As part of the new bill of costs project (being led by Alexander Hutton QC), a new Practice Direction has been made providing for a pilot scheme to operate for six months from 1 October 2015. This will enable parties to use the new bill of costs in cases in the Senior Courts Costs Office instead of the existing model.

From an insurer’s perspective, the new bill of costs is the long-awaited tool to give proper effect to the costs management regime. An instant comparison between incurred and estimated costs for all phases will be possible, with challenges focused in future upon incurred costs and any areas where the estimated costs exceed those approved without good reason.

Getting the right result at the costs case management conference will become even more important, as this will effectively determine the level of costs likely to be recovered. The indications are that paying parties will require ‘good reason’ to argue that approved costs should be reduced, just as receiving parties will struggle to maintain claims in excess of the approved costs.