HM Insights

Personal Injury & Reparation alert: Scottish Civil Litigation Expenses Update

Further to our last update regarding the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, the Bill has now been passed by Parliament following a unanimous vote. Once the Bill receives Royal Assent it will become an Act of the Scottish Parliament. This is expected to follow in the coming weeks.

The main focus of the Bill is to allow people who contemplate litigation through the civil courts to have more certainty about what it will cost them and therefore increase the public's access to justice.

There are four main parts to the bill:

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Part 1 – Success Fee Arrangements

The Bill sets out parameters for enforceable damages-based agreements with solicitors in Scotland for the first time. Success fee arrangements are already popular and can be easily understood by lay people. In these types of arrangements, those wishing to pursue actions do not pay anything in advance and the provider of the legal service will meet the cost of any upfront disbursements such as Court fees in personal injury actions. In return, the legal service provider will be entitled to a success fee which will be deducted from any award of damages over and above any judicial account of expenses that may be recoverable from the Defenders.

Sheriff Principal Taylor recommended in his Review that the level of success fee be capped in Regulations. Proposed Regulations will be put before Parliament in due course.

Part 2 – Expenses in Civil Litigation

As a result of studies carried out by the Civil Justice department, there was a concern that people are put off raising Court actions because of a fear of being found liable for the other party's costs. This section of the Bill introduces qualified one-way costs shifting (QOCS) for personal injury cases.

The introduction of this minimises the risk of a Pursuer being found liable for a Defender's expenses. However, the protection will be lost if the Pursuer or their solicitors have been found not to have conducted their case properly. Examples suggested when a cost award could still be made in a Defenders favour include: if the Pursuer or their agents have made fraudulent representations; or behaved in a manner which is manifestly unreasonable; or constitutes an abuse of process.

Part 3 – Auditors of the Court

There has been very little discussion around this part of the Bill. As a result of issues raised by the Scottish Courts and Tribunals Service they will now be required to publish annual reports on taxations.

Part 4 – Group Proceedings

This introduces for the first time in Scotland class actions. These can only be brought in the Court of Session with the permission of the Court and there can only be one representative per group proceedings.

Whilst the passing of the Bill is good news for Pursuers, particularly in personal injury cases, it is likely to make cases even more expensive for insurance companies to defend particularly as, even if the defence is ultimately successful, they may not be reimbursed for the costs of defending the case.

 

Get in touch

To find out more about how we can assist you in relation to these issues, please contact either Elizabeth Mitchell, Head of Personal Injury & Reparation, or Heather Calderwood, Partner.