AKC v Barking, Havering & Redbridge University Hospitals NHS Trust  1 WLR 946
When it comes to commencing assessment and serving a detailed Bill of Costs, this case is one of the most important decisions to have been made in the last 12 months. Whilst there have been many blogs and case summaries published about it, this case is one that will forever be worth refreshing oneself with to ensure you don’t fall foul of protracted costs litigation or, worse, a strike out.
By way of background, AKC served a Bill of Costs on Barking, Havering & Redbridge University Hospitals (BHR) in August 2019. This was an old style Bill of Costs for work undertaken pre 6 April 2018 and an electronic format Bill of Costs for work undertaken from 6 April onwards, which is permitted by the Rules. The certificate to the Bill of Costs said it was signed by a Partner, but did not identify who that was. Further, AKC hadn’t identified all fee earners and their individual levels of qualification or experience. BHR challenged the Bill of Costs and ultimately sought to strike it out on the basis that AKC had failed to provide “required fee earner information” in both parts of the Bill of Costs. BHR were unsuccessful and so they sought permission to Appeal which was granted and listed for September 2021. There were three grounds of appeal:
- The Bill wasn’t properly certificated because the signatory was not identifiable
- The paper bill failed to properly provide the name and status for each fee earner and to identify the work done by each fee earner
- The electronic bill (work post 06.04.18) failed to properly give the name, the SCCO grade, the date from which rates were effective for the fee earner and to identify the work done by each fee earner.
At the Appeal it was held that the level of functionality and detail in the precedent spreadsheet (electronic Bill of Costs) is required in a Bill, whether or not that spreadsheet is used; and in particular each fee earner must be named, their grade stated and their work separately identified. It was also held that certification of a Bill of Costs requires certification by an individual and, if the Bill of Costs is not certified by the client, then the individual must be a solicitor. The Judge struck out AKC’s Bill on the basis that it did not provide this level of detail and therefore did not comply with the Rules, and ordered it to be redrawn.
AKC served a new Bill of Costs as directed, but challenged the Appeal decision in so far as it had been found that the original Bill was deficient in the information it gave about fee earners. Any rebuttal of the certification point was, however, dropped by AKC.
AKC’s Appeal proceeded to The Court of Appeal where it was subsequently found that electronic Bills of Costs MUST include the name and SCCO Grade, whilst old style “paper” bills MUST state any professional qualification of a fee earner and, unless the SCCO grade is given, the years of post qualification experience.
The Court of Appeal stated that AKC’s paper Bill 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 post-qualification experience. As such, the paper Bill failed to comply and remained struck out. Further, the electronic Bill of Costs was also non compliant as it was without a breakdown of work undertaken by individual fee earners. As such, it was ultimately decided that whilst a Bill of Costs should not necessarily be struck out for a nullity, the Judge was entitled to take this action in the present case and AKC lost the Appeal; the Bill stood struck out.
In summary, the key points to take away from this are:
- Old style (paper) Bills of Costs (pre 06.4.18 work) – MUST state any professional qualification of a fee earner and, unless the SCCO Grade is given, the years of post qualification experience.
- Electronic Bill of Costs (Precedent S) (Post 06.4.18 work) – MUST include the name, SCCO grade and, in so far as it adds anything to the grade, the status of each fee earner.
- Whilst strike out was deemed appropriate in this case, where there is a defect, it does not ordinarily follow that a Bill of Costs should be struck out. A defect would normally, at most, warrant a lesser sanction. Strike out is not an automatic sanction. There is no such sanction.
- The Bill of Costs must be signed by an officer of the Court. CPR 47. PD5.21 and Precedent F says “All certificates must be signed by the receiving party or by his solicitor. Where the bill claims costs in respect of work done by more than one firm of solicitors, certificate (1), appropriate completed, should be signed on behalf of each firm”.
Some may say this case brings a heavier burden to a draftsman and a Solicitor checking and signing a Bill of Costs. Others may say it breathes clarity into the once smoky cloud that some Bills of Costs were having to be assessed through. What is clear, is that the decision in this case supports what has always been asked of a good draftsman, and what was certainly intended as part of the Jackson Reforms, which is to enable the Court to assess a Bill of Costs in a way that any doubt is only on aspects which are subjective rather than missing information entirely and broken functionality. As was once observed in the very case relied upon by most receiving parties when a Bill’s certification is in question (in Bailey v IBC Vehicles) “an ounce of openness is cheaper than any argument”. If your Bill of Costs is detailed and drafted well, you will get a higher costs recovery. Use the right draftsman and you will see more positive results. Trust Paramount Legal Costs.
For further information, or should you have any costs questions, then please do not hesitate to contact the writer, Charlene Turner, here.