16 November 2017
The Scottish Government has now introduced the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. The Bill seeks to introduce Sheriff Principal Taylor's Review of Expenses and Funding of Civil Litigation in Scotland which recommended a fundamental change in the way that expenses are awarded within Scotland.
The Bill aims to make the costs of civil court actions more predictable, increase the funding options for pursuing civil claims and to introduce a greater level of equality to the funding relationship between defenders and pursuers in personal injury actions.
The two key proposed legislative changes are
- the introduction of damages based agreements for solicitors and,
- the introduction of Qualified One-Way Cost Shifting (QOCS) for personal injury cases.
The Bill proposes to allow Scottish solicitors to enter into damages-based agreements (DBAs). This will permit ‘no win no fee’ arrangements whereby the solicitor’s fee (i.e. the success fee) is calculated as a percentage of the pursuer’s damages. The Bill proposes that the Scottish Ministers set the maximum amount of the success fee on a sliding scale depending on the level of damages. The Bill also seeks to introduce QOCS for personal injury cases and appeals. Under QOCS, the court will only make an award of expenses against a pursuer where the pursuer has made a fraudulent misrepresentation, has committed an abuse of process or has behaved in a way that falls below the standard reasonably expected by the court. Otherwise, the costs of the action will be met by the defender. This is one of the more controversial provisions in the Bill and represents a departure from the current approach in Scotland where expenses follow success.
The relationship between QOCS and the protection on expenses offered by Tenders also requires further consideration. Sheriff Principal Taylor had recommended that, if a pursuer does not accept a Tender and is not awarded a sum greater than the amount of the Tender, then the protection of QOCS should be lost. However, he recommended that the pursuer’s liability to meet the defender’s post-tender judicial expenses should be limited to 75% of the damages awarded. His recommendation does not appear in the draft Bill, as presently framed.
The Bill is currently at Stage One of Three in the legislative process. It was assigned to the Justice Committee who invited views and responses to the Bill. The Justice Committee heard evidence on the Bill on 19 and 26 September and on 31 October 2017 from interested parties including the Law Society of Scotland, the Association of British Insurers, the Forum of Insurance Lawyers and the Association of Personal Injury Lawyers, amongst others.
The next stage in the legislative process is for the Justice Committee to produce a report on the responses it has received to the Bill. Once the report has been published, Parliament will debate the general principles of the Bill. It is expected that Parliament will agree to these to allow it to move on to Stage Two when amendments to the Bill will be considered.
Link to the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill
Contact:
 |
|
Rhona McKerracher |