Electronic bills of costs are now standard in multi-track litigation and require a structured approach to preparation and assessment. The phase, task and activity format is designed to mirror Precedent H and enables detailed comparison between the approved budget and the costs claimed. Understanding how electronic bills operate is essential for both receiving and paying parties involved in detailed assessment. What Is an Electronic Bill of Costs? An electronic bill of costs presents time in a spreadsheet format organised by phases, tasks and activities. This structure allows the work undertaken to be analysed and compared directly with the approved costs budget. The objective is transparency so that the court and the parties can identify what work was carried out, by whom and at what stage of the litigation. Phases, Tasks and Activities Electronic bills are designed to reflect the structure of Precedent H: phases correspond to the stages of litigation tasks identify the type of work undertaken activities describe the specific action performed This format allows the bill to be reviewed alongside the approved budget and its assumptions. Relationship with Precedent H The approved costs budget remains the starting point on detailed assessment. Time recorded within each phase of the electronic bill should correspond with the phases and assumptions contained in Precedent H. Where work falls outside those assumptions, the court will consider whether there is good reason to depart from the approved budget. Common Issues in Electronic Bills Issues that frequently arise on detailed assessment include: time recorded in an incorrect phase inconsistent task descriptions block billing within activities duplication of attendances excessive senior fee earner time on routine work work claimed outside the scope of the budget assumptions These matters may affect both the presentation of the bill and the assessment of recoverable costs. Analysis on Detailed Assessment A structured review of an electronic bill involves: comparing phase totals with the approved budget identifying work that does not fall within the budget assumptions analysing time by task and fee earner grade considering proportionality within each phase This phase-based approach assists the court in determining whether the costs claimed are reasonable and proportionate and should be considered alongside proportionality challenges in costs. Points of Dispute and Electronic Bills Effective points of dispute and replies to an electronic bill should address: alignment between the bill and Precedent H phases clarity of task and activity descriptions time recorded outside the approved scope delegation and fee earner grade Addressing these matters at phase level as well as by individual entry supports a structured detailed assessment. Requests for Re-presentation Where an electronic bill does not allow proper comparison with the approved budget, it may be necessary to request re-presentation. This can arise where: phases do not correspond with Precedent H task and activity information is unclear time cannot be reconciled with the budget A properly structured bill assists both the court and the parties during detailed assessment. J-Codes and Bill Structure The use of J-Codes is not mandatory. The critical requirement is that the bill presents time in a clear phase and task format that allows comparison with the approved budget. The focus on detailed assessment is therefore on transparency and structure rather than the coding system used. Preparing Electronic Bills For receiving parties, careful preparation of the electronic bill includes: ensuring phase totals match the approved budget using clear task and activity descriptions maintaining consistency between time records and the bill aligning the bill with the Precedent H assumptions This assists the court and reduces the likelihood of queries on detailed assessment. Assessing Electronic Bills For paying parties, a structured review of the electronic bill enables: comparison with the approved budget identification of work outside scope analysis of fee earner grade and delegation consideration of proportionality by phase This supports a focused and efficient approach to detailed assessment and the preparation of points of dispute and replies. How We Assist with Electronic Bills of Costs We prepare and analyse electronic bills for detailed assessment, including phase alignment with Precedent H, task and activity review and the preparation of points of dispute and replies. Our work supports both receiving and paying parties in presenting and assessing electronic bills in a clear and compliant format as part of our paying party costs services. Detailed Assessment Strategy Guides Detailed Assessment of Costs: The Complete Guide Paying Party Detailed Assessment Strategy How Paying Parties Challenge a Bill of Costs Proportionality Challenges at Detailed Assessment Fee Earner Delegation Challenges at Detailed Assessment Guideline Hourly Rates 2026 Intermediate Track Costs Tables Specialist support for detailed assessment and electronic bills of costs Clear, structured analysis of phases, tasks and budget alignment.

Case Authority Court:  Court of Appeal (England & Wales) Case:   Attersley v UK Insurance Ltd  [2026] EWCA Civ 217 The Court of Appeal considered the costs consequences where a Claimant accepts a defendant’s Part 36 offer after the expiry of the relevant period in a claim that initially fell within a fixed recoverable costs regime. The court confirmed that, in certain circumstances, a claimant who accepts a Part 36 offer late may remain limited to the fixed costs that applied when the offer was made or when the relevant period expired, even where the claim later progresses outside that regime. The decision provides important guidance for litigators dealing with the interaction between Part 36 settlement strategy and fixed recoverable costs. Introduction Part 36 offers remain one of the most powerful strategic tools available in civil litigation. The Court of Appeal’s decision in Attersley v UK Insurance Ltd  highlights the potential consequences where a claimant accepts a defendant’s offer after the expiry of the relevant period, particularly where the claim initially fell within a fixed recoverable costs regime. For defendants, insurers and other paying parties, the judgment demonstrates how early Part 36 offers can significantly restrict recoverable costs if acceptance is delayed. Solicitors and insurers frequently instruct paying party costs lawyers to analyse the costs consequences of late Part 36 acceptance and to challenge bills of costs during detailed assessment. See our guide to paying party detailed assessment strategy: https://www.sphcosts.com/excessive-costs The Role of Part 36 in Costs Strategy Part 36 of the Civil Procedure Rules provides a structured framework designed to encourage settlement. Offers made under the rule carry significant costs consequences depending on when they are accepted. Where a claimant accepts a defendant’s Part 36 offer within the relevant period, the defendant typically becomes liable for the claimant’s costs up to the date of acceptance. However, if the claimant accepts the offer after that period has expired, the court has discretion to determine the appropriate order for costs after that date. In many cases this discretion becomes particularly significant where fixed recoverable costs regimes apply. Paying parties frequently rely on specialist advice when challenging a bill of costs at detailed assessment. See: https://www.sphcosts.com/post/how-paying-parties-challenge-a-bill-of-costs-at-detailed-assessment Interaction Between Part 36 and Fixed Costs Fixed recoverable costs regimes are intended to provide certainty and predictability in certain categories of litigation. Where a claim falls within a fixed costs framework, recoverable costs are capped at prescribed amounts depending on the procedural stage reached. The Court of Appeal in Attersley  highlighted an important point: the costs consequences of late acceptance of a Part 36 offer may be determined by the fixed costs position that existed when the offer was made or when the relevant period expired. Later developments