11 June 2020

The Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (‘the Act’) received Royal Assent in June 2018. Litigators and those in the insurance industry have kept a keen eye on the progress of the Act since then.

The key focus for most has been the timescales for the publication of rules which will bring Qualified One-Way Costs Shifting (QOCS) in to force and set out the detail of how the provisions will apply in practice.

As a reminder, the Act sets out the general principles of how QOCS will apply in Scotland. When QOCS is introduced a pursuer generally will not be liable for a defender’s costs, even if they are unsuccessful in their claim, provided that they have conducted the litigation in an appropriate manner. This applies to all defenders, whether insured or not, and whether the Pursuer has the benefit of third party funding for the litigation or not. Exceptions to that general rule will apply where the pursuer:

• has made a fraudulent representation or has in some other way acted in a fraudulent manner;
• has behaved in a manner which is manifestly unreasonable;
• has conducted the litigation in a way which the court deems to be an abuse of process.

The Law Society of Scotland wrote to the Lord President in May 2020 on behalf of practitioners who had raised concerns about the apparent lack of progress in the publication of the rules. The Lord President confirmed in his reply that the draft rules were to be considered by the Scottish Civil Justice Council’s Cost and Funding Committee by the end of May. The draft rules will be presented to the Scottish Civil Justice Council by the end of the summer. His Lordship envisages that the final version of the rules will be in force by winter 2020 at the latest.

Assuming that his Lordship’s estimates are correct, it would seem that litigators and insurers alike should brace themselves for winter 2020, for QOCS and for the potential onslaught of claims which QOCS is predicted to bring.

A link to the Law Society’s letter and the Lord President’s reply can be found here. 

For further information, please do not hesitate to contact:

Wendy Thomson Partner & Solicitor Advocate T: 0131 222 2939 E: wjt@bto.co.uk