Keeping Detailed Costs Records



This article explains what information about costs you should keep if you have decided to try to claim for everything possible – e.g. in a detailed assessment - rather than adopting the simpler approach of just claiming for the main items.


Introduction 

After the trial at the end of legal proceedings (or at the end of the appeal hearing, if it is an appeal) the judge will give a decision saying which side has won. The judge may also order the loser to pay the winner’s costs. This does not always happen. The judge may not make any costs order, or might even order the winner to pay part of the loser’s costs if, for example, the winner has previously rejected an offer of settlement from the loser which was better (from the winner’s point of view) than the judgment eventually obtained by the winner. The conduct of the parties can also influence costs orders so that, for example, a party which has failed to comply with the judge’s pre-trial directions on time, may be ordered to pay costs (or may not have costs awarded to them when otherwise they might be).

If there is an application hearing at some point before the main trial, the judge may make a costs order just for that application - e.g. ordering the party which unsuccessfully opposed an application for a order, to pay the costs of the other side in making the application. This is separate from any order the judge may make, at the end of the trial, regarding the rest of the costs of the case.

Exactly what costs may be allowed, when the judge makes a costs order, depends on the rules of the particular court or tribunal and, even within a particular court or tribunal, may vary depending on the type of case it is. For example, sometimes only costs incurred from the point you lodge a claim with, or a matter is referred to, a the court/tribunal are allowed; sometimes you can claim the costs of expenditure both before and after lodging the claim. You may be able to recover all reasonable expenditure on the case, or only certain types of expenditure may be allowed. The full cost of monetary expenditure of each item may allowed, subject only to it being reasonable, or, alternatively, there may be monetary limits. The costs judge assessing the claim for costs may just look at whether each individual item of expenditure was reasonable in isolation, or the judge may (alternatively or additionally) look to see whether the total expenditure was reasonable in the light of the amount at stake in the case, or whether it is disproportionate.

With regard to your own time spent on the case (e.g. searching for documents) the rules may not allow you to claim for this at all. Alternatively the rules may allow you to claim for your own time but only if you can prove monetary loss (e.g. taking unpaid leave from employment to work on the case). Or the rules may allow you to claim at a certain prescribed hourly rate (say £20 per hour) irrespective of whether there is any monetary loss. Or the rules might allow an hourly rate anyway but allow you to claim more if you can prove monetary loss which exceeds the hourly rate.

Because, historically, most litigants engaged solicitors, costs rules tend to be based on the traditional practices of solicitors, with litigant in person costs being allowed (where they are allowed) party by reference to what work would have been allowed if it had (hypothetically) been carried out by a solicitor. In some instances this test is not easy to apply, leading to uncertainty over what costs might be recoverable. For example, traditionally a solicitor would take a proof of evidence by interviewing the client: the interviewing solicitor's time would generally be recoverable whereas the client's time being interviewed would not be. If a litigant in person sits down and writes their own proof of evidence, should they be compared to the interviewing solicitor (the cost of whose time is recoverable) or to the interviewed client (the cost of whose time is not recoverable)?

Courts and tribunals are wary of allowing recovery of expenditure for legal services paid by the litigant to persons who are not practising lawyers, out of concern that that would create a market for people to provide legal services without being properly qualified and regulated. Disbursements (as they are called) for things such as scanning and printing services, document management systems, enquiry agents, expert witnesses fees and witness expenses are not the concern, but if a litigant in person paid an unqualified person for doing things which solicitors (or barristers) normally do then that would not normally be recoverable. If the litigant in person is actually a limited company, so that the human being actually carrying out the work is an employee or office holder of the litigant company, then that might not be recoverable. The concern is that allowing recovery of payments to employees might open the door to unregulated persons charging for legal services by becoming temporary employees of clients.

