A bill of costs is the receiving party’s itemised claim for the costs another party has been ordered or has agreed to pay, prepared for detailed assessment and served with the notice of commencement within 3 months of the order or other event giving the right to costs (CPR 47.6 and 47.7). In a Part 7 multi-track claim it must be an electronic bill for work done after 6 April 2018, unless the costs are fixed or scale costs, the receiving party is unrepresented or the court orders otherwise; other bills may be paper bills, on the model of Precedents A to D, or electronic bills (PD 47 para 5.1).

This guide, from DMD Costs, law costs draftsmen in Westhoughton, Bolton (Greater Manchester), explains when a bill must be electronic, what a paper bill contains, how an electronic bill is built and served, and what goes with it. Our costs forms and precedents guide lists every precedent, and the free J-code and Precedent S code lookup finds the code for any piece of work.

Jump to: electronic or paper · what a paper bill contains · dividing the bill into parts · routine items and expenses · electronic bills and Precedent S · what goes with the bill · the certificates · rates, budgets and VAT

Electronic or paper?

A bill for detailed assessment must be an electronic bill, in a spreadsheet that complies with PD 47 paras 5.A1 to 5.A4, where the case is a Part 7 multi-track claim and the bill relates to costs recoverable between the parties for work done after 6 April 2018 (“the Transition Date”). The exceptions are proceedings subject to fixed costs or scale costs, cases in which the receiving party is unrepresented, and cases where the court has ordered otherwise. In all other circumstances the bill may be electronic or on paper (PD 47 para 5.1). Where the work straddles 6 April 2018, the work before it may go in a paper or an electronic bill, and the work after it must go in an electronic bill (para 5.A4).

The exclusions from costs management in CPR 3.12 and the exceptions to the electronic bill rule are different lists, so a claim can be outside costs management and still need an electronic bill. Our post on Precedent S in clinical negligence claims works through that point and the transition date.

What a paper bill contains

A bill may consist of such of these sections as are appropriate (PD 47 para 5.7):

  1. a title page, setting out the full title of the proceedings, the name of the party whose bill it is, a description of the document giving the right to assessment, the VAT number of the legal representative or other person in respect of whom VAT is claimed, if VAT is claimed, and details of any legal aid certificates (para 5.10);
  2. background information: a brief description of the proceedings up to the notice of commencement, the status of each fee earner whose costs are claimed and, if the costs are calculated on hourly rates, the rate claimed for each, and a brief explanation of any agreement or arrangement between the receiving party and its legal representatives that affects the costs claimed (para 5.11);
  3. the items of costs claimed under the heads in para 5.12: attendances at court and on counsel; attendances on and communications with the client, with witnesses including experts, and with other persons; attendances to inspect any property or place; communications with the court and with counsel; work done on documents; negotiations; agents; and other work of or incidental to the proceedings;
  4. a summary of the totals, showing the total profit costs and disbursements separately from the total VAT, with totals for each part of the bill (para 5.20);
  5. schedules of the time spent on non-routine attendances and communications, used where there are twenty or more under any of heads (2) to (10), with the bill claiming the total and referring to the schedule (para 5.18); and
  6. the certificates in Precedent F that are appropriate (para 5.21).

Non-routine communications are set out in chronological order, routine communications as a single item at the end of each head, and every item is numbered consecutively (PD 47 paras 5.13 and 5.15). In each part that claims attendances at court and on counsel, the bill notes all relevant events, including ones that are not chargeable, and every costs order the court made, whether or not costs are claimed under it (para 5.16). Check every interim order before drawing the bill: where an order says nothing about costs, the general rule is that no party is entitled to them (CPR 44.10(1)), and the free costs order decoder explains each kind of order. If the only dispute concerns disbursements, the bill is limited to the title page, the background information, a list of the disbursements in issue and brief written submissions on them (para 5.7), and the court usually decides it on the papers (para 13.5).

When the bill must be divided into parts

PD 47 para 5.8 requires the bill to be divided into parts, each with its own background information, items and summary, in circumstances that include these: the receiving party acted in person for part of the proceedings; it had pro bono representation for part and an order under section 194(3) of the Legal Services Act 2007 was made; it was represented by different legal representatives; it had legal aid for part of the proceedings; there are different paying parties; interest is claimed from different dates; or, in a case started on or after 1 April 2013 with costs to be assessed on the standard basis, the work straddles that date. Where a costs management order was made and the budget was agreed or approved, the bill must also be divided by the phases of the last agreed or approved budget, distinguishing incurred from estimated costs, on the standard basis, and must set out the costs of initially completing Precedent H and the other costs of the budgeting process in separate parts (para 5.8(8) and (9)).

The list is not exhaustive. Divide the bill too where costs are payable on different bases, such as indemnity costs from the end of the relevant period after the claimant did at least as well as its own Part 36 offer (CPR 36.17(4)(b)). Our post on Part 36 in housing disrepair costs explains the split.

Routine items and expenses

PD 47 para 5.22 sets the rules for work done by legal representatives:

  • routine letters out, routine emails out and routine telephone calls are in general allowed on a unit basis of 6 minutes each at the appropriate hourly rate, and the unit charge for letters and emails out includes perusing the routine letters or emails in (para 5.22(1)); the court may allow actual time for electronic communications that properly amount to attendances, if the time was recorded (para 5.22(2));
  • local travelling expenses are not allowed, “local” in general meaning within 10 miles of the court dealing with the case at the time (para 5.22(3));
  • postage, couriers, outgoing telephone call charges, fax and telex are in general not allowed, save exceptionally in unusual circumstances or where the cost is unusually heavy (para 5.22(4)); and
  • copying is not in general allowed, save exceptionally, and then the number of copies, their purpose and the cost must be set out in the bill (para 5.22(5)).