in the litigation, such as allocation to a different track or increased complexity, do not necessarily displace the earlier fixed costs framework. For a practical overview of how the intermediate track fixed recoverable costs regime operates, see: https://www.sphcosts.com/post/intermediate-track-fixed-recoverable-costs Why Late Acceptance Can Restrict Recoverable Costs The reasoning behind this approach is rooted in the structure of Part 36 and the objective of promoting early settlement. A defendant who makes an early settlement offer should be able to assess the potential costs consequences of that offer with a degree of certainty. Allowing later procedural developments to alter those consequences could undermine the predictability of the rule. Where a claimant delays acceptance of a reasonable offer, the court may determine that the costs consequences should reflect the procedural and costs position that existed when the offer should reasonably have been accepted. Strategic Lessons for Paying Parties The decision provides several important practical lessons for defendants and insurers. Early Part 36 Offers Can Limit Costs Exposure Making a well-judged Part 36 offer at an early stage of litigation can significantly reduce the potential costs exposure faced by a defendant. Where the offer is accepted late, the costs position may remain anchored to the earlier fixed costs framework rather than the more expensive regime that might apply later in the case. Late Acceptance Does Not Automatically Increase Costs Liability Claimants sometimes assume that if a case later leaves the fixed costs regime, the defendant’s costs exposure will automatically increase. The Court of Appeal decision demonstrates that such an assumption may be incorrect. The court may conclude that the claimant’s delay in accepting the offer means that the earlier fixed costs framework continues to govern the costs outcome. Settlement Timing Matters. A claimant who delays acceptance of a reasonable Part 36 offer risks losing the opportunity to recover higher costs that might otherwise have been available later in the litigation. Implications for Detailed Assessment Although fixed costs regimes are intended to avoid detailed assessment in many cases, disputes still arise regarding: • whether the claim falls within a fixed costs regime • the stage reached when an offer was accepted • the correct interpretation of the relevant Part 36 rules. In those circumstances, paying parties frequently prepare Points of Dispute for paying parties challenging the recoverability of costs claimed. See: https://www.sphcosts.com/pod Fixed Costs and the Expanding Civil Litigation Landscape The significance of these issues has increased following reforms expanding the scope of fixed recoverable costs in civil litigation. As fixed costs regimes apply to a wider range of claims, disputes concerning the interaction between Part 36 offers and fixed costs are likely to become more common. For a breakdown of the intermediate track fixed recoverable costs tables, see: https://www.sphcosts.com/post/intermediate-track-costs-table Conclusion Late acceptance of a Part 36 offer can have significant consequences for the recovery of litigation costs. In particular, where fixed costs regimes apply, a claimant may find that the recoverable costs remain limited to the framework that existed when the offer was made or when the relevant period expired. For paying parties, the decision highlights the continuing importance of early settlement strategy, careful use of Part 36 offers, and structured analysis of costs claims. These issues frequently arise during detailed assessment costs disputes, particularly where parties disagree about the applicable costs regime or the effect of late acceptance. See: https://www.sphcosts.com/detailed-assessment-costs-disputes Detailed Assessment Strategy Guides Detailed Assessment of Costs: The Complete Guide Paying Party Detailed Assessment Strategy How Paying Parties Challenge a Bill of Costs Proportionality Challenges at Detailed Assessment Fee Earner Delegation Challenges at Detailed Assessment Guideline Hourly Rates 2026 Intermediate Track Costs Tables

The level of fee earner undertaking work is a central issue in paying party costs disputes. Even where time has been reasonably incurred, the court will consider whether the work was carried out at the appropriate grade and whether proper delegation was applied. Challenges based on delegation frequently lead to substantial reductions at detailed assessment. We act for paying parties challenging excessive bills, including delegation and grade disputes at detailed assessment. Why Delegation Matters The court expects litigation to be conducted efficiently and at proportionate cost. Routine tasks carried out by senior fee earners, multiple lawyers attending the same event, or inadequate supervision structures can all justify reductions. Delegation is therefore closely linked to: proportionality Guideline Hourly Rates duplication of work necessity of attendance These issues commonly form part of Points of Dispute . The Judicial Approach to Grade and Role The court assesses not only whether work was done, but who should reasonably have carried it out. Tasks such as routine correspondence, document review, and procedural steps are rarely justified at partner or senior associate level unless supported by clear evidence. Where the grade claimed does not match the complexity of the task, reductions are likely even if the hourly rate itself falls within Guideline Hourly Rates . Duplication of Fee Earners Multiple fee earners attending conferences, hearings, or internal meetings is a common source of challenge. Paying parties will examine: whether each attendee had a defined role whether the attendance advanced the case whether a single fee earner would have been sufficient Unjustified duplication frequently results in disallowance of time or downgrading to a lower grade. Delegation and Proportionality Poor delegation is a key driver of disproportionate costs. Where the level of work and the grades deployed are out of alignment with the value and complexity of the claim, the court may apply both line-by-line reductions and global proportionality adjustments. This creates a direct link between delegation challenges and proportionality arguments. Authorisation and Recoverability of Fee Earner Time The status of the fee earner carrying out the work is also relevant to recoverability. In Mazur v Charles Russell Speechlys LLP [2025] , the High Court confirmed that the conduct of litigation is a reserved legal activity which may only be carried out by a person who is individually authorised or exempt. Supervision by a solicitor is not sufficient where the individual is, in substance, conducting the litigation. For costs purposes, this creates a potential challenge where: work said to involve the conduct of litigation is carried out by an unauthorised fee earner statements of case or formal steps are signed by someone without practising rights responsibility for litigation decisions rests with a person not entitled to conduct litigation In such cases, paying parties may argue that the work is not recoverable as solicitor’s costs or should be allowed only at a reduced level, subject to recoverability principles. The issue is one of substance rather than job title. The court will consider who exercised professional judgment and who had responsibility for the conduct of the litigation. Evidence Required to Justify Senior Involvement Receiving parties seeking to justify higher-grade work must demonstrate: complexity requiring specialist input strategic decisions made by senior fee earners supervision structures that added value tasks that could not reasonably be delegated Absent such evidence, the court is likely to allow time only at the appropriate lower grade. Commercial Impact for Paying Parties Delegation challenges are particularly effective in high-volume litigation where partner-heavy billing structures are common. Early identification of grade mismatches improves negotiation leverage and reduces exposure before a detailed assessment hearing. This is especially relevant for local authorities, insurers, and defendant teams managing multiple costs claims. Key Takeaways The court assesses who did the work, not just whether it was done Routine tasks at senior grade are vulnerable to reduction Duplication of attendance is frequently disallowed Mazur creates recoverability challenges where unauthorised persons conduct litigation Delegation arguments support proportionality reductions Detailed Assessment Strategy Guides Detailed Assessment of Costs: The Complete Guide Paying Party Detailed Assessment Strategy How Paying Parties Challenge a Bill of Costs Proportionality Challenges at Detailed Assessment Guideline Hourly Rates 2026 Intermediate Track Costs Tables