Once you have lodged a claim in the court or tribunal, it becomes easier to predict what costs rules might apply, but, even then, the type of case and other factors may cause different rules to apply. Sometimes costs are only claimable if the other party is held to have behaved unreasonably in the litigation itself and it will not be known at the outset of litigation how a party will behave. And how a court or tribunal might treat items of a costs claim which are in a grey area - e.g. a claim by a litigant company for the wage cost of work carried out by its employees - may not be easy to predict. So this article explains how to keep comprehensive records - both of your time, and of out-of-pocket expenses - if that is what you want to do, so that you can try to claim for everything, but there is no certainty that everything will be allowable. 

Spreadsheet

Time spent

The format of the spreadsheet you should use to keep records of time spent, and out-of-pocket expenses can be found at www.justice.gov.uk/courts/procedure-rules/civil#anchor672

For each piece of work done on each day, a row is completed in the Bill Detail tab of the spreadsheet. As well as the date, the phase code, task code, and activity code are filled in to identify the type of work being done and in which phase of the litigation it is being done. The phase codes, which all start with a P, and the Task codes, which all start with a T, are already in the Reference Table - Phase Task tab together with a description of each task.

The activity codes are already in the Reference Table - Activities tab. Most of the work you do will probably be activity code A10 which covers planning or preparation associated with a matter; Any drafting or revision or other preparation of documents or other material; Any review or analysis of documents or other material; Any handling of documents, files or data though if you send an email that would come under one of the activities A2 to A8 depending who the email is sent to.

The pre-defined phase and task codes cover virtually every kind of work which might be done in litigation which ends with a trial (sometimes called first instance litigation). If the trial has already taken place and you are appealing against the result (or you are responding to an appeal initiated by the other side) then you may have to add some different phases and tasks but this should not be too difficult because there is generally rather less work involved in an appeal than in first instance litigation.       

The spreadsheet is mainly designed to be used by solicitors but it can be used by litigants in person as well. One of the tabs of the spreadsheet is entitled Legal Team Rates. This is intended to list each solicitor giving the solicitor's name, their initials, and their rate per hour. If more than one rate applies to a solicitor then there will be more than one row for that solicitor, with the LTM column (LTM stands for Legal Team Member) will contain initials with a numeric suffix so that the initials are unique for each row. The initials in the LTM column of the Legal Team Rates tab are used in the LTM column of the Bill Detail tab to show who carried out each individual item of work.    

As you are a litigant in person you should put your own name and initials in the Legal Team Rates tab. You might need to add more than one row if there are more than one of you - e.g. if you own property jointly with someone else, or are a business partner with someone else, and are the joint claimants, or joint defendants, in the litigation.

You will also need to have more than one row if more than one rate applies to an individual. For example, if you are employed and you take half a day's unpaid holiday from work in order to work on the case then your hourly rate to be entered on a row in the Legal Team Rates tab would be your net (after tax and NIC) hourly rate of pay because that it what is costs you. But at least some of the work you do on the case will be in your leisure time where there is no actual monetary loss so you need a further row for that in which you should enter a rate of £20 per hour (the exact rate you can claim where you have suffered no actual monetary loss depends on the court/tribunal but if you enter £20 initially it can always be amended later). If your name is John James Smith you could use initial JJS1 in the LTM column and "unpaid holiday" in the Further Relevant Information column for the first row, and JJS2 in the lTM column and "spare time" in the Further Relevant Information for the second row.  

If you are employed and use part of your entitlement to paid holiday from employment to take half a day’s leave to work on the case then, although this is a bit of a grey area, an argument can be made that your loss would be the amount you would have lost had you decided to take unpaid holiday - i.e. your net (after tax and NIC) hourly rate of pay

If you are self-employed, loss - and hence the rate to use - can be difficult to assess because, for example, work not done on one day may still be available to be done on other days and so the profit may not be lost after all. If, however, you continually have more work available to you than you can cope with so that you really are losing paid work by working on the case, then you can normally calculate your hourly loss by taking you average yearly profit (after tax and NIC) and dividing that by the average number of hours you work in a year.

