J-Codes and the new model bill of costs – radical changes to costs recording and assessments

Given the investment (of both time and money) that litigation practices are going to have to make it does seem strange that there is so little information available on line (or elsewhere) just yet.  Whilst we are aware that some of our clients have already taken steps to update time management and billing software, most have not; yet this is something that all litigators will need to be ready for and probably sooner rather than later.  In fact, the latest indications from Alexander Hutton QC, Chairman of the Jackson Steering Committee, suggest that it is likely that most of the recipients of this Newsletter will be recording time in a radically different way by this time next year.

Some background

One of the long-term objectives of the Jackson costs reforms is to develop a new model form Bill of Costs that will assist the courts and practitioners to carry out analysis of litigation costs at different levels of detail, including the comparison of budgeted costs with a litigant’s actual final spend.

The recommendation is summarised at Chapter 45 of Lord Jackson’s Final Report:

‘106 A new format bill of costs should be devised, which will be more informative and capable of yielding information at different levels of generality.

107 Software should be developed which will (a) be used for time recording and capturing relevant information and (b) automatically generate schedules for summary assessment or bills for detailed assessment as and when required.  The long term aim must be to harmonise the procedures and systems which will be used for costs budgeting, costs management, summary assessment and detailed assessment.’

In 2011 the Association of Costs Lawyers (ACL) suggested, as part of the implementation of Lord Jackson’s recommendations, investigating whether a Uniform Task Based Management System (UTBMS), could be adapted for use in a new model Bill of Costs.  A UTBMS is a series of codes used to identify work done by a legal services provider.  UTBMS codes have been in use for some time in the US, and are commonly used to produce, and in the analysis of, electronic attorney-client invoices.

The Jackson Review EW-UTMBS Development Steering Committee (JSC) was tasked with implementing the ACL’s proposal. On 30 July 2014 Jackson LJ, Ramsey J, and Master Hurst (the senior costs judge), publicly endorsed a new set of UTBMS Codes developed by the JSC– the EW-UTBMS J-Code-set (J-Codes) –  in an open letter stating:

‘Developing the J Codes to capture time recording information is an essential aspect of the implementation of the recommendations in the Final (Jackson) report.’

In September 2014 the LEDES Oversight Committee (‘LOC’) approved the new EW-UTBMS J-Code-set.   LEDES’ is a not for profit non-governmental body charged with creating and maintaining standard formats for the electronic exchange of billing and other information between law firms and other corporations.  The approval of the new J-Code-set was seen as a significant first step towards the JSC’s objective, and this certainly caused a bit of a stir last Autumn, but relatively little more was heard until recently.

What are the litigation costs J-Codes?

The idea is that solicitors should be able to produce costs statements, cost budgets and bills of costs with relatively little human intervention and at any stage of the litigation, although actually it must be the case that practitioners will to have to spend rather more time on time recording than they currently do.

The J-Codes follow a Phase/Task/Activity structure for fee earning time and there are additional Expense codes to cover disbursements.   Phase codes will provide the highest level of generality (examples include JA00 Funding, JF00 Disclosure).  Task codes will provide the next level of detail, and will allow the reader to see what work was being done (examples include JF10 ‘Preparation of the disclosure report and the disclosure proposal’, JF30 ‘Preparing and serving disclosure lists’). Activity codes will be used to show ‘how’ the work was carried out (examples include A101 ‘Plan and prepare for’, A112 ‘Billable Travel Time’).

Litigators will note that the ‘phase’ is indicated by each task code itself.  At the point of recording a time history entry the user will not therefore have key in a separate ‘phase’ entry.  The fee earner will however need to enter both task and activity codes, followed by a time narrative for each entry.

