Likewise, the bill of costs should enable the party opposing the costs claimed to identify what they believe was either not allowable, or overpriced, in the context of party-and-party costs.
Unfortunately, neither of these objectives were met satisfactorily in the customary bill of costs under the old regime of taxation of costs, where form tended to predominate over substance.
New form of bill
Now, a ‘new’ bill of costs (introduced by SI 584 of 2019) must now be employed for the purpose of adjudication of costs in the superior courts.
For convenience, the issues that arise will be viewed in the context of a successful plaintiff in a personal-injuries action who has successfully settled or obtained judgment in a High Court action, and obtained an order for payment of his costs of the action – to be adjudicated upon in default of agreement between the parties as to the amount payable in respect of costs.
The form of the bill of costs is now required to be that in ‘Form no 3’ in Part V of Appendix W of the Rules of the Superior Courts (RSC, order 99), as amended. The bill is now required to be divided into sections. A bill may have up to five sections:
- Section A – ‘Costs incurred before commencement of proceedings’,
- Section B – ‘Costs from commencement of action to trial/settlement date’,
- Section C – ‘Costs incurred during course of trial/settlement and up to determination of proceedings’,
- Section D – ‘Costs incurred subsequent to trial’,
- Section E – ‘For what cannot be more conveniently dealt with in preceding sections’.
In a High Court action that goes to trial or is settled shortly before trial, at least four of these five sections (A to D) will have to be completed. There is an explanatory note provided at the commencement of each of these sections.
Section A
Section A of the bill must tell the story of the case, from the initial approach by an intending client until the summons is issued. This section must contain a ‘summary of services’ provided during this period.
Although not specifically required, it would be sensible that this section should commence with an identification of the period of time that this section covers, and also the terms of the order of the High Court with respect to costs. Setting out the terms of the settlement or judgment obtained in this section – although on one view anticipatory – will also put the subsequent course of the litigation into perspective.
Thereafter, a summary of services must be enumerated, comprising all services provided from the client’s initial instructions to the solicitor until the issuing of the proceedings.
It is suggested that this might identify difficulties and complexities in relation to the commencement of the litigation, facts required to be ascertained, investigations required to be made, expert reports required to be obtained, instructions provided to counsel, consideration of the advices of counsel, the formulation of the theory of the case that was settled on, and the formulation of the claim as stated in the indorsement of claim on the personal injuries summons, which will at least require setting out the substance of the indorsement of claim on the personal-injuries summons.
This section must provide an itemised list (in ‘date’ order) of the steps taken by the solicitor, from the initial taking of instructions that ultimately culminated in the issue of the personal-injuries summons.
The adjudication-of-costs process has become a considerably more perilous process for the solicitor for the costs as a result of the introduction of the lodgement in satisfaction of costs provisions of order 99. Solicitors must be careful to demonstrate the work done with specificity if they wish to obtain a successful outcome to the adjudication, and avoid falling foul of any lodgement in satisfaction of costs made by the defendants.
Evidence of work done
Although the prescribed form says that the summary of services “should avoid lengthy recital of the content of the correspondence, reports or other documentation”, it should be remembered that such content is the only evidence of work done by the solicitor in the matter and that, to the extent that it is not included in the bill, it is unlikely to be taken into account.
The format of the bill itself requires items of work to be individually numbered, the dates of these to be stated, and a “detailed description of work done for which costs are claimed to be provided”.
Hence, to demonstrate the work done, one should identify the substance of a letter written on a given date; state the substance of a letter received and considered on a given date, and the action taken in response to it; and state the substance of interviews by telephone or in office with client, experts or counsel, and so on, in addition to more formal steps, such as taking a statement, instructing experts, instructing counsel, considering counsel’s advices, and preparing and issuing the personal-injuries summons.
