That, however, was not done. Moreover, Precedent A, which paragraph 5.1 of Practice Direction 47 identifies as one of the “model forms of paper bills of costs for detailed assessment”, does not name fee earners and, in one instance, clearly refers to them as a group. Hourly rates are given, not by name, but for “Partner”, for “Assistant Solicitor” and, most strikingly, for “Other fee earners”. Nor, in my view, does the need to supply the status and hourly rates for “each such person” in accordance with paragraph 5.11(2) lend significant support to Mr Marven’s contentions. Take Precedent A. That, it seems to me, can be said to state the hourly rates of each of the “Other fee earners” by the compendious reference to “Other fee earners”. Likewise, a bill which, for instance, said that £X per hour was claimed for “Grade B solicitors” could fairly be described as stating the status and hourly rates claimed for “each such person”.
37.It is also, perhaps, relevant that paragraph 5.11(2) of Practice Direction 47 reflects guidance which was given in respect of bills long before the advent of electronic bills at a time when it may have been more common for a piece of litigation to be handled by just a few individuals within a firm of solicitors and, hence, the case for identifying fee earners individually by name might have been less compelling. Thus, paragraph 1.3 of Supreme Court Taxing Office Practice Direction (No.2 of 1992) explained that a bill should contain, first, a narrative and, then, “a statement showing the status of the fee-earners concerned and the expense rates claimed for each”. Paragraph 5.11(2) of Practice Direction 47 uses very similar language.
38.In practice, fee earners are very commonly named even in paper bills, and it is desirable that they should be. Doing so can be of help to both the paying party and the Court, and it is hard to think of a good reason for withholding the identity of fee earners. On balance, however, I agree with Mr Simon Browne QC, who appeared for AKC with Mr Matthew Waszak, that a paper bill does not strictly have to include fee earners’ names. In this particular respect, therefore, I take a different view from Steyn J. I do not think that the omission of fee earners’ names rendered the paper bill which AKC served in August 2019 deficient.
39.Steyn J also, however, held that the paper bill did not comply with paragraph 5.11(2) of Practice Direction 47 because it failed to give the “status” of all fee earners. Steyn J considered that “the description of each fee earner’s status should encompass their professional qualification (if any) and (if the SCCO grade is not given) their number of years of post-qualification experience” and that the paper bill served by AKC did not do so.
40.Mr Browne submitted, and I would accept, that paragraph 5.11(2) of Practice Direction 47 cannot require a receiving party to specify any qualifications or post-qualification experience of a fee earner where none is relied on. If a receiving party is not suggesting that a fee earner had a relevant qualification, nothing need be said on the subject. The receiving party does not have to spell out the absence of any qualification or post-qualification experience.
41.Subject to that caveat, however, Mr Browne accepted that Steyn J had been right that a paper bill must state any professional qualification of a fee earner and, unless the SCCO grade is given, the years of post-qualification experience. It follows, as it seems to me, that Steyn J was also correct that the August 2019 paper bill did not fully meet the requirement to give fee earners’ status. The references in the paper bill to solicitors’ “Years Experience” can, I think, be taken to refer to post-qualification experience and, on that basis, the bill sufficiently stated the “status” of “Solicitor 1” and “Solicitor 2”. Nor does any problem arise in relation to the “Others” or “Paralegal (Special Damages, Sheffield Based Fee Earner)” who can be assumed not to have had any professional qualification. However, AKC was proceeding on the basis that a “Partner” justified a high hourly rate without either confirming that the “Partner” had a professional qualification or stating the number of years of post-qualification experience. To this extent, in my view, the paper bill failed to comply with paragraph 5.11(2) of Practice Direction 47.”

 

THE ELECTRONIC BILL

Difference principles applied to the electronic bill. Here there was a mandatory requirement that the fee earners who carried out the work should be named.