There are 13 Phase codes, 41 Task codes, and 29 Activity codes.  A Summary follows:

Phase Codes:

CodePhase 

  • JA00Funding
  • JB00Budgeting incl. costs estimates
  • JC00Initial and Pre-action protocol work
  • JD00ADR / Settlement
  • JE00Issue / Statements of Case
  • JF00Disclosure
  • JG00Witness statements
  • JH00Expert reports
  • JI00Case and Costs Management Hearings
  • JJ00Interim Applications and Hearings (Interlocutory Applications)
  • JK00Trial preparation
  • JL00Trial
  • JM00Costs Assessment

Task Codes:

CodeTask

  • JA10Funding
  • JB10Budgeting – own side’s costs
  • JB20Budgeting – Precedent H
  • JB30Budgeting – between the parties
  • JC10Factual investigation
  • JC20Legal investigation
  • JC30Pre-action protocol (or similar) work
  • JD10Mediation
  • JD20Other Settlement Matters
  • JE10Issue and Serve Proceedings and Preparation of Statement(s) of Case
  • JE20Review of Other Party(s)’ Statements of Case
  • JE30Requests for Further Information
  • JE40Amendment of Statements of Case
  • JF10Preparation of the disclosure report and the disclosure proposal
  • JF20Obtaining and reviewing documents
  • JF30Preparing and serving disclosure lists
  • JF40Inspection and review of the other side’s disclosure for work undertaken after exchange of disclosure lists.
  • JG10Taking, preparing and finalising witness statement(s)
  • JG20Reviewing Other Party(s)’ witness statement(s)
  • JH10Own expert evidence
  • JH20Other Party(s)’ expert evidence
  • JH30Joint expert evidence
  • JI10Case Management Conference
  • JI20Pre Trial Review
  • JI30Costs Management Conference
  • JJ10Applications relating to originating process or Statement of Case or for default or summary judgment
  • JJ20Applications for an injunction or committal
  • JJ30Applications for disclosure or Further Information
  • JJ40Applications concerning evidence
  • JJ50Applications relating to Costs alone
  • JJ60Permission applications
  • JJ70All other types of application not covered by the categories above
  • JK10Preparation of trial bundles
  • JK20General work regarding preparation for trial
  • JL10Advocacy
  • JL20Support of advocates
  • JL30Judgment and post-trial activity
  • JM10Preparing costs claim
  • JM20Points of dispute, Replies and Negotiations
  • JM30Hearings
  • JM40Post Assessment Work (excluding Hearings)

Activity Codes:

CodeActivity

  • A101Plan and prepare for
  • A102Research
  • A103Draft/Revise
  • A104Review/Analyze
  • A105Communicate (internally within legal team)
  • A106Communicate (with client)
  • A107Communicate (Other Party(s)/other outside lawyers)
  • A113Communicate (witnesses)
  • A114Communicate (experts)
  • A108Communicate (other external)
  • A109Appear For/Attend
  • A110Manage Data/Files/Documentation
  • A112Billable Travel Time
  • A115Medical Record and Medical Bill Management
  • A116Training
  • A117Special Handling Copying/Scanning/Imaging (Internal)
  • A118Collection-Forensic
  • A119Culling & Filtering
  • A120Processing
  • A121Review and Analysis
  • A122Quality Assurance and Control
  • A123Search Creation and Execution
  • A124Privilege Review Culling and Log Creation
  • A125Document Production Creation and Preparation
  • A126Evidence/Exhibit Creation and Preparation
  • A127Project Management
  • A128Collection Closing Activities
  • A129Communicate (with Outside Counsel)
  • A111Other

Recent developments and likely timetable

A prototype of the new model bill of costs, using open XML standards to facilitate the translation of J-Code entries into a bill of costs, is at an advanced stage of preparation and it is expected that that will be presented to the Judiciary for approval in the very near future.  It is intended that the new bill format will become the standard in all proceedings as the J-Code-set develops and that its use by all litigation practices will become compulsory.

The latest information that we have is that the new model bill of costs and J-Codes will be the subject of a voluntary Practice Direction, which will come in to being from October 2015.  The Chairman of the JSC has recently recommended that solicitors should start using J-Codes for time recording as soon as possible (and solicitors should bear in mind that the extra cost of preparing a bill in the old fashioned way may well not be allowed inter partes once the new system has bedded in).  The new bill format is to be subject of a mandatory pilot for all Senior Court Costs Office bills of costs for detailed assessment from April 2016.

We look forward to bringing you more information over the coming months.

Share this article

Michael Heslin

Director & Senior Legal Costs Consultant

View articles