Section B
Section B of the bill continues the story of the case from the date of issue of the summons until immediately before trial or settlement negotiations. Again, this should include a ‘summary of services’ provided for the period to which this section relates. It is suggested that the following should be included as a minimum:
- A statement of the issues in the litigation in the context of the defence(s) delivered by the defendants,
- An identification of the interlocutory matters pursued in correspondence and/or the court applications in such matters made or defended (such as in relation to particulars, discovery or interrogatories, as the case may be),
- Advices on proofs required to be followed,
- Identification of the counsel briefed for trial or settlement negotiations and the extent of the brief required to be prepared for counsel,
- Identification of the expert witnesses (and their reports) instructed by both sides, as well as a demonstration of the complexity of the litigation and any difficulties that arose in obtaining expert reports, and arranging the attendances of witnesses for the trial,
- The matter of the complexity of the case should also be dealt with at this juncture, as this will have become fully apparent with the identification of the issues in the action on the filing of the defence(s) and amplified as the interlocutory matters are pursued in correspondence and before the court.
Again, the appropriate summary of services must provide an itemised list in ‘date’ order of the steps taken by the solicitor that culminated in the commencement of the trial, or negotiations on the same basis as that provided for in Section A.
Section C
This requires a description of the proceedings in the trial itself or in relation to negotiations, as the case may be. In the context of a trial, the management of witnesses, attendance at consultations, and attending on counsel in court will typically comprise the major elements of the narrative here.
The outcome of the trial or negotiations should also be stated at this juncture, and the order made by the court (if any), if not previously stated.
Any special significance attaching to the outcome should also be stated, for example, its importance to the client, or any broader importance that may arise.
Again, the appropriate summary of services must include a history of the steps, in ‘date’ order, taken to advance the litigation to the conclusion of a successful trial or successful negotiations.
The explanatory note to this section is unhelpful. It proceeds on the basis that preparation for the trial is “costs incurred during the course of the trial”, which is clearly incorrect. If one is to adhere to the stated scheme of the bill, matters such as briefing counsel, interviewing witnesses, and arranging pre-trial consultations should appear in Section B.
Section D
This section is intended to allow a claim to be made for work done in the post-trial or post-negotiation phase of the litigation. This aspect of a plaintiff’s costs was seriously overlooked under the old regime, to the detriment of solicitors.
Every litigation solicitor is aware of the amount of work that is required to be done in the aftermath of settlement or judgment, but few of these items were the subject of remuneration in the past.
The form of the new bill affords the plaintiff’s solicitor the opportunity of claiming and recovering for this work in implementing the judgment of the court or the terms of the settlement, as the case may be.
Thus, the summary of services should, where appropriate, refer to applying for an order that is required to be made by the settlement (for example, the order for costs and their adjudication), taking up the order of the High Court, contacting witnesses to advise that their attendance for court is no longer required, requesting expert witnesses to forward a note of their professional fees outstanding, negotiating outstanding matters in relation to amount and other incidentals, and arranging for the discharge of the same.
Other matters to be considered include:
- Receiving funds in settlement and arranging for funds to be transferred to the client,
- Discharging fees of expert witnesses (to be recouped at adjudication and then refunded to the client),
- Discharging other expenses of the litigation (to be recouped at adjudication and then refunded to the client),
- Requesting notes of the fees of senior counsel and junior counsel,
- Negotiating payment on account in respect of costs, pursuant to order 99 RSC, as amended, and
- Applying to the court for an order for payment on account (in the absence of agreement).
All of this work is essential to implement the judgment or settlement, as the case may be, and should be recoverable on party-and-party taxation.
Importantly, the summary of services should include a detailed history of the steps (set out in ‘date’ order) from judgment or settlement that were necessary to implement the judgment or settlement.
Drawing of the bill of costs
An important issue relates to whether ‘costs incurred subsequent to trial’ includes the drawing of the bill of costs itself. In modern times, this function, in High Court actions, is typically delegated to a legal costs accountant by the solicitor for the costs.
It is a function that is no longer usually performed by the solicitor for the costs, and it typically marks the initiation of the adjudication-of-costs process.
