Overview
Civil actions are lawsuits that are brought about to protect the rights of and give compensation to a person or an organisation. These are not criminal proceedings. The most common would be a personal injury claim or a breach of contract.
The Bill aims to increase access to justice in civil actions by:
- making the costs of civil court action more predictable - currently these range from under £100 up to £10,000
- increasing funding options, such as Legal Aid, for raising civil actions
- making sure funding is available to both parties involved in civil actions
You can find out more in the Explanatory Notes document that explains the Bill.
Why the Bill was created
The Bill comes out of a review into the expenses and funding of civil litigation in Scotland. This review was undertaken by Sheriff Principal James Taylor. The Bill seeks to implement the recommendations of that review.
There have been 3 ways to fund civil court cases in Scotland in the past.
- private funding
- legal aid
- trade union funding
There's been more pressure on public funding for legal aid. Fewer people are becoming members of trade unions. This means there is less funding for civil cases.
There's been an increase of speculative funding by commercial investors, usually lawyers. They'll pursue a case for a claimant in return for an agreed share of any sum recovered. These cases are “no win, no fee”. There's a high risk of the costs going up. The funding is in the form of:
- speculative fee agreements (a written agreement about how fees are calculated if a case is won)
- damages based agreements (a fee calculated as a percentage of damages if a case is won)
The Bill is aimed at making more options available for people to fund their actions privately.
You can find out more in the Policy Memorandum document that explains the Bill.
The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill became an Act on 05 June 2018
Becomes an Act
The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill passed by a vote of 115 votes for, 0 against and 0 abstentions. It became an Act on 5 June 2018.
Introduced
The Scottish Government sends the Bill and related documents to the Parliament.
Related information from the Scottish Government on the Bill
Why the Bill is being proposed (Policy Memorandum)
Explanation of the Bill (Explanatory Notes)
How much the Bill is likely to cost (Financial Memorandum)
Opinions on whether the Parliament has the power to make the law (Statements on Legislative Competence)
Information on the powers the Bill gives the Scottish Government and others (Delegated Powers Memorandum)
Stage 1 - General principles
Committees examine the Bill. Then MSPs vote on whether it should continue to Stage 2.
Committees involved in this Bill
Lead committee: Justice Committee
Who examined the Bill
Each Bill is examined by a 'lead committee'. This is the committee that has the subject of the Bill in its remit.
It looks at everything to do with the Bill.
Other committees may look at certain parts of the Bill if it covers subjects they deal with.
Who spoke to the lead committee about the Bill

First meeting transcript
The Convener
Agenda item 4 is an evidence-taking session with the Scottish Government bill team for the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. I welcome Hamish Goodall, who is from the civil law and legal system division, and Greig Walker, who is a solicitor in the directorate for legal services.
I refer members to paper 2, which is a note by the clerk, and paper 3, which is a private paper, and I invite Hamish Goodall to make an opening statement.
Hamish Goodall (Scottish Government)
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.
10:15In 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.
The Convener
Thank you very much. It is helpful to have had that brief introduction.
Two of the recommendations implemented in the bill come from the Gill review’s report, which was published in September 2009, and the rest come from the Taylor review’s report, which was published in September 2013. Is there not a danger that the bill and those recommendations are already out of date?
Hamish Goodall
The proposals on auditors of court and group proceedings were not included in the Courts Reform (Scotland) Bill because that was already huge. There have been proposals on group proceedings in Scotland for many years. The Scottish Law Commission looked at group proceedings 20 years ago, I think, so the provision for them that is now being made is long overdue. It has simply been a case of finding the correct legislative vehicle to include those matters.
As far as Sheriff Principal Taylor’s review is concerned, there have been quite a lot of intervening pieces of legislation on the civil justice side, including the large Courts Reform (Scotland) Act 2014 and the Inquiries into Fatal Accidents and Sudden Deaths etc (Scotland) Act 2016, which you will remember, convener. It is not as if we have been doing nothing. Various pieces of legislation in the civil justice area have been introduced, and it is now the turn of Sheriff Principal Taylor’s review.
The Convener
I suppose that the question then is whether you have looked at that legislation and compared it with the recommendations to see whether something is out of kilter now that that new legislation and procedures are in place.
Hamish Goodall
Do you mean the courts reform legislation?
The Convener
I mean everything that has happened in civil litigation legislation since the reviews that might have impacted on their recommendations.
Hamish Goodall
Sheriff Principal Taylor’s review grew out of the Gill review. When the Gill review was on-going, it was realised that the issues of expenses and funding of civil litigation were too big to be dealt with in that review, which is why it was dealt with separately by Sheriff Principal Taylor. It was a conscious decision to take the two matters separately. It is completely separate from the courts reform agenda.
The Convener
I understand that, but I am asking about the recommendations that have been adopted in the bill, given that the law evolves over the years. What cognisance has been taken of the changes that have taken place during the interim period?
Hamish Goodall
The Government consulted on the proposals in 2015 and we have been meeting stakeholders since the beginning of the year, so we think that we are fairly well in tune with what stakeholders believe.
Greig Walker (Scottish Government)
I can give a concrete example of something that we have added that goes beyond the Taylor review. There is nothing in the Gill or Taylor reports about the auditor of the Sheriff Appeal Court, because that court did not exist at the time. The bill makes provision for the new office of auditor of that court, which has come in since the Courts Reform (Scotland) Act 2014. That illustrates the fact that we have looked at the Taylor and Gill reports critically in 2017 to come up with a bill that is fit for the justice landscape now.
The Convener
Thank you for that.
Providing access to justice is the bill’s main objective. What does the Scottish Government think that the practical effects of the bill will be on lawyers and the court system, particularly in view of the criticism that has been expressed that it could lead to a compensation culture?
Hamish Goodall
As far as lawyers are concerned, the bill will permit solicitors to offer damages-based agreements, which will increase competition among solicitors. As far as the court system is concerned, the advent of group proceedings should have a beneficial effect, because it will mean that, instead of a large number of similar cases being dealt with separately, it will be possible for them to be dealt with in one action—one set of group proceedings—and there should be economies for the court system in that.
The thrust of the bill is to provide more access to justice for people who have a claim and are concerned about what it will cost them from the point of view both of what they will have to pay their own lawyer and of what they might have to pay the other side if the other side wins and they lose.
The Convener
Other members have more in-depth questions. Liam McArthur has a supplementary.
Liam McArthur
Thanks, convener. I want to follow up on your point about the time that has elapsed between Sheriff Principal Taylor’s report and recommendations and the introduction of the bill, as well as your point about a compensation culture.
As I understand it, in making his recommendations, Sheriff Principal Taylor drew on figures from the Department for Work and Pensions that suggested that, between 2008 and 2011, the number of personal injury claims in Scotland rose by about 7 per cent, whereas south of the border the increase was around 23 per cent. However, between 2011 and 2016, the rise in the number of personal injury claims in Scotland more than doubled to 16 per cent, while the figure south of the border reduced to around 4 per cent. That does not suggest to me that there is an issue with access to justice in relation to personal injury claims; it suggests that the introduction south of the border of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 might have had a bearing on the number of personal injury claims that are made there. What assessment has the Scottish Government carried out of the impact that that legislation is having south of the border?
Hamish Goodall
The English system is completely different. We are implementing Sheriff Principal Taylor’s recommendations.
Liam McArthur
But you are doing so based on data that seems to me to be rather out of date.
Hamish Goodall
Sheriff Principal Taylor did not think that a compensation culture of the kind that he thought existed in England existed in Scotland.
In 2015-16, 8,766 personal injury actions were raised in Scotland. Only 99 of those received legal aid, so the vast majority of the rest of them must have been funded by some kind of success fee agreement. The bill will build on the popularity of the use of such funding mechanisms to enable people to take forward cases. Somebody who is not eligible for legal aid therefore needs some other means to take forward their case. Sheriff Principal Taylor thought that there was an excluded middle who are not eligible for legal aid and who might therefore not take forward—
Liam McArthur
You talked about success fees. The figures that I quoted earlier of a jump from a 7 per cent increase in the period 2008 to 2011 to a 16 per cent increase between 2011 and 2016 suggest that the system seems to be working relatively well, and there is a question as to whether we want to accelerate the increase by making further changes. I do not doubt that the evidence before Sheriff Principal Taylor did not point to the sort of compensation culture that appears to exist south of the border. I am saying that, since then, there has been a dramatic reduction in the rate of increase in cases south of the border but a doubling in the increase in the number of cases in Scotland. That begs the question whether the recommendations still stand and what assessment the Scottish Government has done of the relevance of those recommendations now rather than when they were made.
Hamish Goodall
As I say, we have spoken to various stakeholders. If there has been an increase in the number of claims, that has not really been raised with us, has it, Mr Walker?
Greig Walker
No.
John Finnie
Forgive me if I have picked you up wrongly, Mr Goodall, but I think that you said that 99 per cent of cases—
Hamish Goodall
No—
John Finnie
Sorry, it was 99 cases that were legally aided.
Hamish Goodall
Yes, it was 99 cases.
John Finnie
How do you describe the others?
Hamish Goodall
On the basis that very few people have the personal financial resources to finance a case, we assume that most of the other cases have been funded either by speculative fee agreements with solicitors or by damages-based agreements through claims management companies.
John Finnie
Does that not discount the significant role that trade unions and staff associations play?
Hamish Goodall
Yes, indeed. In some cases, people may have been assisted by trade unions.
John Finnie
Thank you.
Liam Kerr
In your answers to Mr McArthur and Mr Finnie, you said that Sheriff Principal Taylor “thought” that there was an excluded middle, that the cases “must have been” funded by a particular arrangement and that you “assume” that very few people can fund a case and so are running with speculative fee agreements or other agreements. Does it not concern you that you cannot say what the situation is or provide objective data on which you have based the proposed legislation?
Hamish Goodall
I may have used the wrong language. Those are the conclusions that Sheriff Principal Taylor came to in his review, which took two and half years.
Liam Kerr
But it was based on data from about 10 years ago.
Hamish Goodall
I assume that Sheriff Principal Taylor will give evidence to the committee, so—
The Convener
We should remember that we have the bill team in front of us today and that we will have the minister in to account for why he still thinks that it is good to go ahead with the bill. However, those are fair questions.
Is there anything that you would like to add, Mr Goodall?
Hamish Goodall
We have also produced a business and regulatory impact assessment for the bill.
The Convener
Okay. Thank you for that.
Why does the bill not regulate claims management companies?
Hamish Goodall
That is simply because the review of the regulation of legal services, which was announced in April, will consider the regulation of claims management companies.
The Convener
This might again be more of a policy issue, but perhaps you could provide some information on that. There is a real fear that, in the interim, there might be a displacement of claims companies to Scotland from England and Wales, where stricter regulations have been in place since 2007. I suppose that that builds into the claim culture fears. Did you consider including the issue in the bill?
Hamish Goodall
As I understand it, the review will report a year from now, and it will be followed by legislation. Therefore, if there is a gap, I hope that it will not be a very long one.
We have heard that concern, because, as you say, some of the English claims management companies are moving to do business in Scotland because of the stricter financial regime south of the border. They will still be subject to United Kingdom regulation. There may be a gap before legislation is introduced, but I think that it will be a short one.
10:30The Convener
I realise that that is as much as you can answer. The Government has had the opportunity for the 10 years since 2007 to move to a much more relaxed regime, but that is a policy matter.
My final question is on success fee agreements based on fee uplift. They are subject to general regulation under the bill’s provisions, when they appear to have been operating satisfactorily, according to the market, without regulation. Will you tell us the thinking behind that?
Hamish Goodall
That is correct. Speculative fee agreements have been in place for just over 20 years.
All that the bill does in relation to speculative fee agreements is to cap the success fee in the same way as the success fee for a damages-based agreement will be capped. Sheriff Principal Taylor devoted separate chapters in his review to speculative fee agreements and damages-based agreements. He came to the same conclusion on both: that the success fee should be capped so that the cost of civil litigation would become more predictable to the clients.
Rona Mackay (Strathkelvin and Bearsden) (SNP)
I want to follow up on what you said about the capping of success fee agreements. Can you give us more detail of when the full information will be available?
Hamish Goodall
As is set out in the policy memorandum, our current intention is that we will go with the levels of cap that Sheriff Principal Taylor recommended. Those caps will be set out in regulations that will follow the bill. The idea is that, if the caps are put into regulations, they can be amended up or down depending on experience.
Greig Walker
Those would be affirmative regulations, so the committee would have the opportunity to debate them.
Rona Mackay
Is there a risk that the bill might make it uneconomical for solicitors to offer some services on a no-win, no-fee basis? Would they back off from some cases?
Hamish Goodall
I am not sure why that would be the case. Under the provisions of the bill, in personal injury actions, the successful pursuer solicitor will be able to recover expenses from the losing side. They will also get the success fee, so they will get two payments.
Balanced against that, however, is the fact that they will be liable for all the outlays that are paid out in the course of the action. If they have taken the decision to engage counsel, for example, they will have to pay for that. If they have had to get an expert opinion, that will also have to be paid as part of the outlays.
We do not see that this is likely to make it less economical for solicitors. In fact, Sheriff Principal Taylor said in his review that he thought that they would still get a good return from raising such actions.
Rona Mackay
I am sure that they will.
The Convener
On the risk factor, one of the submissions pointed to the fees far outweighing the compensation and expenses. Would that not be the element of risk that a solicitor would have?
Hamish Goodall
The fees—
The Convener
What had been incurred in fees.
Hamish Goodall
We have raised that issue with various bodies. One of the comments was that the solicitor is the gatekeeper to the system of personal injury litigation. If his or her professional judgment is that they need to employ counsel or get an expert opinion, they will do that. If, at the end of the day, something strange goes wrong in the case and due to contributory negligence or perhaps because it is discovered that there is a pre-existing condition, the damages that are awarded are not what was expected, that is just the fortunes of war—as someone once said. One big firm said that it would simply absorb that loss. That is the professional risk.
The Convener
We will probably get into that further as we go on.
Rona Mackay
Do you think that damages-based agreements will become the norm if the bill is passed? Will there still be a role for other forms of success fee agreements?
Hamish Goodall
I suspect that damages-based agreements will become more and more popular because of their simplicity. Some firms of solicitors will undoubtedly have a business model in which they prefer to go with speculative fee agreements, based on fee uplifts, but that is a matter for them.
Rona Mackay
I want to move on to compensation for future loss and the fact that care costs, lost earnings and so on are obviously speculative. Should such compensation be entirely excluded from the success fee calculation, given the importance of the award to the pursuers?
Hamish Goodall
That is what has happened in England, but Sheriff Principal Taylor specifically rejected that view. Under the bill’s provisions, if the future element of damages is to be paid as a periodical payment order, it will automatically be excluded from the calculation of the success fee. If the future element of the damages is to be paid in a lump sum, Sheriff Principal Taylor has quite a lot to say on the matter. He thought that if the damages are under about £500,000 it is unlikely that they would be intended to include a future element. If the damages are above £500,000, under the provisions on the cap on success fees, only 2.5 per cent would be payable on that element of the award.
There are further safeguards in sections 6(5) and 6(6) when the future element is to be paid as a lump sum. If the money has been awarded by a court, the court must agree that it is awarded as a lump sum, rather than as periodical payments. If it is part of a settlement, the matter should be referred to an actuary.
Liam Kerr
I have a brief question. Do you consider that there might be a risk of inflation of court awards as a result of such funding arrangements? For example, if a court knows that X represents the appropriate level of damages, but also knows that 20 per cent will be taken away by the solicitor or representative, is there a risk that the court might overaward, so that the pursuer gets the full entitlement for their current and future loss?
Hamish Goodall
I do not think that that is a risk because, as I said, if the award is more than £500,000 the cap is 2.5 per cent. That is a very small proportion. The court will award damages based on the law of damages, not on the law of expenses.
Liam Kerr
However, the court will also know that a proportion of the appropriate damages will be taken off the pursuer. Is that not the case?
Hamish Goodall
I do not think that a court would consider that.
Greig Walker
As Hamish Goodall has said, the court is required to award damages based on the compensatory principle. As he has said, success fee agreements in one form or another are not new, so if that approach is a risk it is not a new one. I do not think that Sheriff Principal Taylor identified any evidence or likely risk that that would happen.
Rona Mackay
Just two brief questions are left for me. You mentioned a figure of £500,000. Do you envisage protection ever being expanded to above £500,000? Is that likely?
Hamish Goodall
We will be very interested to hear what evidence is given to the committee, particularly by Sheriff Principal Taylor. We are quite open to that option.
Greig Walker
The figures in section 6 can be amended by regulations in the years ahead.
Rona Mackay
The figure is not set in stone.
You mentioned an actuary. Who would pay for advice from an actuary?
Hamish Goodall
Sheriff Principal Taylor recommended that the solicitor would pay for an actuary, so that would be one of the outlays.
John Finnie
Mr Goodall, I do not know whether I can get used to QOCS at all, but when qualified, one-way cost shifting was introduced in England, it was accompanied by measures to discourage spurious claims. Is there any intention to have a similar arrangement in Scotland?
Hamish Goodall
We think that four factors will mitigate against spurious claims in Scotland. First, as Sheriff Principal Taylor pointed out in his review, it is not worth a solicitor running a case on a no-win, no-fee basis if there is not a good chance that they will win. If it is an unmeritorious case, they will not run with it because they will not get paid.
Secondly, as I mentioned, claims management companies are to be the subject of consideration by the review of regulation of legal services, so we suspect that they are likely to become regulated in the future and therefore there will be a provision that states that they should not run actions that have little chance of success.
The third factor is that a new compulsory pre-action protocol was introduced into the sheriff court last November for personal injury actions of less than £25,000. The effect of a pre-action protocol is that it front-loads the whole process, so it should become apparent at a very early stage if a case does not have merit.
The fourth and last factor is the provisions in section 8(4), which outline the circumstances in which the benefits of QOCS may be lost. It basically provides that that may happen if there is fraudulent or unreasonable behaviour that
“amounts to an abuse of process.”
John Finnie
I want to ask about the term “unreasonable”. One of the written submissions to the committee suggests that the level of unreasonableness that is described in subsection 8(4)(b) is less than the Wednesbury test of unreasonableness that was recommended by Sheriff Principal Taylor. Is that the case?
Hamish Goodall
We think that what is in the bill is tantamount to or analogous to the Wednesbury test. We have had a lot of discussions with stakeholders about the provision. You will perhaps not be surprised to hear that those who represent insurers think that the test is already too high and those who represent pursuers think that it is not high enough, so we therefore think that it is maybe about right. We certainly think that some clarification is needed around section 8(4). We will listen with interest to what witnesses say to the committee.
John Finnie
Thank you.
Has the Scottish Government considered limiting the benefit of QOCS to situations in which the defender is insured or a public body?
Hamish Goodall
I think that the Faculty of Advocates has given evidence on that. We can have a look at the matter and will listen to the evidence that the committee receives. It would be quite harsh if an uninsured person who did not have the benefit of having an insurance company behind them would not have the benefit of QOCS, but we can look at that in future.
10:45John Finnie
Other members have questions on this section, but I have a final question. Does the Scottish Government intend to implement the changes to the tender process that Sheriff Principal Taylor recommended?
Hamish Goodall
I will defer to my legal friend here on that, but I understand that most of the law of tendering is in common law and that what is not in that is in subordinate legislation and not in primary legislation, which is why it is not in the bill. Is that right?
Greig Walker
Yes, absolutely. The language is quite confusing, but a tender is really an offer in the course of proceedings to set up a formal offer. As Hamish Goodall said, it is largely common law, but it is possible for acts of sederunt—rules of court—to modify the process, which can be done by the Scottish Civil Justice Council. A recent example of that is pursuers’ offers, which were reintroduced to Scottish practice by act of sederunt. The general principle is therefore that changes to the tender process would be for rules.
Section 8(6) provides that QOCS is subject to any further fine details that might be in rules. Essentially, we are proposing the key policy things on unreasonable behaviour and fraudulent behaviour in section 8(4), which you mentioned, but the fine detail of interaction with other rules of court—and tenders in particular—would be in rules of court under section 8(6). I think that we might have put in the policy memorandum—it is certainly in the Scottish Parliament information centre briefing—that it is the cost and funding committee of the Scottish Civil Justice Council that is looking at this field.
The Convener
A number of members indicated that they had supplementaries. Liam McArthur is first, followed by Stewart Stevenson, then Liam Kerr.
Liam McArthur
I will follow up on John Finnie’s line of questioning and the safeguards that you have outlined, which return us to the point around the lack of regulations under the bill on claims management companies. However, I think that I heard Hamish Goodall suggest that he anticipates such regulations coming through from the review that is under way. To me, that rather suggests that there is recognition that that sort of regulation is needed, which begs the question why, given the time that has elapsed since Sheriff Principal Taylor’s report, steps were not taken to include the regulations in the bill. Provisions of that nature could have gone out for consultation, as appropriate, and could have been included in the bill. Is that not a reasonable conclusion to draw from what you have said?
Hamish Goodall
The starting point is that Sheriff Principal Taylor did not think at the time of his review that the claims management companies in Scotland caused a difficulty. However, the reason why regulations are not in the bill is that the matter is being considered. The range of regulation of legal services in Scotland is being considered in the review that is being taken forward by Esther Roberton. It seems more appropriate that they are considered in that context.
The Convener
I remind Liam McArthur that that matter is probably a policy decision for the minister.
Liam McArthur
I appreciate that comment, convener. We might need to come back to that with the minister, because early indication of the Government’s likely intentions in that area might stave off some of the concerns that have been coming through in the written submissions. However, I appreciate that that is not something for officials to address.
Again, earlier on Mr Goodall was talking about—
The Convener
We are actually on the section on QOCS.
Liam McArthur
Yes. Mr Goodall, I think that you said that the number or proportion of cases where defenders would pursue the pursuer for legal costs was a fraction of 1 per cent.
Hamish Goodall
Yes.
Liam McArthur
Does that not open up the question as to why there seemed to be a problem that needs to be addressed? If those are the figures and there is a disincentive to pursuing a valid case or claim, there does not seem to be evidence to suggest that someone would hold off making a claim because of a threat that they would be pursued for the defender’s legal costs.
Hamish Goodall
But the pursuer might not know that.
Liam McArthur
But the claims management companies would, and the solicitors who act in this area would certainly know those figures or have a general sense of them.
Hamish Goodall
QOCS has been in place in England and Wales for some time, hence Sheriff Principal Taylor’s recommendation that we should also have it in Scotland.
Liam McArthur
Finally, in relation to the financial memorandum and the safeguards running alongside QOCS, you were talking about the unlikelihood of vexatious speculative cases being brought and the likelihood that, if they were brought, they would be triaged out at an early stage. I note that paragraph 59 of the financial memorandum says:
“Defenders will have to balance the cost of going to court with the risk of losing a case. For example, if expenses in a case exceed the expected payout, insurers may settle rather than go to court even if they consider it likely that they will be successful in the case.”
That seems to go against what you have said and it goes against what is set out in paragraph 60, which is that
“Pursuers are unlikely to raise actions with little prospect of success and the Bill provides protections for defenders where the pursuers have acted inappropriately.”
I am finding it difficult to square those two statements, which are right next to each other in the financial memorandum.
Hamish Goodall
Sorry, which paragraphs?
Liam McArthur
I am talking about paragraphs 59 and 60 in the financial memorandum. The memorandum does not quantify the likely number of cases where defenders may just decide to pay out, but it suggests that there is a recognition that a risk certainly exists and that even where defenders are confident that they would be successful in the case, they will choose to pay out rather than to go through a court process.
Hamish Goodall
This may be a matter that you would really need to raise with—
Liam McArthur
The minister.
Hamish Goodall
Not only the minister; I am sure that you will be taking evidence from representatives of pursuers and defenders, so you can see what they say.
Liam McArthur
I take that point, although this is the Government’s financial memorandum for its bill so, in a sense, it is the Government that is stating this, rather than those acting for either pursuers or defenders.
Greig Walker
The only point that I would add is that there are weak cases, there are very strong cases and there are the ones in the middle. Perhaps that is how paragraph 59 is to be read—it is not about defenders feeling boxed in to settling what they think are very weak cases; it is about the ones in the middle.
Stewart Stevenson
Where is the definition of “personal injury”? I do not see it in the bill so I assume that it is elsewhere.
Greig Walker
It is in the bill. I will find it if you give me a second. It is in section 6(9).
Stewart Stevenson
If it is there, that is fine.
Greig Walker
I think that we have put in the explanatory notes that it is the same definition that applies to the personal injury court. We are not creating a new definition.
Stewart Stevenson
Okay. We will move on to something a bit more substantial. The assumption is that QOCS is about rebalancing power between a well-endowed defender and a relatively impoverished pursuer. Let me just posit an example.