Bills of Costs, Points of Dispute, Proportionality and Detailed Assessment Strategy Detailed assessment proceedings are often the stage where litigation costs exposure is either significantly reduced or successfully recovered. Where parties cannot agree the amount of costs payable following a costs order, the court may determine the recoverable costs through detailed assessment under CPR Part 47. For paying parties, the process is an opportunity to: challenge excessive costs reduce exposure dispute hourly rates raise proportionality arguments challenge unreasonable or unnecessary work For receiving parties, detailed assessment is critical to: maximising recovery defending reductions justifying rates and time claimed responding effectively to Points of Dispute protecting recoverable profit costs and disbursements SPH Costs acts for both paying and receiving parties across England & Wales in detailed assessment proceedings, including: insurers local authorities defendant organisations claimant firms Court of Protection practitioners specialist litigation solicitors What Is Detailed Assessment? Detailed assessment is the court process used to determine the amount of legal costs recoverable following litigation. The process usually arises where: a costs order has been made proceedings settle without costs agreement interim costs orders are disputed parties cannot agree the level of recoverable costs The receiving party serves a Bill of Costs setting out the costs claimed. The paying party may then serve: Points of Dispute identifying the reductions sought and the basis for challenge. The receiving party may respond with: Replies to Points of Dispute before the matter proceeds toward provisional assessment, negotiation or an oral detailed assessment hearing. Facing a Bill of Costs? For paying parties, detailed assessment proceedings frequently involve disputes concerning: excessive hourly rates duplication of work proportionality counsel’s fees expert fees fee earner delegation unnecessary attendances inflated electronic bills Well-drafted Points of Dispute often determine whether exposure is significantly reduced before any hearing takes place. For specialist support see: Draft Points of Dispute Challenge a Bill of Costs Maximising Recovery at Detailed Assessment For receiving parties, detailed assessment strategy is equally important. Poorly structured Bills of Costs, weak Replies or procedural failures can result in substantial reductions even where the underlying litigation succeeded. Receiving party disputes commonly concern: reductions to hourly rates proportionality challenges criticism of staffing levels disputes concerning incurred time challenges to counsel’s fees recoverability of disbursements Careful preparation of: Bills of Costs Replies supporting evidence schedules narrative explanations can materially affect the outcome of assessment proceedings. The Main Stages of Detailed Assessment Proceedings Detailed assessment proceedings usually involve: Preparation and service of the Bill of Costs Service of Points of Dispute Replies to Points of Dispute Negotiation between the parties Provisional assessment or oral hearing Many disputes resolve through negotiation once the key issues are identified clearly within the Points of Dispute and Replies. Bills of Costs The Bill of Costs sets out: the work undertaken time claimed hourly rates disbursements VAT funding information The structure and presentation of the Bill frequently influence: negotiation strategy proportionality arguments settlement prospects the scope of disputes at assessment Electronic bills and phased bills now play an increasingly important role in higher-value litigation and costs budgeting disputes. Points of Dispute Points of Dispute are the paying party’s primary mechanism for reducing costs exposure. Weak, generic or poorly targeted challenges frequently result in unnecessary costs being allowed. Effective Points of Dispute usually focus on: proportionality unreasonable time claimed excessive hourly rates duplication lack of delegation excessive attendances unnecessary work non-recoverable items Specialist drafting often materially affects both: settlement negotiations final recoverable costs For practical guidance see: How Paying Parties Challenge a Bill of Costs Replies to Points of Dispute Replies are the receiving party’s opportunity to defend: work undertaken rates claimed staffing structures litigation strategy proportionality recoverability Strong Replies frequently narrow disputes significantly before any hearing takes place. Weak Replies may leave substantial reductions difficult to resist later during assessment proceedings. Hourly Rates and Guideline Hourly Rates One of the most common areas of dispute concerns solicitor hourly rates. Courts frequently consider: Guideline Hourly Rates complexity of litigation seniority of fee earners location of the practice conduct of the litigation Disputes commonly arise where: rates exceed guideline levels Grade A/B fee earners conducted routine work delegation between fee earners is challenged the complexity of the case is disputed Proportionality Even where individual items are reasonably incurred, the court must still consider whether the total costs claimed are proportionate. Proportionality arguments are often central to detailed assessment proceedings. The court may consider: the value of the claim complexity conduct importance of the litigation wider factors affecting the proceedings For paying parties, proportionality may provide a powerful route to reducing overall exposure. For receiving parties, careful presentation of the litigation context is frequently essential. Provisional Assessment Many detailed assessments proceed initially by provisional assessment This paper-based process involves the court reviewing: the Bill of Costs Points of Dispute Replies supporting documents without an oral hearing. The court then issues a written provisional assessment. Where either party disputes the provisional outcome, the matter may proceed to an oral detailed assessment hearing. Oral Detailed Assessment Hearings Some disputes require oral hearings before a Costs Judge. Common disputes include: hourly rates proportionality counsel’s fees electronic bills procedural compliance staffing structures recoverability arguments Preparation before oral assessment is often critical to the final outcome. Detailed Assessment Strategy Matters Early Detailed assessment outcomes are rarely determined solely at the hearing stage. The approach taken during the litigation itself frequently affects: recoverability proportionality arguments drafting strategy settlement prospects evidential support Early costs strategy is therefore important for both: paying parties seeking to reduce exposure receiving parties seeking to maximise recovery Specialist Detailed Assessment Support SPH Costs acts nationwide across England & Wales for both paying and receiving parties in detailed assessment proceedings. Our work includes: Bills of Costs Points of Dispute Replies proportionality challenges electronic bills provisional assessment disputes oral detailed assessment hearings strategic costs advice Related Services Paying Party Detailed Assessment Challenge a Bill of Costs Draft Points of Dispute Receiving Party Bills of Costs Contact SPH Costs If you require specialist support with: Bills of Costs Points of Dispute Replies proportionality disputes provisional assessment oral detailed assessment hearings contact SPH Costs for confidential assistance across England & Wales.