“42.Paragraph 5.A1 of Practice Direction 47 introduces Precedent S, and worksheet 5 of Precedent S includes columns headed “LTM”, “LTM Name”, “LTM Status” and “LTM Grade”. The existence of those columns suggests an expectation that they should be populated or, in other words, that the receiving party should provide the name, status and grade of each fee earner.
43.As, however, Mr Browne stressed, Practice Direction 47 does not expressly stipulate that an electronic bill must contain the information needed to fill in the columns of worksheet 5 of Precedent S. Neither does it even insist on Precedent S being used. Paragraph 5.A2 states that electronic bills must be in either Precedent S spreadsheet format or any other spreadsheet format which satisfies sub-paragraphs (a) to (e) of paragraph 5.A2. Further, sub-paragraphs (a) to (e) are not entirely easy to interpret. By sub-paragraph (c), “any other spreadsheet format” must allow the user “to identify, in chronological order, the detail of all the work undertaken in each phase”, but the sub-paragraph does not expand on what “detail” is required. As for sub-paragraph (e), that provides for “any other spreadsheet format” to contain “all calculations and reference formulae in a transparent manner so as to make its full functionality available to the court and all other parties”. Steyn J attached significance to the references to “a transparent manner” and “full functionality”, but it is doubtful whether sub-paragraph (e) is of any real assistance with the issues raised by the present appeal. The focus of sub-paragraph (e) appears to be on ensuring that the workings of a spreadsheet are knowable and, hence, that the Court and all other parties can make full use of whatever “functionality” the spreadsheet has, not on quite what information the spreadsheet must contain.
44.Even so, it seems to me, on balance, that a receiving party who elects to use the Precedent S spreadsheet format must include in his bill of costs information sufficient to enable the columns of worksheet 5 to be completed. When paragraph 5.A2 of Practice Direction 47 states that electronic bills “may be in … Precedent S spreadsheet format”, it surely cannot mean that a receiving party need complete a Precedent S only to whatever extent he chooses. It is, I think, to be inferred that a receiving party using Precedent S has to provide enough data for its worksheets to be filled in. It follows, given the columns comprised in worksheet 5 of Precedent S, that a bill adopting Precedent S must at least generally include, among other things, the “LTM Name”, “LTM Status” and “LTM Grade” (which must mean SCCO grade) of each fee earner. That is not to say that a receiving party necessarily has to complete in full both the “LTM Status” and “LTM Grade” columns in worksheet 5. As Steyn J recognised in paragraph 112 of her judgment, entering fee earners’ SCCO grades in the “LTM Grade” column may allow a receiving party to say relatively little in the “LTM Status” column. Recording that a fee earner was grade B, say, will without more imply that the fee earner was qualified as a solicitor or legal executive and had over four years’ post qualification experience, including at least four years’ litigation experience. There can be no obligation to duplicate that information in the “LTM Status” column and so it may be enough to state in that column whether the individual in question’s qualification was as a solicitor or as a legal executive.
45.There is one respect in which the conclusions expressed in the previous paragraph might be thought to be inconsistent with the model Precedent S populated with example data. The “LTM Name” column in worksheet 5 of that has been completed for most fee earners, but not for every one. Names have been entered for the “Partner”, “Legal Assistant”, “Costs Draftsman” and “Junior Counsel”, but in the case of the “Medico-Legal Assistant” the “LTM Name” column has been left blank. The “Medico-Legal Assistant” is identified only by the initials “NLB” in the “LTM” column.
46.The omission of the name of the “Medico-Legal Assistant” is something of a puzzle. One possibility is that it is simply a slip. The best explanation may, however, be that suggested by Mr Marven: that the bill proceeds on the basis that the receiving party’s solicitors outsourced the work in question to an agency with the result that it was not appropriate to insert the name of an individual. (As Mr Marven pointed out, Crane v Canons Leisure Centre [2007] EWCA Civ 1352, [2008] 1 WLR 2549 shows that delegated work can sometimes be charged for by way of profit costs rather than disbursements.) It seems, therefore, that even a bill in Precedent S format need not necessarily include anything in the “LTM Name” column of worksheet 5 in respect of work delegated to an outside agency.
47.Of course, an electronic bill does not have to use Precedent S but can instead be in “any other spreadsheet format” which satisfies the requirements of sub-paragraphs (a) to (e) of paragraph 5.A2 of Practice Direction 47. However, it is, I think, to be inferred that the “detail of all the work undertaken” which, in accordance with sub-paragraph (c), an electronic bill in “any other spreadsheet format” must allow a user to identify has to provide as much information as a duly completed Precedent S. After all, unless “detail” as used in sub-paragraph (c) is so understood, there is scant guidance in Practice Direction 47 as to what information an electronic bill in “any other spreadsheet format” must supply; “any other spreadsheet format” will represent a substitute for Precedent S; and electronic bills were clearly introduced with a view to making bills more informative. On top of that, as was pointed out to us by Costs Judge Rowley, the “Guidance Document to the New Format Bill of Costs” which the Hutton Committee published in July 2015 noted in paragraph 12.4 that “[t]he new form calls for tabular presentation of the identity, any initials used for abbreviation, status and hourly rate(s) of the various members of the legal team” (emphasis added). It is fair to say that this document (which we raised with counsel during the hearing) pre-dated the pilot schemes which were run before Precedent S was finally adopted, but there is no reason to suppose that electronic bills, when introduced, were in this respect intended to provide less information about team members.
48.Steyn J said this in paragraph 96 of her judgment about the desirability of being able to identify the work done by specific fee earners:

Without a breakdown of work undertaken by individual fee earners, it is impossible to know whether, for example, two different fee earners within the same status category each spent one hour working on a letter, on consecutive days, or whether only one fee earner spent two hours across two days working on it. This kind of information is capable of revealing that work has been duplicated, in whole or in part. It is also impossible to detect, for example, if a claim has been made that an individual fee earner undertook, say, 10 hours work on disclosure on a day when a claim has also been made for the same fee earner’s attendance at a one day hearing, giving rise to questions about the accuracy of the claim. Such anomalies are hidden if work is claimed by reference to categories of fee earner. In addition, the provision of the names of fee earners enables the paying party to check the expertise and experience of individual fee earners, when considering whether the rate claimed is reasonable.”

