Electronic Coding is coming to N260s

Sean Linley – Costs Consultant

It was only a matter of time. Never has a phrase been so apt. The Civil Procedure Rules Committee have finally confirmed what we already knew.

From 1 April 2019, a 2 year voluntary pilot scheme will commence which will see the introduction of electronic time recording to any cases where costs are to be summarily assessed (regardless of when they are commenced). Given the track record of the voluntary pilot scheme for the electronic Bill of Costs it seems most likely that the new format will be ignored before becoming mandatorily enforced sometime in 2021. The new N260s can be viewed via the Judiciary website here:

https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/update/cpr-104thpd-update-signed.pdf

Ever since the idea of electronic time recording was first mooted it was strongly implied that changes would be coming to ensure that the N260 was more consistent with its siblings (the electronic Bill of Costs and Precedent H).

We will see the introduction of two N260 documents which are conveniently called N260A and N260B. The latter relates to interim applications and the former relates to costs to trial. In terms of the N260A (interim applications) you require activity name and communication method but crucially you do not need to break-down the time by phase (presumably as it’s assumed all of the work will relate to the interim application).

The N260B (costs to Trial) is more cumbersome and will present time by phase and activity. Counsel’s fee will be broken down by phase and task and other disbursements will be broken down by phase name and expense name. The only thing removed is the need to set a task code.

For both N260s the document schedule will now require the time entries to be dated. This gives the N260 something of a closer relationship to a Bill of Costs.

It is important to be aware of the distinct documents because if you were to utilise the wrong one then the Court could refuse to deal with it. At best this means re-drawing your N260 but if the Court is not feeling particularly forgiving then a worse penalty could follow. It is unlikely to go down well if you reach the day of Trial and present the wrong N260 form.

The N260s will be available in paper / PDF form and also in an electronic Excel format. Parties can use the paper / PDF form only. If you use the electronic format then it is more complicated as parties must file and serve the form in both electronic and paper forms. It seems odd that an electronic format is pushed but that we are still putting such an onus on the physical form. Surely in this day and age an electronic form should suffice? This seems at pained odds with the Judiciary’s view to make use of the existing technologies available.

The shift, whilst not unexpected, still raises questions. Why is an enhanced level of detail required for summary assessment? And, perhaps more importantly, why do the rules state that a Precedent Q should be filed with the N260 where it is a budgeted case?

In terms of the former the only real answers appear to lie in the judiciary’s determination to make the whole process more efficient. Presumably, the N260 we all know is cumbersome, outdated and does not make use of existing technologies (the reasonings behind the new electronic Bill).

The reality of the judiciary’s view is that they anticipate a world where practitioners will be able to export their time-recording spreadsheets into the new N260 format. This does not take into account the availability of such technologies, the costs of such technologies and the issues of human error. With so many different permutations (and when costs specialists can’t even agree on where all time should fall) it’s not difficult to envisage the introduction of the electronic N260 becoming a cumbersome and more expensive exercise.

The point of summary assessments is for it be speedy and at a proportionate cost. It is easy to see why an electronic N260 is attractive. For the judiciary they can look at a glance at the time spent on each issue thanks to the fact that all the time spent will be attributed a phase and activity code. That said the new N260 begins to move closely to Bill territory and surely that defeats the purpose of the summary assessment process? Does this mean that we will see more summary assessments and see detailed assessments become more redundant?

As to the Precedent Q point, it’s hard to envisage a scenario where a party will require this. If a case has a Costs Budget then the matter will be multi-track and consequently there would be no requirement for an N260. This scheme does not change that. It seems like a largely redundant provision but does at least demonstrate how the new N260 will work practically with the Precedent H.

The changes are likely to be met with a lack of enthusiasm by practitioners as the electronic N260 adds an extra layer of complexity. For the moment there can be a sigh of relief that a compulsory scheme is not likely until at least April 2021. That said when there was no engagement with the Electronic Bill of Costs the Judiciary’s response was to simply end the pilot scheme and enforce it. To this effect taking the plunge now and getting involved in the pilot scheme has its attractions. Taking the scheme up now allows firms to join in the process of streamlining legal costs and to future proof. It also provides an opportunity to give feedback to the judiciary before the mandatory scheme comes into force. We know the changes are coming so it’s best to be prepared. To end as we started, it’s only a matter of time.

If you have any queries in respect of the new N260s then please do not hesitate to contact Sean by clicking here

Sean Linley – Costs Consultant – PIC – 27.02.2019

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