There is a cyclist in a cycle lane; up against the left of the cycle lane is a wall. A Rolls-Royce draws up; the passenger, who is a half billionaire, opens the rear door into the path of the cyclist. The cyclist has no option but to hit the door and, in the process, to injure the half billionaire. The cyclist is a professional person, aged 55, with a house in Edinburgh that is worth £750,000. They have not paid off their mortgage. They are running down their career, so they are working part time. They have an income of £40,000 a year. They are in that middle ground.
Each person, it would seem, might have a case against the other. There might be two cases, because the multimillionaire might have experienced permanent physical damage as a result of the cyclist hitting them and the cyclist might also have experienced such damage from the door. Do they each have the ability to benefit from QOCS, given that the multimillionaire has, for legal purposes, unlimited resources to pursue the case and recover their legal costs if and when, which they might do, and given that the cyclist is uninsured?
Hamish Goodall
Who is the pursuer?
Stewart Stevenson
They both are. There are two cases. The cyclist is suing the multimillionaire for opening the door and injuring him; the multimillionaire is suing the cyclist—
Hamish Goodall
So it is a counterclaim.
Stewart Stevenson
—because the design of the cycle created particular injuries of the multimillionaire that were not reasonable.
Hamish Goodall
Well, it sounds like a rather fanciful example. However, as the bill is drafted, the pursuer would have the benefit of QOCS unless they had behaved inappropriately.
Stewart Stevenson
That is, if their behaviour had been fraudulent, unreasonable or an abuse of court. However, I assume that that would not apply to both claims.
Greig Walker
That would depend on the facts and circumstances. It is very difficult for us to address such a detailed scenario.
Stewart Stevenson
I am making a general point. Let us not labour it, as we are looking at the construction of the bill. The general point is that the assumption that the defender will be the wealthy one and the pursuer will be the impoverished one is surely not sustainable in all circumstances, as the opposite may be true. Is that a fair comment and something that you have considered in constructing the bill?
The Convener
Would the pursuer who brought the first claim be the only beneficiary of QOCS or would the person who brought the counterclaim have the same rights?
Greig Walker
The narrow point about a rich pursuer and a poor defender is linked to the point that has been made about whether the bill team is going to consider the application of QOCS to uninsured persons, and the answer is yes. As I said earlier, the fine detail can be left to rules of court. However, if the committee believes that the finest detail needs to be included in the bill, we will consider that.
Stewart Stevenson
Let me close the discussion off without going too far. Are you saying that it is reasonable for us to consider that that particular kind of case could be dealt with under rules of court?
Greig Walker
Absolutely. In that sort of case, there will be detailed counterclaims and so on, whereas we are legislating for the standard case involving a pursuer and a defender.
Stewart Stevenson
I may have made the scenario more complex than I should have. The basic point is that there could be a case in which there is a wealthy pursuer and a defender who is impoverished and uninsured but asset rich and therefore worth pursuing.
Greig Walker
That is on the officials’ radar.
Stewart Stevenson
They might be income poor and uninsured but asset rich.
Hamish Goodall
Yes. The Faculty of Advocates has raised the point that the defender might be uninsured and might not be a public body. We can consider—
Stewart Stevenson
The bottom line is that there is a way forward in the legislative process in the round, not just in the bill, that deals with that situation.
Greig Walker
Yes.
The Convener
Stewart Stevenson makes a good point. As always when we are scrutinising legislation, it is not totally satisfactory that so many questions are left to guidelines and so on.
Hamish Goodall
Yes. Some bad cases make bad law.
The Convener
Yes.
Liam Kerr
I have a brief question for Mr Goodall. You said that there are four reasons why there will not be a rise in the number of unmeritorious claims, the first of which is that the solicitor operating under a no-win, no-fee agreement would have no incentive to pursue an unmeritorious claim because they would be unlikely to get paid at the end of the process. That stacks up—I accept the point—but would it not be open to a no-win, no-fee solicitor to insure against that loss so that they would get paid anyway?
Greig Walker
You can put such questions to the representatives who come before you. None of the claims management companies—or funding companies, as they are sometimes described—works in exactly the same way. They are private business arrangements and the full details have not been given to us because they are commercially confidential, but you can ask such questions of the other witnesses.
Liam Kerr
That may be more appropriate, but it feels as though the bill ought to have taken account of that. The point was made that there could well be a rise in the number of unmeritorious claims, and I suggest that such a funding arrangement, which already exists, means that the reason that Mr Goodall gave for there being no increase in the number of unmeritorious claims might not be entirely valid.
11:00Hamish Goodall
Professional ethics come into play here, quite apart from the economic arguments. Solicitors are bound by their professional rules—I do not know exactly what the professional rules would say about that.
Greig Walker
One possible impact of the bill is that firms that have a claims management company or funding company will feel that they no longer need it, because they can fold all those activities within the firm, which is under Law Society regulation. The Law Society can always promulgate new practice notes and guidelines, as no-win, no-fee agreements become more of a thing in Scotland.
Liam Kerr
Okay, but that suggests a need for more stuff after the event, as Mr Stevenson proposed.
I might have missed this in the papers. What estimates have been made or modelling done of the impact of the bill on the number of claims?
Hamish Goodall
It is impossible to estimate that. We simply do not know. Those who wish to offer their services under success fee agreements might have an estimate, but it is impossible to say.
Liam Kerr
You are saying that we do not know the impact of the bill on the number of claims. No modelling has been done.
Hamish Goodall
No. We cannot know how many claims there might be.
Greig Walker
The best estimates are in the financial memorandum.
Liam Kerr
Thank you.
Mary Fee (West Scotland) (Lab)
I want to ask about third-party funding. In England, a market is emerging in which investors with no direct interest fund claims in return for a share of the compensation. Sheriff Principal Taylor argued that that should be an additional option.
The bill will enable a third-party funder with a financial interest in the outcome of the proceedings to be found liable for the winner’s expenses if the case is lost. The policy memorandum refers to “commercial third party funders” being caught by the provision, and the financial memorandum suggests that claims management companies that operate no-win, no-fee arrangements could be caught. Some evidence that we received suggests that trade unions could also be caught by the provision, as could insurers or solicitors who pay an initial fee to get a claim going. Will you clarify the situation?
Hamish Goodall
Certainly. Section 10, “Third party funding of civil litigation”, is intended to catch only commercial third-party funders. It is not intended to catch trade unions or trade associations. We are aware that there has been some confusion about whether section 10 should apply to lawyers. We intend to clarify section 10 to make it clear that what it is about is completely separate from qualified one-way costs shifting. Sections 8 and 10 are completely separate.
Mary Fee
It will be made clear that only commercial organisations, and no one else, will be liable.
Hamish Goodall
Yes.
Mary Fee
Does the bill conflate the two separate Taylor recommendations on liability for expenses and transparency of funding arrangements? Will you explain how qualified one-way costs shifting and third-party funding will sit together?
Hamish Goodall
We intend to amend section 10 to separate the two issues—disclosure and liability for expenses—to make that clear. As I said, the provisions on third-party funding are intended to catch only commercial third-party funders and not lawyers under success fee agreements. We need to clarify that.
Mary Fee
That is helpful, thank you.
Liam Kerr
There is a proposal to change the employment status of the auditors of the courts. Why does the Scottish Government consider that having the auditors employed by the Scottish Courts and Tribunals Service is a better guarantor of independence than the self-employment model?
Hamish Goodall
The auditor of the Court of Session was salaried until 1997 or 1998, when the arrangements were changed. The proposal in the bill is for the auditor of the Court of Session and all other auditors to become salaried members of staff of the Scottish Courts and Tribunals Service; the Gill review recommended that the auditors all become salaried officials, and that is basically what the bill will do.
The argument with regard to self-employment of the auditor of the Court of Session relates to his independence. We think that, even if in future the auditor of the Court of Session were to become a member of the SCTS staff, there is no question that he or she would be independent. First of all, following the Judiciary and Courts (Scotland) Act 2008, the SCTS is completely independent of the Scottish Government. As a result, the question of independence would arise only in relation to cases that involved the SCTS itself. We understand that it is involved in only one or two cases per annum, and of course, such cases need not necessarily have to go through the taxation of accounts process.
There is precedent for members of staff of bodies taking decisions that affect those bodies. For example, although planning reporters are employed by the Scottish Government, they take decisions all the time that affect the Government. There is also legal precedent with regard to independence.
Did you want to say something about that, Mr Walker?
Greig Walker
The other relevant precedent is that all the other officers of court—the clerks, the macers and so on—are employed by the SCTS at arm’s length from the Scottish Government. As employees, they are all subject to the freedom of information, ethical standards, data protection and complaints procedures that are standard for civil servants. The fact that they are also officers in the Scottish Administration brings in another layer of governance, including the requirement for funds to be paid into the consolidated fund, which is ultimately the Parliament’s money.
We begin to amplify our legal position on this matter in paragraphs 58 and 59 of the policy memorandum by making it clear that the aim
“is to increase transparency and consistency”—
indeed, Lord Gill identified some concerns in that respect that persist to this day—
“whilst preserving the fair and adversarial character and integrity of the ... process.”
There is therefore no intention to depart from the rules of natural justice that we have currently. We also recognise that
“Auditors ... perform important functions in resolving disputes about expenses in which considerable amounts of money may be at stake.”
From time to time, the amount of money involved in expenses is more than the sum in dispute.
We set out the key legal arguments towards the end of the policy memorandum in paragraphs 108 to 110, in which we recognise that not only common law and natural justice but article 6 of the European convention on human rights apply to auditing disputes where the principal dispute—say, about damages—engages that article. We have set out in those paragraphs the European and Scottish case law that makes us really quite confident that independence can continue to be secured—and be seen to be secured—under the bill’s arrangements.
Ultimately, it is a policy matter for the minister, but we think that abandoning all the reforms and leaving these people self-employed outside the Scottish Administration in order to address the tiny number of cases in which the SCTS is a party to a taxation would be a departure from the Gill recommendation.
Liam Kerr
Paragraph 70 of the policy memorandum says that
“transitional arrangements”
will enable current auditors
“to continue as self-employed until their retirement.”
Do you have any details of the transitional arrangements that you intend to put in place for current sheriff court auditors?
Hamish Goodall
Basically, they will continue in place for the time being until such time as the SCTS has sufficient numbers of trained auditors to be able to do all the work. Of course, it will be open to existing sheriff court auditors to apply for posts in the SCTS and then move over and work for it.
Liam Kerr
You say “basically”. Is that set down anywhere? Is there anywhere people can look to get that clarity?
Hamish Goodall
Sorry, but what clarity?
Liam Kerr
How can people assure themselves about what you have just said? Is that written down?
Hamish Goodall
It will be provided for in transitional arrangements that are made under section 19.
Greig Walker
It will be under regulations. One of the quirks of the existing system of auditors is that it does not have much of a statutory basis. Sheriff court auditors get commissions from the sheriffs principal, and those are relevant to only one sheriffdom. I am afraid that we cannot point you to any legislation for that arrangement, which is based on custom and practice. The aim in the bill is to produce a new, modern, future-proof and transparent regime.
In the particular case of the auditor of the Court of Session, under section 26 of the Administration of Justice (Scotland) Act 1933 he has the right to stay in office until he is 65. We propose to honour that, so the transitional arrangement for the auditor of the Court of Session is that he enjoys his current statutory rights and the new system will not come in unless or until he retires or resigns.
Ben Macpherson (Edinburgh Northern and Leith) (SNP)
I want to focus on part 4, which is on group proceedings. As you know, the bill does not give any detail about how group proceedings should operate and instead gives the Court of Session the power to make the rules covering the issue, and the Scottish Civil Justice Council will consult stakeholders on how to develop those rules. It is also notable that the bill requires people to opt into any proceedings. Given that some countries allow an opt-out procedure, will you explain why the Scottish Government excluded the possibility of developing an opt-out procedure in the bill?
Hamish Goodall
In the discussions that we have had with stakeholders since the beginning of this year, all of them have favoured the opt-in procedure, because it is thought to be much more straightforward. As this will be the first time that group proceedings have been permitted in Scotland, we thought that we should go for a more straightforward model.
The opt-out procedure would be much more complicated because the court would have to decide what the group was going to be and define its boundaries. Inevitably, that would mean that some people would be included in the group who actually had not taken any decision and who might be completely ignorant of the fact that they were part of group proceedings. It seems much fairer to require people to opt in. As I said, all the stakeholders we have spoken to this year agreed with that view.
Greig Walker
The Scottish Law Commission did detailed work on the issue in the 1990s, the culmination of which was a draft set of court rules that provided for an opt-in procedure.
Ben Macpherson
So it is purely a practical issue. I can think of a group of people in my constituency who are interested in the bill and they would certainly want to opt in. It is interesting to get that clarity.
Are there any plans to revisit the issue, or are we on the course of an opt-in procedure?
Hamish Goodall
We should never say never, but the intention is that the opt-in procedure will be bedded in and allowed to operate for a few years before any consideration is given to trying the other system.
Ben Macpherson
I have a number of other practical points on part 4. How does the Scottish Government expect group proceedings to be funded?
Hamish Goodall
Group proceedings could be funded under success fee agreements, or they could be legally aided, although we think that the regulations will need to be amended.
Ben Macpherson
Do you mean the legal aid regulations?
Hamish Goodall
Yes.
Ben Macpherson
Has the Scottish Government considered issues such as how an adverse award of expenses might be enforced against a group and how disputes about the distribution of compensation between group members might be dealt with?
Hamish Goodall
Those are all issues for rules of court, although some of them might be considered in the document that sets up the scheme for the group proceedings. There would be something in that agreement between the parties about how the damages will be distributed.
Ben Macpherson
So, in effect, it will be down to private decisions between the parties who are involved.
Hamish Goodall
Yes.
Ben Macpherson
Thank you for that insight.
The Convener
That concludes our questioning. It has been a helpful and detailed session, and I hope that our witnesses found it helpful as well.
We now move into private session. Our next meeting will be on Tuesday 12 September 2017.
11:15 Meeting continued in private until 12:31.5 September 2017

5 September 2017

19 September 2017

26 September 2017

31 October 2017

14 November 2017

21 November 2017
What is secondary legislation?
Secondary legislation is sometimes called 'subordinate' or 'delegated' legislation. It can be used to:
- bring a section or sections of a law that’s already been passed, into force
- give details of how a law will be applied
- make changes to the law without a new Act having to be passed
An Act is a Bill that’s been approved by Parliament and given Royal Assent (formally approved).
Delegated Powers and Law Reform committee
This committee looks at the powers of this Bill to allow the Scottish Government or others to create 'secondary legislation' or regulations.
It met to discuss the Bill in public on:
12 September 2017:
23 January 2018:
Read the Stage 1 report by the Delegated Powers and Law Reform committee published on 9th November 2017.
Debate on the Bill
A debate for MSPs to discuss what the Bill aims to do and how it'll do it.

Stage 1 debate on the Bill transcript
The Presiding Officer (Ken Macintosh)
The next item of business is a debate on motion S5M-09894, in the name of Annabelle Ewing, on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill.
14:24The Minister for Community Safety and Legal Affairs (Annabelle Ewing)
I am pleased to open the stage 1 debate on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. I thank all the members of the Justice Committee for their careful consideration of the bill thus far. I also thank the very hard-working clerks on the Justice Committee and the many stakeholders who contributed to the proceedings.
Above all, I express my sincere thanks to Sheriff Principal Taylor for his diligent and thorough review, which lasted more than two years, of the issues to do with the expense and funding of civil litigation in Scotland. Sheriff Principal Taylor was kind enough to give very comprehensive evidence to the committee in spite of on-going health problems. I am sure that we all wish him well.
The context of the review was a 41 per cent decrease in civil litigation in Scotland since 2008-09. We know that, further to the review, the potential costs involved in civil court action can deter many people from pursuing legal action even where they have a meritorious claim.
When the bill was introduced, Sheriff Principal Taylor said:
“The proposals address some concerns which may cause people not to exercise their legal rights and ultimately their right to go to court. The fear of having to pay their own solicitor and also the legal costs of their opponents can be a significant deterrent. This Bill provides for the setting of a straightforward formula, in personal injury and other civil cases, to enable a client to work out what his or her own lawyers can charge. It also removes the risk of having to pay their opponent’s costs in personal injury cases, provided they have acted properly.”
Those contemplating civil litigation need to have more certainty about how they will be able to afford to exercise their rights, and the provisions contained in the bill will make the cost of civil litigation in Scotland more predictable and hence increase access to justice.
The three major reforms proposed in the bill that will bring that about are the introduction of sliding caps on success fees, allowing solicitors to offer damages-based agreements, and qualified one-way costs shifting.
The first proposed reform—the introduction of sliding caps on success fees—has been generally welcomed and, when the time comes to provide the caps in regulations to be made under the bill, I confirm that I am minded to set the levels at those suggested by Sheriff Principal Taylor in his report—that is, up to 20 per cent on the first £100,000, up to 10 per cent on the next £400,000 and up to 2.5 per cent on any amount more than £500,000.
The second major reform proposed will widen the availability of damages-based agreements by allowing solicitors to offer them directly. Currently, damages-based agreements are not enforceable by solicitors but are offered through claims management companies. They have proven to be very popular for those contemplating pursuing a claim, as they are simple to understand. Basically, the client pays nothing up front, but agrees to pay a percentage of the damages awarded, or agreed, to the provider of the legal services. The solicitor will be responsible for all outlays in personal injury actions, such as court fees.
Sheriff Principal Taylor stated in his evidence that one solicitor-owned claims management company has entered into 17,600 new damages-based agreements in the past three years and 23,800 such agreements in the past five years. This, he argued, goes some way towards explaining the rise in the number of claims in Scotland over the past five years, about which some giving evidence to the committee have expressed concern. The Government considers that the enforcement of legal rights by individuals is something to encourage.
While on the subject of claims management companies, I will mention the concern that has been expressed that the bill does not make provision for their regulation. We have, however, been in discussions with the United Kingdom Government about the extension to Scotland of the regulation of claims management companies by the Financial Conduct Authority, as proposed in the Westminster Financial Guidance and Claims Bill. I am pleased to say that appropriate amendments were accepted during the bill’s third reading in the House of Lords. Claims management companies will therefore be regulated in Scotland more quickly than would have been the case through our initial approach, which would have involved relying exclusively on the work of the Esther Robertson review of legal services regulation. However, at this stage, I cannot give a definite date when the Westminster legislation will be implemented.
The third major proposed reform is the introduction of qualified one-way costs shifting in personal injury cases. The vast majority of defenders in personal injury actions are well resourced and the majority of pursuers are of comparatively limited means. Although very few claimants are pursued for expenses by successful defenders, there is always a risk to a pursuer that they would be liable for considerable expenses and could face bankruptcy if they lose. Sheriff Principal Taylor’s review confirmed that there is real fear of that in the minds of potential pursuers, which stops too many meritorious claims from getting off the ground. Qualified one-way costs shifting removes that risk, so long as the pursuer and his or her legal team conduct the case appropriately.
The tests by which the benefit of qualified one-way costs shifting can be lost by pursuers due to their behaviour have been the subject of varying views from witnesses before the committee. Broadly, representatives of insurers have suggested that the bar is too high, while representatives of claimant groups have suggested that it is too low. We are therefore considering amendments at stage 2 to make it clearer that the Wednesbury test of reasonableness recommended by Sheriff Principal Taylor is to be applied to determine whether the benefit of qualified one-way costs shifting might be lost.
The bill also makes provision for the potential payment of expenses by third-party funders, which is intended to ensure that venture capitalists, whose only interest in a case is commercial, will be subject to adverse awards of expenses. There have been concerns that awards of expenses will be made against trade unions and providers of success fee agreements. That is not the Government’s intention; indeed, as trade unions have no financial interest in the proceedings, they will not, as the bill is drafted, be subject to such awards. We will, however, consider amendments at stage 2 to make it clear that trade unions and providers of success fee agreements will not be liable for expenses. Moreover, Sheriff Principal Taylor recommended that all funding of litigation be disclosed, and amendments will be considered to broaden the requirement for disclosure.
Part 3 of the bill relates to auditors of court, who determine a successful party’s expenses in litigation by order of the court or where there is a dispute with their opponent—a process referred to as taxation. The Scottish civil courts review, headed by the former Lord President, Lord Gill, expressed concern that the auditor of the Court of Session and the sheriff court auditors were able to make private profit out of a public office that provides a public service. The bill’s provisions will remedy that situation by providing that auditors will, in future, be employees of the Scottish Courts and Tribunals Service. Auditors of court who are currently self-employed will remain so until they retire, if they so wish; however, in future, auditors will be appointed under the same civil service rules that apply to the appointment of other officers of court.
Auditors will continue to have functional independence as part of the Scottish Courts and Tribunals Service and the auditing process will continue as it has in the past. As part of the service, auditors will be independent of the Scottish ministers in the same way as the rest of the service, which is an independent body corporate under the Judiciary and Courts (Scotland) Act 2008. Provision for an annual report on the activities of court auditors will make the system of taxation of judicial accounts more transparent.
Finally, I want to say a word about group proceedings. I am pleased that the proposal to introduce class actions to the Scottish courts has broad support. I am convinced that the best way forward at this time is to introduce an opt-in system, as it is prudent when introducing a new procedure in the Scottish courts to select the option that will be more straightforward to implement and will therefore not cause undue delay in getting the procedure off the ground. Opting in means that individuals must have explicitly chosen to be part of the group, having weighed up the benefits and possible disbenefits of doing so. The approach has been supported by an overwhelming majority of stakeholders, including the Faculty of Advocates, the Law Society of Scotland, the Scottish Trades Union Congress, the Association of Personal Injury Lawyers and the Forum of Insurance Lawyers. Of course, we have not ruled out considering an opt-out procedure at a later date, once group proceedings have bedded in.
In summary, the bill seeks to put in statute approximately half of the recommendations in Sheriff Principal Taylor’s review. Some of his recommendations, for example on sanction for counsel, have already been implemented in the Courts Reform (Scotland) Act 2014, while the remainder will be considered for potential rules of court by the Scottish Civil Justice Council.
As I have mentioned, the civil justice statistics for Scotland show an overall—and continuing—decrease in civil litigation in Scotland of no less than 41 per cent since 2008-09. That should be a source of concern for all those who care about the provision of access to justice in Scotland and, indeed, the health of our Scots civil law jurisdiction. The bill will therefore implement Sheriff Principal Taylor’s major recommendations to begin to address this situation by making the cost of going to court more affordable, more predictable and more equitable.
I move,
That the Parliament agrees to the general principles of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill.
14:34Margaret Mitchell (Central Scotland) (Con)
I am pleased to speak on behalf of the Justice Committee in this stage 1 debate on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. I begin by thanking all the witnesses who provided evidence to the committee. I also thank the Delegated Powers and Law Reform Committee for its report, which we endorsed. I pay particular tribute to the Justice Committee clerks, who have done a superb job in producing the stage 1 report on what is a technical and complicated bill.
By changing the rules on how people can fund their claim and the costs that they could be liable to pay the other side, the bill will directly affect many thousands of people in Scotland who bring a civil claim. The bill’s principal policy objective is to improve access to justice. The committee considers that, on balance and despite conflicting evidence, there are problems with access to justice in respect of civil litigation. However, it also considers that more up-to-date research on the consumer experience of legal services in Scotland is required in order to properly inform future policy.
I turn to the detail of the bill. The bill will regulate success fee agreements, which are often known as no-win, no-fee agreements. For the first time, solicitors in Scotland will be allowed to enforce damages-based agreements where the solicitor receives a percentage of the compensation awarded to their client if the case is won. One of the committee’s key concerns relates to the approach that the bill takes to damages for future loss in personal injury cases. For example, damages can cover lost earnings while an injured person is off work recovering. In more serious personal injury cases, damages can cover the loss of all future earnings, as well as care and medical costs. The bill will allow a solicitor to include damages for future loss when calculating their success fee, subject to certain conditions. Here, the bill implements Sheriff Principal Taylor’s considered recommendations, but the committee remains concerned that the failure to ring fence damages for future loss could reduce the money available to a person to pay for their future care and medical support. The committee therefore asks the Scottish Government to reconsider that approach.
The bill will also introduce qualified one-way costs shifting, known as QOCS. That means that, provided that the pursuer has acted appropriately, they will not be liable for the defender’s expenses if they lose their case. Committee witnesses had starkly opposing views on the introduction of QOCS. Pursuers’ representatives argued that QOCS is necessary to redress the David and Goliath relationship between pursuers, who tend to be individuals with little experience of the legal system, and defenders, who tend to be insurance bodies. However, representatives of defenders and insurers argued that QOCS could have adverse unintended consequences and could facilitate a compensation culture in Scotland.