There is, moreover, no reference to ‘bill of costs’ in the explanatory note to Section D and, if drawing the bill of costs were intended to be included in Section D, one would have expected that term to have been employed.
There is a reference to ‘negotiation and accounting for party-and-party costs’, but this seems to refer to negotiation with individuals who have provided services in the litigation and to whom moneys are outstanding. It is submitted that the better view, therefore, is that the drawing of the bill of costs is part of the ‘costs of the adjudication process’, rather than of the trial.
Fees
One of the remarkable features of the new bill of costs is that it makes no provision for the specification of an instruction fee. This does not mean that the instruction fee has been abolished, to be replaced by item-by-item charging – although the format of the new bill would, at first sight, seem to suggest this.
For a start, the instruction fee exists as a matter of positive law and could not be abolished by the side wind of a new form that omits to mention its existence. Second, the new form provides for charging on the basis of time as an option – the only anomaly being that it does not mention the standard option for charging, namely, the instruction fee.
In Best v Wellcome Foundation Ltd (High Court, 19 May 1995), the instruction fee was described as an amount that is intended “to cover taking instructions for the trial or hearing and not merely for the preparation of a brief …
It was a fee to cover the overall care and attention which the case required, the difficulties in taking proofs of evidence and intended witnesses and generally organising the case. Ensuring the availability of witnesses and indeed the availability of counsel. It had to cover living with the case. It covered a variety of consultations as well as the cost of assembling and preparing the brief itself.”
It is likewise in the case of counsel, who is entitled to mark a ‘rolled-up’ brief fee – that is to say, an inclusive brief fee that is intended to cover all work done by counsel in relation to the litigation.
Although the format of the new bill indicates, on first impression, that a total charge in respect of lawyers’ professional fees should be specified for each section, this is only to cover those circumstances where the lawyers have charged on the basis of an hourly rate.
Living with the case
Where the charge has been made on the basis of an instruction fee or rolled-up brief fee, as the case may be, then, by definition, the charge is not intended to be split over several sections. Any attempt to do so would be artificial in the extreme, since the instruction fee is intended to be one single whole “to cover living with the case”, perhaps for several years.
Demands by defendants that the plaintiff’s solicitor should split the instruction fee across the several sections of the bill have been successfully resisted, and bills based on composite instruction fees have been accepted in the Office of the Legal Costs Adjudicators.
It is considered that the logical place to claim for the solicitor’s instruction fee and counsel’s rolled-up brief fee – where it is desired to claim on this basis – is at the conclusion of Section D, which is typically the conclusion of the bill itself.
Section E is an omnibus section intended to provide for the opportunity to claim in respect of matters that cannot conveniently be dealt with elsewhere in the bill. For example, if there was an appeal to the Court of Appeal in relation to an interlocutory order that awarded costs to the plaintiff, it may be convenient to deal with the statement of those costs in this section.
Separate detailed claims
Each and all of these sections – A, B, C, D and E – are divided into subcategories, so that separate detailed claims are required to be made in respect of solicitor, counsel, experts, and expenses.
While counsel may mark a ‘rolled-up’ brief fee (as previously described), they must nevertheless identify the work to which that brief fee relates. Obviously, counsel should be invited to offer a statement of the work done by them for inclusion in each of the bill’s sections.
Duty to attempt to agree
Either party to party-and-party costs may refer a bill of costs (once served) for adjudication, provided that party has first attempted to agree the bill with his, or her, opponent (see section 154(2) and (3) of the Legal Services Regulation Act 2015).
The duty to attempt to agree the bill with one’s opponent before proceeding to adjudication requires that the parties discuss the bill with a view to reaching agreement. But if agreement is not forthcoming, then either party may proceed to adjudication.
Given that the party resisting the bill is now entitled to make a lodgement, or tender, in satisfaction of costs, the party presenting the bill should be aware that such discussions may well be subsequently employed for the purpose of deciding upon the amount of
the lodgement or tender.
Denis O’Sullivan is principal of Denis O’Sullivan & Company Solicitors, Grand Parade, Cork.
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