What is a Bill of Costs?

Upon successful conclusion of your case, costs may be assessed at a summary assessment. Alternatively, a costs order may be granted and parties will be required to negotiate costs.

if an order is given for a detailed assessment of your legal costs, a Bill of Costs must be prepared.

A Bill of Costs is a detailed breakdown of any legal expenses incurred, such as solicitor’s fees (charged at hourly rates) for their time spent working on the case, court fees and expert fees.

This list is used to provide the paying party with relevant information about the costs associated with a case.

If your case is a multi-track matter, an electronic Bill of Costs will be required; special rules apply for electronic bills.

Preparing a Bill of Costs

Preparing a Bill of Costs under the Civil Procedure Rules (CPR) in England and Wales involves a detailed process. Outlined below is a step-by-step guide to you (as the receiving party) understand and prepare a bill of costs effectively:

Part 47 of the Civil Procedure Rules deals with the procedure for detailed assessment of costs.

Practice Direction (PD) 47 provides additional guidance on the preparation and presentation of a Bill of Costs.

A Bill of Costs itemises the work performed in handling the case, detailing each task and the corresponding efforts.

This transparency allows the paying party to thoroughly review the work completed. For this reason, it is crucial to engage an experienced law costs draftsman to prepare the bill of legal costs.

This ensures that the bill is accurately prepared, including only recoverable items, and optimises the amount recovered during any assessment.

The receiving party must serve the bill of costs on the paying party, along with a notice of commencement of detailed assessment proceedings (N252 form).

In Multi-Track cases where costs are claimed after 6 April 2018, the new Electronic bill of costs format is mandatory. This bill is presented in an Excel format, enabling the parties and the Court to easily filter through budget phases, work types, tasks, and activities.

In Multi-Track cases, a cost budget is often required, and if a Costs Management Order has been issued, the electronic Bill of Costs must reflect this by detailing the work phases and separating incurred costs from anticipated costs. A Precedent Q is also required to compare the incurred and anticipated costs with the Costs Management Order.

When serving an Electronic Bill of Costs, a digital Excel version must be emailed to the paying party in addition to sending a postal copy. In addition, when filing for a detailed assessment hearing at Court, a digital copy of the bill must be e-filed with the Court.

Parties should be prepared to attend the detailed assessment hearing if required, where the costs will be scrutinised by a costs judge or a costs officer.

Which costs can be claimed?

The following costs can typically be claimed in a Bill of Costs:

• Solicitor’s Fees: Time spent by solicitors on case preparation, client meetings, drafting documents, court appearances, and other legal work directly related to the case.
• Counsel’s Fees: Fees paid to barristers for their advice, drafting, and advocacy work.
• Court Fees: Fees paid to the court for issuing claims, applications, and other court-related costs.
• Expert Fees: Costs incurred for expert witnesses or reports that were necessary for the case.
• Disbursements: Out-of-pocket expenses that were reasonably incurred in the course of the litigation, such as travel expenses, photocopying, postage, and service fees.
• VAT (where applicable): Value Added Tax on legal services that is recoverable if the paying party is not VAT-exempt.
• Costs of preparing the Bill: Reasonable costs associated with the preparation of the Bill of Costs itself.
• Costs of detailed assessment: If the Bill of Costs is contested and goes to a detailed assessment, the costs of that process may also be recoverable.

It is important that all claimed costs are reasonable, necessary, and proportionate to the matter in order to be recoverable.

Which costs cannot be claimed?

Not all costs incurred will be recoverable.

CPR 47 PD 5.12 offers valuable guidance on the categories of legal costs recoverable between parties. However, over time, common law has also clarified certain costs that should not be claimed.

These include:

• Costs related to funding arrangements (such as setting up the retainer) – as established by the court of appeal in Motto & Ors v Trafigura Ltd [2011] EWCA Civ 1150.
• Discussions between fee earners, which are generally only permissible in complex cases – as seen in TUI UK Ltd v Tickell & Others [2016] EWHC 2741 (QB).
• Claims for estimated time without supporting evidence should be made with caution.

How can Greener Costs assist?

Greener Costs are a team of costs lawyers and expert law costs draftsmen with many years of experience in the field. We can draft your Precedent H and engage in negotiations with the other party to reach an agreement on costs. We are able to support you from the outset of a case by assisting in the drafting of retainers, right through to the settlement of a case by drafting Bills of Costs, points of dispute and points of reply.

In addition to our drafting services, at Greener Costs, we are actively doing everything we can to ensure our business benefits the environment.

We are doing this through carbon offsetting of our staff, becoming completely paperless and carbon offsetting through each instruction.

For a free, no obligation discussion, get in touch using the form at the bottom of the page or contact info@greenercosts.co.uk.

We offer legal services to individuals and law firms who are located in England and Wales and have a registered office in Bolton. We will always keep your personal data private.