The committee was persuaded that QOCS could improve access to justice for pursuers, but it considered that that must be balanced by other safeguards to prevent any rise in fraudulent claims—for example, through the introduction of pre-action protocols in certain cases to safeguard against fraudulent claims without adversely affecting access to justice. Crucially, the committee asked the Government to commit to post-legislative scrutiny of the bill.
The regulation of claims management companies is a vital safeguard against any rise in fraudulent claims. Regulation was introduced in England and Wales in 2007, but there is no regulation of claims management companies in Scotland. Witnesses spoke about the negative impact of the practices of some claims management companies on Scottish consumers, particularly as a result of cold calling, which Sheriff Principal Taylor stated was
“the biggest mischief of claims management companies.”—[Official Report, Justice Committee, 31 October 2017; c 15.]
In addition, research from Which? reveals that Scottish cities suffer the highest number of nuisance calls in the UK.
The UK Financial Guidance and Claims Bill, which will strengthen the regime in England and Wales by transferring responsibility for regulation to the Financial Conduct Authority, was being considered at the same time that the committee was considering the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. Following correspondence between the committee and the Minister for Community Safety and Legal Affairs, the UK bill has been amended to extend regulation by the FCA to claims management companies in Scotland. Nonetheless, there remains a potential regulatory gap that could have detrimental consequences for Scottish consumers if the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill is implemented before such FCA regulation is in place. The committee therefore recommends that the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill should not be implemented until claims management companies in Scotland are regulated.
The bill allows group proceedings or multiparty actions to be brought in Scotland for the first time. Although that is welcome, to improve access to justice, the bill allows group proceedings to be brought only on an opt-in basis—that is, a person must expressly consent to being part of the action. In an opt-out system, the court agrees the definition of those affected, and anyone who is covered is deemed to have consented to court action on their behalf unless they expressly opt out.
The committee recognises the Government’s pragmatic reasons for starting with an opt-in approach. However, given the strong evidence from Which? on the benefits of an opt-out approach for low-value consumer claims, the committee considers that there could be advantages in the court deciding whether proceedings are to be opt in or opt out.
So far, the minister has made no commitment to post-legislative scrutiny, to commissioning more consumer research, to changing policy on future damages, QOCS and uninsured defenders, to delaying the bill’s implementation until the claims management companies are regulated, and to amending the bill to ensure that only regulated bodies can offer success fee agreements. Although the committee unanimously agrees with the general principles of the bill, it asks the Scottish Government to give serious consideration to the above recommendations to ensure that access to justice is improved and unintended consequences are avoided.
14:41Liam Kerr (North East Scotland) (Con)
At the outset, I declare an interest: I am a practising litigation solicitor and hold practising certificates with the Law Society of Scotland and the Law Society of England and Wales.
I am pleased to open for the Scottish Conservatives and to speak in favour of the principles of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. The Scottish Conservatives are committed to the principle of access to justice. Anything that ensures that those who have rights are better able to avail themselves of those rights must be a good thing.
In the 2013 Taylor review, Sheriff Principal Taylor concluded that there would often be a David and Goliath relationship that prejudiced the attractiveness and prospects of litigation for those with rights. He made 85 recommendations on funding civil litigation in Scotland, and the bill seeks to introduce some of them.
However, there are a number of areas in which the bill can be improved. First, like the Justice Committee, I am concerned about the lack of ring fencing for future loss and the consequent potential for award erosion. Under the bill as drafted, compensation that is intended to pay for the care of a seriously injured litigant will be reduced by a cut going to their solicitor. That could lead to injured parties being undercompensated and not receiving the full value of the damages that a court awards. We should bear in mind the fact that future losses are an assessment of what might be required to pay for future care needs. It could also lead to courts overcompensating claimants by increasing the damages award to negate that carve-out, or the statement of valuation of claim could perhaps be inflated to offset the deduction.
Many have expressed their concern over those points, including the Forum of Insurance Lawyers, which argued that
“To apply a crude percentage deduction from such huge sums could result in an enormous windfall for the solicitor and a funding gap (and significant anxiety) for the injured pursuer.”
I therefore agree with the Justice Committee’s recommendation that the future loss part of any award should be ring fenced and, notwithstanding the Scottish Government’s response to the stage 1 report, I urge further consideration of the matter.
The second question that merits further reflection is whether there are sufficient safeguards in place around QOCS to prevent a rise in unmeritorious and/or fraudulent claims. Some evidence suggests that, in Scotland, the number of personal injury claims has risen significantly during the past seven years, without QOCS. Logically, removing the financial risk in raising a claim will result in a further increase as access to justice is increased. By extension, there will, of course, be a rise in the number of fraudulent or unmeritorious claims. As drafted, the bill does not sufficiently define the circumstances in which a pursuer will lose QOCS protection. We therefore support the proposal from Sheriff Principal Taylor and the Justice Committee that section 8(4) should make it clear that the benefit of QOCS would be lost in fraudulent situations when the pursuer fails to beat a tender and when a pursuer’s claim is summarily dismissed.
I welcome the amendments to the Financial Guidance and Claims Bill, which will provide for the regulation of claims management companies in Scotland. That is a sensible move that will provide Scottish consumers with the same level of protection against nuisance calls that consumers in other of the UK receive.
However, reasonable concern has been raised that if the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill comes into force before UK-wide regulation is in place, there will be a regulatory gap, whereby there are no rules governing the activities of claims management companies in Scotland. According to Which?, that could lead to more claims management companies registering in Scotland, leading to even more nuisance calls for Scottish consumers and leaving Scottish consumers open to harmful practices by rogue firms. I hope that the Justice Committee’s recommendation that the bill should not be brought into force until UK-wide regulation of claims management companies is in place is looked upon favourably at stage 2.
Finally, I am concerned at the lack of detail in the financial memorandum on the cost implications for public bodies—in particular, the national health service. NHS Greater Glasgow and Clyde argues that a more comprehensive analysis of future costs is “essential” to quantify the financial impact. The Medical and Dental Defence Union of Scotland argues that QOCS, if introduced, will mean that NHS resources will be taken up in defending unsuccessful claims, rather than spent on delivering services to patients.
The purpose of the financial memorandum is to assess the financial implications for public bodies. It is surely possible to calculate the total number of claims made against public bodies and then to calculate the increased cost to the taxpayer if there is, for example, a 5 or 10 per cent uplift in the number of claims. Like the Justice Committee, I urge the Scottish Government to undertake more detailed modelling on the likely impact of the bill.
The general principles of the bill are sound and I shall vote accordingly today. However, there are some flaws, and we hope that the Government will reflect on the debate and lodge appropriate amendments.
14:47Daniel Johnson (Edinburgh Southern) (Lab)
Before I begin, I draw members’ attention to the fact that my wife is a practising solicitor.
Justice that is only open to those who can afford it is not justice at all. A critical component of any justice system is the ability to seek redress against third parties who have harmed an individual or their interests. That is a fundamental point of the civil justice system, and we must ensure that that ability is available to as many people as possible. As Sheriff Principal Taylor put it:
“Court action is always going to be stressful for litigants. Much of the stress is a fear of the unknown: ‘Will I win my case and if I don’t, what will it cost me?’”
The Taylor proposals represent a sensible way of increasing certainty and rebalancing the risks, particularly through qualified one-way costs shifting. The bill takes forward those proposals and has the potential to mark a significant improvement in the ability and confidence of individuals to seek justice, so Labour will be supporting it at stage 1 at decision time.
However, as the bill progresses, we would like improvements to be made on a number of issues. In particular, we feel that trade unions must be explicitly exempted in section 10; that more could be done on the predictability and affordability of court fees; and that improvements might be possible with regard to group litigation.
For many people who pursue a case involving their employment or workplace, seeking assistance from their trade union is the single most important step that they will take. Trade unions provide support to the individual and can help them to meet their financial costs, so the role of trade unions in this area is highly complementary to the aims and objectives of the Government in introducing the bill.
It is right that the bill seeks to ensure that speculative involvement by third parties is limited or excluded from the changes, but trade unions are not a corporate interest and their explicit exclusion in section 10 is vital. I welcome the minister’s comments in her opening remarks, but I seek a firm commitment and would welcome the minister making such a commitment in her closing speech.
Currently, court fees are incurred and payable on an on-going basis as a case proceeds. The pay-as-you-go model can prove to be an insurmountable barrier, even for those with a good chance of success, as they find that that cash-flow hurdle stops them taking their complaint to court. One way to address that could be by making fees payable only at the end of litigation, and the Government could consider whether they should be payable only if the case is successful, with fees being recovered from an unsuccessful defender.
The provision for group proceedings on an opt-in basis is welcome, but further consideration should be given to adopting an opt-out model. The consumer group Which? contends that, given the often low value to individuals in consumer claims and the lack of awareness or knowledge of the claims process, individuals might not choose to opt in. The Government should clarify its thoughts on the area and give those proposals serious consideration.
There are two areas of very real concern: the financial memorandum and the provision for delegated powers. Although nobody would wish for the NHS, the Parliament or any other public body to have increased costs, making it easier to pursue litigation clearly gives rise to the risk of an increase in the number of court actions that are taken against the public sector. The financial memorandum must be improved to include actuarial projections and risk-based forecasting to assess the possible financial impact on the public purse.
Liam Kerr
I agree with the point that the member has just made. As an extension of that, does he recognise the evidence that was given to the committee that the bill could increase insurance premiums? Does he agree that that is an unintended consequence that the Government needs to reflect on before the next stage?
Daniel Johnson
Naturally, any action that could increase the volume of civil litigation has that potential consequence. I was going to come on to the fact that there needs to be post-legislative scrutiny of the impact of the legislation and the general environment. I very much agree with the member on that point.
The Delegated Powers and Law Reform Committee concluded in its report on the bill that the provision in section 7(4) would enable the Government to amend part 1 of the bill and in that regard is “unusually wide”. Parliament must protect its right to legislate and hold the Executive to account, and section 7(4) must be amended to ensure that that happens.
The bill is welcome, and we all hope that it leads to greater access to justice. However, as I have just remarked, it is vital that Parliament reviews the impact of the changes, as there might well be unintended consequences, such as an increased compensation culture or a greater number of vexatious or weak claims. For that reason, the Government should commit to a review of the legislation in five years, particularly of qualified one-way costs shifting and damages-based agreements.
We support the aims and objectives of the bill and we will vote for it, but we ask the Government to consider our constructive comments so that the bill can be improved as it progresses through Parliament.
The Presiding Officer
We move to the open part of the debate.
14:52Rona Mackay (Strathkelvin and Bearsden) (SNP)
I support the general principles of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill at stage 1, because the purpose of the bill, which can seem complex and which is hard to boil down into a four-minute speech, is to increase access to justice and, in my view, that can never be a bad thing.
There is a need for civil litigation to be more accessible and affordable to everyone. How many times have we heard about people being put off bringing an action because they say that they cannot afford it? Since 2008-09, there has been a decrease of 41 per cent in civil litigation and, in my view—and, more importantly, in Sheriff Principal Taylor’s view—that is based on a fear of the costs that are involved.
I will briefly outline what to me seem the most relevant points in the bill. I am aware that other members will focus on one or two more specific issues. To me, the most relevant points are damages-based agreements, the power to cap success fees, damages for future loss, qualified one-way costs shifting, the regulation of claims management systems and group proceedings.
On damages-based agreements, the set-up of a Law Society of Scotland working group will work to protect against conflicts of interest. It is vital that the pursuer is aware of the full range of funding options that are open to them.
The bill includes the power to cap success fees, which means that clients are not required to pay two success fees from damages obtained. I am pleased that the Government has committed to consider whether legislation is required to ensure that caps would apply.
On damages for future loss, much of the committee’s evidence and questioning surrounded whether those should be ring fenced when calculating solicitors’ fees, particularly when someone has been injured so severely that they require lifelong care. As has been said, the committee is asking for that provision.
The bill introduces qualified one-way costs shifting for personal injury claims. Under QOCS, a pursuer is not liable for the defender’s expenses if they lose but can still claim for their own expenses from the defender if they win.
We heard opposing views on the introduction of QOCS. Supporters of its introduction argue that it is necessary to redress the David and Goliath relationship in personal injury cases between pursuers, who tend to be individuals with little or no experience of the legal system, and defenders, who tend to be insurance bodies. People who are against the introduction of QOCS argued that it could have unintended consequences and, in particular, could facilitate a compensation culture or fraudulent claims in Scotland. I believe that QOCS will improve access to justice for pursuers, but the committee heard concern about that. However, I agree with Sheriff Principal Taylor’s oral evidence that it would not facilitate a compensation culture or fraudulent claims, among other reasons because a solicitor would not take on a case that had little prospect of recovery.
I am pleased that the Government will consider amending section 10 of the bill to protect third-party funders such as trade unions or public bodies so that they are not affected by the introduction of QOCS.
We are all aware of the prominence of claims management companies and the negative impact of cold calling on customers, so I am encouraged that regulation will be introduced for claims management companies in Scotland. Apart from deterring nuisance calls, that will discourage spurious court actions. This year, £125,000 was provided to fund call blocking for people who are identified as vulnerable. The Government agrees that the Law Society should make it clear to solicitors that a case referred by a claims management company must not be a result of cold calling.
The bill will also allow one set of court proceedings to be brought on behalf of two or more people with similar claims—referred to as group proceedings—which the committee welcomed. It will allow group proceedings to be introduced only on an opt-in basis, whereby the pursuer must express their consent to be part of the action, as opposed to an opt-out system, in which the court agrees a definition of the people who are affected by the proceedings. It is simpler for an opt-in system to be introduced in the first instance.
The Deputy Presiding Officer (Christine Grahame)
I am sorry, but you must conclude.
Rona Mackay
The bill will facilitate access to justice, and I am happy to recommend its general principles to the chamber for that important reason.
The Deputy Presiding Officer
The previous item of business overran, so we are on tight four-minute speeches.
14:57Maurice Corry (West Scotland) (Con)
Ensuring that everyone has suitable access to justice is a principle that is vital to an open democracy, and it is one that I and the Scottish Conservatives are deeply committed to maintaining. That is why I will join my Conservative colleagues in supporting the bill at stage 1, but only on the understanding that the Government will lodge amendments during stage 2 to address the flaws that we are all aware exist in the bill.
Everyone accepts that the bill’s aims and objectives are well intentioned. The Association of Personal Injury Lawyers argued:
“the fear of swingeing expenses awards … currently results in cases not being brought or routine undersettlement in our jurisdiction”.
Unison Scotland similarly stated:
“the risk of being exposed to that legal bill is a real barrier to access to justice even to members supported by their trade union.”
As Ronnie Conway of the Association of Personal Injury Lawyers pointed out, the number of personal injury claims in Scotland has increased in the past few years. However, he emphasised that it was from “a very low base” and that the rate of claims per head of population in Scotland remains well below that in England. That view was shared by Sheriff Principal Taylor, who said that he had
“no doubt … that the fear of an adverse award of costs inhibits people from exercising their legal rights.”—[Official Report, Justice Committee, 31 October 2017; c 17-18.]
There is also a general consensus that the bill has the potential to improve access to justice. In its written submission, the Law Society of Scotland stated that the bill had
“the potential to significantly increase access to justice.”
Nevertheless, improvements will be required to ensure that the bill does not cause issues while solving others.
One potential issue, on which I would be interested to hear from the minister in her closing speech, is the potential for the bill to result in an increase in insurance premiums for the Scottish people. If there is a large increase in court action because there is no financial risk in going to court, insurers will pick up the cost of more court cases. That would increase their overheads, and I worry that it would lead to price pressure on premiums for everyone in Scotland.
In addition, I am interested to hear from the minister about what thought she has given to ensuring that proper resourcing follows group proceedings because of the possibility that they will require correspondingly greater judicial preparation time and consistent management by a nominated judge who deals with those particular proceedings. The increases in court delays, with only three courts—Portree, Lerwick and Lochmaddy—managing to meet the 26-week target for 100 per cent of cases in any month in 2017 is of particular note. It would be a comfort to us and the professional person working in the courts service to know that the Government has started to think about and plan for proper and effective resourcing.
I welcome the bill and its intentions, but I would like to hear from the minister on the issues that I have raised.
15:00Fulton MacGregor (Coatbridge and Chryston) (SNP)
I speak in this debate as a member of the Justice Committee and, like others, I want to put on record my thanks to those who provided evidence during the course of the scrutiny of the bill.
I am pleased that the committee agreed to the general principles of the bill, and we have made some suggestions about how it can be improved. The balance of evidence that we heard suggested that there is an access-to-justice issue in Scotland, and the bill, carrying out the conclusions of the review of Sheriff Principal Taylor, seeks to address that.
Many people are put off pursuing legal action even when they have a genuine claim. As mentioned by the minister, civil justice statistics from 2015-16 demonstrate a decrease in civil law cases initiated across the Court of Session of 41 per cent from the 2008-09 figures, and we should all be worried about that. Many people fear that they will have to pay the solicitor and defender if they lose a case, and I cannot help but think that the current issues around austerity, welfare and other financial factors are at play here. On that basis, I would say that we need the bill, and I am glad that the committee has agreed to its principles.
Like Rona Mackay, I want to concentrate on the bill’s introduction of qualified one-way cost shifting for personal injury claims. Under that arrangement, the pursuer is not liable for the defender’s legal expenses if they lose, but can still claim the expenses from the defender if they win. On balance, the committee is persuaded that the introduction of QOCS could improve access to justice for pursuers, but notes concerns that it could have unintended consequences, as mentioned by Daniel Johnson for example, including a rise in unmeritorious and fraudulent claims. However, the arguments for QOCS were much stronger, and included the rectification of the David and Goliath situation that was raised by the Association of Personal Injury Lawyers and was referenced by Sheriff Principal Taylor. Further, during the committee’s sessions on the bill, Unison said that the issue was the cornerstone of Sheriff Principal Taylor’s report.
There were arguments against QOCS, such as those from the Glasgow Bar Association, which legitimately had concerns about weak claims because of a nothing-to-lose attitude. The main argument against QOCS, as I could tell, was that there would be a rise in spurious claims. However, we heard evidence from many people, such as Patrick McGuire of Thompsons Solicitors Scotland and Paul Brown of the Legal Services Agency, who argued that it was unlikely that there would be a rise in such claims, that the bill would protect against that and that the majority would indeed be genuine. As a further safeguard, as Daniel Johnson mentioned, the committee has asked the Government to consider post-legislative scrutiny of the bill, including of QOCS, at the five-year mark.
Liam Kerr
Does the member therefore support the expansion of the test for fraud in section 8(4), as Sheriff Principal Taylor recommended?
Fulton MacGregor
I am not going to comment on that at this stage. My point was on QOCS and the David and Goliath situation.
The David and Goliath argument really resonated with the committee and I note that that particular argument resonated with Liam Kerr. I think that we were all agreed on that issue and it was good that the committee was in agreement on that. We should be united in trying to restore a balance to access to justice.
However, what about cases where there is not a David and Goliath situation? I think that those situations were referred to at one stage as David v David. The Faculty of Advocates argued, for example, that QOCS should only be available in claims against public bodies and insured defenders. The committee therefore asked the Government to consider that as an option, but I welcome the Government’s response, which highlights why it is not minded to change its position. Some reasons that it gave were that defenders may
“choose not to be insured when they should be; take a larger excess than they should; or breach the terms of their policy so that the insurance company will not act”.
I note those concerns. The Government’s arguments for not being minded to change its position have been laid out well.
15:04Mary Fee (West Scotland) (Lab)
I thank the Justice Committee and its clerks for the informative stage 1 report that was produced for the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill.
As a member of the committee during the evidence sessions and the drafting of the report, I heard from a wide range of voices that supported the bill. I am no longer a member of it, but I take this opportunity to pass on my best wishes to the committee as it continues its work.
Scottish Labour welcomes the bill and its aim of improving access to justice. The Scottish Government’s commitment to justice reform is commendable and the bill shows that the Government’s intent is honourable. Sheriff Principal Taylor’s detailed review, which shows the challenges facing Scots in accessing civil justice, is also welcome. During committee discussions about the bill, there were conflicting views on whether there was a problem with access to justice. I am glad that the majority opinion backed the position of Sheriff Principal Taylor, the Scottish Government and the bill.
However, as highlighted by the committee and previous speakers, there are numerous areas where the bill must be improved. That was acknowledged by the minister in the Government’s response to the stage 1 report. The most notable issue is with section 10. As a trade unionist, I deeply value the role played by unions in supporting members to access justice. I would like section 10 to be amended to make it explicit that the power to award expenses against third-party funders does not apply to trade union-funded litigation. I welcome the fact, as stated in the Government’s response to the stage 1 report, that the minister is considering amending section 10, and I am grateful for the minister’s comments on the issue today, but we need a clear commitment that no trade union or trade union member will suffer any unintended consequence of the bill.
It is commendable that the imbalance between individuals and large insurance firms is being redressed. The regulation of success fee arrangements is a step in the right direction to tilt justice back in favour of the individual. The introduction of qualified one-way costs shifting, or QOCS, will also help to address the imbalance.
The committee has rightly raised concerns about possible unintended consequences, such as a rise in unmeritorious and fraudulent claims. I have sympathy with the minister’s position in her response to the committee’s concerns, but I believe that the Scottish Government must be vigilant after the bill has been enacted, to ensure that the committee is not proved right and that pursuers are not at a loss because of unmeritorious claims.
I support the Government’s ambition to improve access to justice for all. I hope that the concerns raised today and in the committee report are properly considered and that the right safeguards are there for pursuers and solicitors against conflicts of interest.
The Deputy Presiding Officer
At this rate, we are making up time at an accelerated pace. Members should not take that as a licence to go over their time.
15:07Mairi Gougeon (Angus North and Mearns) (SNP)
It is fair to say that this is one of the more complex matters that the committee has dealt with. It is probably also fair to say that it is an issue that does not pick up a lot of traction or interest in the press or among the public. When we say civil litigation, sometimes it feels like people’s eyes tend to glaze over. That is unfortunate, because it is a vitally important issue that is about fairness and access to justice. The legislation that we are looking at today could affect any one of us at any given time.
The element of the bill that I will focus on today is section 8 and the proposed introduction of qualified one-way costs shifting, or QOCS, for personal injury cases. Others have already talked about QOCS. In Scotland, we follow the principle that expenses follow success, and that the unsuccessful party in a case should bear the legal costs of the successful party. There are situations where that does not apply, such as when the unsuccessful party is in receipt of legal aid, has before-the-event insurance or is supported by a trade union. However, that is not always the case.
After-the-event insurance is another option. It can be purchased by the pursuer before any significant legal costs are incurred, but it is often prohibitively expensive—it can cost as much as 60 per cent of the cover sought. People can therefore be prevented from bringing forward a claim because they are effectively being priced out of taking any action for fear of the legal expenses that they might incur. It is because of that, along with the view that in personal injury cases the pursuer tends to be an individual versus a large organisation or insurer—the David v Goliath scenario—that Sheriff Principal Taylor, in his review of expenses and funding of civil litigation in Scotland, argued for the introduction of QOCS in relation to personal injury claims.
The introduction of QOCS will essentially mean that there will be no risk to the pursuer in bringing forward a claim. During our evidence sessions we heard fears that that would result in a rise in spurious claims, though that was refuted by some, such as Thompsons Solicitors, which stated that it was quite simply not in their interests to take forward a claim that had little chance of success or where the defender was an individual, as there would be little chance of recovering expenses.
I had a particular concern that if I, as an individual, was taken to court by someone and the court found in my favour, I could still be liable for the pursuer’s legal fees. The Glasgow Bar Association had similar concerns and felt that QOCS subverts the principle that expenses follow success. As the association put it,
“Not every defender is a Goliath and not all defenders are insured or wish to rely on insurance ... Section 8 would protect even wealthy pursuers. And prejudice even poor defenders.”
Rather than there being a blanket application of QOCS, Simon Di Rollo of the Faculty of Advocates suggested in oral evidence to the committee that in order to create a balanced civil justice regime,
“QOCS could be available only to somebody who is insured, a public authority, somebody who has the backing of the Motor Insurers Bureau or somebody whose means and resources are such to enable them to make payment of expenses.”—[Official Report, Justice Committee, 26 September 2017; c 17.]
However, all those concerns were not shared by Sheriff Principal Taylor when he responded to that issue at committee. He said:
“We can look to England and Wales, where the rules of court are the same as what is proposed here, to find out what has happened there. We have heard of no difficulties with qualified one-way costs shifting being operated as it is proposed to be operated here.”—[Official Report, Justice Committee, 31 October 2017; c 10.]
