Preparing a bill of costs for detailed assessment is one of the most technical tasks in civil litigation practice. A well-prepared bill maximises inter partes cost recovery and withstands challenge; a poorly prepared one leaves money on the table, invites satellite litigation, and can result in adverse costs orders. Yet in many firms, bill preparation is treated as an afterthought — something done in a rush once the main litigation is concluded.

This step-by-step guide walks through the full process: what the bill must contain, how to structure it, what the rules require, and how to get the best result on assessment.

When Is a Bill of Costs Required?

Inter Partes Costs

A bill of costs is required when a court has made a costs order in your client’s favour and the parties cannot agree the amount. The order will typically say “costs to be the subject of detailed assessment if not agreed”. This triggers the formal assessment process under CPR Part 47.

Bills of costs are also prepared for:

Solicitor and own client assessments under Section 70 of the Solicitors Act 1974, where the client disputes the solicitor’s invoice
Legal aid assessments where costs are claimed from the Legal Aid Agency (LAA)
Public funding costs in family proceedings under the Legal Aid scheme

This guide focuses primarily on inter partes (between the parties) bills, which represent the majority of contentious costs work.

When Detailed Assessment Is Not Required

Summary assessment is used for hearings lasting one day or less (and sometimes longer hearings). The court conducts the assessment at the end of the hearing, relying on a statement of costs in N260. Detailed assessment is typically for matters of greater complexity or where summary assessment is not practical.

Under the Fixed Recoverable Costs regime (expanded from October 2023), recoverable costs for cases valued between £25,000 and £100,000 in the fast track and intermediate track are fixed by reference to CPR 45 tables. No bill of costs is required — recovery is automatic on the applicable fixed sum.

Step 1: Gathering the File

Before drafting the bill, assemble everything you need:

Time Recording Export

Export all time recorded on the matter from your practice management system. Review each entry for:

Completeness: are there gaps in the record? A busy month with very few time entries logged may indicate missing entries.
Narratives: are the narratives sufficiently descriptive? Entries that read “correspondence” or “telephone call” will be challenged.
Fee earner details: is each entry attributed to the correct fee earner and grade?
Codes: are the entries correctly coded to the appropriate work phase (pre-action, issue, disclosure, etc.)?

Contemporaneous records are more credible than reconstructed ones. If you are reconstructing missing time from the file, be conservative — courts take a dim view of inflated reconstruction.

Disbursement Documentation

Collect invoices for every disbursement:

Counsel’s fee notes (marked as paid where applicable)
Expert invoices
Court fee receipts
Search fee confirmations
Process server invoices
Transcript costs
Any other third-party costs

Every disbursement in the bill must be supported by documentation. Missing a disbursement invoice does not mean the disbursement was not incurred — but it does mean you will struggle to recover it without the evidence.

The Costs Budget (If Applicable)

If costs budgeting applied in the proceedings (multi-track, not subject to FRC), obtain the approved costs budget. Recovery in detailed assessment is generally limited to the budgeted amount for each phase unless there is good reason to depart (Revision to Precedent H was approved, or a significant development occurred after budgeting).

A phase where costs exceeded the budget without variation approved at a costs management hearing is a vulnerability. Note these in advance and prepare your explanation.

Step 2: Understanding the Bill Structure

The Electronic Bill Format

Since October 2019, bills of costs filed in the CCMCC and the Senior Courts Costs Office must be in electronic format (Practice Direction 47, paragraph 5.1A). The electronic bill is prepared using approved software (such as Costs Master, Laserforms, or CE File-compatible tools) and filed electronically.

The electronic bill has a prescribed structure:

Part 1 — Narrative: Brief description of the proceedings, the costs order being assessed, and the parties.

Part 2 — Rate Information: The hourly rates claimed for each fee earner, their grade, their experience, and justification for any above-guideline rates.

Part 3 — Profit Costs: Time entries grouped into mandatory phases, in chronological order within each phase.

Part 4 — Disbursements: Chronological list of disbursements.

Part 5 — VAT: Breakdown of VAT applicable to profit costs and disbursements.

Part 6 — Summary: Grand total claimed.

The phases that must be used are set out in the Precedent H format. Standard phases include: Pre-action; Issue/statements of case; CMC; Disclosure; Witness statements; Expert reports; PTR; Trial preparation; Trial; ADR/settlement; Costs.

Coding Time Entries to Phases

Each time entry must be assigned to a phase. This sounds simple but requires care:

A letter written at the issue stage responding to service of a defence is “Issue/statements”
Drafting a schedule of loss annexed to the particulars of claim is also “Issue” — even though loss schedules can feel like expert work
Correspondence with an expert instructed before the expert report is finalised belongs in “Expert reports”
Settlement correspondence goes in “ADR/settlement”

Miscoded entries can be challenged as falling outside the approved budget phase and face reduction. Consistent coding from the start of the matter — enforced through the practice management system — reduces this risk.