The Legal Aid Agency (LAA) has issued a further update confirming key deadlines connected to CCMS billing, contingency legal aid payments, and the end of the Average Payment Scheme in January 2026. With Average Payment Scheme recoupment due to begin shortly afterwards, civil and crime legal aid providers should now be prioritising the preparation of outstanding legal aid costs claims to avoid cashflow disruption and account deficits. Key Dates for Average Payment Scheme Recoupment Legal aid providers should ensure the following dates are firmly diarised: 22 December 2025 – Controlled work fee uplifts take effect 12 January 2026 – Average Payment Scheme ends 19 January 2026 – Final Average Payment Scheme payments made 26 January 2026 – Average Payment Scheme recoupment process begins 2 February 2026 – First recoupments applied to payments received These dates are critical for planning the submission of legal aid costs claims through CCMS. Contingency Legal Aid Billing and Prior Authority For matters billed under contingency arrangements during CCMS disruption, the LAA has confirmed: Prior authority granted by email remains valid proof of authorisation Prior authority decisions made under contingency will not be uploaded to CCMS A copy of the prior authority grant email must be submitted with the legal aid costs claim There is no requirement to reapply via CCMS where prior authority has already been granted Ensuring that prior authority evidence is clearly linked to each costs claim will help reduce delays during assessment. Average Payment Scheme Recoupment – Why Early Costs Preparation Matters The Average Payment Scheme will close on 12 January 2026, with recoupments starting from 26 January 2026. Although the LAA has built in a short gap between final payments and recoupment, firms that are not ready to submit their legal aid costs claims promptly may see recoupments applied before final bills are paid. To minimise the impact of Average Payment Scheme recoupment, providers should now: Identify all matters paid under the Average Payment Scheme Prepare and finalise legal aid costs claims in advance of January 2026 Check that all supporting documentation is complete Submit bills via CCMS as soon as they are bill-ready Proactive preparation is essential to protecting cashflow and avoiding unnecessary deficits on legal aid accounts. Legal Aid Fee Uplifts and CCMS Billing A statutory instrument introducing increases to some civil and crime legal aid fees takes effect on 22 December 2025. Providers should be aware that: Controlled work fee uplifts apply to matters starting on or after 22 December 2025 Fee uplifts must continue to be applied via the contingency process until standard CCMS billing routes are fully restored The deadline for December legal aid claims is 20 January 2026 Licensed work fee uplifts remain under development Correct application of fee uplifts within legal aid costs claims will be essential to avoid underpayment. Issues such as CCMS restoration, rejected bills, contingency billing errors or delayed payments often arise where Legal Aid costs have not been drafted and submitted in accordance with procedural requirements, which is why specialist support for Legal Aid costs drafting, CCMS claims and assessment strategy can be essential. Staying Updated on CCMS and Legal Aid Payments The LAA has confirmed that future updates will be issued on an as-needed basis, rather than bi-weekly. Providers should continue monitoring GOV.UK for guidance on CCMS billing, contingency arrangements, and legal aid payments. How SPH Costs Supports Legal Aid Costs Claims With Average Payment Scheme recoupment approaching, now is the time to ensure your legal aid costs claims are prepared and ready for submission. At SPH Costs, we support legal aid providers with: Preparation and submission of legal aid costs claims via CCMS Reviewing contingency legal aid billing and prior authority compliance Ensuring correct application of legal aid fee uplifts Reducing the financial impact of Average Payment Scheme recoupment If you would like assistance preparing your legal aid costs claims ahead of recoupment, please contact the SPH Costs team. Legal Aid costs claims frequently involve technical issues around billing, assessment, and compliance with Legal Aid Agency requirements. Specialist Legal Aid costs drafting support is often required to ensure claims are prepared and progressed correctly within the applicable framework. Our Legal Aid costs drafting services are explained in more detail on our Legal Aid Costs Drafting .

Provisional assessment under CPR 47.15 was introduced to deal with lower value detailed assessments on the papers rather than through a full oral hearing. The procedure currently applies where the bill of costs does not exceed £75,000. The Association of Costs Lawyers (ACL) is currently undertaking a survey of its members to assess how effective the provisional assessment process has been in practice. The survey also asks whether the £75,000 limit remains appropriate. When the scheme was originally piloted, it applied only to bills of up to £25,000, and the process appeared to work reasonably well. The increase to £75,000 has prompted ongoing debate, particularly regarding how the limit should be interpreted. Some judges have taken the view that the £75,000 threshold is exclusive of VAT, based on the interpretation that the definition of “costs” in the Civil Procedure Rules does not expressly include VAT, which is defined separately elsewhere in the rules. If such a strict interpretation were applied more widely, it raises interesting questions—for example whether an order for costs would need to expressly refer to both costs and VAT. Another issue often raised is whether the £1,500 plus VAT and court fee cap on the costs of provisional assessment is reasonable when dealing with bills approaching the £75,000 limit. In practice, it may be more realistic to assume that cases at the upper end of the provisional assessment threshold are more likely to proceed to an oral hearing. In that sense, provisional assessment can be viewed as a mechanism for narrowing the issues between the parties, rather than as the final determination of the dispute. This approach may carry some risk, particularly where significant costs are incurred that may not ultimately be recoverable if the matter concludes at the provisional stage. However, the process may still prove worthwhile if it helps focus the issues and ultimately leads to a better outcome at detailed assessment. For assistance with costs disputes and detailed assessment, see our guidance on paying party costs.