The system has been operating in England and Wales with no issues having been raised, as far as the committee is aware, which makes the point that he raised hard to argue with.
Consideration of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill has been one of the most difficult pieces of work that we have undertaken, because of the polarising views on each side of the issues raised, so finding a compromise on all of them was never going to be an easy task. I want to add to what my colleagues have said by thanking all those who took time to submit evidence to the committee, and the clerks for pulling it all together.
The introduction of QOCS will be a positive step, and the bill, if passed, will increase access to justice for people in Scotland. That is why I support the general principles of the bill.
15:12John Finnie (Highlands and Islands) (Green)
I took gratification from the convener saying earlier that the bill was technical and complicated. We have heard that from others, too. The bill has also broadened our parliamentary vocabulary to include QOCS, of which we have just heard an excellent explanation from Mairi Gougeon. I am grateful to all the people who continue to give us briefings, including the Law Society of Scotland, which said of QOCS that
“the basic terms are good and will help provide certainty which is the priority for solicitors.”
We need to have a discussion about the purpose of our legal system, and we did so in the course of examining the bill. It is to serve our citizens, and we heard from the minister that there was a reduction of 41 per cent in the level of litigation. Clearly, there are a lot of interests to be served, not least those of David and Goliath, which have been much mentioned in the debate thus far. Patrick McGuire, representing Thompsons Solicitors, told the committee:
“I have absolutely no doubt that the provisions that are in the bill will enhance access to justice ... Equally important, it will also do what Sheriff Principal Taylor said was his prime focus and what I see as the mischief of the bill, which is redressing the imbalance in the asymmetrical relationship ... between pursuers of personal injury claims and the extremely large, powerful and wealthy insurers”.—[Official Report, Justice Committee, 19 September 2017; c 5.]
The Scottish Government made it clear that the principle of the bill was to create a more accessible, affordable and equitable justice system, and at close of play today the Scottish Green Party will support the general principles of the bill. That is not to say that there are not things that we would wish to see improved, such as issues relating to court fees. Again, Thompsons Solicitors had a clear view on that and suggested that court fees should be treated in the same way as expenses are treated under QOCS, which would mean that pursuers’ court fees would be paid only at the end of the case, and then only when they could be recovered from an unsuccessful defender, so the pursuer would always be protected from liability. If the case was won the defender would pay the pursuer’s fees, and if the case was lost the pursuer would not have to pay court fees.
Money is at the heart of much of what we discussed. We were particularly concerned about issues surrounding future loss, and the committee suggested that that be ring fenced. That is a personal thing and something that could affect a person’s future career prospects, loss of earnings and health projections, and I hope that that can be taken on board.
A number of colleagues have mentioned third-party funders. Clearly, we have heard the assurance from the minister that those were not to include trade unions. That should be expressly said.
I welcome the issue of disclosure of funding, and post-legislative scrutiny, which is also important.
I want to touch on something that the minister will not be surprised to hear me mention, as I seem to mention it on every piece of civil legislation. I refer to the Aarhus convention, and the view that access to environmental justice in Scotland urgently requires a comprehensive response. It is certainly the view of Friends of the Earth Scotland and others that Parliament should extend qualified one-way costs shifting to environmental cases, in order to ensure that bringing such cases is not prohibitively expensive. We know that equality of arms has not applied thus far, and the bill goes some way to addressing that.
Criticism has rightly been directed to the Scottish legal system and its failure to comply with the Aarhus convention. Addressing that was a manifesto commitment of the previous Government. It said that it would consult on it and, in fairness, four years and 50 weeks into its five-year term, it did so. I hope that the minister takes that on board.
I confirm that the Scottish Green Party will support the general principles of the bill.
15:16Ben Macpherson (Edinburgh Northern and Leith) (SNP)
I declare an interest as a previous practising solicitor who is still registered on the roll of Scottish solicitors, although not practising.
I thank my colleagues on the Justice Committee, the witnesses who gave evidence and the clerks for helping us through the process to this point.
I highly commend the Scottish Government for bringing forward the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill in order to enhance access to justice through a number of means, as we have already heard, and to undertake the constant evolution of our independent legal system to make sure that it keeps in touch with the needs of society and the development of our economy.
As others have done, I will focus on a specific part of the bill—in my case, part 4 on group proceedings, which came out of Sheriff Principal Taylor’s chapter 12 on multiparty actions. As the Scottish Government has said, the bringing forward of group proceedings in Scotland will help to broaden access to justice by allowing a litigant the opportunity to take part in a multiparty action at a lower cost than an individual case. It will also deliver a more streamlined and cost-effective outcome and reduce court time by enabling a number of related claims to be taken forward as one group procedure.
That has support from many stakeholders. As the Scottish Government’s response to the Justice Committee’s report says, the Scottish Law Commission supported group proceedings in the 1990s with the opt-in procedure, which the bill includes at present. That was also supported in written evidence that we received in August 2017 from the Law Society of Scotland, which said:
“The basic proposals for group actions seem sensible and should be able to work for solicitors in practice. A system which proceeds on the basis of ‘opt in’ (rather than ‘opt out’) is a positive development and is welcomed by agents.”
I appreciate that the difference between opt-out and opt-in procedure is a point of contention. I listened attentively in committee to the evidence from Which? on the benefits of an opt-out procedure. We also received an interesting briefing from Friends of the Earth Scotland about the value of an opt-out procedure. I asked a number of questions about that in committee.
However, I am convinced that there are practical issues around introducing a new area of Scots law such as this. There needs to be an opportunity for the legal system to build up experience of group proceedings. An opt-in is better for introducing something entirely new to Scots law.
The Scottish Government’s remarks on legal aid, which we mention in paragraph 396 of our report, are reassuring, but there is a need to keep looking at the matter. I therefore welcome the fact that the Scottish Government has committed to looking at it on an on-going basis. Opt-in is better in order to not cause undue delay now but, as a Parliament and as a society, we need to keep looking at the possible value of using an opt-out system in the future for group proceedings. If there is a commitment to post-legislative scrutiny, which the convener of our committee suggested, perhaps an evaluation of opt-out procedure could be undertaken then.
Finally, I note that the Law Society of Scotland states in its briefing for this debate:
“the question of how issues of expenses in group actions will be dealt with has not been considered in the Bill and, we believe, would be helpful to address.”
I support the principles of the bill.
The Deputy Presiding Officer
For a fleeting moment, Mr Macpherson, I thought that witches had given evidence, but I realised that it was Which? That was quite intriguing, as the bill is about group actions. [Laughter.]
I call Daniel Johnson to close for Labour.
15:20Daniel Johnson
I should have pointed out at the beginning of my previous speech that I am a trade union member, being a member of both Community and the Union of Shop, Distributive and Allied Workers.
The high degree of consensus in this afternoon’s debate is notable. There is a huge common agreement that we must commit to the reforms in terms of both the specifics and the general principles. Mairi Gougeon put it very well. Quite often, when we discuss these matters, people’s eyes glaze over and they wonder what on earth it means to them, but the reality is that, when someone needs redress and needs to use the courts, it all becomes all too real.
For too many people, both the cost and the complexity of taking court action become prohibitive, and that is why the key measures that the Government is bringing forward in the bill will be helpful. I think that there is broad agreement about the sliding caps, the introduction of damages-based agreement for solicitors, qualified one-way costs shifting and group proceedings. They will improve the transparency of the costs that people are likely to face while pursuing a court case, and they will remove downside uncertainty, provide more options for individuals to access legal services and provide more routes to justice through the introduction of group proceedings. Those things are all welcome.
There has been a lot of talk of QOCS and David and Goliath relationships, but it is the central and key provision. Fulton MacGregor did an excellent job of outlining both the advantages of the introduction of QOCS and the pitfalls. The removal of the awarding of costs to people pursuing a case removes the huge consideration that many people would contemplate, which is clearly of considerable advantage, but it also comes with the possibility of some downsides. Fulton MacGregor provided a balanced analysis of that. The Government will need to watch for what might happen because of the reduction in the threshold for litigation, and the examples of David v David actions need to be considered.
Three key concerns that I did not cover in my opening remarks were well expressed in the debate. First, a number of members pointed out the issue around future losses. One of the key reasons why individuals pursue court actions is that they are facing increased living costs or care costs because of personal injury. It is vital that those people are still able to achieve awards to enable them to support themselves, and any consequences of the bill that led them to find it harder to achieve those awards would be of serious concern. Ring fencing must be looked at.
Likewise, a regulatory gap that might be introduced through the bill passing into law needs to be looked at. It would be absurd if claims management companies descended on Scotland because they found a loophole as we were attempting to democratise the law. Again, that point was well made.
We also heard about the possibility or risks of increased insurance premiums, and that needs to be watched. I mentioned in my opening speech the cost to the public sector. The point about what might happen if there are increased volumes and values of claims needs to be looked at, whether in relation to insurance premiums or costs to the public sector. For those reasons, it is vital that the Government commits to a review.
The points that John Finnie made on the possibility of QOCS for environmental cases were well made. It is clear that that would be of real interest in environmental cases in which communities look for redress. The costs can be prohibitive, and it is worth looking at whether those principles could be extended in those cases.
In conclusion, the measures are welcome and are a positive step forward. We must ensure that the law is accessible and open to all. The bill is but one step. As Ben Macpherson said, we must continually review the law and how it works and seek to improve it, whether there are specific issues or in general. I ask the Government to commit to excluding trade unions from section 10. I know that it has said that it will look sympathetically on amendments, but I would welcome a further and more robust commitment to that. It is also vital that we have a commitment to a five-year review of the legislation as a whole.
The Deputy Presiding Officer
I call Gordon Lindhurst to close for the Conservatives.
15:26Gordon Lindhurst (Lothian) (Con)
I begin by mentioning my register of interests: I am a practising advocate and a member of the Faculty of Advocates.
I want to provide an anecdote and to mention a mythical creature that has hardly featured in the debate, except in the minister’s speech: the auditor of the Court of Session. I do not know whether anyone else here has appeared before the auditor of the Court of Session, as I have. The auditor has a long history, of course. The office was created by an act of sederunt of the Lords of Council and Session in 1806, and confirmed by an act of Parliament in 1821. I note the minister’s comments and am pleased that she has confirmed that the auditor will remain independent of the Scottish ministers. I want to raise with her one or two brief points on that.
Having acted in a case a number of years ago, I appeared before the auditor of the Court of Session, who can determine whether fees are fair or reasonable. Therefore, I did not appear before the current auditor, but one of his predecessors. The solicitor had questioned the level of fee that I had charged on the basis that it was too much, although I thought that it was reasonable. We went into a room, and the auditor sat at one side of the table. I explained in detail to the auditor why I thought that the fee was appropriate, and the solicitor explained in detail why he thought that it was not. The auditor then basically made a decision as a judge does in a court case. The hearing was very professional, and it did not interfere with the relationship between the solicitor and me, as professionals.
The confidence in the process for the office of auditor of the Court of Session is probably not in question. My confidence in that process was certainly boosted by the outcome of that hearing. The auditor’s decision arrived to my surprise: although I had not asked for it, he decided that my fee was too low, so he increased it. I do not know whether it was for that reason that I never had to appear in front of him again. I should add, of course, that solicitors and I would discuss fees on occasion, because that is normally how one would adjust fees.
I have a question on which the minister may want to give reassurances. Section 13(4) deals with the appointment of an auditor of court. It says that the appointment
“lasts for such period, and ... is on such other terms and conditions ... as the”
Scottish Courts and Tribunals Service “may determine.” My concern about that is whether we will continue to have, as we have had with the previous 13 auditors, someone who is legally qualified and entitled to litigate in the courts, and is therefore in a position to judge matters properly, fairly and appropriately. The auditor holds a sort of quasi-judicial office. I am pleased to see that the auditor’s functions for the whole of Scotland in the auditing of court fees will be retained in the legislation. Will the minister give us an assurance on the length of tenure, which does not seem to be spelled out, and the security of conditions of the office, because the office is an integral part of ensuring that the legislation that is before the Parliament will be properly applied?
I think that most points have been covered in this fairly consensual debate. On the primary purpose of the legislation, which is said to be to resolve disparity between the positions of pursuer and defender, particularly in personal injuries litigations, the question has always been the fear of swingeing expenses awards, similar to those in a court of law. My understanding from the Justice Committee’s report is that the evidence was not entirely clear on that issue, but the committee has clearly come to a view on the value of the proposals based, in particular, on Sheriff Principal Taylor’s view that fear of adverse awards and costs inhibits people from exercising their legal rights.
It is right that members should also bear in mind the other side of the coin: we should avoid creating in Scotland the compensation culture that we see in other jurisdictions, and which is not necessarily of benefit to people who have valid claims. That point was addressed by Justice Committee members Rona Mackay and Fulton MacGregor.
I wonder about the test for qualified one-way costs shifting being based on Wednesbury unreasonableness. Fraud would be a very high standard to apply, but Wednesbury unreasonableness is equally hard in the specifics of a case, when one tries to argue for it before a judge, as I have done. It may be helpful to have more clarity on that test.
I welcome the committee’s proposal that the Government consider extending the mandatory pre-action protocol for personal injury claims. Consideration and definite proposals are needed for post-legislative scrutiny, as Daniel Johnson called for. Margaret Mitchell also touched on the issue on behalf of the committee.
We need to look at the bill very carefully. Liam Kerr referred to David against Goliath cases, but some cases are simply David against David—or, indeed, Goliath against Goliath.
The Deputy Presiding Officer
Before I call the minister, I will say that we will be moving on shortly to the next debate. I do not see any front-bench members or other speakers for the next debate. I hope that they are paying attention, wherever they are, because in eight minutes they had better be on their toes. I call the Minister for Community Safety and Legal Affairs. You have eight minutes.
15:32Annabelle Ewing
I point members to my entry in the register of interests, wherein they will find that I am a member of the Law Society for Scotland and hold a current practicing certificate, albeit that I am not practising.
I have listened with great interest to the debate and contributions from across the chamber. I welcome the general support that has been expressed for the bill, although I appreciate that some members have concerns. It will be helpful to stress at the outset that the fundamental aspiration of the bill is to ensure that people who contemplate litigation in our civil courts will have more certainty about what it will cost them. With predictability about costs and increased funding options, we seek to address inequality of arms in personal injury cases. Those, in turn, will afford increased access to justice, which, I am pleased to hear, all members support.
The bill has received broad support from stakeholders who represent pursuers and those who represent defenders. I will now, in the time that I have available, which is about seven minutes, turn to issues that have been raised. I may not be able to deal with every issue, but I shall do my best.
On section 10 funding, I thought that I had made it clear at the Justice Committee, and again in today’s opening statement, that we do not intend to cover or encompass trade unions in the obligation. We and the parliamentary draftsmen will reflect on that point very carefully. They take the view that section 10 is clear, but I acknowledge the concerns that have been raised and undertake to ensure that it is absolutely clear that trade unions and legal service providers are not covered.
A number of members raised the important issue of the future-loss element of damages; the Justice Committee asked us to have another think about the matter. It is important to remember that, in his report, Sheriff Principal Taylor gave detailed and careful consideration to the future-loss element of damages and whether it should be paid by way of a periodical payment or a lump sum. Periodical payment orders are currently a matter of practice in our courts, albeit that the court cannot impose a PPO without the parties’ consent. We propose to introduce this year legislation to amend the position. The future-loss element of damages is already ring fenced under the bill’s provisions, because it may not be included in any success fee calculation, if there is a PPO. PPOs tend to be made in cases in which the longer-term care needs of individual pursuers have to be addressed.
Sheriff Principal Taylor concluded that future loss that is to be compensated for in a lump sum
“should not be excluded from the ambit of a damages based agreement”
and the calculation of a success fee under that agreement. He went on to say that
“This has the considerable advantage of simplicity.”
He came to that conclusion on the basis that the approach would not involve agreement on how a principal sum of lump-sum damages should be divided between past and future loss. Indeed, he remarked that there was a risk of incentivising delays in proceedings, such that people would seek to attribute more to past loss than to future loss.
Sheriff Principal Taylor also argued:
“To require parties to stipulate how an agreed lump sum settlement figure should be divided into different heads of loss could be impractical and pose a barrier to settlement.”
He concluded that
“Protection for the pursuer should be achieved by other means”.
Such “other means” are set out in the bill. Subsections (5) and (6) of section 6 make provision, in circumstances in which the lump sum exceeds £1 million, for independent assessment of whether it is in the best interests of the pursuer to have the future-loss element paid by periodical payment or in a lump sum. If the damages are awarded by the court, the court will make that assessment. If they are agreed in a settlement, the question will be referred to an actuary.
The bill faithfully follows Sheriff Principal Taylor’s recommendations in that regard. The Scottish Government, taking account of that and Sheriff Principal Taylor’s comprehensive evidence to the Justice Committee on the issue, is not persuaded that there is a need to change its policy on the matter. Reference has been made to what happens in England and Wales; Sheriff Principal Taylor said that Lord Justice Jackson had taken a different view some years ago, but had subsequently got cold feet.
It is important also to point out that the success fee that can be deducted as a percentage of the claim will be capped, on a sliding scale. Currently, if the claim is for £1 million, a fee of 15 per cent applies to the entire amount—it is £150,000. If the proposed cap and sliding scale are accepted by Parliament, the success fee in such a case would be £72,500. It is important to bear that in mind.
I welcome the Justice Committee’s conclusion that the introduction of qualified one-way costs shifting will “improve access to justice”, but I do not accept—and nor is this conclusion borne out by the key evidence—that the approach will lead to
“a rise in unmeritorious and fraudulent claims.”
A number of factors militate against that happening. First, why would a solicitor take on a case if there was no chance of success? The solicitor would not be paid, they would use up their time and they would spend money on outlays that they could not recover. Secondly, the regulation of claims management companies in Scotland will discourage unscrupulous companies from operating north of the border.
Liam Kerr
Does that mean that the minister agrees that we should wait for that regulation before passing the bill?
Annabelle Ewing
I was coming on to that, but time is short. No, we should not wait, because first, if there is to be a gap, I think that it will be very short and, secondly, we should remember that many claims management companies already operate subject to regulation, be it through their solicitor ownership or through the Ministry of Justice.
Also, the direction of travel in Scotland is clear. The message is out there for any claims management company that wishes to operate in a way that is inconsistent with the legislation that, should the bill be passed by Parliament, the legislation will be applied to it in very short order.
Also, with regard to the unlikelihood of there being a huge surge in unmeritorious claims, it is the case that the bill provides in section 8(4) for circumstances in which the benefit of qualified one-way costs shifting might be lost. I understand the comments that have been made about section 8(4), and we are looking into the matter.
On possible increases in insurance premiums, it is not founded that there will be an automatic rise in spurious claims. I therefore do not accept that the consequential conclusion that there will be a significant rise in insurance claims is founded.
I see that I am quickly running out of time. Before I do so, I thank the Justice Committee for its work, and I look forward to further discussion on all the issues at stage 2. I did not have time to deal with a number of issues today, but I am always happy to speak to members about concerns that they may have.
I thank the members for their support in principle for the bill. I commend the motion in my name.
The Deputy Presiding Officer
That concludes the debate on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill at stage 1. Before we move on to the next item of business, I will suspend briefly to allow members to take their places on the front benches. I apologise to Ms Hyslop, who is in already in the chamber, and to Mr Carlaw, who is looking a bit peeved.
15:41 Meeting suspended.15:42 On resuming—
16 January 2018
Financial resolution
A financial resolution is needed for Bills that may have a large impact on the 'public purse'.
MSPs must agree to this for the bill to proceed.

Financial Resolution Transcript
The Presiding Officer (Ken Macintosh)
The next item of business is consideration of motion S5M-08437, in the name of Derek Mackay, on a financial resolution for the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill.
Motion moved,
That the Parliament, for the purposes of any Act of the Scottish Parliament resulting from the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, agrees to any expenditure of a kind referred to in Rule 9.12.3(b) of the Standing Orders arising in consequence of the Act.—[Annabelle Ewing.]
16 January 2018
Vote at Stage 1

Vote at Stage 1 transcript
The Presiding Officer (Ken Macintosh)
There are six questions to be put today.
The first question is, that motion S5M-09894, in the name of Annabelle Ewing, on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill at stage 1, be agreed to. Are we agreed?
Motion agreed to,
That the Parliament agrees to the general principles of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill.
The Presiding Officer
The next question is, that amendment S5M-09887.3, in the name of Claire Baker, which seeks to amend motion S5M-09887, in the name of Fiona Hyslop, on Scotland’s international policy framework and priorities for 2018, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baillie, Jackie (Dumbarton) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Hyslop, Fiona (Linlithgow) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Russell, Michael (Argyll and Bute) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Scott, Tavish (Shetland Islands) (LD)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
Abstentions
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Scott, John (Ayr) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
The Presiding Officer
The result of the division is: For 80, Against 0, Abstentions 30.
Amendment agreed to.
The Presiding Officer
The next question is, that amendment S5M-09887.1, in the name of Mark Ruskell, which seeks to amend the motion in the name of Fiona Hyslop, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baillie, Jackie (Dumbarton) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Hyslop, Fiona (Linlithgow) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Russell, Michael (Argyll and Bute) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Scott, Tavish (Shetland Islands) (LD)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Scott, John (Ayr) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
The Presiding Officer
The result of the division is: For 80, Against 30, Abstentions 0.
Amendment agreed to.
The Presiding Officer
The next question is, that amendment S5M-09887.2, in the name of Alex Cole-Hamilton, which seeks to amend motion S5M-09887, in the name of Fiona Hyslop, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baillie, Jackie (Dumbarton) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Russell, Michael (Argyll and Bute) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Scott, Tavish (Shetland Islands) (LD)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Hyslop, Fiona (Linlithgow) (SNP)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Scott, John (Ayr) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
The Presiding Officer
The result of the division is: For 79, Against 31, Abstentions 0.
Amendment agreed to.
The Presiding Officer
The next question is, that motion S5M-09887, in the name of Fiona Hyslop, on Scotland’s international policy framework and priorities, as amended, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baillie, Jackie (Dumbarton) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Hyslop, Fiona (Linlithgow) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Russell, Michael (Argyll and Bute) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Scott, Tavish (Shetland Islands) (LD)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Davidson, Ruth (Edinburgh Central) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Scott, John (Ayr) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
The Presiding Officer
The result of the division is: For 79, Against 30, Abstentions 0.
Motion, as amended, agreed to,
That the Parliament notes the new International Framework and International Policy Statement published on 8 December 2017 and the four overarching objectives that it contains; supports the Scottish Government working with business, higher education, civic Scotland, trade unions and the UK Government in achieving the best outcomes for the people of Scotland; recognises that Scotland must now work toward a new lasting progressive partnership with the EU based on shared values and history; agrees that maintaining an international perspective remains vital to the continued prosperity of Scotland’s economy, society and people; commends the Principles for Just Trade Deals paper, which has been published by the Trade Justice Scotland Coalition; believes that international trade agreements are a key opportunity for Scotland to provide ethical leadership; further believes that such trade deals should support rather than undermine human rights, labour and environmental standards and that these trade agreements should be based on solidarity and facilitating the two-way sharing of knowledge and technologies with the Global South; calls on the UK Government to ensure that the devolved administrations have a formal role in the negotiation and democratic scrutiny of future agreements; commends the efforts of those building partnerships to advance Scotland’s role as a good global citizen; shares the importance of a human rights-based approach in doing so; believes that there should be a clear protocol on human rights for Scottish public agencies operating in countries where there is cause for concern, and calls for the Scottish Government’s working practices and cabinet secretary sign-off protocols to be revised to make sure that basic checks on the human rights record of potential partners and investors are made at an earlier stage.
The Presiding Officer
The final question is, that motion S5M-08437, in the name of Derek Mackay, on a financial resolution for the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, be agreed to.
Motion agreed to,
That the Parliament, for the purposes of any Act of the Scottish Parliament resulting from the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, agrees to any expenditure of a kind referred to in Rule 9.12.3(b) of the Standing Orders arising in consequence of the Act.
16 January 2018
Stage 2 - Changes to detail
MSPs can propose changes to the Bill. The changes are considered and then voted on by the committee.
Changes to the Bill
MSPs can propose changes to a Bill – these are called 'amendments'. The changes are considered then voted on by the lead committee.
The lists of proposed changes are known as a 'marshalled list'. There's a separate list for each week that the committee is looking at proposed changes.
The 'groupings' document groups amendments together based on their subject matter. It shows the order in which the amendments will be debated by the committee and in the Chamber. This is to avoid repetition in the debates.
How is it decided whether the changes go into the Bill?
When MSPs want to make a change to a Bill, they propose an 'amendment'. This sets out the changes they want to make to a specific part of the Bill.
