Carefully considered defences can cost pursuers a pretty penny

This is a quick round up of recent decisions, where expenses were awarded against pursuers. Yes, it does happen and like waiting on the proverbial bus, more than one has turned up.

The decisions of the All-Scotland Sheriff Personal Injury Court are worth considering by insurers and those who defend claims, in relation to the expenses issues which may arise, where the pursuer has raised proceedings against multiple defenders, and then either abandons against one of them, or discontinues the entire case. Despite QOCS protection, a pursuer may end up with a liability in expenses.

In cases 1 and 2, the two defenders are for brevity referred to as D1 and D2. Case 3 also involved two defenders, although it deals with the expenses position where the entire case was dismissed.

Case 1

McRae v Screwfix Direct Ltd and Royal Mail Group Ltd [2023] SC EDIN 28  is the first reported decision regarding abandonment in the context of QOCS. In short, where abandonment is sought, the issue of expenses is a matter entirely for the discretion of the Sheriff which is in contrast with other situations, where the party seeking an award of expenses against a pursuer, must persuade the Court to disapply QOCS with specific reference to the grounds contained within section 8(4)(a) to (c) of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (fraudulent representation; manifestly unreasonable behaviour; abuse of process).

The pursuer in this case suffered injury due to an accident at home and sued both defenders from the outset. Neither defender blamed the other.

On 31 March 2023, D2 accepted the pursuer’s Minute of Offer to Settle. On 4 May 2023, the pursuer lodged a Minute of Abandonment in respect of D1. This led to two opposed motions – D1 sought an award of expenses against the pursuer. The pursuer asked the court to find D2 liable to D1 in the expenses of the action, as, the pursuer claimed, they were occasioned by D2.

The court held that D2 had not caused or induced the pursuer to convene D1 to the action and, therefore, the pursuer alone was liable to D1 in expenses. D1 had adopted a consistent position from an early denial of liability, pre-litigation. The pursuer’s submission, that the court should exercise its discretion in a manner consistent with the overriding principles of QOCS, failed.

Case 2

George MacDougall v SA Telepherique Morzine-Pleney and SERMA.  In this action, the pursuer suffered injuries in a skiing accident in France. He raised proceedings in Scotland against two defenders. D1 sold the ticket which allowed access to the ski slope (which was essentially the height of their involvement). D2 operated and exercised control over the locus. BTO were instructed for D2.

 D2 settled the case against them and reflected that within the terms of a joint minute. This provided that D2 would be liable for expenses only in relation to D2’s involvement. However, that was not the end of the matter. The pursuer continued with the action against D1 until the week prior to proof, before advising the Court that the matter had settled. D1 had offered the pursuer the opportunity to abandon on a no-expenses basis, approximately one year earlier, but the pursuer had declined that offer.

This was a pre-QOCS case. The case against D1 was contractual, and against D2, delictual. The pursuer raised proceedings against both defenders at the outset; neither defender argued that the other was at fault. The issue in dispute was whether the pursuer should be responsible for expenses incurred by D1 and if so, should D2 relieve the pursuer in relation to those expenses (in addition to the expenses for which D2 was already responsible).

At the hearing, the pursuer argued that the terms of the Joint Minute were not binding, in relation to the issue of expenses relating to D1. The Court disagreed and held that there was no basis to make any award in favour of the pursuer against D1, and that D2 was not liable to provide relief, had such an award been made. D1 was awarded expenses against the pursuer and the Court ruled that the pursuer had no right of relief against D2 in that respect.

Case 3

There is no written judgment in Stephen Murray v Boots UK Ltd + othersas the case was dismissed, although an interlocutor was pronounced on 25 September 2023, with an explanatory note. The pursuer’s agent had withdrawn from acting, resulting in a peremptory diet, at which the pursuer failed to be represented. The action was dismissed. The defenders enrolled a joint motion seeking expenses and the disapplication of QOCS. The pursuer was not represented at the hearing. The Court held that while abandonment is a specifically listed exception to QOCS, dismissal of an action by way of default is not. However, in terms of QOCS, the pursuer’s conduct, in failing to appear or be represented at a peremptory diet and the hearing on the motion to disapply QOCS, was tantamount to “manifestly unreasonable” behaviour in terms of section 8(4)(b) of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018. Therefore, the Court exercised its discretion, and expenses were awarded to both defenders against the pursuer.

There you have it: cases 1 and 3 show that despite QOCS, expenses will not automatically be awarded to pursuers and that there are circumstances in which the court will exercise its discretion in favour of defenders.  This, in our view, is very much in keeping with the general rule that expenses should be met by the party who causes them, as highlighted in case 2.