I agree.

49.Querying the weight to be attached to Practice Direction 47, Mr Browne cited U v Liverpool City Council [2005] EWCA Civ 475, [2005] 1 WLR 2657, An NHS Trust v Y [2018] UKSC 46, [2019] AC 978 and In re NY (A Child) [2019] UKSC 49, [2020] AC 665. In U v Liverpool City Council, Brooke LJ, giving the judgment of the Court of Appeal, said in paragraph 48:

“The status of a practice direction has been authoritatively delineated by Hale LJ in In re C (Legal Aid: Preparation of Bill of Costs) [2001] 1 FLR 602, para 21, May LJ in Godwin v Swindon Borough Council [2002] 1 WLR 997, para 11, and Dyson LJ in Leigh v Michelin Tyre plc [2004] 1 WLR 846, paras 19-21. It is sufficient for present purposes to say that a practice direction has no legislative force. Practice directions provide invaluable guidance to matters of practice in the civil courts, but in so far as they contain statements of the law which are wrong they carry no authority at all.”

Echoing that, Lady Black observed at paragraph 98 of An NHS Trust v Y that “a practice direction cannot establish a legal obligation when none already exists” and Lord Wilson said in In re NY (A Child) at paragraph 38 that “practice directions, even including those which are stated to supplement the [Family Procedure Rules 2010], are not made pursuant to that or any other statutory authority”. However, CPR 47.6 specifically cross-refers to Practice Direction, providing for service of “a copy or copies of the bill of costs, as required by Practice Direction 47” and “if required by Practice Direction 47, a breakdown of the costs claimed for each phase of the proceedings” (emphasis added in each instance). In the circumstances, Practice Direction 47 does not merely “provide invaluable guidance to matters of practice” but carries authority.

50.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.
51.There was some debate before us as to whether AKC’s August 2019 electronic bill was “in … Precedent S spreadsheet format”. Mr Browne submitted that, while the bill had much in common with Precedent S, there were also differences and that it was to be seen as in “any other spreadsheet format” rather than “Precedent S spreadsheet format”. However, the August 2019 electronic bill appears to have the same worksheets and columns as Precedent S and to have been described as a “Precedent S” bill when served and filed. In the circumstances, I am inclined to think that AKC is to be regarded as having adopted “Precedent S spreadsheet format”.
52.The point does not matter, however. Even if the electronic bill is properly considered to be in “any other spreadsheet format”, it should have contained as much information as a duly completed Precedent S and, in particular, the name, the SCCO grade and, where it added something, the status of each fee earner. It did not do so. It neither gave fee earners’ names nor specified their SCCO grades. I agree with Steyn J, therefore, that the electronic bill failed to comply with paragraph 5.A2 of Practice Direction 47.”

 

THE CONSEQUENCES

The fact that the bill was defective did not automatically lead to a striking out.  A lesser sanction could be appropriate.  In this case striking out the bills and ordering that compliant bills be filed was appropriate.
“53.It is very far from the case that a bill of costs which fails fully to comply with the rules should invariably be struck out, let alone treated as a nullity. Typically, a defect will, at most, warrant a lesser sanction.
54.In the present case, the significance of the defects in the paper and electronic bills which AKC served in August 2019 is reduced by the extra information which AKC gave about fee earners in its points of reply to the Trust’s points of dispute and in response to the Trust’s Part 18 request (see paragraphs 24 and 26 above). Piecing together the bills, the points of reply and the Part 18 information, it is possible to work out the names of the fee earners who worked on the matter and the grades and status attributed to them.
55.However, even with the benefit of the points of reply and Part 18 information it is by no means always possible to say which of the 33 fee earners named in response to the Part 18 request is said to have carried out particular work. While, as Mr Browne explained, the application of filters may help to limit the possible candidates, he did not dispute that the name and grade of the specific fee earner responsible for an item of work cannot necessarily be identified.
56.In the circumstances, Steyn J was, as it seems to me, fully entitled to decide that the appropriate course in the particular circumstances was to strike out the existing bill of costs and order AKC to serve a replacement which complied with the Civil Procedure Rules.”