Step 3: Drafting the Bill

The Rate Section

The rate section sets out the hourly rates you are claiming and, critically, the justification for them. Compare your claimed rates to the current Guideline Hourly Rates (GHR). If you are claiming above-GHR rates, you need to explain why:

Specialist expertise in the subject matter
Out-of-hours availability
Particular experience of the specific court or judge
Seniority within the firm above the grade band

Courts will not award above-GHR rates simply because the solicitor asked for them. You need a reasoned argument in the bill narrative. Where multiple fee earners worked on the matter, include a brief biography of each: years of qualification, relevant specialism, PQE.

Writing Narratives for Time Entries

The narrative for each time entry is the most time-consuming part of bill preparation and the most valuable. Good narratives:

Identify the specific task: not “drafting document” but “drafting letter of response to Part 18 request for further information on breach of contract claim”
Identify why the time was reasonably incurred: “required due to defendant’s unexplained failure to respond to earlier request for documents”
For longer attendances, identify the substance of what was discussed or achieved

A costs officer reading the bill should be able to understand, from each entry alone, what was done, why it was necessary, and why the time claimed is reasonable. Entries that fail this test are vulnerable.

Disbursements Section

List each disbursement chronologically. For each item include:

Date
Payee
Description (enough to understand what it was for)
Net amount
VAT (if applicable)
Gross amount

Include a brief note for large or unusual disbursements — for example, why a particular expert was instructed at a particular rate, or why a second expert was required when a single joint expert might have been expected.

Counsel’s fees deserve particular care. List each return separately. If a brief fee was agreed in advance, note the date of agreement and the circumstances. If a fee was uplifted (enhanced after a hearing), explain the uplift.

The Summary

The summary should match the detailed entries exactly. The figures in the summary are what you are claiming. If there is a discrepancy between the detailed entries and the summary — even a minor arithmetic error — it will be identified on assessment and can undermine confidence in the bill’s accuracy.

Step 4: Reviewing and Sense-Checking the Bill

Before service, carry out a final review:

Proportionality check: Does the total claimed bear a reasonable relationship to the sums at stake? A £200,000 costs bill on a £150,000 damages claim will face serious proportionality scrutiny. Identify in advance which items are most likely to be challenged on proportionality and consider whether they should be presented at full rate or pre-emptively reduced.

Budget check: For budgeted cases, compare phase totals against the approved budget. Phases within budget are presumptively recoverable (subject to reasonableness). Phases over budget require explanation.

Duplication check: Are there entries that appear to duplicate one another? A 2-hour attendance note and a 1-hour letter about the same topic on the same day will attract scrutiny.

Arithmetic: Verify the totals. Practice management systems with integrated bill drafting tools reduce arithmetic errors significantly.

Step 5: Commencement of Detailed Assessment

N252 — Notice of Commencement

To commence detailed assessment proceedings, file Form N252 with the relevant court and serve it, together with a copy of the bill, on the paying party. Under CPR 47.7, commencement must happen within three months of the judgment, order, or event giving rise to the right to costs. Failure to commence in time does not extinguish the right but may result in a penalty under CPR 47.8.

Points of Dispute

The paying party has 21 days from service of the bill to serve points of dispute (CPR 47.9). Points of dispute must be in the prescribed format and must be concise and specific. Each point must identify the item challenged and the basis for the challenge.

If no points of dispute are served in time, the receiving party can apply for a default costs certificate.

Replies to Points of Dispute

Once points of dispute are received, the receiving party should serve replies within 21 days (though there is no prescribed time limit; late replies require leave). Replies should respond substantively to each point. A reply that simply reiterates the original claim without engaging with the point raised will not assist on assessment.

The Assessment Hearing

Request a hearing date through the court. For bills under approximately £75,000 in the CCMCC, hearings are conducted by a Costs Officer; larger bills are assessed by a Costs Judge. Attend prepared:

Know your concessions in advance — don’t fight points you will lose
Have case law ready for above-guideline rate arguments
Bring disbursement invoices as originals if possible
Have a Scott Schedule of disputed items ready to use if the hearing proceeds item by item

After the Assessment

The assessed bill produces a costs certificate. Interest runs on the certified sum from the date of the original order (unless the certificate specifies otherwise). Apply for the certificate promptly — it is the enforcement document.

If you are dissatisfied with the assessment, you can appeal under CPR 47.20 to a Costs Judge (if assessed by an officer) or a High Court Judge (if assessed by a Costs Judge). Permission is not generally required for an appeal from a Costs Officer, but is required from a Costs Judge. Appeals must be filed within 21 days of the assessment.

How Technology Helps

The biggest predictor of a successful detailed assessment is the quality of the underlying time records. Bills prepared from contemporaneous, well-narrated, correctly coded time entries are faster to prepare and more resilient to challenge.

Obiter captures time automatically from fee earner activity — emails drafted, documents reviewed, calls attended — and generates ready-to-approve time entries with appropriate narratives. By the time a matter reaches the bill preparation stage, the file records are complete and accurate, meaning the costs draftsman or billing solicitor spends time refining and presenting costs rather than reconstructing them from memory.

Summary

A bill of costs is only as strong as the records behind it. The firms that achieve the highest inter partes recovery rates invest in accurate time recording from day one, code entries correctly to phases, capture every disbursement with documentation, and prepare their bill with specific, detailed narratives. Follow these steps systematically and the assessment process becomes manageable — and profitable.

Bill of Costs: A Step-by-Step Guide for Solicitors