The group of MSPs that is examining the Bill (lead committee) votes on whether it thinks each amendment should be accepted or not.
Depending on the number of amendments, this can be done during one or more meetings.
First meeting on amendments
Documents with the amendments considered at this meeting held on 27 February 2018:

First meeting on amendments transcript
The Convener
Agenda item 6 is consideration of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill at stage 2. Members should refer to the bill, the marshalled list of amendments and the groupings. For the last time today, I welcome Annabelle Ewing, the Minister for Community Safety and Legal Affairs, and her officials.
We move straight to consideration of the amendments.
Section 1—Success fee agreements
The Convener
Group 1 is on success fee agreements: claims management services. Amendment 18, in the name of the minister, is grouped with amendments 19, 20, 20A, 21 to 26, 30 and 65.
Annabelle Ewing
At the outset, I refer members to my entry in the register of members’ interests, where they will find that I am a member of the Law Society of Scotland and that I hold a current practising certificate, albeit that I do not currently practise.
Amendments 20 and 22 are intended to clarify that the provisions of part 1 on success fee agreements apply to claims management companies as well as to solicitors, as providers of relevant services. Concerns had been expressed that that was not clear. There are a wide range of ways in which claims management companies operate or may operate in future, and that sometimes may be in association with firms of solicitors. It is claims management companies rather than law firms that currently offer damages-based agreements in Scotland, although the bill will provide for solicitors also to offer damages-based agreements.
The approach taken is to define success fee agreements as agreements for the provision of “relevant services” rather than just “relevant legal services” and to define that master concept as including legal services and claims management services respectively. Amendment 20 defines “legal services” and “claims management services” in a similar way to that in proposed section 419A of the Financial Services and Markets Act 2000, which is to be inserted by the Westminster Financial Guidance and Claims Bill. It seems appropriate to draw on the definition of “claims management services” that will be applied by the Financial Conduct Authority, which the Parliament has agreed through a recent legislative consent motion should be the regulator of claims management companies in Scotland in the near future.
The definition of “claims management services” includes advising claimants as to funding options, such as success fee agreements or commercial funding for commercial cases. It also includes services in relation to legal representation, which means getting everything in place in terms of paperwork and witnesses so that, when a case is handed over to a lawyer, the amount of time and cost spent by lawyers doing non-legal work is minimised.
The purpose of amendment 20 is to ensure that part 1 applies to claims management companies. However, amendment 20A, in the name of Daniel Johnson, would amend the definition of “claims management services” in amendment 20 so that only “regulated” claims management services would be caught by the definition. That would therefore mean that the provisions of part 1 on success fee agreements would not apply to claims management companies as providers of relevant services until such companies are regulated by the Financial Conduct Authority. In other words, it would not stop claims management companies offering success fee agreements in the regulatory gap; instead, it would negate Government amendment 20, which brings such companies within the ambit of part 1. They would therefore have a free-for-all, because none of the restrictions and protections under part 1 would apply. In particular, that would mean that claims management companies would not be subject to the cap on success fees that will be brought forward in regulations.
I understand that Daniel Johnson does not intend amendment 20A to have that effect. If the inspiration for the amendment was to be clear that providers of success fee agreements would all be regulated persons, I am happy to put it on the record that a provider of a success fee agreement under the Government’s amendments will be either a regulated law firm or a regulated claims management service provider, once the Financial Conduct Authority assumes its full rather than its transitional powers. For that reason, I ask Daniel Johnson not to move amendment 20A.
Amendment 65, in the name of Gordon Lindhurst, would delay the commencement of parts 1 to 4 until claims management companies are regulated by the Financial Conduct Authority. Members should be clear that the amendment would delay not only the commencement of QOCS—qualified one-way costs shifting—but every single provision set forth in parts 1 to 4. A balance needs to be struck between the benefits of increased access to justice and the risk of increased unscrupulous operations of claims management companies in Scotland during the so-called regulatory gap. The Scottish Government does not consider that there will be a flood of rogue claims management companies moving north from England in the period between commencement of the provisions of parts 1 and 2 and the commencement of full regulation of claims management in Scotland by the FCA. Sheriff Principal Taylor was quite clear in his evidence that he did not believe that that would happen. Although there will be a gap between implementation of the bill and full FCA regulation, the gap is expected to be relatively short.
There have been certain developments since stage 1. Specifically, the Financial Guidance and Claims Bill, as amended, which is now going through the House of Commons, has transitional clauses that will give the FCA the power, on a transitional basis, to obtain reports, information and documents from claims management companies operating in Scotland in advance of full commencement of the FCA’s regulation. Further, the UK bill has also recently been amended to ban cold calling for claims management services, and that provision is to apply in Scotland. In fact, I wrote to the convener on 8 February about those important amendments at the Palace of Westminster, and I hope that all committee members have had an opportunity to look at that information.
Although that does not mean immediate regulation, the FCA will be able to clamp down on errant companies the moment that regulation starts. Any rogue companies that are contemplating a move to Scotland will know that regulation is coming and that any such operations will be short lived. Any delay in implementing the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill will delay its access-to-justice benefits to anyone in Scotland who is contemplating civil litigation. Kim Leslie, the convener of the civil justice committee of the Law Society of Scotland, was clear that the Law Society did not want to delay implementation until there is full regulation of claims management companies in Scotland.
Gordon Lindhurst will be unsurprised to hear that I am unable to support his amendment to delay commencement of all the substantive provisions of the bill until FCA regulation of claims management companies is in place. First, that does not take into account the latest developments, which I have referred to in some detail, with respect to the amendments to the UK Financial Guidance and Claims Bill. Secondly, to do so would be to delay the real access-to-justice benefits that the bill that we are considering delivers.
I reiterate that amendment 65 would not only delay QOCS but would delay the other provisions of the bill, such as group procedure, third-party funding, solicitors being able to offer damages-based agreements, a sliding cap on success fees and so on. Consequently, I ask Mr Lindhurst, in light of those latest developments, not to move amendment 65.
Amendments 18, 19, 21, 23 to 26 and 30 are all consequential on amendments 20 and 22.
I move amendment 18.
Daniel Johnson
I lodged amendment 20A as a probing amendment, because although I fully acknowledge the minister’s comments and recognise that pressing my amendment might have consequences, it is important that we address the possibility of a regulatory gap for claims management companies. Indeed, the committee asked the Government to look at that in our stage 1 report, and it continues to be a concern. I recognise that, in the fullness of time and as the UK legislation comes forward, that would cease to be an issue, but at the moment there is a gap that is not clear or certain. It is important that the Government looks at how it could use the precautionary principle to provide for interim regulation of claims management companies for the period of the gap.
For those reasons, I thought that it was important to lodge my probing amendment, but I also fully support the bill. I acknowledge that Gordon Lindhurst’s amendment may well be in the same broad space as mine and may have the same broad intent, but I would not support delaying the bill overall. I hope that that explains and clarifies my intentions behind amendment 20A.
Gordon Lindhurst (Lothian) (Con)
I refer to my entry in the register of members’ interests, and to the fact that I am a member of the Faculty of Advocates and a practising advocate.
I do not need to go into detail about the wording of amendment 65, in light of the fact that the minister has covered that. The purpose of my amendment is to ensure that protection for those who are seeking access to justice under the terms of the bill, by regulation of claims management companies, is in place before the bill is brought into force.
That would anchor in the bill the committee’s recommendation in paragraph 326 of its stage 1 report, which says:
“The Committee considers that the Bill’s provisions should not be brought into force until such regulation is in place.”
As committee members are aware, amendment 65 also has the support of the Association of British Insurers, which, in its stage 2 briefing to the committee, said:
“This would ensure that there is no regulatory gap to the detriment of Scottish consumers and safeguard against a further increase in CMC activity in Scotland.”
11:15I take on board the minister’s comments, but with regard to the suggestion that the bill’s principal provisions need to be brought into force urgently—indeed, immediately—I point out that the Taylor report was published in October 2013, and that it has, quite properly, taken a number of years for us to get to this stage. I submit, therefore, that there is no urgency to bring the principal provisions into force immediately, in light of what the minister has said about the minimal delay that will be caused. The comment that regulation is coming is not, in my view, good enough, given that minimal delay and, because quite a number of years have been spent bringing the bill to this stage, it is important that claims management company regulations are in force and the bill is brought into force in tandem with them.
Liam McArthur
It is a happy timetabling coincidence that we move from the Offensive Behaviour at Football and Threatening Communications (Repeal) (Scotland) Bill and our debate over whether there is a gap in that respect, and the desirability of closing any such gap, to this instance, in which the minister seems to be taking a slightly more relaxed position. I not only accept her points about the wider benefits of the bill’s provisions and the desirability of not delaying their implementation but acknowledge the steps that she and her officials have taken to link into the process at UK level and try to address the problem of claims management companies that was raised with us at the outset of stage 1.
On the amendments in this group, I was probably more taken with Daniel Johnson’s approach to addressing the issue—I am sure that he is happy to accept that the idea originally came from Sheriff Principal Taylor as a way of addressing that hiatus—than with the approach that, for very genuine reasons, Gordon Lindhurst has suggested. I accept some of the shortcomings or problems that are inherent in the approach in Daniel Johnson’s amendment 20A, but I think that we will need to look at the matter again at stage 3 to ensure not only that we are doing everything possible to deliver the bill’s wider benefits but that this very serious concern, which has been raised with us pretty much across the board and from the get-go, is dealt with as best as it can be.
The Convener
I would add that we raised the concern that there would be a period in which the claims management companies would not be covered by regulation and the fear that, in that interim period, they might gravitate towards Scotland and its less stringent regime. It would be very much appreciated if the minister could address that in her comments.
Annabelle Ewing
The purpose of the Government amendments in the group is to ensure and remove any doubt that the bill’s provisions apply to both solicitors and claims management companies as providers of success fee agreements. As I have said, those providers will be regulated either by the Law Society of Scotland, in the case of solicitors, or by the Financial Conduct Authority, in the case of claims management companies.
Gordon Lindhurst, quite rightly, referred to the committee’s stage 1 report, but I would note that the developments at the Palace of Westminster that I have mentioned postdate it. They will give the FCA on a transitional basis the power to demand information, reports and documents from claims management companies and, very importantly, will introduce a ban on cold calling, which will also apply to Scotland. As I have said, given those further moves to ensure that claims management companies operate in a reasonable fashion, it is for us to weigh them up with where we ourselves have reached and where we are with the important provisions in the bill, which indeed emanate from Sheriff Principal Taylor’s excellent review.
However, given that the review is dated 2013, I would have thought that that might be a reason to crack on and ensure that the bill contains the important provisions concerning group proceedings, that solicitors will be able to offer damages-based agreements that will not just be within the purview of claims management companies, and that there will be a sliding cap on success fees and qualified one-way costs shifting and many other provisions. We will allow the bill to go ahead to ensure that individuals in Scotland feel that they have a remedy to enforce their rights in civil litigation.
Amendment 18 agreed to.
Amendment 19 moved—[Annabelle Ewing]—and agreed to.
Amendment 20 moved—[Annabelle Ewing].
Amendment 20A not moved.
Amendment 20 agreed to.
Amendments 21 to 24 moved—[Annabelle Ewing]—and agreed to.
Section 1, as amended, agreed to.
Section 2 agreed to.
Section 3—Expenses in the event of success
Amendments 25 and 26 moved—[Annabelle Ewing]—and agreed to.
Section 3, as amended, agreed to.
Section 4 agreed to.
Section 5—Exclusion for family proceedings and other proceedings
The Convener
Group 2 is entitled “Success fee agreements: exclusion of certain matters”. Amendment 27, in the name of the minister, is grouped with amendments 28 and 29.
Annabelle Ewing
Amendments 27 and 29 will remove the exclusion of family proceedings for success fee agreements generally. However, amendment 28 will permit a more nuanced approach by allowing the Scottish ministers to make regulations setting out what kinds of success fee agreement will be prevented from being used in certain kinds of litigation.
The Scottish Government agrees with Sheriff Principal Taylor that family proceedings should not be financed by damages-based agreements. However, section 5 of the bill will currently prevent any type of success fee agreement from being used to finance family proceedings. Success fee agreements can be either speculative fee agreements or damages-based agreements. Those terms are not defined in the bill and the Scottish Government does not propose to introduce definitions because that would add unnecessary complexity.
The Faculty of Advocates submitted to the Justice Committee evidence to the effect that speculative fee agreements are sometimes, if rarely, used in family proceedings, and argued that such a funding option should, where appropriate, remain available to litigants. Amendment 28 will therefore extend the existing power of Scottish ministers to provide by regulations the kinds of litigation that might or might not be financed by certain types of success fee agreements.
The risk in dealing with the matter in the bill is that either too many types of funding arrangements will be excluded, as the bill does currently, or too few. Primary legislation could prove to be inflexible in that regard.
The approach that we suggest will allow for future proofing, because regulations can change as practice changes. Such regulations would be the subject of public consultation before being presented to Parliament, and would be subject to affirmative procedure. Amendments 27 and 29 will remove from the bill the exclusion of family proceedings.
The Government remains committed to prohibiting the use of damages-based agreements in family proceedings, as was recommended by Sheriff Principal Taylor. Equally, it is concerned to ensure that speculative fee agreements should continue to be available, where those are appropriate and will assist litigants in pursuing cases. The amendments in the group will permit that, and the expanded delegated power will ensure sufficient flexibility to react to changes in success fee agreement practice in the years ahead.
I move amendment 27.
Liam McArthur
I understand the rationale for the amendments, and it is helpful that the minister has set out the position further. I suppose that there is always a slight anxiety in moving measures from primary legislation into secondary legislation, but as I said, I understand the rationale. Is it the minister’s understanding that the amendment on post-legislative scrutiny of the bill that we will debate later would capture those provisions and allow us an opportunity, at a later stage, to review how the provisions are working?
Annabelle Ewing
Yes. My understanding is that the post-legislative scrutiny proposals are sufficiently wide to allow how—assuming that the bill is passed—the act operates in practice to be looked at.
Liam McArthur
Thank you.
Amendment 27 agreed to.
Amendments 28 and 29 moved—[Annabelle Ewing]—and agreed to.
Section 5, as amended, agreed to.
Section 6—Personal injury claims
Amendment 30 moved—[Annabelle Ewing]—and agreed to.
The Convener
Group 3 is entitled “Personal injury claims: use of damages for future loss in calculation of success fee”. Amendment 57, in my name, is grouped with amendments 58, 59 and 31.
Amendment 57 would ensure that damages for future loss are effectively ring fenced and cannot be included in a success fee agreement, so those would not form part of the overall damages that would be awarded in a claim for the purpose of calculating a success fee agreement.
Amendments 58 and 59 are consequential on amendment 57.
The committee heard evidence at stage 1 about the term “future loss”. The committee report states that future loss can cover damages awarded for
“lost earnings while an injured person is off work recovering, or travel expenses for expected future hospital appointments. In more serious personal injury cases, it could cover loss of all future earnings, as well as the costs of future care and specialist equipment which may be needed.”
The bill will allow for damages awarded
“for future loss to be included when calculating a solicitor’s success fee, provided certain conditions are met”.
In summary, the conditions state that the damages are
“paid in a lump sum”
and that
“if damages for future loss are for a lump sum”
exceeding
“£1 million, then ... damages will only be included if ... the solicitor has”
advised the client to accept the lump sum and
“either the court (where damages are awarded by the court) or an independent actuary (where damages are obtained by settlement) has confirmed that it is in the client’s best interests that payment be in a lump sum.”
It is fair to say that witnesses had conflicting views on the issue. The Association of British Insurers and the Forum of Insurance Lawyers both argued—because damages for future loss are awarded to pay for the pursuer’s care and support, including accommodation and equipment that they may need for the rest of the lives—that that money should not be included in the fee agreement.
Taking the opposite position, pursuer representatives
“argued against ring-fencing damages for future loss”
and said that they considered that the bill
“struck the right balance between protecting the pursuer and ensuring that a solicitor is paid fairly for the work involved”.
11:30In its stage 1 report, the committee voiced its concerns about
“damages for future loss”
being “included”, and it asked
“the Scottish Government to reflect on this evidence and to reconsider whether damages for future loss should be ring-fenced when calculating a solicitor’s success fee.”
Having considered the evidence from defender, insurer and pursuer representatives, I am persuaded that damages for future loss should be ring fenced from the calculation of a solicitor’s success fee. Quite simply, that money has been specifically awarded to the pursuer for their future care and support in whatever form that might take. Some aspects might, for example, be necessary immediately at the time of the award, but it is evident that they will be required over time.
Furthermore, the pursuer’s representatives can still be paid through a variety of methods, including through recovering judicial expenses, claiming from any part of the award that does not include damages for future loss and, possibly, claiming an additional fee in complex cases. The committee heard that those fees could be
“a multiple of three or four times the judicial expenses.”
In conclusion, I believe that amendments 57, 58 and 59 not only strike the right balance in calculating a success fee, but are necessary to ensure that the appropriate measures are in place to protect a pursuer’s entitlement for an award for future loss.
I should say that I support the definition of “actuary” in amendment 31.
I move amendment 57.
Annabelle Ewing
The group of amendments is about damages for future loss. From the outset, it is important that we do not lose sight of the fact that we are considering people who have been victims of very tragic circumstances and who have received catastrophic injuries through no fault of their own.
Sections 6(4) to 6(8) make provision for the future element of damages awards. The system in the bill as drafted would be, as Sheriff Principal Taylor recommended, that damages for future loss
“will be included in the amount of damages”
from which the success fee will be calculated if, but only if, the
“future element ... is to be paid in a lump sum”.
If the future element is to be paid by periodical payment, it will not be included in the calculation. In other words, in the bill as drafted, it will be ring fenced.
Following the change to the discount interest rate, and in the light of the provisions in the forthcoming damages bill, it seems to be much more likely that, in the future, the element of damages payment relating to future loss will be made by means of a periodical payment order. Sheriff Principal Taylor considered the position in England, where all of the future element of the award is ring fenced and is not included in the calculation of the success fee. The bill faithfully implements Sheriff Principal Taylor’s recommendations on success fees and lump-sum payments, including future loss, when calculating the success fee.
Alongside that, the bill contains a number of safeguards in sections 6(5), 6(6) and 6(7). If the future element is more than £1 million, the court will have to agree that it is in the client’s “best interests” that the payment be made by lump sum rather than by periodical payment order. If the award is agreed by settlement, an actuary would have to agree that the payment relating to future loss should be paid by lump sum.
Margaret Mitchell’s amendment 57, and the consequential amendments 58 and 59, go further than Sheriff Principal Taylor’s recommendations. Amendment 57 would change the effect of the provisions in section 6(4) of the bill in relation to the calculation of a success fee. It would mean that no success fee could be taken from the future-loss element of an award if it is to be paid as a lump sum. Under the bill’s existing provisions, the future element of an award is already excluded from the calculation of the success fee if the future element of an award of damages is to be paid by periodical payment order.
In that light, and having considered the issues that the committee raised in its stage 1 report, the Government is prepared to support the amendments, which will make the position the same when the future element of an award of damages is paid by lump sum. If the committee supports the amendments, the Government will consider whether any changes will be needed as a consequence. If they are, the Government will lodge appropriate amendments at stage 3.
Amendment 31 responds to concerns that were raised by Stewart Stevenson—a former member of the committee—at stage 1 about the need for an appropriate definition of “actuary” to be provided in section 6. However, the intention of amendment 31 will be overtaken by the changes that amendment 58 seeks to make, so I intend at this point not to move amendment 31. I will wait to find out the result of the debate on the convener’s amendments.
However, as I will not have another opportunity to speak on this group of amendments, I will quickly explain the intention behind amendment 31, just in case the committee votes against amendment 58.
In his evidence, Sheriff Principal Taylor suggested that the actuary should be a chartered actuary. Amendment 31 provides that the reference to an actuary in section 6(6)(b) would mean
“an Associate or Fellow of the Institute and Faculty of Actuaries.”
The Institute and Faculty of Actuaries has advised that the approach should be future proofed, because even if the concept of “chartered actuary” emerges in the future, the concepts of “associate” and “fellow” would be retained.
I will not move amendment 31, because its intent would be overtaken by the changes that the convener’s amendment 58 seeks to make.
John Finnie (Highlands and Islands) (Green)
I want to speak briefly in support of amendment 58. The minister mentioned the client’s best interests, which I think should be at the forefront of our deliberations. A lot of what we do here can be very dry, and we have to think about the practical implications. I do not for a second doubt that the very able individuals who deliver the important sums of money for personal care and so on that we are discussing will use appropriate methods to ensure that people are properly remunerated, but I think that it is wholly appropriate that the money be ring fenced.
Liam McArthur
We were all seized by the fact that there appears to be an incongruity with regard to the use of lump-sum payments as opposed to periodic payments, and I welcome the fact that the minister accepts that amendments 57 to 59 will address that concern.
I am slightly concerned about the fact that the minister does not intend to move amendment 31, which I see as an attempt to stave off attempts by Stewart Stevenson to set himself up as an actuary, but I am reassured that she thinks that amendment 58 will achieve the same objective. I therefore whole-heartedly support amendment 58.
The Convener
I note that the minister said that it is likely that the proposed damages bill will provide for payments for future loss to be made in instalments, but that is by no means certain. In the meantime, lump sums will still be recommended and will continue to be awarded. Moreover, £1 million is a colossal amount of money; indeed, for some pursuers, £1,000 is a colossal amount of money. There is a danger that a pursuer could, under what is proposed in section 6, lose out even in relation to a payment of damages for future loss of £1,000, so I will press amendment 57.
Amendment 57 agreed to.
Amendments 58 and 59 moved—[Margaret Mitchell]—and agreed to.
Amendment 31 not moved.
Section 6, as amended, agreed to.
Section 7—Form, content etc
The Convener
We move to group 4, which is on independent advice about success fee agreements. Amendment 63, in my name, is the only amendment in the group.
Amendment 63 seeks to address a potential conflict of interests with regard to success fee agreements, which is an issue that was raised by Professor Alan Paterson during stage 1. Professor Paterson stated that success fee agreements had to be subject to appropriate protections and that in some cases there might be a need for clients to receive advice, independent from their original solicitors, on the terms of success fee agreements. He considered that that would protect both solicitors and clients from underlying potential conflicts of interest. Although it would not be necessary for every speculative fee agreement and every damages-based award, there is an argument for it in some situations.
Amendment 63 therefore allows further discussion to ascertain from the minister her views on the independent review issue and how best to ensure that the necessary protections are in place. The amendment would allow the Scottish ministers to make regulations about
“the circumstances in which the provider (‘A’) must ensure that, prior to the agreement being entered into, the recipient receives advice”
from an independent provider as to whether the agreement is
“in the recipient’s best interests”.
However, I am aware that, thereafter, the question would be what those circumstances were.
Since lodging the amendment, I have spoken further with Professor Paterson, who pointed out that all lawyers are required to act in good faith and in the objective best interests of their clients. Currently, fee agreements regarding property transactions are voidable if there is either an actual or a potential conflict of interest, unless the transaction was fair and reasonable in the circumstances, there was no undue influence, the client gave his or her informed consent following disclosure of all the relevant facts, and another independent solicitor would have advised it.
At present, such tests are applied in property cases but not in the basic lawyer-client fee contract. Therefore, to ensure that vulnerable potential clients have a level of protection and that success fee agreements are fair, I propose that those tests be applied to such agreements in personal injury cases. That is on the basis that a success fee agreement involves a lawyer taking a share of the client’s damages, which is their property. It therefore follows that, in certain success fee agreement cases, we need more than the normal protection in a client retainer contract. The onus should be placed on the lawyer to show that those two tests—first, that the agreement is fair and reasonable, with no undue influence, and, secondly, that there has been informed consent—have been met. If those tests have not been met as provided for, the agreement would be voidable.
I look forward to hearing the minister’s comments, and I would be grateful for a commitment from her to work with me to look at those tests with a view to putting them in the bill.
I move amendment 63.
Annabelle Ewing
Amendment 63, in the convener’s name, as drafted—which is all that I can deal with as that is all that is in front of me today—provides that the Scottish ministers may make regulations about the circumstances in which a services provider must furnish a pursuer with advice from another independent provider before the pursuer enters into a success fee agreement.
I find it difficult to know when such a check might be required. I take into account what the convener has just said but, as has also been said, many providers will be solicitors, who are professionally required to act in the best interests of their clients at all times. It is therefore difficult to see whether there is any need to provide the pursuer with a second opinion—if that is still what is being contemplated—with attendant costs and the questions of who should bear them, what the process should be, what steps would be required and how long all that would take.