Electronic bills and Precedent S

Precedent S is the model electronic bill, annexed to Practice Direction 47 in spreadsheet and PDF formats (PD 47 para 5.A1). It is a model, not the only format: any other spreadsheet may be used if it reports and aggregates costs by the phases, tasks, activities and expenses defined in Schedule 2 to the Practice Direction, reports summary totals in a form comparable to Precedent S, lets the user see in chronological order the detail of all the work in each phase, recalculates its intermediate and overall totals automatically when the data changes, and contains all its calculations and formulae transparently (para 5.A2).

Schedule 2 sets out 15 phases, 41 tasks and 10 activities, with expense categories. Precedent S codes them P1 to P15, T1 to T41, A1 to A10 and, for the 15 expense categories listed, X1 to X15. The EW-UTBMS J-code set, used to record time so that it can become a bill or a budget, codes the same 41 tasks JA10 to JM40, in 13 phases, with activity codes A101 to A129. Our J-code and Precedent S code lookup matches the two sets and gives each task’s Precedent H budget phase.

Paragraphs 5.7 to 5.21 apply to electronic bills so far as they are not inconsistent with the form and content of Precedent S, and where they require or recommend dividing the bill into parts, an electronic bill should include a summary comparable to the “Funding and Parts Table” in Precedent S, unless its format already gives the information (PD 47 para 5.A3).

Serve both versions together. Whenever an electronic bill is served or filed, it must be in hard copy, in a manageable paper format as shown in the PDF version of Precedent S, and a copy of the full electronic spreadsheet must at the same time be provided to the paying party, or filed at court, by email or other electronic means (PD 47 para 5.1A). An electronic bill filed at the Costs Office on CE-File is uploaded as both the spreadsheet and a PDF, and must not be filed by any other means (para 5.1B). For a paper bill that can be copied electronically, the paying party can ask, before the hearing, for a copy in its native format, such as Excel, which must be supplied free within 7 days (para 5.6).

What goes with the bill

The bill is served with the notice of commencement, Form N252, within 3 months of the order or other event giving the right to costs (CPR 47.6 and 47.7). PD 47 para 5.2 requires copies of counsel’s and experts’ fee notes for fees claimed in the bill, written evidence of any other disbursement over £500, a statement of the name and address for service of anyone else on whom the notice is to be served and, where a costs management order was made, a breakdown of the costs by phase (Precedent Q is a model form), unless an electronic bill already gives the same information in full. The free N252 builder fills in the notice, and our guide to detailed assessment, step by step follows the bill from there.

The certificates

Precedent F sets out the certificates a bill must contain, as appropriate (PD 47 para 5.21). Certificates (1), as to accuracy, and (2), as to interest and payments, are required in every case, and certificate (3), as to the legally aided person’s interest, in every case where the receiving party is legally aided. Where costs are claimed for work by a legal representative, the receiving party is not legally aided and the representative is not its own employee, the accuracy certificate confirms that the costs claimed do not exceed what the receiving party is required to pay: the indemnity principle. Certificates (4) (in legal aid cases, consent to the final costs certificate being signed straight away), (5) (disbursements of £500 or less) and (6) (recovery of VAT) are optional, but a VAT certificate must be given if VAT is disputed (PD 44 para 2.5); if that dispute arises after the bill is served, it can be filed and served as a supplementary document amending the bill (PD 47 para 13.10).

The certificates are signed by the receiving party or its solicitor, and where the bill covers work by more than one firm, the accuracy certificate is signed for each firm (Precedent F). A signed bill that leaves out the indemnity principle certification is defective but not automatically invalid (Duffy v Birmingham City Council [2026] EWCA Civ 146). A bill that claims more than the client is liable to pay can be assessed at nil, and instructing an outside costs draftsman does not move that risk: the bill is served by the instructing firm and certified on its behalf (Kapoor v Johal [2024] EWHC 2853 (SCCO)).

Hourly rates, budgets and VAT

Rates. The background information gives the status of each fee earner and the hourly rate claimed for each (PD 47 para 5.11(2)). Our guide to the guideline hourly rates for 2026 sets out the bands and how they are argued.

Budgets. Where a costs management order was made, the court assessing costs on the standard basis has regard to the last approved or agreed budgeted costs for each phase, will not depart from them unless satisfied that there is good reason to do so, and takes into account any comments it recorded on incurred costs (CPR 3.18). Budgeted costs are the estimated costs approved or agreed; incurred costs are assessed in the ordinary way. That is why the bill is divided by budget phase, separating incurred from estimated costs (PD 47 para 5.8(8)).

VAT. The summary shows the VAT separately from the profit costs and disbursements (PD 47 para 5.20), and the title page gives the VAT number of the legal representative or other person in respect of whom VAT is claimed (para 5.10(3)). Whether VAT can be claimed from the paying party at all depends on the receiving party’s own VAT position: the free VAT on costs checker works it out, with the Precedent F(6) certificate where VAT is disputed.

Changing the bill later

A party that wishes to vary its bill files an amended or supplementary bill with the court and serves copies on the other relevant parties. Permission is not needed, but the court may disallow the variation or allow it only on conditions, including as to the payment of any costs it causes or wastes (PD 47 para 13.10).

How DMD Costs can help

DMD Costs prepares paper and electronic bills for claimant solicitor firms in housing disrepair, clinical negligence and MoD NIHL claims: the coding by phase, task and activity, the parts the Practice Direction requires, the narrative that supports the figures and the certificates, for your firm to check and sign. Your firm serves the bill with the notice of commencement; we then draft the Replies to the Points of Dispute and negotiate. We prepare the costs documentation and support your team through the process. The instructing solicitor retains conduct of the matter. The fee is fixed and agreed before any work begins.

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