Context: The Rule Against Hindsight in Indemnity Costs In costs law , it is established that indemnity costs should generally be awarded only where conduct was unreasonable at the time it occurred, not with the benefit of hindsight. This reflects a fundamental fairness principle: a party should not be penalised for strategic decisions that only later appear unwise behavior must be judged based on information reasonably available at the time it was made This case reaffirmed that approach and continues to influence how indemnity costs are applied in practice. What the Decision Confirms The key principle from this decision is: Indemnity costs should not be awarded based on hindsight review of events. Rather, indemnity must be justified by conduct that is unreasonable when measured at the relevant point in time. This denies the temptation to say, after an outcome is unfavourable: “It was obvious at the end that this was a bad strategy — so indemnity is justified.” Instead, courts look at the information and context available at the moment the disputed conduct occurred. This protects strategic freedom of litigation while still enabling costs consequences for genuinely unreasonable conduct. Why This Matters in Costs Disputes Understanding this principle is not academic, it has real implications for: arguing indemnity costs claims defending against indemnity costs applications resisting indemnity at detailed assessment framing conduct evidence strategically Indemnity costs awards can shift recoverable totals dramatically, especially when combined with other challenges. A party’s conduct throughout the case becomes the battleground; how it is framed in submissions can determine whether indemnity is justified. Practical Application at Detailed Assessment The “Conduct at the Time” Test Courts look at: what information was reasonably known when decisions were taken why particular strategic choices were made whether there was a real basis for the conduct at that time if any deviation from standard practice was truly justified This test avoids penalising reasonable strategy that only later proved unsuccessful. For paying parties and respondents alike, the focus is: “What did the other side know  and reasonably do  at the time?” How Paying Parties Use This in Indemnity Challenges Practical methods for resisting indemnity costs include: demonstrating that decisions were objectively reasonable at the relevant time showing that opposing arguments rest on hindsight assumptions relating conduct to contemporaneous correspondence and case events drawing out the difference between hindsight logic and real-time decision-making The stronger your evidence on real-time justification, the harder it is for indemnity to be justified on hindsight review. When Indemnity Costs Are Still Justified Although hindsight should not be used, indemnity costs are appropriately awarded when conduct at the time was: plainly unreasonable abusive or obstructive in breach of a clear rule or court order manifestly without real basis Indemnity remains a tool to penalise truly inappropriate conduct, but not merely to reward post-hoc criticism of decisions that were reasonable at the time. Common Mistakes That Lead to Indemnity Awards Parties (and sometimes less experienced practitioners) fall into traps such as: arguing that “it was obvious this would fail” long before the hearing attacking strategic choices with hindsight language assuming a different outcome should mean indemnity failing to locate conduct in a real-time context These mistakes make indemnity awards more likely. Bringing This Into Costs Strategy Understanding the hindsight rule helps in: Resisting indemnity at assessment Framing conduct submissions effectively Preparing opposing party evidence Modelling total recoverable costs (including costs of indemnity applications) This links back into broader themes such as: assessment strategy recoverability planning paying party dispute tactics Key Takeaways The “no hindsight” rule is foundational to indemnity costs Conduct is judged in real time, not with benefit of outcome Indemnity can still be justified for truly unreasonable conduct Challengers succeed by rooting arguments in contemporaneous evidence This principle matters not just in theory, but in assessment strategy

Quick Summary of the Decision The issue in Marbrow  was whether a costs budget should be treated as inclusive or exclusive of VAT when assessing recoverability limits. The court confirmed that, unless clearly stated otherwise, budgeting figures are generally treated as exclusive of VAT, meaning VAT may be recoverable in addition to the approved phase totals. On the surface this looks like a technical budgeting clarification. In reality, it has practical consequences for forecasting, proportionality arguments , and assessment disputes. Why This Matters Beyond the Case This decision is not just about accounting treatment. It affects: How costs professionals structure Precedent H budgets How paying parties analyse exposure risk How receiving parties protect recoverability How proportionality challenges are framed at detailed assessment Misunderstanding VAT treatment can distort: total litigation cost forecasting settlement strategy the perceived gap between budgeted and claimed costs That makes this a recoverability and risk issue , not just a drafting point. The Strategic Impact on Costs Budgeting 1️⃣ Budget Presentation Risk If a budget is unclear on VAT treatment: Paying parties may argue that phase totals were intended to be VAT inclusive Receiving parties may face disputes about whether claims exceed approved limits Clarity in drafting avoids later arguments that the budget has been exceeded when VAT is added. 2️⃣ Exposure Analysis for Paying Parties From a paying party perspective , treating budgets as VAT-exclusive means: The real financial exposure is higher than the approved phase totals suggest Settlement modelling must account for VAT on top of budgeted figures Proportionality arguments based purely on budget totals may understate recoverable sums This affects how early-stage offers and reserve calculations should be approached. 