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J-Codes and the USA: A Warning from History?

The ‘J-codes’ are set to come in over the next year or so, starting with a mandatory pilot in the SCCO next spring. One thing to point out from the outset is , save for a mandatory pilot scheme, the codes are voluntary and are intended to stay that way. But the message from the ‘code makers’ is that the new style of the bills of costs will reflect the J-codes, so you will be wasting time by not adopting them. But is this really true?

The theory is sound; to significantly reduce the amount of costs incurred in preparing a Bill of Costs at the conclusion of the case. Alexander Hutton QC, has said in his update on 15 May 2015 that the J-codes will allow you to “compare easily each phase of your costs with the budgeted costs as you go along and it will be much easier and cost effective to use the new bill for a period when the time had been recorded contemporaneously under J-codes.”

The J-codes are heavily based on the ‘UTBMS Codes’ which have been in place in the USA for approximately 20 years now. So if the Americans have been doing it for years and it has worked over there surely it’s a no brainer to follow suit? Having undertaken some research on this and speaking with those in the know across the pond the answer is unfortunately a resounding ‘no’.

Despite the length of time that they have been in place, the codes are still optional. Only a very small percentage of lawyers in the USA use the codes voluntarily. Those that use them do so because their clients tell them to do so. One American Legal Auditor estimates that approximately 90% were using them when they first came in because they believed they would be saved a large amount of time and expense and that percentage is more like 10% today. Many in the US now believe that the UTBMS Codes should be dispensed with altogether for a number of reasons and has resulted in a significant amount of wasted time and effort.

For the J-codes to work there must be consistency. There are 1,479 permutations for each line item, which means that consistency is unachievable. Nobody seems to disagree with the notion that, even two decades later, uniformity of timekeeping is a problem that they are yet to overcome.

Another problem is that timekeeping is frequently delegated to junior staff (e.g. billing clerks or administrative staff). The reasons for doing so are understandable and universal in the legal profession; court deadlines, demanding clients, difficult opponents, business development etc etc. These staff will have even more problems with accuracy when entering the codes given that they have not done the work which means that the resultant Bill is woefully inadequate and Costs Auditors have to come in and spend significant amounts of time in correcting the same.

So the message seems to be that the UTBMS codes have increased costs as opposed to reducing them, and the data that has been produced from the codes is inaccurate and has largely been dispensed with. If you think I have been biased in my research of this topic I promise you I haven’t- I have tried valiantly to find those who believe UTBMS Codes have solved more problems than they have created without any success.

Only time will tell if we experience the same thing with the introduction of the J-codes, but what is clear is that even after a 20 year bedding in, a code based system is woefully lacking in endorsements from our friends across the pond. Their message would be not to commit to the J-codes as you will waste a lot of time and money in doing so only to find that this isn’t the silver bullet we had all hoped it would be.

Regardless, with the new system being introduced soon we’ve taken a number of steps to ensure that our clients are ready for the changes ahead and will watch with interest to see how those changes are received.