Introduction

The case of AKC v Barking, Havering & Redbridge University Hospitals NHS Trust, heard by the England and Wales Court of Appeal (Civil Division) on May 10, 2022, addresses critical questions surrounding the formulation and certification of bills of costs in civil litigation. The appellant, AKC, initiated a clinical negligence claim against the respondent, a National Health Service (NHS) Trust. Following admissions of liability and a settlement agreement, disputes arose concerning the detailed assessment of AKC's quantum costs, particularly the adequacy of information provided about fee earners in both paper and electronic bills.

The central issues revolved around whether AKC's bills of costs complied with the Civil Procedure Rules (CPR) and Practice Direction 47, specifically regarding the naming and grading of fee earners. The Trust challenged aspects of the bills, leading to judicial scrutiny and eventual appellate review.

Summary of the Judgment

The Court of Appeal upheld the decision of Steyn J, who had ordered AKC to strike out her original bills of costs and file replacements compliant with the CPR. The judgment delved into the requirements stipulated by Practice Direction 47 concerning the detailed assessment of costs, emphasizing the necessity for transparency in billing practices. While the Costs Judge Nagalingam initially dismissed the Trust's objections, Steyn J found deficiencies in both the paper and electronic bills of costs, primarily due to inadequate information about fee earners' qualifications and SCCO grades.

The appellate court affirmed Steyn J's reasoning, underscoring that electronic bills, especially those adhering to Precedent S, must include detailed information about each fee earner. Although some leniency was acknowledged due to additional information provided by AKC in replies and responses to Part 18 requests, the overall lack of clarity and completeness in the original bills necessitated the requirement for compliant replacements.

Analysis

Precedents Cited

The judgment referenced several key precedents that shaped the court's approach to the interpretation of Practice Direction 47 and the CPR. Notably:

• U v Liverpool City Council [2005] EWCA Civ 475: Emphasized that practice directions do not hold legislative force but provide essential guidance for court procedures.
• In re NY (A Child) [2019] UKSC 49: Highlighted that practice directions supplement rules but cannot establish new legal obligations.
• Dyson LJ in Leigh v Michelin Tyre Plc [2004] 1 WLR 846: Reinforced the authoritative nature of practice directions in guiding court practices.

These precedents were pivotal in determining the weight and authority of Practice Direction 47 in the absence of explicit legislative mandates.

Legal Reasoning

The court meticulously dissected the requirements of Practice Direction 47, particularly focusing on the necessity for detailed billing. The crux of Steyn J's reasoning was that both paper and electronic bills must offer sufficient transparency regarding the professionals involved in a case, including their qualifications and SCCO grades.

For paper bills, while naming fee earners was not explicitly mandated, Steyn J concluded that omitting such details rendered the bill less transparent and potentially obstructed the court's ability to assess costs effectively. Conversely, electronic bills, especially those adhering to Precedent S, were expected to be more informative, necessitating the inclusion of fee earners' names, grades, and statuses to align with the full functionality requirement of the electronic format.

The court balanced the technical compliance with the CPR against the practical need for clarity and transparency, ultimately prioritizing the latter to ensure fair and informed cost assessments.

Impact

This judgment sets a significant precedent for future detailed assessments of costs in civil litigation by clarifying the expectations for both paper and electronic bills under Practice Direction 47. Key implications include:

• Enhanced Transparency: Litigants must provide clear and detailed information about each fee earner, including names and SCCO grades, to facilitate accurate cost assessments.
• Strict Adherence to Formats: Electronic bills, especially those using Precedent S, must fully populate all relevant columns to meet the functionality and transparency standards expected by the court.
• Judicial Scrutiny: Courts will closely examine the compliance of bills of costs with the CPR and Practice Directions, potentially leading to stricter enforcement and requirements for detailed disclosures.

Overall, the judgment reinforces the importance of meticulous adherence to procedural rules in cost assessments, promoting greater accountability and clarity in legal billing practices.

Complex Concepts Simplified

Bill of Costs

A bill of costs is a detailed statement submitted by a party in a legal case, outlining the legal fees and expenses incurred during the litigation process. It serves as a request for reimbursement from the opposing party.

Detailed Assessment Proceedings

This refers to the court process where the receiving party examines the bill of costs submitted by the paying party in detail to determine their reasonableness and propriety before approval or adjustment.

SCCO Grades

The Senior Courts Costs Office (SCCO) grades categorize legal professionals based on their experience and qualifications. These grades help standardize the hourly rates charged for legal services, ensuring consistency and fairness in cost assessments.

Practice Direction 47

This is a set of guidelines supplementing the Civil Procedure Rules, specifically addressing the detailed assessment of costs. It outlines the required format and content for bills of costs, both paper and electronic, aiming to enhance transparency and facilitate efficient cost assessments.

Conclusion

The AKC v Barking, Havering & Redbridge University Hospitals NHS Trust case underscores the judiciary's commitment to ensuring transparency and accountability in the preparation and assessment of bills of costs. By mandating detailed disclosures about fee earners, including their names and SCCO grades, the court seeks to eliminate ambiguities and foster fair cost allocations.

This judgment serves as a clarion call for legal practitioners to meticulously adhere to procedural requirements, particularly in the realm of cost assessments. As legal billing practices evolve, especially with the increasing adoption of electronic formats, the principles established in this case will guide future litigants and courts in maintaining clarity and equity in financial disclosures within the legal process.

Ultimately, this decision enhances the integrity of cost assessments, ensuring that all parties possess the necessary information to evaluate and contest legal fees effectively, thereby contributing to the broader objective of fairness in the civil justice system.