3️⃣ Interaction with Proportionality VAT treatment can influence proportionality debates: Budgets approved exclusive of VAT may still lead to totals that appear high once VAT is added Paying parties may try to argue that the overall  figure is disproportionate even if phase figures were approved Understanding this interaction helps frame arguments on: Reasonableness Budget adherence Global proportionality Practical Guidance for Costs Professionals ✔ When Preparing Budgets State expressly whether figures are exclusive of VAT Ensure assumptions sections align with VAT treatment Avoid ambiguity that invites post-assessment arguments ✔ When Acting for Paying Parties Analyse whether VAT was addressed during the budgeting stage Factor VAT into exposure modelling from the outset Consider whether any ambiguity supports arguments that totals were intended as global caps ✔ At Detailed Assessment This issue can arise where: There is a dispute over whether claimed sums exceed the approved budget VAT pushes totals above phase limits Parties argue about the meaning of approved figures Being able to link budgeting treatment to recoverability principles strengthens the argument on both sides. Why This Decision Still Matter Although procedural rules continue to evolve, budgeting disputes remain common. VAT treatment is one of those “small” technical points that can shift recoverable totals significantly, particularly in multi-phase or high-value litigation. For costs practitioners, this case reinforces a wider principle: Budgeting is not just about numbers — it is about how those numbers will be interpreted later in a recoverability dispute . Understanding VAT treatment helps avoid artificial arguments about budget exceedance and ensures that financial exposure is assessed realistically from the outset. Disputes over whether VAT pushes a claim beyond an approved budget are not rare on assessment, particularly where phase assumptions are unclear Key Takeaways Costs budgets are generally treated as exclusive of VAT unless stated otherwise This affects real exposure, not just drafting mechanics Ambiguity can lead to disputes at assessment Paying parties should model VAT risk early Receiving parties should draft budgets to eliminate later interpretation arguments

Issues surrounding retainers and client invoicing are not just solicitor–client concerns. They frequently resurface later during costs assessment, where paying parties examine whether costs were properly incurred under a valid retainer. If the retainer wording, scope of authority, or charging structure is unclear, opponents may argue that work was not recoverable at all, not because it was unnecessary, but because the entitlement to charge was defective. The case below highlights how retainer issues can have consequences beyond the solicitor-client relationship In a previous blog we dealt with some issues which arise if the retainer between a Solicitor and Client has not been well thought through. We now have another case where such a retainer has been subjected to close scrutiny by the Court, this time in relation to whether invoices rendered to the client were effectively requests for payment on account or, alternatively, self-contained (“statute”) bills which were capable of being sued upon. The lesson to be learned? If you want to be able to send a statute bill – say so, very clearly, in the retainer document. In these days, a Solicitor who does not carefully think about funding and cash flow will probably be characterised as being either too rich or too lazy. For the vast majority of practitioners, ensuring that a client fully understands the invoicing regime is crucial not only in terms of the financial aspects, but also to ensure that there are no surprises and that the client is kept happy. Perhaps the best way to start here therefore is to consider the fairly brief summary of the relevant law set out in Bari v Rosen [2012] EWHC 1782 (QB): 13 … Where a solicitor issues to his client a bill of costs which complies with the requirements of the Solicitors Act 1974 it is known colloquially as a “statute bill”. Section 70(1) of the Act gives the client the right, within one month of delivery of the bill, to apply to the High Court for the bill to be assessed, without requiring any sum to be paid into court. If no such application is made, the absolute right to assessment is lost. However, if a statute bill has not been paid and the client applies to the High Court for assessment of the bill within twelve months from delivery of the bill, the combined effect of s 70(2) and (3) is that the High Court may allow assessment (and I am advised by my assessors usually does allow assessment), on such terms as the court thinks fit. If the bill remains unpaid and twelve months have expired from delivery of the bill, the court may only order an assessment if special circumstances are shown. 14 The position after a statute bill has been paid is somewhat different. The client still has the absolute right to an assessment before the expiry of one month from delivery of the bill. After that, but only up to twelve months from the date of payment, if the client applies for assessment, special circumstances need to be shown. No assessment at all can be ordered after the expiration of twelve months from payment. Section 70(4) creates an absolute bar. For completeness I should mention that there are additional provisions where the solicitor has obtained judgment on the bill, but this does not arise in the present case. All of this was relevant in the case of Vlamaki v Sookias & Sookias [2015] EWHC 3334 (QB), where the High Court was dealing with an appeal from Master Campbell in the SCCO in a matter where the Claimant sought leave to have assessment of her Solicitors’ costs. At the heart of the case was whether various invoices rendered to the client whilst matters were continuing should be treated as final bills for the work done in the periods to which they related – and thus the clock would be ticking for the various time limits in section 70 set out above. The High Court rehearsed the argument that in general, a retainer between a Solicitor and client is an “entire contract” and the Solicitors can only claim remuneration when either all of the work is completed or there has been a natural break in the matter. However, this is subject to any express agreement to the contrary and it is perfectly in order for Solicitors to seek to agree a different provision. Thus, the general rule will be that invoices rendered during the course of a matter will be treated as requests for payment on account rather than final, or what are commonly called “statute bills”. It is permissible for a Solicitor to transfer money from client account to office account when money has been paid in by the client even if that is not pursuant to a statute bill, provided that the amount so transferred does not exceed the work actually done. The main benefit of treating such invoices as no more than payments on account is that it is open to the Solicitor to adjust the charges at the conclusion of the matter (upwards or downwards) in order to reflect the particular circumstances of the case. Most Solicitors will be aware of the so-called “7 pillars of wisdom” which are directly relevant to Solicitors’ charges and which may mean (again depending upon what is actually in the retainer) that until the matter has been concluded the appropriate amount to be charged cannot be properly known. On the other hand, a statute bill cannot be adjusted later, but if it is not paid, then the Solicitor will be able to sue upon it without waiting