Of course, one of the overarching objectives of the bill is to make costs more predictable. The pursuer will be able to go to a lawyer who can offer, for example, a damages-based agreement, no up-front costs and so on, and there will be QOCS in personal injury actions. That is the straightforward approach of the bill, and it seems to me that the proposed process could unintentionally lead to a more cumbersome approach in circumstances in which the solicitor is duty bound under their practising certificate to act in the best interests of their client.
11:45With regard to the theoretical conflict that has been mentioned, solicitors have been able to offer speculative fee agreements since, I think, the early 1980s—[Interruption.] Sorry—it is since the 1990s. Although there has been a theoretical conflict of interests with regard to the provision by solicitors of speculative fee agreements, that has not presented any problem in practice. We can take some comfort from the fact that that arrangement has been in operation for some decades now without any need for the additional process that is set out in the amendment.
Further, the setting of professional standards rules for solicitors, for example, is a matter for the Law Society of Scotland, as the professional regulator. As I said during the stage 1 evidence session that I attended, it is not for the Scottish Government to direct the Law Society of Scotland to take particular actions, although, of course, we can have discussions with it. Therefore, the member’s concerns might more properly be addressed by having discussions with the Law Society of Scotland, as the regulator, to see what its view is.
I hope that that is helpful.
The Convener
Thank you for those comments. There are potential conflicts of interest with regard to success fee agreements and the bill does not address them. I endorse the two-test provision that Professor Paterson set out in our discussions, which involve the lawyer or solicitor proving that the arrangement is fair and reasonable, with no undue influence being exerted, and that the client has given their informed consent. I believe that Sheriff Principal Taylor said that the provision concerning informed consent in particular would mean that the solicitor would say that they charge a certain amount per hour, set out the reasons for that and say that other rates are available, which would allow the client to make an informed choice about whether to engage the solicitor or look elsewhere. The provision seems to work in the interests of the client and of access to justice.
I am aware that, as drafted, amendment 64 does not do what I want the review of the success fee agreement to do. For that reason, I will seek leave to withdraw the amendment. However, I will do what the minister suggests and speak to the Law Society, and I hope that she will engage with me to consider what might be brought forward at stage 3 to ensure that vulnerable clients and others are not disadvantaged as a result of not benefiting from the two tests for success fee agreements that have been suggested.
Amendment 63, by agreement, withdrawn.
The Convener
Group 5 is entitled “Success fee agreements: multiple providers”. Amendment 32, in the name of the minister, is the only amendment in the group.
Annabelle Ewing
Amendment 32 is intended to address a potential problem that was identified by members of the committee, particularly John Finnie and Rona Mackay, during stage 1 evidence, which concerned the possibility that attempts might be made to charge more than one successive fee in relation to a case, thus circumventing the caps to be imposed on success fees under section 4.
The suggestion was that a firm of solicitors and a claims management company might both take a success fee, and that the combined charge to the client might exceed the proposed caps on success fees to be paid out of damages awarded or agreed.
Pursuer representatives gave evidence to the committee that that does not happen in practice. Nevertheless, we wish to ensure that it can never happen in practice, and amendment 32 will give ministers the power to ensure that it will not. It will allow regulations to be made, under the existing delegated power in section 7(3), that will prevent a pursuer from being liable to pay two or more success fees. Those regulations will engage the affirmative procedure.
By referring to more than one provider rather than more than one agreement, we intend to allow the provision to deal with cases, first, in which there is more than one party to an agreement and, secondly, in which there are multiple agreements.
In addition, the committee will be pleased to learn that the Law Society of Scotland’s working group on success fee agreements proposes to develop a model success fee agreement. That model should make it clear that only one success fee is payable, which will further reduce the risk of abuse.
I move amendment 32.
Amendment 32 agreed to.
The Convener
Group 6 is on the power to make further provision about success fee agreements. Amendment 33, in the name of the minister, is the only amendment in the group.
Annabelle Ewing
The Delegated Powers and Law Reform Committee’s report on the bill at stage 1 expressed concern about the breadth of the power that section 7(4) gives to the Scottish ministers to modify part 1. Amendment 33 responds to those concerns by restricting that power so that it will apply just to section 7, rather than to part 1 as a whole. The amendment also contains a restriction that the regulations can add to section 7 or modify text that is added by the regulations, but they cannot otherwise alter section 7. In other words, none of the text of section 7 that the Parliament agrees to at stage 3 may be removed by regulations.
It might be helpful if I explain the kind of addition and modification that is envisaged. As the Government explained in its response to the DPLRC, the purpose of sections 7(3) and 7(4) is
“to augment the current provisions of the Bill in relation to success fee agreements”,
where it is considered to be desirable to have future provision about the mandatory terms of success fee agreements or their enforcement. Such provision would be brought forward only after consultation on the regulation of success fee agreements with stakeholders and thus it cannot be included in the bill at present. The regulations would mean that any new provisions could be set out in section 7, rather than in freestanding regulations, which would mean that all the mandatory terms that relate to success fee agreements would be found in the primary legislation.
I move amendment 33.
Amendment 33 agreed to.
Section 7, as amended, agreed to.
Section 8—Restriction on pursuer’s liability for expenses in personal injury claims
The Convener
Group 7 is on the restriction of the pursuer’s liability for expenses in environmental proceedings. Amendment 60, in the name of John Finnie, is the only amendment in the group.
John Finnie
I wish to speak on the implications of the Aarhus convention, which is now 20 years old. I have not talked about the subject continuously throughout that intervening period, but I have certainly done so frequently, with the minister and her predecessors in her position and with ministers in environmental portfolios.
The bill introduces qualified one-way costs shifting in personal injury cases, including those with an environmental aspect—so-called toxic torts. That is seen as first-class protection, because we know that costs are a huge barrier to justice. We also know that the Scottish Government has consistently been criticised for its perceived failure to comply in full with the convention, although I accept that that is not the Government’s position. Amendment 60 would go some way toward addressing that issue, although it would not do so completely. I am keen to hear what the minister has to say; I am always keen to engage on this subject.
I move amendment 60.
Annabelle Ewing
Amendment 60, in the name of John Finnie, is intended to give pursuers or petitioners in environmental cases that fall under the Aarhus convention the protection of qualified one-way costs shifting, under section 8.
At present, protective expenses orders, or PEOs, limit a party’s liability for paying the expenses of an opponent or third party up to a particular sum, whatever the outcome of the case. That limit gives a degree of certainty and predictability in relation to litigants’ potential exposure to an opponent’s expenses.
Rules of court currently regulate the award of protective expenses orders in judicial review cases and statutory reviews that fall within the scope of the public participation directive—broadly, Aarhus cases. Last year, the Scottish Civil Justice Council consulted on further draft rules in relation to protective expenses orders. Following the consultation, the Scottish Civil Justice Council has set up a working group to consider protective expenses orders. We await its final conclusions and it would be wrong to pre-empt them now.
During Sheriff Principal Taylor’s two-and-a-half-year review of expenses and civil litigation, he examined in some detail the need to restrict certain litigants’ liability for expenses in judicial review applications, which would cover most Aarhus cases. He stated:
“To an extent, the judiciary are already embracing the concept of QOCS, albeit under the guise of PEOs.”
Sheriff Principal Taylor rejected an extension of QOCS to other types of case that he considered did not always involve a weak pursuer against a powerful defender. The Scottish Government considers that that argument applies to environmental cases, given that well-funded charities, wealthy landowners or businesses might be the ones seeking to judicially review Scottish ministers’ decisions on energy consents, for example.
The post-legislative review paper on the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which introduced QOCS in England and Wales, did not suggest that QOCS should be extended to any other area of civil proceedings beyond personal injury. We should also recall that there has been no consultation on the matter, given that the extension of QOCS beyond personal injury claims was not a recommendation of Sheriff Principal Taylor in his review. Furthermore, no environmental non-governmental organisation made any submission to the consultation on the bill on that issue and nor did any other respondent to the consultation suggest any extension of QOCS beyond personal injury claims.
I consider that the best approach is for the Scottish Civil Justice Council to continue to keep the matter of costs in environmental proceedings under review as part of its civil justice remit. As I have already pointed out, Sheriff Principal Taylor did not recommend QOCS for environmental cases or any other types of civil litigation beyond personal injury actions, and the post-legislative scrutiny of the 2012 act that introduced QOCS in England and Wales did not recommend extending QOCS to anything other than personal injury.
Later today, or perhaps next week, we will debate a group of amendments that provide for post-legislative review of the act, including QOCS.
John Finnie
Will the minister take an intervention?
Annabelle Ewing
Certainly.
John Finnie
Thank you. I was not sure whether you were about to reach the end of your speech and I wanted to give you the opportunity to comment on the criticisms that have been made—legitimate or otherwise—and how you intend to address those. Most recently, the First Minister spoke in Paris and there was criticism about what was seen as a shortfall in the Scottish legal system’s compliance with Aarhus. Can you comment on that and on your willingness to discuss the matter further?
Annabelle Ewing
Scotland has made progress on the implementation of Aarhus and that should be recognised—to be fair, Mr Finnie recognised that in his first comments on the matter. Recently, certain changes have been made to the protective expenses order regime. It is clear that those do not go far enough for Mr Finnie. However, that is properly a matter for the Scottish Civil Justice Council, which has a working group on the issue and it would be wrong to pre-empt the result of its work.
In conclusion, the consultation on the bill was not about QOCS in environmental cases; it was about QOCS in personal injury cases. No respondent suggested an extension of QOCS and nor did any NGO make a submission suggesting the extension of QOCS to environmental cases.
I appreciate the member’s long-standing interest in the matter and I fully expect him to raise the matter with me on many more occasions. I am always happy to discuss that or any other issue. However, I ask him to consider not pressing his amendment and to allow the Scottish Civil Justice Council to continue with its work.
John Finnie
I thank the minister for her comments and note what she said. I do not intend to press the amendment.
Amendment 60, by agreement, withdrawn.
12:00The Convener
The next group is on pursuer’s liability for expenses in personal injury claim: circumstances of pursuer and defender. Amendment 1, in the name of Liam Kerr, is grouped with amendments 2, 3 and 9.
Liam Kerr
I would suggest that, fundamentally, the amendments that I have proposed to section 8(1) strike the appropriate balance. Qualified one-way costs shifting is to be introduced as a means of improving access to justice. That is a good thing, but it should not apply in cases in which there is no David and Goliath relationship. We heard a great deal about the importance of mitigating any such relationship, and what I am proposing is that the QOCS amendments should not apply where there is no such relationship.
My view is that there is a lack of protection in the bill for defenders who are uninsured and/or of limited means. The amendments that I am proposing reflect my view that QOCS should not apply where there is a funder—and amendment 9 clarifies what a funder would be—or where a defender is uninsured, is not a public body, is a person who is legally aided and/or is a person who gets third-party funding. That is what my amendments seek to achieve.
I move amendment 1.
Liam McArthur
I welcome Liam Kerr’s clarification of his amendments and recall the debate that we had at stage 1. My anxiety about trying to limit the QOCS provisions—or where they apply, in this instance—is that we need to guard against introducing unhelpful incentives into the system. One example would be providing an incentive for people not to take out insurance in order to escape liability or the prospect of personal injury cases being brought. I will listen carefully to what the minister has to say, but I think that concerns were raised during stage 1 about where we would get to if we try to define the provisions in the way that Liam Kerr has quite legitimately sought to do.
Daniel Johnson
I likewise hear what Liam Kerr is saying regarding David and Goliath situations, but I am worried that his amendments do not strike the right balance. I question whether the indicators that he is using—such as whether defendants have insurance or pursuers have third-party funding—would actually exclude the situations that he is concerned about. With regard to third-party funding, I am particularly concerned that that would exclude people who are pursuing claims with the backing of a trade union, which would clearly not be right. That is a useful relationship and, indeed, one that enhances the intent behind the legislation. Therefore, while I understand the intent behind them, I will not support the amendments.
Annabelle Ewing
During the stage 1 evidence sessions, some concern was raised by the Faculty of Advocates and defenders’ solicitors about the operation of QOCS in what was termed a David versus David case—in other words, where the defender was, for example, ostensibly an uninsured individual—and I refer to the points made by Mr McArthur a moment ago. Amendments 1 to 3, in the name of Liam Kerr, attempt to address that issue, but go further in a way that risks seriously undermining the operation of QOCS in Scotland when it is introduced. Indeed, the amendments appear to have the intention of watering down QOCS from what Sheriff Principal Taylor proposed to the point that it would offer little benefit to personal injury pursuers.
The effect of amendment 1 is that section 8 would only apply if the pursuer has no funder. We wonder whether that is an attempt to remove pursuers benefiting from success fee agreements from the effect of section 8. That would be a significant departure from Sheriff Principal Taylor’s proposals, because success fee agreements and QOCS were intended to be complementary measures for personal injury pursuers.
Under amendment 1, section 8 would apply only when it appears to the court that the defender is insured in respect of the claim, when the defender is not insured but the Motor Insurers’ Bureau is liable to make payment, or when the defender is a public body. In other words, QOCS would only be available if the pursuer had no funding and the defender was insured or, if not insured, was a person for whom the MIB would pick up the tab, or was a public body.
The committee heard evidence from Sheriff Principal Taylor and from Patrick McGuire of Thompsons Solicitors that pursuers do not in practice sue uninsured defenders. As Sheriff Principal Taylor said:
“if the defender is a man of straw the pursuer will not raise proceedings. After all, there is no point in obtaining a court award that cannot be enforced.”
In his stage 1 evidence, Sheriff Principal Taylor also pointed out some of the drawbacks of further restricting QOCS:
“The difficulty with that is that you could end up with parties not bothering to insure themselves when they ought to or with parties taking on a much higher excess in order to pay a much lower premium and thereby making themselves, in effect, self-insured. You could find parties who have policies—so QOCS would apply—but who have breached the terms of their policy with the insurers, such as the obligation for fidelity. As a consequence, one-way costs shifting would not be available in circumstances in which it should be available.”—[Official Report, Justice Committee, 31 October; c 9, 10.]
I think that Liam McArthur picked up on those points in Sheriff Principal Taylor’s evidence.
QOCS is part of a raft of measures introduced by the bill to provide more certainty about the cost of litigation for those with a meritorious claim. The bill makes it clear that the pursuer will not be liable for the expenses of the defender if the case is lost. Sheriff Principal Taylor quoted statistics from England, where it was noted that defender insurers claim expenses only in 0.1 per cent of the cases that they win. Sheriff Principal Taylor had no doubt that the situation was the same in Scotland.
Amendments 2 and 9 would have similar effects in restricting QOCS where the pursuer was separately funded—I think that Daniel Johnson’s concern dealt with that.
The effect of amendment 3 would be to disapply QOCS where the pursuer was legally aided. It is not, however, envisaged that personal injury claimants will be legally aided if they have a success fee agreement. It is, of course, absolutely right that there should be no benefit if the claim is pursued inappropriately—we will discuss shortly fraud and other grounds on which QOCS protection may be lost—but to add the further restrictions that Liam Kerr seeks through his amendments would just add uncertainty about costs to the process of litigation. That would be in direct contradiction to the bill’s overarching principle, which is to increase the predictability of the costs of civil litigation such that we can promote access to justice on the part of the citizens of this country; and it would reduce the bill’s effectiveness and remove an essential element of the carefully constructed framework of recommendations made by Sheriff Principal Taylor. Again, I cite the fact that QOCS was introduced in legislation in England and Wales in 2012 without such restrictions being in place. Moreover, no problems in that regard were identified in the recent post-legislative scrutiny of that legislation.
A number of stakeholders have cautioned against any reforms that could invite satellite litigation. I fear that Liam Kerr’s amendments could increase the likelihood of such disputes. It is for the foregoing reasons that I ask Liam Kerr to consider withdrawing amendment 1 and not moving amendments 2, 3 and 9.
The Convener
I invite Liam Kerr to wind up and to say whether he will press or withdraw amendment 1.
Liam Kerr
I am grateful for the arguments that have been made and I will respond to some of the points. On the situation in England and Wales, I think that I am right in saying that there are some significant differences. That is not to say that I disagree with the minister; I simply think that there is more to be investigated in that regard. Mr McArthur’s point about insurance, which the minister also made, is concerning. Again, I would be interested in looking at that further, although I am not convinced that it is a reason to withdraw amendment 1.
I am not attempting to remove success fee agreements, although I am interested in the minister’s point. The minister pointed out that some evidence suggests that, as a matter of practice, pursuers do not pursue the uninsured, but I do not know whether that is a good basis on which to legislate with regard to a person with an interest. On that note, I declare my interest as a registered member of and practising solicitor with the Law Society of England and Wales and the Law Society of Scotland.
The minister talked about introducing uncertainty around costs, but it is arguable that relying on a practice whereby a pursuer does not pursue an uninsured person provides even more uncertainty than would be the case were my amendments agreed to. I want my amendments to be put to the vote, so I am pressing amendment 1 and will move amendments 2, 3 and 9.
The Convener
The question is, that amendment 1 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 1 disagreed to.
Amendment 2 moved—[Liam Kerr].
The Convener
The question is, that amendment 2 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 2 disagreed to.
Amendment 3 moved—[Liam Kerr].
The Convener
The question is, that amendment 3 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 3 disagreed to.
The Convener
The next group is on the grounds on which a pursuer may be liable for expenses in a personal injury claim. Amendment 34, in the name of the minister, is grouped with amendments 4, 35, 5, 36, 6 to 8, 10, 40, 47 to 49 and 17.
Annabelle Ewing
This group of amendments provides for the circumstances in which the protection of qualified one-way costs shifting, or QOCS, will be lost by a pursuer in personal injury proceedings.
Amendment 34 makes it clear that failure to conduct proceedings in an appropriate manner by the pursuer’s legal representative as well as by the pursuer may lead to the loss of benefit of QOCS. When Sheriff Principal Taylor gave evidence to the committee, he said that
“‘Fraudulent representation’ involves word of mouth”
but that fraud can also
“take place through actions.”—[Official Report, Justice Committee, 31 October 2017; c 11.]
Amendment 34 faithfully reflects Sheriff Principal Taylor’s suggested wording for the test of fraud in relation to QOCS. It ensures that actions as well as representations will be considered by the court in deciding whether the benefit of QOCS should be lost.
Amendment 4, in the name of Liam Kerr, is very similar to the Government’s amendment 35 but relies on a further amendment, which is amendment 5. Although the Government’s amendment is simpler from a drafting point of view, the amendments have the same aim. I am, therefore, willing to support Liam Kerr’s amendments 4 and 5, as they have the same effect as amendment 35. I do not intend to move amendment 35 if the committee supports amendment 4. If amendments 4 and 5 are agreed to, the Government will, of course, consider whether any drafting changes may be required at stage 3.
Amendment 36 makes it clear that the test of reasonableness in section 8(4)(b) is tantamount to that of Wednesbury unreasonableness. The original drafting was intended to reflect the Wednesbury test, but it was clear that stakeholders wished the Government to revisit its drafting approach. Amendment 36 broadly follows the wording that was suggested to the committee on 26 September by Simon di Rollo QC of the Faculty of Advocates and that Sheriff Principal Taylor endorsed in his evidence to the committee on 31 October. It means that any “manifestly unreasonable” behaviour by the person bringing the proceedings or a legal representative will result in QOCS protection being lost. The concept of manifest unreasonableness delivers in substance the Wednesbury test. Sheriff Principal Taylor said in his review that there has to be a high test, because otherwise the benefits of QOCS might be lost as pursuers might not have the confidence to litigate.
Amendment 6, in the name of Liam Kerr, would mean that the benefit of QOCS would be lost if the pursuer failed to beat a tender that was made during the court proceedings or an offer of compensation to settle that was made before the court proceedings started. The question of tenders—that is, whether a pursuer should lose the benefit of QOCS—was raised in written submissions by much of the insurance lobby. Other groups that responded to the call for evidence, such as the Law Society of Scotland and Brodies LLP, considered it to be the kind of issue that may be dealt with in rules of court. I agree with Sheriff Principal Taylor that the benefit of QOCS should be lost if a pursuer fails to beat a tender. However, I also agree that it is more appropriate to deal with tenders through secondary legislation.
Members will have noted that that is the firm position of the Lord President, who recently wrote to the committee on the issue. If, as the Lord President indicated, tenders and settlement offers are to be dealt with in rules of court, that is the appropriate place for any provision on the failure to beat a tender or a settlement offer. Section 8(6) clearly states that QOCS are subject to such exceptions as may be provided for in an act of sederunt—that is, in court rules. The Lord President has stated that having a reference to tenders in primary legislation, which would be the effect of Mr Kerr’s amendment 6, would restrict the courts’ ability to regulate in the area. Indeed, it would preclude the Scottish Civil Justice Council from coming up with straightforward terminology rather than using the word “tender”, which may have other connotations.
12:15Liam Kerr’s amendment 7 is similar. The benefit of QOCS would be lost if the pursuer was, in the court’s opinion, being unreasonable in refusing to accept an offer under a pre-action protocol. Again, I consider that that should be left to the rules of court. In his letter of last week to the convener, Lord Carloway, the Lord President, commented that the committee might take the view that amendment 7 would be
“anomalous in both its operation and effect”,
and I agree with the Lord President. Pre-action protocols are a matter for rules of court.
Amendment 8, in the name of Liam Kerr, would mean that the pursuer would be deemed to have acted in an inappropriate manner and so would lose the benefit of QOCS if the proceedings were summarily dismissed by the court. I am not aware that the term “summarily dismissed” is used in primary legislation, and there appears to be some doubt about whether the Court of Session has powers to dismiss a case summarily. However, I am aware that the Scottish Civil Justice Council is considering the matter and that rules are likely in the foreseeable future.
Whether those rules will use the term “summary dismissal” or some other phrase, such as “strike out” as is used in England and Wales, is not yet known. Again, the Lord President has emphasised that Parliament should be slow to tie the Scottish Civil Justice Council’s hands. In his letter, Lord Carloway also noted that the general power of summary dismissal that is referred to in amendment 8
“will be considered as part of the current rules rewrite project.”
Amendment 10, in the name of Liam Kerr, defines what is meant by “proceedings” in section 8(4) to the effect that it means all actions of the pursuer in a damages claim before and after proceedings have been served. The amendment will be unnecessary if the Government’s amendments succeed, as the phrase
“in connection with the proceedings”
will cover behaviour by the pursuer or their lawyer in the pre-litigation period as well as in the civil proceedings proper.
Amendments 40, 47 and 49 are consequential drafting amendments. Amendment 49 inserts a new section after section 12 that provides the definition of “legal representative” for the whole of part 2 of the bill.
Amendment 40 is a consequential amendment that removes the definition from its previous place in the bill at section 9(4). The definition is not changed. That change is necessary because the definition of “legal representative” is now relevant to section 8, on QOCS, as well as to section 9, on third party funding, and section 11, on the award of expenses against legal representatives.
Amendment 47 is another consequential amendment that removes the reference in section 11 to the definition of “legal representative” in the now defunct section 9(4).
Amendment 48 is a minor consequential amendment to the Courts Reform (Scotland) Act 2014. It relates to section 81(5)(b) of that act, which provides that only in the case of unreasonable behaviour will a party lose the benefit of fixed expenses in civil procedure cases in the sheriff court.
Amendment 17, in the name of Liam Kerr, requires the Court of Session to make rules for a new pre-action protocol for clinical negligence cases. The amendment also provides that clinical negligence cases would not have the benefit of QOCS until those rules come into force. We consider that the extension of pre-action protocols to medical negligence cases is for the Lord President and the Scottish Civil Justice Council to consider. We do not consider it appropriate that there should be a delay in extending the benefit of QOCS to pursuers in such cases. We do not consider that that would be in accordance with the spirit of the bill.
I move amendment 34.
Liam Kerr
I hope that you will forgive me, convener, as I have not done this before.
My amendments deal with where the benefit of QOCS should be lost pursuant to section 8(4). I am grateful to the minister for clarifying that my intention in amendment 4 is in the same vein as the intention of amendment 35 and for clarifying that, if amendment 4 is agreed to, amendment 35 will not be moved.
The benefit of QOCS should be lost when, on the balance of probability, a claimant has acted fraudulently in connection with a claim or proceedings. Again, I am grateful for the clarification that it is a wider category of proceedings. Many claims will never reach court, so the test should include the behaviours and actions prior to litigation, because that will deter more spurious claims. That accords with Sheriff Principal Taylor’s recommendations.
On amendments 6 and 7, which, as the minister has said, rather go together, the bill’s provisions on QOCS do not take account of the tender process. As we have heard throughout the evidence taking, tenders are a very important aspect of this type of litigation, and it is my view that the bill should refer specifically to them. Indeed, if I recall correctly, that was a recommendation of the Taylor report. Certainly, Sheriff Principal Taylor stated in evidence to the committee:
“I am persuaded that qualified one-way costs shifting should not be available, and should be specified as not being available, in the event that the pursuer has failed to beat a tender.”—[Official Report, Justice Committee, 31 October 2017; c 12.]
