The bill will deliver a manifesto commitment and increase access to justice by creating a more accessible, affordable and equitable civil justice system for Scotland. It will make the cost of civil action more predictable, increase the funding options for pursuers of civil actions and introduce a greater level of equality to the funding relationship between pursuers and defenders in personal injury actions.
The bill provides the legal framework to implement a number of key recommendations in Sheriff Principal James Taylor’s 2013 “Review of Expenses and Funding of Civil Litigation in Scotland”. Sheriff Principal Taylor made 85 recommendations, at least half of which will be taken forward in rules of court to be made by the Lord President, on the recommendation of the Scottish Civil Justice Council.
Some of Sheriff Principal Taylor’s recommendations have already been implemented by the Courts Reform (Scotland) Act 2014, such as those on sanction for counsel. Some of his recommendations on claims management companies and referral fees will be considered by the review of the regulation of legal services, which is being led by Esther Roberton, the head of NHS 24.
Part 1 of the bill includes legislative measures that will introduce sliding caps for success fee agreements, which are more commonly known as no-win, no-fee agreements. There will be sliding caps for success fee agreements in personal injury and other civil actions in order to make the costs of civil litigation more predictable. Part 1 will also allow damages-based agreements to be enforceable by solicitors. Currently, damages-based agreements can be used only by claims management companies. Under the proposal, the solicitor’s fee will be allowed to be taken as a percentage of the damages awarded by the court or agreed between the parties.
Section 8 introduces qualified one-way cost shifting, otherwise known as QOCS. I had better explain what qualified one-way cost shifting is, because it is not an easy concept. It is proposed that the process will apply only in personal injury cases and associated appeals. The parties to a personal injury action are, usually, the pursuer, who is a private individual, and the defender, which is an insurance company. Sheriff Principal Taylor thought that there was an imbalance there—an inequality of arms between the pursuer and the defender. One of the problems is that, if the pursuer were to lose the action, they might become liable to pay the expenses of the defender. Sheriff Principal Taylor pointed out that, in England, only in 0.1 per cent of cases will a successful defender pursue the pursuer for their expenses. He has therefore recommended that qualified one-way cost shifting should be introduced, whereby, if the pursuer is unsuccessful, they will not become liable for the expenses of the defender, which is usually a large insurance company. We will no doubt return to the subject of qualified one-way cost shifting later.
Other parts of the bill make the auditor of the Court of Session, the auditor of the Sheriff Appeal Court and sheriff court auditors salaried posts within the Scottish Courts and Tribunals Service, under a new statutory governance framework.
Part 4 allows for the introduction—for the first time in Scotland—of a class action procedure, to be known as “group procedure”. That is otherwise known as a multiparty action.
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In general, the bill is designed to balance the needs of pursuers and defenders in personal injury actions. The potential costs involved in civil court action can deter many people from pursuing legal action, even when they have a meritorious claim. The proposals in the bill for sliding caps on the amount that can be taken from an award of damages under success fee agreements will mean that the cost of what the client must pay his own lawyer is predictable. Success fee agreements, I should explain, include both speculative fee agreements and damages-based agreements.
The proposals on QOCS in personal injury cases will protect the pursuer from paying the defender’s expenses if the case is lost. As I said, defenders are almost invariably well-resourced insurance companies that rarely claim their expenses when they successfully defend actions. However, the benefit of QOCS will be lost to the pursuer if there is fraudulent or unreasonable behaviour, or any other behaviour that
“amounts to an abuse of process.”
We appreciate that this is not easy stuff and we are very happy to answer questions.