until the end of the matter. In this case, Master Campbell had found that the retainer did not contractually entitle the Solicitors to render Statute bills during the currency of each matter. After a close analysis of the wording of the retainer, the High Court agreed with the Master. In interpreting the retainer, the Court proceeded on the basis of the fundamental principles that where there was ambiguity, this would be construed against the Solicitors and that the client here was not a lawyer and therefore could not be assumed to know the provisions of the Solicitors Act (or indeed the law generally). The Court took account of the provisions in the retainer which suggested that interest could be charged upon these invoices if they were not paid and that the Solicitors could insist upon their payment, but found that to a layperson, they would not understand the wording to represent the right to deliver statute bills. In construing the retainer against the Solicitors, the Court found that it was not in the client’s interest for these invoices to be treated as statute bills and approved the consideration of Master Leonard at first instance in Bari in which he said: “The potential difficulties and expense faced by a client who can only challenge regular bills by instituting multiple assessment proceedings – against the same solicitor who is actively handling a number of current matters … – are obvious. Further, the choice is between a right which begins to diminish after one month from the first regular bill and a right which does not begin to diminish until a later and, for the client, obviously more practicable time.” The most fundamental point which the Court made here was that the retainer lacked an express statement that each interim invoice would be a final (statute) bill. It is clear from the Judgement that if Solicitors want interim invoices to be treated as statute bills then they had best set that out explicitly and extremely clearly in their retainer documentation. So far so good for the Claimant. However, there was a very neat argument from the Defendants which rather left the Claimant being “hoist by her own petard”. The Defendant said that if the Court was against them on their contention that the invoices should be treated as statute bills, then it must surely follow that there had been no statute bills delivered and therefore the Claimant’s application for a Solicitors Act Assessment must be premature. After considering the construction of a letter written by the Defendants upon termination of their retainer, the Court found that this letter could not convert what had previously been no more than requests for payment on account into Statute bills. At first instance, Mastic Campbell had found that this letter had the effect of bringing the series of bills to a head and that the final invoice should be treated as a statute bill to incorporate all of the previous invoices done. The High Court disagreed and therefore the Claimant was left in a position where the application for assessment of the invoices could not proceed because no final or statute bill had ever been delivered. Practical Steps Firms Should Take To reduce exposure to retainer-based challenges during assessment: Ensure engagement letters clearly define scope and charging structure Record supervision and delegation transparently Avoid ambiguous “all work required” descriptions Review retainer wording when matters change in complexity Seek specialist input where recoverability could be questioned Why This Matters in Costs Disputes Retainer problems rarely stay confined to client complaints. They are increasingly deployed by paying parties during detailed assessment to argue that: Work was not authorised The scope of the retainer did not cover the activity claimed Charging arrangements were unclear or non-compliant The indemnity principle prevents recovery These arguments often appear late in proceedings, when positions are entrenched and the sums at stake are significant. Clear retainer drafting and structured time recording are therefore not merely administrative issues, they are central to protecting costs recovery. The Strategic Point Retainer issues are often viewed as professional conduct matters. In reality, they are costs risk issues . A technically strong case can still suffer reductions if entitlement to charge is not clearly evidenced. Specialist costs professionals regularly encounter these arguments during assessment. Addressing potential vulnerabilities early is far easier than defending them once raised.

The Civil Legal Aid (Procedure and Remuneration) (Amendment) Regulations 2025 , due to come into force on 22 December 2025 , introduce long-awaited increases to civil legal aid remuneration. For firms undertaking Controlled Work, particularly in the housing and immigration sectors, the reforms represent a material shift in funding levels. Controlled Work Uplifts The Regulations provide substantial uplifts to Controlled Work fees: Housing-related Controlled Work : 42% increase Immigration and asylum Controlled Work : 31% increase These increases reflect the time-intensive nature of this work and the sustained pressure placed on providers by inflation and rising operating costs. New Minimum Hourly Rates Minimum hourly rates have been revised and formally set at: £65.35  for work conducted outside London £69.30  for London-based work While still modest by commercial standards, the introduction of updated national minimum rates provides greater clarity and consistency when assessing remuneration under the civil legal aid scheme, particularly where work falls outside fixed-fee arrangements. Fixed Fee Adjustments Fixed fees will either: rise proportionately , or increase by a minimum of 10% , whichever results in the higher figure. This mechanism avoids fixed fees lagging behind hourly rates — a recurring issue in previous remuneration reforms — and should benefit firms operating high-volume legal aid practices. Practical Considerations for Providers From a costs perspective, firms should be alert to: transitional issues for cases spanning the commencement date, updated billing and costing assumptions from December 2025, the interaction between revised hourly rates and fixed-fee escape provisions, and the impact of the new rates on supervision and preparation time allowances. Early planning will be key to ensuring firms maximise recovery under the revised scheme. Our Costs Expertise At SPH Costs , we regularly advise legal aid providers on remuneration disputes, billing compliance and recovery under the civil legal aid framework. The 2025 Regulations introduce welcome change, but careful costs management remains essential to ensure firms obtain full entitlement under the scheme. For practical guidance on preparing and submitting legal aid costs claims following fee changes, see our Legal Aid costs drafting guide.

