QOCS: Let’s go round again

I know, I know, another article about QOCS… But this one is a bit different as it discusses the case of Manley v McLeese [2024] SAC (Civ) 16, the first reported Sheriff Appeal Court decision on QOCS.

It’s fair to say that, in Scottish terms, the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 made a seismic shift in how expenses (costs) are dealt with north of the border.

The halcyon days of expenses following success are now long gone. In the 18 months that have followed since the first reported decision on QOCS in December 2022 (Lennox v Iceland Foods [2022] SC EDIN 42), there have been no fewer than twelve further reported decisions on the application of these rules – and that’s just the reported ones. I can add in a successful QOCS disapplication in one of my own unreported cases and I’m sure that colleagues could add in many others. The point is that QOCS rules remain one of the most fast-paced areas of personal injury practice.

Enter now Manley into the mix. This action arose from an RTA in which the Defender emerged from a minor road onto a major road, resulting in a collision with the Pursuer who was already established on the major road. The factual disputes between the parties concerned: (a) the precise location of the impact and (b) whether the Defender’s vehicle was stationary or moving at the time of the collision.

At first instance, the Pursuer’s claim failed, having been found to be incredible as well as unreliable. Despite no averments of fraud or any cross-examination by the Defenders to suggest that the Pursuer was lying, the Court also held that the Pursuer had acted in a manner which was fraudulent and that it automatically followed that she had acted in a manner which was manifestly unreasonable, and which amounted to an abuse of process. In the circumstances, QOCS was disapplied at first instance.

Faced with an expenses exposure, the Pursuer lodged an appeal, both in relation to liability and the disapplication of QOCS. The appeal on the former was unsuccessful. However, the Sheriff Appeal Court overturned the decision to disapply QOCS.

In relation to fraud, the Sheriff Appeal Court held that the Sheriff at first instance had no basis to find on the balance of probabilities that the Appellant had made a fraudulent representation. The Sheriff had erred in (a) concluding that there was no need to make a finding in fact that the Pursuer had made a fraudulent representation, (b) failing to provide reasons why the Pursuer’s post-accident behaviour had amounted to a fraudulent representation and (c) failing to provide reasons for disregarding relevant evidence, including the physical damage to the vehicles and an expert report obtained by the Pursuer which supported her position.

In relation to the other grounds, the Sheriff Appeal Court held that the Sheriff’s reasoning in automatically applying these was flawed and that each required to be considered separately. In the absence of any facts or reasons to support the decision, the Sheriff Appeal Court concluded that the Sheriff had no basis to find on the balance of probabilities that the Pursuer behaved in a manner which was either manifestly unreasonable, or in a manner which amounted to an abuse of process. In the circumstances, the Pursuer’s appeal was partly successful.

This case adds to the growing bank of authorities on QOCS and provides helpful guidance on the QOCS provisions and exemptions. It underpins the proposition that the threshold for fraudulent representation is a high one and that simply preferring one witness over the other does not in itself give rise to disapplication of QOCS; whether it ought to or not must depend on the court’s reasoning, having regard to particular facts and circumstances of the case. The starting point from a fraud perspective is that there has to be a finding in fact of fraud before the QOCS exemption can apply.