At present, when a pursuer fails to beat a pre-litigation offer, they must beat the offer at the conclusion of the action or be liable for the defender’s judicial expenses from the date of the offer. My view is that that discourages unnecessary litigation and ensures that courts and parties to lawsuits can focus on claims that can genuinely not be settled. However, if QOCS protection was not lost if a pursuer failed to beat a defender’s tender, that would seriously undermine the tender process and dilute the current incentive to resolve cases before they go to court. My amendment therefore covers tenders made prior to the commencement of court proceedings to encourage early settlement of claims to the benefit of the parties.
On amendment 8, which relates to summary dismissal, I do not necessarily agree that the provision should not be in the bill. I have tried to make it clear that QOCS protection should be lost when a pursuer’s claim is summarily dismissed, which I think is in line with Sheriff Principal Taylor’s recommendations and, indeed, his evidence to the committee. That would be a key protection against the bringing of frivolous claims.
I think—if I heard correctly—the minister clarified that, if the Government amendments were to be agreed to, there would be no need for amendment 10. In that case, I would not seek to move it. Amendment 17 proposes that clinical negligence claims should not fall under section 8 until a pre-action protocol is in place. Sheriff Principal Taylor recognised in his evidence the vital importance of pre-action protocols in that, inter alia, they incentivise settlement and allow a focus on claims that cannot be settled by the court. As members will remember, I was concerned about the cost of clinical negligence claims, and it is certainly my view that a pre-action protocol is required before implementing something—in this case, QOCS—that, by its own definition, will increase the number of claims.
On that basis, I will move amendment 4 and other attendant amendments at the relevant time.
Liam McArthur
I, too, welcome the progress that we appear to be making on ensuring that the provisions adhere to the Wednesbury principle. I think that the minister said that amendments 4 and 5, in the name of Liam Kerr, do so. Amendment 36 reinforces that, too, and I very much welcome the progress in that respect.
On the points that Liam Kerr has rightly made about pre-action protocols and tenders, I read with interest the Lord President’s submission. Given the questions that he has raised about my own amendments, I have some reservations about siding with him in this instance; however, I think that the concerns that he has raised are perhaps legitimate.
The point that the minister made about orders of court seems to be not unreasonable. If amendment 55 is agreed to, we will have the potential to have post-legislative scrutiny of the matter. In that respect, we might be able to say to the Lord President and colleagues that there will, over the coming years, be an opportunity through orders of court and subordinate legislation to address the legitimate concerns that not just Liam Kerr but Sheriff Principal Taylor has expressed. If, when she winds up, the minister could be more explicit in that regard, it might give some of us who are sympathetic to what Liam Kerr is trying to drive at in amendments 6 to 8 comfort that the issues will be addressed not in the fullness of time but in a timespan that recognises the importance of getting this right.
Annabelle Ewing
As I have said, I am happy to support amendments 4 and 5, in the name of Liam Kerr, but I cannot support his other amendments in this group.
I appreciate that the provisions in section 8 do not include some of the criteria that Sheriff Principal Taylor recommended should lead to a person losing the benefit of qualified one-way costs shifting. However, as the Lord President has clearly indicated in his letter to the committee, matters relating to tenders, settlement offers, pre-action protocols and summary dismissal are much better dealt with in rules of court—indeed, that is the normal practice. I hope that the committee agrees with the Lord President in that regard.
I am fairly confident that the provisions on post-legislative scrutiny that are particular to the bill—we will get on to that when we get to that section—will serve as a spur to action within a timetable that is not the same as the initially scheduled timetable.
Amendment 34 agreed to.
Amendment 4 moved—[Liam Kerr]—and agreed to.
Amendment 35 not moved.
Amendment 5 moved—[Liam Kerr]—and agreed to.
Amendment 36 moved—[Annabelle Ewing].
The Convener
The question is, that amendment 36 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
Against
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
The Convener
The result of the division is: For 8, Against 3, Abstentions 0.
Amendment 36 agreed to.
Amendment 6 moved—[Liam Kerr].
The Convener
The question is, that amendment 6 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 6 disagreed to.
Amendment 7 moved—[Liam Kerr].
The Convener
The question is, that amendment 7 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 7 disagreed to.
Amendment 8 not moved.
Amendment 9 moved—[Liam Kerr].
The Convener
The question is, that amendment 9 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 9 disagreed to.
The Convener
I call amendment 10 in the name of Liam Kerr.
Liam Kerr
Forgive me, convener. Can I have some clarification? The minister was clear that, if certain amendments were agreed to, I would not need to move amendment 10. Have we agreed to those amendments?
The Convener
I will get some advice.
Annabelle Ewing
I understand that it is now not necessary for you to move amendment 10.
Liam Kerr
That is what I am trying to get at.
Amendment 10 not moved.
Section 8, as amended, agreed to.
The Convener
That ends today’s consideration of the bill. We will continue next week.
12:29 Meeting suspended.12:31 On resuming—
27 February 2018
Second meeting on amendments
Documents with the amendments considered at this meeting held on 6 March 2018:

Second meeting on amendments transcript
The Convener
The second item on the agenda is the continuation of stage 2 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. I refer members to the bill, the marshalled list and the groupings of amendments.
I welcome back to the committee Annabelle Ewing, the Minister for Community Safety and Legal Affairs, and her officials.
After section 8
The Convener
The first group of amendments is on the pursuer’s liability for court fees in personal injury claims. Amendment 11, in the name of Daniel Johnson, is grouped with amendments 64 and 16.
Daniel Johnson (Edinburgh Southern) (Lab)
The purpose of amendment 11 is to reconsider the pay-as-you-go model for court fees. It is an issue that has been raised by trade unions and other bodies as a not insignificant hurdle in bringing forward court actions. Amendment 11, in my name, seeks to allow fees to be paid at the end of the court action, rather than have them paid during its course. In a successful action, the fees would be a lot easier to settle once damages have been awarded.
In broad terms, amendment 11 is very much in line with amendment 64, which has been lodged by John Finnie, although his amendment goes further. I urge members to support both the amendments.
Some comments contrary to the amendments have been made by the Scottish Courts and Tribunals Service, which argues that the pay-as-you-go model encourages early settlement and that debt recovery would carry a cost. However, the argument that the pay-as-you-go model encourages early settlement is not particularly strong, given that the bill as a whole seeks to lower the barriers to people bringing court cases. Amendment 11 proposes something that is in line with that aim.
The nature of court actions is that people bring them forward via solicitors. The very fact that there would be an intermediary would simplify the recovery of debts, as courts would be pursuing solicitors firms and, similarly, solicitors firms will be very mindful about people’s ability to pay court fees as they go. A person paying at the end of a service that has been undertaken and that they have procured does not mean that they stop looking at whether they can afford it. Regardless of whether it is a court action or work that they are having done to their house, people will always have to be mindful of the bill that they are likely to face at the end. Simply paying at the end does not necessarily have a significant impact on that.
To recap, I say that the primary reason for amendment 11 is to lower the barriers to people bringing court actions. As I have said, the provision is being sought by several groups, including trade unions, to aid their work.
I move amendment 11.
John Finnie (Highlands and Islands) (Green)
I align myself with everything that Daniel Johnson said. The issue is a concern for trade unions. The SCTS’s suggestion about debt recovery is a wee bit off the mark: the nature of the engagement in the process means that debt recovery is extremely unlikely to be an issue. Indeed, I imagine it would be said that the parties involved had not acted in good faith if that were the case, and that it would have wider implications.
I initially had an amendment that was similar to Daniel Johnson’s amendment 11, but I have been told that my amendment 64 is what is required to bottom out the issue. I support amendment 11 and encourage members to support my amendment 64.
The Minister for Community Safety and Legal Affairs (Annabelle Ewing)
The main intention of amendment 11 appears to be to make court fees payable at the end of a case rather than, as is the case under the present system, as an action proceeds through the courts. Amendment 11 would apply only to personal injury proceedings. However, in practice, personal injury claimants usually do not pay up-front fees because they benefit from a success fee agreement. Part 1 of the bill encourages that practice and makes it more likely that personal injury claimants will not pay any up-front fees at all, including court fees. Thus, it could be argued that the real beneficiaries of amendment 11 could well be law firms and claims management companies.
A consultation on court fees closed recently: the Government’s response to it was published last week, with impact assessments. I am sure that members will find it to be of interest because it sets out how the Government proposes to protect access to justice while retaining the current pay-as-you-go model of court fees in general terms. I have just signed new fees instruments for the period April 2018 to March 2021, which have now been laid for scrutiny by the Justice Committee and the Delegated Powers and Law Reform Committee.
The Scottish Government supports the current pay-as-you-go model because it encourages people to resolve their disputes outside the courts; it encourages settlement and it ensures that people value the resources of the court and use them wisely. The model also reinforces the level of financial risk if a party loses a case, it discourages unreasonable behaviour and it deters weak or vexatious claims.
The pay-as-you-go model actively supports those outcomes specifically because fees are charged in small increments as cases progress through each of the key steps in the legal process. The effect is to make the parties stop to consider whether it is appropriate for them to continue. Ultimately, under either pay as you go or payment of a bill at the end of the case, the losing party will normally pay the fees of both parties and the winner will be reimbursed or not billed. The two models affect the timing, but they do not change the eventual outcome.
It is worth pointing out again that under the proposals in section 6 for success fee agreements in personal injury actions, it will be the solicitor rather than the client who will be liable for all outlays that are incurred in provision of the relevant services to the client, including—of course—court fees. The client will therefore not pay for court fees in such cases, which are among the most commonly litigated in Scotland. There is therefore no barrier, under the bill, to access to justice for personal injury actions, because the individual pursuer will not pay fees up front.
Moreover, the solicitor, for his or her part, will recover the court fees as part of the expenses that are recovered from the opponent at the conclusion of the case, assuming that it is successful. Under the bill’s provisions on qualified one-way costs shifting, the client cannot become liable for their opponent’s court fees even if they lose their case.
It is worth pointing out that there are generous exemptions to the requirement for parties to pay court fees, which means that many vulnerable and disadvantaged groups of people do not pay court fees. The consultation analysis to which I referred a moment ago confirms that the Scottish Government will extend the exemptions regime to include recipients of Scottish welfare funds and people—often women—who are seeking civil protection orders, as was suggested by Scottish Women’s Aid. In addition, the income threshold below which fees are not to be paid will be increased.
It is also worth noting the recent Supreme Court judgment—of which I am sure members are aware—concerning fees in employment tribunals. In striking down the fees because they were exorbitant and acted as a barrier to justice, the Supreme Court went on to say something that I think is worth quoting. It said:
“Fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice.”
It must also be stressed that billing for court fees at the end of cases would place an immense burden on the Scottish Courts and Tribunals Service, and the long-standing arrangements for payment of court fees on the pay-as-you-go principle would have to be completely revised and reformed, with consequent expense and disruption to business.
Furthermore, the Scottish Courts and Tribunals Service must attempt to recover court fees that are due on behalf of the taxpayer and there will, inevitably, be a measure of loss through irrecoverable debt. If court fees were not paid on a pay-as-you-go basis, the SCTS, and therefore the Scottish taxpayer, would have to pay them and the debt might not be recovered in all cases. There would therefore be a high cost to the Scottish Courts and Tribunals Service and the taxpayer, and the efficient conduct of business in Scotland’s courts would be disrupted if the long-standing arrangements for court fees were to be fundamentally altered to make court fees payable at the end of cases, rather than on an on-going basis.
Liam McArthur (Orkney Islands) (LD)
Will the minister take an intervention?
Annabelle Ewing
Certainly, I will.
Liam McArthur
I appreciate the clarification that the minister has given.
On the clawback provision, you have already suggested that the fees would be payable at each stage by the solicitor, who would then, in turn, recover them from the litigant. It seems unlikely that there would be considerable difficulty in clawing back from solicitors firms fees that are due to the courts. The problem would be for solicitors in recovering the fees, rather than for the Scottish Courts and Tribunals Service. Is that a fair reflection of the actual problem in chasing down debt?
Annabelle Ewing
I will turn that slightly on its head and look at it from the perspective of the motivation for amendments 11, 64 and 16, which is concern about access to justice. We all share that concern.
The most likely scenario for personal injury actions is that they will be done under success fee arrangements. In such circumstances—as Liam McArthur pointed out—the solicitor takes the hit in that they take on the obligation to pay up-front fees, including court fees. In terms of the barriers to justice that there have been concerns about, it is difficult to see how that will impede a person who is pursuing a personal injury action.
On Liam McArthur’s point about recovery, court fees are currently paid on a pay-as-you-go basis, which helps to resource the work of the Scottish Courts and Tribunals Service, as it said in its letter to the committee. If we take away that on-going resource, we will have a problem. At the end of the day, seeking to recover might look easy on paper, but it might prove not to be practicable in every single case, for whatever reason.
The pay-as-you go system means that the money is going into the court service. If we were to take that away, we would take away a big part of the Scottish Courts and Tribunals Service’s budget. That point is made in the relevant documentation about the fees instruments that the committee will consider shortly. The instruments look at the potential negative impact and possible shortfall for the operation of the Scottish Courts and Tribunals Service, which could run to £30 million-plus over the piece. That is a not insignificant budget item.
I understand the motivation for the amendments in the group, but bear in mind that the amendments are intended to cover personal injury actions and such cases will most likely benefit from success fee agreements. Therefore it is the solicitor that will, as part of the package, take on the onus of paying all fees, including court fees.
On the budgetary implications, if there were to be a gap in the budget of the Scottish Courts and Tribunals Service, it would ask central Government to fill it. Under the current financial budgetary constraints, if the service were to look for money from the justice portfolio to fill that gap, something else in the justice budget would have to give: there is not an infinite amount of money available.
Members have referred to the letter that the Scottish Courts and Tribunals Service sent to the committee about the impact that it, as the organisation that operates the system, says that such a move would have, and the fear of the unintended consequences of the amendments in the group.
On the procedural aspect, the service recommended use of secondary legislation on management of fees in order to retain the current flexibility and accessibility to a wider audience.
For those reasons, I respectfully ask Daniel Johnson to seek to withdraw amendment 11 and not to move amendment 16.
John Finnie’s amendment 64 would mean that a pursuer who had the benefit of QOCS would not be liable for court fees at all. I consider amendment 64 to be unnecessary. If a pursuer has the benefit of QOCS, they are liable to pay only the success fee at the end of the case, but only if they win.
As I said, it is the responsibility of the solicitor, not the pursuer, to pay up front all other expenses, including court fees. It is not clear to me why a substantial benefit should be provided to them when that benefit would come at a substantial cost to the Scottish Courts and Tribunals Service and, ultimately, the taxpayer.
10:15In addition, I say that exemptions from civil court fees are best made in the body of court fees orders, in line with the existing enabling power in section 107 of the Courts Reform (Scotland) Act 2014. The new fees instruments that I mentioned include new additional exemptions that will be particularly relevant to women who seek civil protection orders for domestic abuse.
Therefore, although amendment 64 is well intentioned, for the reasons that I have set out at some length—I thought it important to do so—I believe it to be unnecessary and potentially harmful to the funding of the Scottish Courts and Tribunals Service, so I ask Mr Finnie to not move it.
Daniel Johnson
The arguments are relatively straightforward. I think that there is a slight contradiction between the minister’s statement that law firms would be the primary beneficiaries and her dismissal of the point that they would be liable and would have to recover their fees. Amendment 11 addresses a significant barrier as regards cash flow, particularly for trade unions. For that reason, I press it.
The Convener
The question is, that amendment 11 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Finnie, John (Highlands and Islands) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Against
Adam, George (Paisley) (SNP)
Corry, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Kerr, Liam (North East Scotland) (Con)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
Mitchell, Margaret (Central Scotland) (Con)
The Convener
The result of the division is: For 2, Against 9, Abstentions 0.
Amendment 11 disagreed to.
Amendment 64 not moved.
Section 9—Expenses where party is represented free of charge
The Convener
The next group is on free representation. Amendment 37, in the name of the minister, is grouped with amendments 38 and 39.
Annabelle Ewing
In his report, Sheriff Principal Taylor recommended that
“in the interests of transparency, the arrangements as to how a litigation is to be funded must be disclosed to the court and intimated to all parties at the stage when proceedings are raised or notification given that a cause is to be defended. This applies equally to cases where legal representation is provided on a pro bono basis.”
Amendment 37 makes that clear in the bill. The rationale for disclosure of funding arrangements is that that might facilitate earlier settlement of a case. Amendment 37 requires a party to disclose to the court that part or all of its legal representation has been provided free of charge. Section 10 already requires third-party funding to be disclosed, and the proposed new provision will complement that.
Section 9 permits a payment to be made to a charity when a party is successful in litigation and has been represented free of charge—in other words, on a pro bono basis. There is a long and honourable tradition of pro bono representation in Scotland. The payment to charity would be in place of expenses being paid to the successful party. Sheriff Principal Taylor thought that it would be inappropriate to compensate a party for a liability for expenses that it had not incurred. Amendment 38 makes it clear that the size of the payment to charity should be decided by the court on the same basis as it would have been if the representation had not been free of charge. That arrangement broadly follows the model of section 194 of the Legal Services Act 2007 for England and Wales.
Amendment 39 seeks to disapply the provisions of section 9(2) when a party is provided with financial assistance by the Equality and Human Rights Commission. Representation that is funded by the commission still has to be disclosed, as is the case for all funding arrangements. In its submission to the committee, the EHRC queried how section 9 would interact with section 28 of the Equality Act 2006, which empowers it to provide assistance in civil proceedings concerning equality law. The EHRC was concerned that, under section 9 of the bill as drafted, it might not get the expenses to which it would otherwise be entitled under section 29 of the 2006 act.
Amendment 39 therefore rectifies the situation, and the EHRC will still be able to claim expenses in such cases. My officials have checked, and there appear to be no similar special expenses regimes for other public bodies; the Scottish Human Rights Commission, for example, is not empowered to fund civil proceedings by third parties.
I move amendment 37.
The Convener
I would comment that the amendments seem to improve transparency.
Amendment 37 agreed to.
Amendments 38 to 40 moved—[Annabelle Ewing]—and agreed to.
Section 9, as amended, agreed to.
Section 10—Third party funding of civil litigation
The Convener
The next group is on third-party funding. Amendment 41, in the name of the minister, is grouped with amendments 42 to 44, 61, 45, 46 and 12.
Annabelle Ewing
Sheriff Principal Taylor recommended both in his report and in evidence to the committee that all funding of civil litigation should be disclosed to the court, on the rationale that disclosure has implications for how parties proceed and their willingness not only to settle but to settle early. He said:
“disclosure expedites dispute resolution to the benefit of both parties and promotes efficiency in the legal system.”
As a result, section 10 has been reworked to cover all disclosure of all funding of litigation. In the bill as introduced, section 10 provided only for transparency in the case of third-party funders with “a financial interest” in the outcome of a case. Amendment 41 adjusts section 10(1) to ensure that the section now applies a duty of disclosure to all funding of litigation in Scottish courts.
It might also be the case that a pursuer is crowdfunded by people using pseudonyms or who remain anonymous, so he or she will not know the identity of all the funders. Amendment 42 provides for that possibility and makes an exception to the rule that the names of all funders must be disclosed, with the effect that it will apply only if those funders are known to the litigant.
Amendment 44 now makes separate provision for those narrower cases in which the funder has a financial interest in the proceedings—in other words, commercial funding. Proposed subsection (2A) includes the text that was formerly in section 10(2)(c) as well as section 10(3), which is removed by amendment 43 and allows the court to make awards of expenses against venture capitalists and commercial funders if a case is lost.
Concern was expressed at stage 1 that solicitors and other providers of success fee agreements would also be pursued for expenses by a successful defender—albeit, of course, that such defenders would not be able to claim expenses from the litigant in personal injury cases because of the effect of qualified one-way costs shifting in section 8. New subsection (2B) as proposed in amendment 44 therefore makes it clear that the provision of section 10 on liability to expenses will not apply to providers of success fee agreements.
Amendment 61, in the name of John Finnie, makes it clear that a trade union or similar body representing the interests of workers will also not be liable for any expenses if the pursuer whom they have supported is unsuccessful in court. Amendment 12, in the name of Daniel Johnson, is similar, but restricts the exemption only to trade unions and exempts funding from trade unions from the general disclosure requirement. Such a provision would depart from Sheriff Principal Taylor’s recommendations on transparency.
I have noted the concerns that were raised at stage 1 in relation to the application of section 10 to trade unions and similar bodies, and I am happy to support amendment 61. I am afraid that I cannot say the same of amendment 12. Although it seems likely that Mr Johnson was seeking to achieve the same results, I think that Mr Finnie’s amendment better reflects the bill’s overarching principles.
Finally, I note that in its written evidence to the Justice Committee, the Family Law Association expressed concerns about the application of section 10 in some situations. First, a pursuer, particularly one who has been dependent on their spouse or partner for support throughout their relationship, might require a litigation loan to raise proceedings against that spouse or partner. Secondly, parents might give a loan to a child to fund the deposit on a pre-marriage property that then becomes part of the dispute in subsequent proceedings.
The association’s view is that it is neither helpful nor appropriate to require parties to family proceedings to disclose such funding arrangements. The Scottish Government agrees. Amendment 45 therefore disapplies section 10 in family proceedings that are funded by a close family member, who will therefore not be exposed to any risk of an adverse award of expenses. Additionally, in the interests of family privacy, the pursuer will not be required to disclose the funding. Close family members are defined as a spouse, civil partner, co-habitant, parent, child or sibling.
Amendment 46 is consequential on amendment 45 and defines family proceedings for the purposes of the exception for close family members.
I move amendment 41.
John Finnie
I align myself with the minister’s comments, and I think that everyone is supportive of the principle of disclosure.
Throughout our deliberations, we have heard that the intention was never for trade unions to be caught up in the provisions. Amendment 61 refers to a
“trade union or similar body”,
which will cover a range of staff associations. I hope that members will support that.
I strongly support the family privacy aspects that the minister outlined, which are an excellent addition to the bill.
Daniel Johnson
It is important that we explicitly exempt trade unions. I am minded to move amendment 12, although I recognise that John Finnie’s amendment 61 largely achieves the same result; I will be mindful of that at the appropriate time.
The Convener
We will come to that in due course.
Liam McArthur
Like John Finnie, I welcome the amendments that improve transparency, which was certainly a theme at stage 1.
The minister talked about crowdfunding. I would welcome a bit of additional clarification on what the provisions that are to be put into the bill imply for what an individual who receives crowdfunding might have to declare. With any crowdfunding initiative, there will be people who will not be known to the individual, and that issue is captured in the provisions. However, there is the prospect of there being very many funders of small amounts that cumulatively add up to a lot. Is it the expectation that all those individuals would have to be revealed to the court under the amendments that we are considering?
Annabelle Ewing
I am proposing that only those funders who are known to the pursuer need to be disclosed. If the pursuer does not know who the people are, perhaps because they are using pseudonyms, they cannot be expected to disclose that information. I am happy to reflect further on that aspect as we move to stage 3, just to take a belt-and-braces approach and to ensure that we are covering what we need to cover and excluding what we need to exclude.
Liam McArthur
That is helpful. I welcome that clarification. I entirely support the principle; I am just wary about whether the provisions are proportionate in those specific circumstances.
The Convener
Were those your winding-up comments, minister?
Annabelle Ewing
Yes.
Amendment 41 agreed to.
Amendments 42 to 44 moved—[Annabelle Ewing]—and agreed to.
Amendment 61 moved—[John Finnie]—and agreed to.
Amendments 45 and 46 moved—[Annabelle Ewing]—and agreed to.
Amendment 12 not moved.
Section 10, as amended, agreed to.
Section 11—Awards of expenses against legal representatives
10:30Amendment 47 moved—[Annabelle Ewing]—and agreed to.
Section 11, as amended, agreed to.
Section 12—Minor and consequential modifications to rule making powers
Amendment 48 moved—[Annabelle Ewing].
The Convener
The question is, that amendment 48 be agreed to. Are we all agreed?
Members: No.
The Convener
There will be a division.
For
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
Against
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
The Convener
The result of the division is: For 8, Against 3, Abstentions 0.
Amendment 48 agreed to.
Section 12, as amended, agreed to.
After section 12
Amendment 49 moved—[Annabelle Ewing]—and agreed to.
Section 13 agreed to.
Schedule—Auditors of court: modification of enactments
The Convener
The next group is on auditors of court. Amendment 51, in the name of the minister, is grouped with amendments 52, 50, 53 and 54.