The Legal Aid Agency’s Client and Cost Management System (CCMS) is now entrenched in everyday practice for legal aid firms. However, despite years of use, many solicitors and caseworkers still face frustrating CCMS rejections, delays, or requests for further information — all of which slow down cash flow and create unnecessary administrative burdens. With the reintroduction of the portal imminent, now is a good time to revisit common reasons for rejection. The vast majority of CCMS problems are avoidable. Below is a practical guide to the most common CCMS errors  we see every week, along with clear, actionable steps to help you prevent rejections and keep your submissions moving smoothly. 1. Missing or Incomplete Supporting Evidence The error: Uploading the wrong supporting documents, missing mandatory evidence, or submitting documents that aren’t legible or properly named. Why it causes rejections: CCMS requires specific evidence to justify both the application and the costs. If the LAA cannot immediately see what they need, they will reject or query the submission. How to avoid it: Use a checklist  for each application or claim type. Ensure all files are clearly titled  (e.g. “Means Evidence – May 2024”). Upload documents as PDFs , not scans of scans or photos. Always check that the document is visible and readable  before submitting. Tip:  Have a standardised internal template of required evidence for each matter type (Family, Housing, Community Care, Immigration, etc.). 2. Incorrect or Inconsistent Time Recording The error: Unclear narratives, inconsistent times between attendance notes and CCMS entries, or time recorded without an explanation of necessity. Why it causes rejections: The LAA must be able to follow your “story of the case.” If the narrative is vague (“Phone call”, “Work on file”), the assessor is more likely to challenge or reduce your costs. How to avoid it: Record who  did the work, why , and what it achieved . Ensure that your attendance notes match your CCMS entries. Avoid vague descriptions — always show the purpose and outcome . Example of weak note: “Email to client.” Strong note: “Email to client explaining next steps in child arrangements proceedings and confirming hearing date.” 3. Submitting the Wrong Matter Type or Level The error: Choosing the incorrect matter type, assigning the wrong level of service, or selecting an inapplicable stage in the proceedings. Why it causes rejections: The CCMS workflow depends heavily on correct matter categorisation. If the wrong type is selected, the assessment team may automatically reject or request amendments. How to avoid it: Double-check the matter type  before starting the application. Train staff on the correct categories for common cases. Use internal crib sheets listing typical scenarios (e.g. “Non-Molestation → Domestic Abuse Matter Type”). 4. Incorrect Disbursement Information The error: Missing invoices, incorrect provider details, disbursements without justification, or trying to claim non-permitted items. Why it causes rejections: Disbursements must be justified, reasonable, and supported by evidence. The LAA is especially strict on expert fees. How to avoid it: Always attach the invoice  or expert quotation . Make sure the expert is LAA-compliant  with correct CV and details. Provide a clear justification  for why the disbursement was necessary. Use clear titles like “Psychologist Invoice – Dr Smith – £650”. 5. Failing to Track and Respond to “Further Information” Requests The error: Missing or late responses to LAA queries, often because they get buried in the task list or no one is monitoring notifications. Why it causes rejections: If you don’t respond in time, the claim can be rejected simply due to inactivity. How to avoid it: Allocate a staff member to check CCMS daily . Use case management systems that integrate CCMS alerts. Maintain an internal “CCMS Queries Log”  to ensure nothing is missed. When responding, answer all points clearly in the same message  to avoid back-and-forth. 6. Incorrect Provider Details or Cost Limit Requests The error: Submitting applications with outdated office details, incorrect fee earner rates, or cost limit requests that don’t reflect the complexity or stage of the case. Why it causes rejections: Incorrect details automatically trigger queries or force amendments. How to avoid it: Keep CCMS provider records up to date . Ensure hourly rates match the relevant Civil Finance Guidance . When requesting an uplift to cost limits, always provide: A short summary of case progress Details of complexity Estimated future work Clear justification for why the increased limit is needed 7. Poor Quality Bills of Costs The error: Bills uploaded with missing narratives, incorrect categories, or inconsistent totals between the bill and CCMS. Why it causes rejections: The LAA relies heavily on the accuracy and clarity of your bill. If it doesn’t reflect the file or doesn’t comply with legal aid billing rules, it will be rejected. How to avoid it: Ensure your bill is drafted by a specialist costs draftsman . Cross-check totals and categories before upload. Include clear narratives describing the complexity and key case events. Never upload a bill that isn't fully checked — errors cause major delays. 8. Using the Wrong Document Type When Uploading Files The error: Uploading vital information under categories like “Correspondence” or “Other”. Why it causes rejections: CCMS uses document type labels to route the case for approval. Incorrect categorisation = delays or rejections. How to avoid it: Always match the document to the correct CCMS label (e.g. “Court Order”, “Means Evidence”, “Bill of Costs”, “Expert Invoice”). Avoid the “Other” category except for genuinely uncategorisable material. 9. Not Keeping Digital Files CCMS-Ready The error: Uploading overly large files, incorrectly rotated documents, poor scans, or bundles with no pagination. Why it causes rejections: The LAA often rejects submissions that are difficult to read or navigate. How to avoid it: Ensure all PDFs: Are scanned at 300 DPI Are right-side-up Are properly paginated Are under CCMS size limits Avoid photographs of documents. Use PDF combining/compression tools. Conclusion Most CCMS rejections are preventable. With systematic checks, clearer narratives, and properly prepared supporting evidence, you can dramatically reduce delays, avoid unnecessary queries, and maintain a smooth funding and billing process. If you’d like help preparing CCMS submissions, drafting Legal Aid bills, avoiding rejections, or improving cashflow through better CCMS workflows, SPH Costing Services can support you with expert, compliant Legal Aid costs preparation . Legal Aid costs claims frequently involve technical issues around billing, assessment, and compliance with Legal Aid Agency requirements. Specialist Legal Aid costs drafting support is often required to ensure claims are prepared and progressed correctly within the applicable framework. Our Legal Aid costs drafting services are explained in more detail on our Legal Aid Costs Drafting

Two days ago, the LAA officially launched LAA Silas , marking a significant milestone in the ongoing effort to modernise and streamline key processes across the sector. The introduction of this new system has already sparked interest, with many welcoming its potential to deliver greater clarity, efficiency, and user-focused functionality. What Is LAA Silas? LAA Silas (Sign into Legal Aid Services) is the Legal Aid Agency’s new digital platform created to enhance the way legal aid applications, assessments, and related workflows are managed. Designed with usability and transparency in mind, Silas aims to simplify processes that were previously time-consuming, reduce administrative burdens, and offer a more intuitive experience for both providers and clients. By centralising key functions and introducing improved digital tools, Silas supports smoother decision-making and helps ensure cases progress more efficiently. Changes to Legal Aid systems such as Silas have direct implications for how costs are prepared, submitted and assessed, which is why specialist support with Legal Aid costs drafting, CCMS claims and assessment strategy  is often required. At SPH Costing Services Ltd , we are fully embracing this development. We recognise the positive impact LAA Silas can bring to costing, case management, and overall workflow improvements. As the system continues to roll out, we are committed to adapting smoothly, supporting our clients through the transition, and making the most of the opportunities this new platform offers. The launch of LAA Silas signals an exciting shift toward a more streamlined future, and we look forward to being part of that journey. Need Help? The LAA have launched a specific learning platform at: https://legalaidlearning.justice.gov.uk/sign-in-to-legal-aid-services/ Or contact us to discuss your requirements.