What is the Detailed Assessment Procedure?

Detailed assessment proceedings are required when any substantive proceedings/dispute has been resolved, but the issue as to how much one party owes the other for legal costs remains in dispute.

To initiate the detailed assessment process in all multi-track cases, the Receiving Party must serve a bill of costs on the Paying Party along with a Notice of Commencement. Upon receipt, the Paying Party should promptly serve their Points of Dispute (usually within 21 days) and engage in negotiations as soon as practicable.

Following an update to Practice Direction 27 in 2018, the traditional three-column bill was replaced in multi-track cases by the Electronic Bill of Costs, also known as the Precedent S. Use of the electronic bill became mandatory in the Senior Courts Costs Office and County Courts from 6 April 2018. However, for costs incurred before this date, both the old three-column bill and the new electronic bill may be used in combination.

The changes to Practice Direction 47, along with the introduction of Electronic Bill of Costs, were implemented to make billing more cost effective and more streamlined. Electronic Bill of Costs must adhere to the principles set out in Precedent S and the cost management process, and any discrepancies between the initial cost estimates and the final bill must be justified.

Precedent S is a bill devised to reflect the costs budgeting process used at the start of multi-track litigation (at CCMC stage) to provide an estimate of the total costs a party expects to incur during the case. It is important to understand that the figures approved in Costs Budget represent only base costs figures (excluding VAT and additional liabilities) and estimates of future base costs, but those in a Precedent S Bill are the totality of the costs actually incurred during the litigation.

When is the Electronic Bill of Costs Required?

The rules apply to all Part 7 Multi-Track claims (irrespective of whether they have been budgeted or not) where costs are incurred on or after 6 April 2018. In these cases, an Electronic Bill of Costs must be used, subject to the following exceptions:

• Claims involving fixed or scale costs
• Litigants in person
• When the court has issued an order otherwise (parties may agree not to use electronic billing)
• Multi-Track costs incurred before 6 April 2018, though the electronic bill is mandatory for costs incurred after that date.

What is the Precedent S?

Precedent S is a standardised form introduced in the England and Wales civil costs regime to assist in the assessment of costs. It was developed as part of efforts to increase transparency and consistency in the way solicitors present their costs for work undertaken for summary and detailed assessment, and also to adopt a more digital approach to detailed assessments of costs. This standardisation benefits both the Court and the parties involved by enabling easier assessment and comparison of budgets.

A Precedent S is typically presented in a spreadsheet format which has been created for use with an electronic billing system. This document comprises of 17 sheets which can be completed to provide details of the costs which the receiving party intend to claim.

Its use is optional; however, it serves as a model format for presenting the necessary information, ensuring that all relevant details are included (CPR PD 47, para 5.A2). In particular, the Precedent S requires the Receiving Party to allow all costs data to be phased and capable of analysis and filtering through the use of Excel, as well as to update in relation to any calculations in the document as any changes are made during assessment.

What Should be Included in a Precedent S?

Precedent S divides the litigation process into stages as are used as part of the Costs Budgeting process, sub-divided into Parts for costs incurred pre and post Budget approval (split by the date on which the Costs Management Order was made).

• Pre-action stage: Costs incurred before the formal issue of proceedings.
• Issue and service of claim: Costs for issuing the claim and serving it on the other party.
• CMC: Work undertaken in relation to preparing for and attending the Case Management Conference.
• Disclosure: Costs associated with the exchange and inspection of documents.
• Witness statements: Costs related to preparing and exchanging witness statements.
• Expert Reports: Items associated with obtaining and considering expert reports, including the costs of reports themselves.
• PTR: Costs associated with filing Pre-Trial Checklists, payment of the hearing fee and preparing for and attending any Pre-Trial Review.
• Trial preparation: Costs of preparing for Trial, including expert evidence and legal research, and accounting for Counsel’s brief fee.
• Trial: Costs related to the actual trial process, including attendance upon the Trial and dealing with judgment.
• ADR: Work associated with informal negotiations, settlement meetings and any other form of Alternative Dispute Resolution.