If you are self-employed, the case is a business matter, and your employees are doing work on the case, then their time might be a monetary loss. If the time of existing employees (i.e. not new employees engaged temporarily purely to work on the case) is being spent on the case then the identification of monetary loss may be more complicated because, as existing employees, you would be paying their salaries anyway even apart from the case. If all the work on the case done by existing employees is being done as paid overtime, the hourly loss is the hourly overtime rate plus employer’s NIC and any other variable overheads of employment. If the work, or some of the work, is being done by existing employees as part of their normal working week, and covered by their normal salary which they would be paid anyway, the hourly rate can be calculated as their normal hourly rate plus employer’s NIC (and any other variable overheads of employment) but in this case the judge assessing costs may expect to be provided with some hard evidence that there was disruption to the business from the diversion of existing staff time (from which the court may be prepared to infer that had staff time not been diverted, the staff would have applied their time to activities which would, directly or indirectly, have generated revenue for you in an amount at least equal to the cost of employing them for that time). If business was slack, and the staff had spare time to work on the case without it affecting their normal duties, so that there was no business disruption, then there is no loss to you in continuing to pay their normal salaries. This also applies if it is your limited company which is the party to litigation (rather than you personally) and you, or other employees or officers of the company, are doing work on the case.

Expenses

Predefined categories of expenses are shown in the Reference Table - expenses tab. The codes all start with an X. For example Travel Expenses is X9.

If you have to stay overnight - e.g. because the court/tribunal is a long way from where you live - then the cost of overnight accommodation and meals would come within Travel Expenses and would be entered in the Bill Detail tab with code X9.

If you use your own vehicle to travel then you will not know the exact cost to you of fuel, wear and tear etc. so it is usual to claim an amount per mile as an approximation of this. 45p per mile is often claimed. You should record the number of miles and the rate you are claiming – e.g. “own car 84 miles at 45p = £37.80”. For actual expenditure which is specific to your journey such as toll fees and parking fees, you enter the exact amount you have paid.

For other travel expenditure – e.g. on buses, trains and hotels - you enter the actual amount you have paid.

Witness expenses are X5. If you have applied for a witness summons to compel a reluctant witness to attend court/tribunal, you will have had to pay them “conduct money” at the time they were served with the summons. “Conduct money” is money to pay for the travel and subsistence expenses of the witness when attending court, and, depending on the rules of the court or tribunal, may also include a certain amount as compensation for loss of time. You enter the amount of the conduct money you have paid.

In the vast majority of cases witnesses attend voluntarily without being summonsed and in this case you enter the witness's actual expenses which you will be reimbursing them for. You should ask each witness what expenses they have incurred/will occur in attending court/tribunal as a witness and record this in the Bill Detail tab with code X5. This can include both travelling expenses and, if they had to take a day off work unpaid, their net (after tax) loss of earnings. If the witness uses their entitlement to paid holiday from employment to attend, then the court might allow a claim based on the value of that paid holiday – i.e. based on the net amount of earnings they would have lost if they had decided to take unpaid holiday rather than use part of their paid holiday allowance. 


Receipts

Receipts should be kept for the larger items such as hotel bills but these are not necessary for small items such as bus fares and toll fees.


Disclaimer

This information page is designed to be used only by clients of John Antell who have entered into an agreement for the provision of legal services. The information in it is necessarily of a general nature and is intended to be used only in conjunction with specific advice to the individual client about the individual case. This information page should not be used by, or relied on, by anyone else.

The information on this page about specific computer techniques is provided for information purposes only. Every reasonable effort has been made to ensure that the information is accurate and up to date at the time it was written but no responsibility for its accuracy, or for any consequences of relying on it, is assumed by me. You should satisfy yourself, before using any of the techniques, software or services described, that the techniques are appropriate for your purposes and that the software or service is reliable.


This page was lasted updated in November 2016 Disclaimer