For each stage, the Precedent S includes the time and costs associated with each task, specifying hourly rates for solicitors, paralegals, and other members of the legal team. It also outlines the disbursements, which may include court fees, expert witness fees, witness expenses, and other third-party costs necessary for the case.

In a summary referred to as Precedent Q, the total of actual incurred costs are compares as against the approved estimated costs of the any agreed/approved budget for the entire case.  It is mandatory that this should be provided, and the Precedent Q will show whether the Receiving Party has come in above or below Budget for each litigation phase.

In the event that the costs have changed due to unforeseen developments or additional work (which has led to costs above and beyond any approved Budget being incurred), explanation should be provided in the narrative to the Precedent S as to why a “good reason” is demonstrated to exceed the approved Costs Budget.

Should I Seek Assistance to Prepare a Precedent S?

Whilst we recommend you always consult a costs specialist when having any specialist costs document prepared, the Precedent S is a particularly complex document to prepare.

The consequences for failure to provide a compliant document which breaches legal costs principles can be serious, as demonstrated recently in Kapoor v Johal [2014] EWHC 2853.

In addition, there are common pitfalls that can arise which can lead to strike out of a Bill, as was encountered when a law firm failed to specifically identify all the fee earners in their Bill of Costs in Barking, Havering & Redbridge University Hospitals NHS Trust v AKC [2021] EWHC 2607 (QB), and the subsequent Court of Appeal determination.

Bills of Costs are often subject to challenge, making it crucial to ensure your bill is accurate. Whether you are a lawyer claiming costs on behalf of a client or a Litigant in Person, you may want to seek the help of a Costs Lawyer or Costs Draftsman when preparing e-Bill of Costs and a Precedent S.

Their expertise will ensure that the document’s format and the costs claimed are compliant, reasonable, and proportionate to the specifics of the case. A Costs Draftsman can ensure that both the electronic and traditional paper bills are submitted to the court properly, ensuring all procedures are followed to facilitate a smooth detailed assessment of the costs.

In some cases, a qualified Costs Lawyer (certified and regulated to have rights of audience in Court) may attend cost management hearings to assist with costs budgeting hearings (CCMCs) as well as representing parties in any detailed assessment hearing at Court. They can help explain the rationale behind the cost figures, answer questions from the judge, and address any concerns regarding the proportionality of the proposed costs.

A poorly drafted bill may include poorly justified or unrecoverable costs, leading to challenges from the opposing party as to the compliance of the Bill.  In addition, if the Bill of Costs doesn’t comply with the required format (e.g. Precedent S, electronic bill formats), the Paying Party may seek a decision from the Court to oppose assessment of the Bill and seek re-drawing of the same, requiring restarting of the costs assessment process, likely alongside an adverse costs order for wasted detailed assessment costs.

As such, submitting your Precedent S Bill of Costs without obtaining professional assistance in what has become a very specialist area of law, runs significant risks.

How can ARC Costs Assist You in Preparing your Precedent S?

At ARC Costs, our Costs Draftsmen and Costs Lawyers can assist in the preparation, service and negotiation of an Electronic Bill of Costs through the Precedent S format. We will ensure that every Precedent S is drafted with a high degree of accuracy. We pride ourselves on our average recovery of 72%+ of all Bills, achieved in the majority of cases within 1 month of service of the Bill of Costs upon the paying party.

By reviewing the specifics of the case, and analysing your file of papers, our team of costs experts can help draft realistic and defendable costs bills which they are happy to defend on detailed assessment. Our team will also ensure that all recoverable costs are included in your Costs Budget and subsequent Bill of Costs, to maximise recovery of your legal fees, including time costs, expert witness fees, court fees, and other disbursements.

We can assist through the process of detailed assessment through the preparation of your bill of costs, negotiations and points of reply, and our costs lawyers can provide representation at detailed assessment hearings, if required.

As independent experts, we can also represent Paying Parties, and our costs team are adept at settling Points of Dispute as well as advising on, and negotiating on your behalf if you wish, the maximum possible reductions to be achieved.

For assistance with your costs related queries, contact one of the team at info@arccosts.co.uk, or speak to one of our experts by calling 01204 397302.

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