Annabelle Ewing
Section 51(3) of the Solicitors (Scotland) Act 1980 and section 2(2)(b) of the Legal Profession and Legal Aid (Scotland) Act 2007 set out lists of auditors of court and other legal figures who are entitled to make certain complaints to the Scottish Solicitors Discipline Tribunal and the Scottish Legal Complaints Commission respectively. Those lists ought now to include the auditor of the sheriff appeal court, who, for the first time, is given statutory status by section 13 of the bill. Amendments 51 and 52 therefore allow the auditor of the sheriff appeal court to report any wrongdoing or inadequate professional services discovered on the part of a lawyer to the appropriate authorities.
Amendment 50 provides for situations in which there is a vacancy in the office of auditor of the Court of Session or where, for some other reason, the incumbent auditor of the Court of Session cannot carry out his or her functions—for example, due to illness or maternity or other family-related leave. Amendment 50 empowers the Lord President to appoint an ad hoc office-holder to act as auditor of the Court of Session for the relevant period. This amendment was requested by the Lord President of the Court of Session and has been agreed with his office and the Scottish Courts and Tribunals Service. The person so appointed on a temporary basis will be treated as the auditor of the Court of Session for most purposes, but he or she will not have any responsibility for the provision of the guidance under section 15 of the bill. A temporary auditor must, of course, comply with the statutory guidance.
Amendment 53 responds to concerns raised by the Lord President and the Scottish Courts and Tribunals Service that section 15, as drafted, would require the auditor of the Court of Session to produce a large tome of voluminous guidance on the taxation of judicial accounts, such as currently exists in England. It was feared by the Lord President and the Scottish Courts and Tribunals Service that the production of such a volume would take the auditor away from his or her normal duties, thus potentially causing delays in the taxation of accounts and even potentially inviting satellite litigation. The amendment amends section 15(2), which is the provision requiring the auditor of the Court of Session, as head of the auditor of court profession, to provide guidance on practice and policy relating to the taxation of accounts of expenses. It is intended that the auditor will provide guidance on questions of taxation of judicial accounts as they arise. That will build into a comprehensive set of guidance for practitioners, which is more consistent with the recommendations made by the Scottish civil courts review, headed by the former Lord President, Lord Gill. However, it should not be such an onerous task as to interfere with the auditor’s other duties.
Amendment 54 makes it clear that, when preparing guidance, the auditor of the Court of Session must nonetheless have regard to the need for auditors across Scotland to exercise their functions in a manner that is consistent and transparent. The Scottish civil courts review referred to the objective of guidance as being
“to ensure that a consistent approach is taken to the taxation of accounts across Scotland”.
Amendment 54 will achieve that objective, as regards the way in which we have now formulated the requirement.
I move amendment 51.
Amendment 51 agreed to.
Amendment 52 moved—[Annabelle Ewing]—and agreed to.
Schedule, as amended, agreed to.
After section 13
Amendment 50 moved—[Annabelle Ewing]—and agreed to.
Section 14 agreed to.
Section 15—Guidance
Amendments 53 and 54 moved—[Annabelle Ewing]—and agreed to.
Section 15, as amended, agreed to.
Section 16 agreed to.
Section 17—Group proceedings
The Convener
Group 14 is on group proceedings: opt-out proceedings. Amendment 13, in the name of Liam McArthur, is grouped with amendments 14 and 15.
Liam McArthur
I welcome the provisions in the bill that allow group proceedings to take place under Scots law. That is welcome, and I do not diminish the importance of that, but I believe that an opportunity will be missed to underscore the ambition that we have on protections for consumers if we limit ourselves simply to an opt-in model. The minister has argued that an opt-in solution is quicker and easier to put in place, but that is contested by the consumer organisation Which?, which suggests that it risks delivering very little for very few in practice. As Which? makes clear, breaches of consumer law invariably have a small impact on a large number of people, so the cumulative impact may be high but the incentive for any single individual to bring legal action is perhaps very low.
For legislation that is meant to be about widening access to justice, and which looks set to do that in a number of areas, the current lack of ambition in relation to group proceedings is a concern. That is why my amendments seek to expand the options available, including the possibility of an opt-out route being taken. As colleagues will see, amendment 13 does not require opt-out rather than opt-in. Instead, it seeks to introduce discretion to the court, allowing it to take into consideration the nature and circumstances of a case. That reflects the approach taken in the Consumer Rights Act 2015 and seems a pragmatic and reasonable way of addressing the concerns that the committee heard at stage 1 from Which? and others.
For the sake of completeness, amendments 14 and 15 go on to lay out what would be required for a proficient opt-out mechanism, including the need to provide a description of a group of persons whose claims are eligible, as per the Consumer Rights Act 2015, as an additional condition of the court’s assessment that reasonable measures have been taken by the representative party to identify and notify any eligible persons, so that they can choose whether or not they want to opt out. Those additional measures should help to address some of the concerns that have been raised that an opt-out proceeding might disadvantage any person or be an administrative burden on the court, by providing definitive boundaries and leaving responsibility for identification and notification with the representative party.
After the Competition Act 1998 introduced an opt-in clause, just one action was brought in 17 years. Only with the introduction of an opt-out provision in the Consumer Rights Act 2015 have we seen a move forward in consumer protection, illustrated by the successful case brought against JJB Sports in 2007 over price fixing for football shirts. I believe that amendments 13 to 15 provide a pragmatic solution that will reinforce the measures in the bill around group proceedings. They have the potential more effectively to incentivise corporate social responsibility on the part of businesses and to underpin the rights of consumers.
I look forward to hearing contributions from colleagues and the minister.
I move amendment 13.
John Finnie
I speak in support of Liam McArthur’s amendments. The key word that he used was “opportunity”. We deal with complex legislation, and the issue should not be the ease with which a provision can be applied. We heard some compelling examples of practice that the amendments would support, and it is important that we try to make that better in the future, so I support the amendments.
Daniel Johnson
I, too, would like to speak strongly in support of Liam McArthur’s amendments. I think that they would be extremely useful. The examples that he set out and the impact of opt-in legislation that we see south of the border lead us to the conclusion that opt-out legislation would be extremely useful. The situations in which a large number of people are suffering a low-level cost present quite a compelling argument. For those reasons, I strongly support the amendments.
The Convener
I also welcome the amendments. We are presented with an opportunity, and I think that the amendments strike the right balance in giving the court the discretion to go to the opt-out procedure if that is deemed to be the best option.
Annabelle Ewing
I am pleased that the proposal to introduce group proceedings, otherwise known as class actions, to the Scottish courts has broad support. To pick up on Liam McArthur’s description of my position, I would say that I do not lack ambition either, but I am perhaps more of a pragmatist, as a result of my position as a Government minister. I will flesh out the reasons why I take that view at this stage.
It is the position of the Scottish Government and most stakeholders—including the Faculty of Advocates, the Law Society of Scotland, the Scottish Trades Union Congress and the Association of Personal Injury Lawyers—that the best way forward is to proceed at this time by way of the introduction of an opt-in system. Principally, that is because it will be more straightforward to implement, easier for potential litigants to understand and easier for practitioners to administer. Further, there would also not be undue delay in commencing the procedure.
The Scottish Government does not have any financial or political objections to opt-out, and the decision to go for opt-in at this stage has been for purely practical reasons.
It is to be borne in mind, of course, that group procedure—notwithstanding the clever drafting of Liam McArthur’s amendment 13—still involves the discretion of the court, and there still have to be court rules in place. That is where we get to one of the nubs of the matter. Group procedure—whatever kind of procedure is adopted—will require new court rules from the get-go, which will be drafted by the Scottish Civil Justice Council. Some of the issues relating to the opt-out option are much more complicated than those relating to the opt-in option. For example, the opt-out option will imply that people might become part of litigation without their consent, and, possibly, without their knowledge. That would have to be addressed in court rules. Further, the concept of aggregated or global damages sits uneasily with Scots law, which adheres to the compensatory principle. No stakeholder has yet proposed a scheme that would ensure that individual claimants are not under or over-compensated.
Members will have seen that the Lord President has written to the committee commenting that any extension of the group proceedings provisions in the bill should be approached with considerable caution. He went on to say that the practical and legal challenges that are presented by an opt-out model are significantly greater than those that are presented by an opt-in model. The Government therefore believes that it would take the Scottish Civil Justice Council far longer to draft rules for both the opt-in and the opt-out procedures from the same starting point, which is what would be required if amendment 13 were to be accepted by the committee, because we would still need to have court rules in place in order to follow a procedure, regardless of whether the court exercised discretion to follow the opt-out procedure. It has been explained why, from the same starting point, it would take longer to formulate those court rules.
John Finnie
If your view is that you will not support the amendments, when do you think would be the appropriate time to move to the system that is proposed?
10:45Annabelle Ewing
That is an extremely practical question. If we proceed on the basis of the bill as it currently stands, and proceed with the opt-in procedure—because that would allow us to start somewhere, as was highlighted by several of those who gave evidence to this committee—it will take some time even to get the opt-in procedures going. The next group of amendments address the issue of post-legislative scrutiny, and it might well be that that would be the perfect stage at which to assess where matters have got to.
There is no question of kicking the matter into touch for ever; my view is inspired by pragmatic considerations that have been raised. We heard in committee that the subject has been discussed for many decades. We need to get on with it and start somewhere. If it is too complicated from the start, we risk delaying the whole thing. Instead of being able to start with at least some opt-in proceedings, we may find ourselves in a position in which no class actions are possible for a considerably longer period of time, as an unintended consequence, because we are trying to be too ambitious at the outset. I am sure that that is not Mr McArthur’s intention, but my concern is that class actions per se could be delayed.
A number of people, including Paul Brown of the Legal Services Agency, have given evidence to the committee to the effect of taking that more pragmatic view. It was not that those people do not wish to see opt-outs—they do. There is a fear that the simultaneous introduction of two processes—one of which is extremely complex, because it introduces elements that we do not currently wrestle with in Scots civil procedure—would mean a delay to all class actions.
I will pick up on the reference—I think it was by Mr McArthur or Mr Johnson—to the experience of the United Kingdom Competition Appeal Tribunal where class actions have been possible. I think that Which? flagged up that experience. We are not sure that the experience of the tribunal is typical; a particularly large number of claimants are before it in competition actions, and competition law is highly specialised and a technical area of law. Scotland has a much smaller jurisdiction, so introducing an opt-in scheme as the starting point would be more straightforward. That is something to bear in mind.
For all those reasons, I ask the committee not to support Liam McArthur’s amendment 13. In response to Mr Finnie’s point, I recognise that this area of the bill would be right for post-legislative scrutiny, assuming that, in the grouping of amendments that we will shortly get to, an amendment on post-legislative scrutiny is agreed to by the committee.
I would be happy to support Liam McArthur’s amendments 14 and 15, which are potentially useful additions to the proposals for opt-in group proceedings. I emphasise that we are not closing the door on an opt-out scheme; I am simply guided by pragmatism whereby I wish to see class actions as a possibility in Scotland as soon as possible. Court rules will need to be drafted and it would be easier to start with an opt-in scheme and then move to opt-out. Post-legislative scrutiny would give members the assurance that this is not an attempt to kick opt-out into touch. If our starting point would be to have to come up with court rules for both opt-in and opt-out schemes, I fear that we would see no class actions for years to come because of the complexity of that approach.
Liam McArthur
I thank the minister and members for their contributions, and I thank the convener, John Finnie and Daniel Johnson for their strong support for my amendments. There seems to be a tussle over who has greater claim to the badge of pragmatism, and I stake my claim again. The way in which I have sought to cast the amendments strikes the right balance by recognising the complexities and the need for court discretion in taking the schemes forward. The minister pointed out, quite fairly, that we still require amendments to rules of court. I do not entirely dismiss the concerns of the opponents cited by the minister, but, given the strength of the evidence that we have heard from Which?, which is a representative of consumer interests, we need to ascribe a suitable weight to its concerns. Direct comparisons between the situations north and south of the border are probably fraught with difficulties—I hear what the minister has said about the actions before the tribunal—but it has taken 17 years south of the border to move from the Competition Act 1998 to the Consumer Rights Act 2015.
We should gain some optimism from the fact that the Consumer Rights Act 2015 demonstrates that it is not beyond the wit of man to construct an opt-out model and in such a way that allows for group proceedings. As Daniel Johnson reminded us, the issue affects high numbers but has a low impact. Unless we address that, we will miss the opportunity that John Finnie raised in his comments.
Liam Kerr (North East Scotland) (Con)
How do you respond to the minister’s point about the delay? From what the minister was saying, it appears that if we agree to the amendment we potentially kick the whole thing quite a long way into the future. Is it not better to get the opt-in scheme going, then look at the opt-out model, perhaps at the stage of post-legislative scrutiny, rather than potentially put back the whole issue for some considerable time?
Liam McArthur
That is not an unreasonable point. The counter to it is that I dare say that Which? has no interest in seeing group proceedings delayed unduly. However, there is an opportunity at this stage to introduce a mechanism that embeds the opt-in model, but leaves the option open to courts to decide on an opt-out mechanism.
We saw the delays that occurred south of the border—they stretched for 17 years, which is a considerable amount of time. There is a bit of a risk that we hang our hat on post-legislative scrutiny because we see it as something that would allow us to return to the issue and address it at that stage. However, there will still be people at that stage, in five years’ time, who suggest that having an opt-out model is awfully complicated, that it would be terribly difficult to amend the rules of court and that it would be better to kick the can further down the road. We have an opportunity now, while there is pressure in the pipe, to introduce group proceedings under an opt-in model and take additional time—I accept that that is needed—to propose a mechanism that allows opt-out proceedings in certain circumstances and in accordance with the discretion of the court. On that basis, I press amendment 13.
The Convener
The question is, that amendment 13 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kerr, Liam (North East Scotland) (Con)
McArthur, Liam (Orkney Islands) (LD)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
The Convener
The result of the division is: For 6, Against 5, Abstentions 0.
Amendment 13 agreed to.
Amendments 14 and 15 moved—[Liam McArthur]—and agreed to.
Section 17, as amended, agreed to.
Section 18 agreed to.
After section 18
The Convener
The final group of amendments is on post-legislative review. Amendment 55, in the name of the minister, is grouped with amendments 62 and 56.
Annabelle Ewing
During the stage 1 debate, several calls were made for there to be post-legislative scrutiny of the bill in five years’ time. In its stage 1 report on the bill, the Justice Committee asked the Scottish Government to commit to post-legislative scrutiny of the bill within five years of its provisions coming into force. In particular, the committee was concerned that such a review should look at the impact of qualified one-way costs shifting.
I have listened to the arguments and I am persuaded that post-legislative scrutiny is appropriate for the special circumstances of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. That does mean that the Government accepts that a statutory requirement for post-legislative scrutiny is appropriate for all legislation passed by the Scottish Parliament. The Government continues to believe that there is a need to take a flexible and proportionate approach to post-legislative scrutiny, so that time and resources are targeted effectively. We look forward to working with the Public Audit and Post-legislative Scrutiny Committee on that.
Amendment 55 provides for post-legislative scrutiny of parts 1 to 3 of the bill, five years after each part is fully commenced. In respect of part 4, on group proceedings, the five-year period will commence from the day on which the first rules of court for group proceedings come into force. That different arrangement is considered necessary because the detail of the procedures for group proceedings will be provided in rules of court to be brought forward by the Scottish Civil Justice Council, which will draft and consult on the rules of court that are to govern group procedure. Group proceedings cannot take place until such rules are in force. Arguably, there is therefore no point in triggering the five-year period for post-legislative scrutiny of group proceedings until they have actually taken place and have had a chance to bed in over the proposed five-year period.
The post-legislative reports that are envisaged in amendment 55 will require consultation with appropriate stakeholders. They will have to be laid before the Scottish Parliament as soon as is practicable after the relevant report has been prepared and then published. The post-legislative scrutiny will provide an opportunity to look at how various key parts of the act are operating and whether amendment is necessary. That could include, for example, the part 1 provisions, as amended, on the future element of damages, taking into account the likely addition at that time of specific damages legislation.
The post-legislative scrutiny of part 2 will allow, as the committee has requested, a review of the operation of qualified one-way costs shifting and how the grounds on which QOCS protection is lost are operating in practice, since they are intended to facilitate meritorious claims while discouraging spurious ones. The post-legislative scrutiny of part 2 will also allow consideration of whether QOCS should be extended to areas of civil litigation other than personal injury actions.
As regards post-legislative scrutiny of part 4, most stakeholders have agreed that opt-in is the practical option for the introduction of group proceedings. However, we heard the committee’s view on that just a moment ago.
Amendment 55 seeks to link the post-legislative scrutiny to the timing of the entry into force of the various parts. I do not want to belabour the point.
Amendment 56 will mean that the whole of the new part will come into force automatically two months after royal assent.
Convener, your amendment 62 appears to have much the same purpose as the Government’s objective in amendment 55. Although it embodies differences from the Government’s proposal, I am willing to support it. As with other non-Government amendments that we are supporting at stage 2, the Government will consider whether any refinements are required and bring them forward at stage 3 if necessary. If Margaret Mitchell’s amendment 62 is duly agreed to, we may nonetheless be required to reflect on the rationale for the timing of the review as it pertains to particular parts of the bill.
That is where we are. On the basis that I need to move amendment 55 in order for the group to be considered, I will move it, although that is only to allow debate to take place on the rest of the group of amendments.
I move amendment 55.
The Convener
Thank you, minister. I will speak to my amendment 62. I think that it complements the minister’s amendment 55. Both insert provisions for post-legislative review of the operation of the act as soon as is practicable after five years, and both require the laying before Parliament of a report on the review.
However, in our stage 1 report, the committee specifically asked the Scottish Government
“to commit to post-legislative scrutiny of the Bill (within five years of its provisions coming into force), in particular to review the impact of introducing”
qualified one-way costs shifting in section 8. Amendment 62, therefore, specifically calls for a review of the effect and operation of section 8 and QOCS, which represents a radical departure from the traditional loser-pays principle. It also specifically calls for a review of the effect and operation of section 17, on group proceedings, including the opt-in approach, and now that the committee has agreed to Liam McArthur’s amendment, it would include a review of the opt-out provision, as well a review of how sections 8 and 17 affect
“access to justice and the administration of Scottish courts”.
Amendment 62 states:
“The report must include a statement by the Scottish Ministers setting out—
(a) whether they intend to bring forward proposals to modify any provision of this Act, and
(b) where no such proposals are to be brought forward, their reasons for not doing so.”
As such, it covers all the provisions in the minister’s amendment, but it specifically provides for QOCS, as the most contentious aspect of the bill, to be reviewed, with further scrutiny of its operation, together with section 17 and group proceedings.
As there are no other comments from members, I ask the minister to wind up.
Annabelle Ewing
I just want to point out that, as you have highlighted, post-legislative scrutiny will permit a number of complex and technical aspects of the bill to be reconsidered in the light of five years of its operation. I must emphasise again that the Government does not believe that post-legislative scrutiny is necessary for every piece of legislation, but, as I have said, we will work with the Public Audit and Post-legislative Scrutiny Committee in that regard.
In the light of the convener’s comments, I will not press amendment 55. I support amendment 62, in the name of Margaret Mitchell, and as with all stage 2 amendments, I will, if the committee agrees to that amendment, reflect whether any refinements might be required at stage 3.
11:00Amendment 55, by agreement, withdrawn.
Amendment 62 moved—[Margaret Mitchell]—and agreed to.
Section 19—Regulations
Amendment 16 moved—[Daniel Johnson].
The Convener
The question is, that amendment 16 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division. [Interruption.] The clerks could not see who was voting. We will take the division again.
For
Corry, Maurice (West Scotland) (Con)
Finnie, John (Highlands and Islands) (Green)
Johnson, Daniel (Edinburgh Southern) (Lab)
Kerr, Liam (North East Scotland) (Con)
McArthur, Liam (Orkney Islands) (LD)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
The Convener
The result of the division is: For 6, Against 5, Abstentions 0.
Amendment 16 agreed to.
Section 19, as amended, agreed to.
Sections 20 and 21 agreed to.
Section 22—Commencement
Amendment 56 moved—[Annabelle Ewing]—and agreed to.
Amendment 17 moved—[Liam Kerr].
The Convener
The question is, that amendment 17 be agreed to. Are we all agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
McArthur, Liam (Orkney Islands) (LD)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
The Convener
The result of the division is: For 4, Against 7, Abstentions 0.
Amendment 17 disagreed to.
Amendment 65 moved—[Gordon Lindhurst].
The Convener
The question is, that amendment 65 be agreed to. Are we all agreed?
Members: No.
The Convener
There will be a division.
For
Corry, Maurice (West Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Finnie, John (Highlands and Islands) (Green)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
McArthur, Liam (Orkney Islands) (LD)
The Convener
The result of the division is: For 3, Against 8, Abstentions 0.
Amendment 65 disagreed to.
Section 22, as amended, agreed to.
Section 23 agreed to.
Long title agreed to.
The Convener
That ends stage 2 consideration of the bill. The bill as amended will now be printed. The Parliament has not yet agreed when stage 3 proceedings will take place, but members can lodge stage 3 amendments with the clerks in the legislation team at any time. The deadline for lodging amendments will be announced as soon as it is known.
I thank the minister and her officials for their attendance, and I suspend briefly to allow them to leave.
11:04 Meeting suspended.11:11 On resuming—
6 March 2018
Additional related information from the Scottish Government on the Bill
Revised explanation of the Bill (Revised Explanatory Notes)
More information on how much the Bill is likely to cost (Supplementary Financial Memorandum)
More information on the powers the Scottish Parliament is giving Scottish Ministers to make secondary legislation related to this Bill (Supplementary Delegated Powers Memorandum)
Stage 3 - Final amendments and vote
MSPs can propose further amendments to the Bill and then vote on each of these. Finally, they vote on whether the Bill should become law
Debate on the proposed amendments
MSPs get the chance to present their proposed amendments to the Chamber. They vote on whether each amendment should be added to the Bill.
Documents with the amendments considered at this meeting on 26 April 2018:

Debate on proposed amendments transcript
The Deputy Presiding Officer (Christine Grahame)
The next item of business is consideration of stage 3 amendments to the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. In dealing with amendments, members should have with them the bill as amended at stage 2, the marshalled list and the groupings.
The division bell will sound and proceedings will be suspended for five minutes for the first division of the afternoon and the period of voting for that first division will be 30 seconds. Thereafter, I will allow a voting period of one minute for the first division after a debate.
Members who wish to speak in the debate on any group of amendments should press their request-to-speak buttons as soon as possible after I call that group.
Members should now refer to the marshalled list of amendments.
Section 2—Enforceability
The Deputy Presiding Officer
I call group 1. Amendment 34, in the name of Margaret Mitchell, is the only amendment in the group.
Margaret Mitchell (Central Scotland) (Con)
For an ordinary member of the public, understanding civil litigation can be a complex and confusing process. The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill seeks to increase access to justice. By means of success fee agreements, it introduces provision whereby a lawyer who uses a damages-based agreement can take a share of their client’s injury compensation, which can include compensation for both past and future loss.
Amendment 34 seeks to ensure that the bill will protect the consumer by ensuring that the injured pursuer has the relevant information with which to make an informed choice about whether to accept the terms of the success fee agreement that is on offer where the damages are awarded not by a court but through a negotiated settlement. The amendment ensures that before the success fee is agreed—which can be by means of a damages-based agreement—the solicitor or provider has explained in writing to the client
“how the terms of the success fee agreement would determine the fee payable in respect of the different elements of damages that may be obtained”.
The onus is on the lawyer to state, in writing, that the amount that is being taken as part of the lawyer’s fee is fair and reasonable. Amendment 34 also ensures that the client has confirmed, in writing, that they have understood and agreed to the terms of the agreement. In addition, it ensures that, after an offer of damages is received, but before it is accepted, the recipient fully understands how much of the damages amount is being paid to their lawyer and, in particular, to what extent the part of the offer that relates to damages for future loss is being claimed as part of the lawyer’s fee.
It is important to recognise that compensation for future loss is awarded to an injured pursuer to cover their future care, which can include lost earnings while an injured person is off work and recovering, or travel expenses for expected future hospital appointments. In more serious personal injury cases, it could cover loss of all future earnings as well as the costs of future care and specialist equipment that may be needed. Therefore it is crucial that an injured pursuer fully understands how much of their future loss entitlement—which can vary, depending on very complex care needs—will instead go towards their solicitor’s fee if their case should be successful.
In addition, the amendment will ensure that the lawyer must provide
“a certificate that the fee payable is fair and reasonable in the circumstances of the case, and ... that no conflict of interest or undue influence has arisen”.
That will also provide protection for the lawyer.
In conclusion, in the minister’s remarks at stage 2, she indicated, in essence, that she thought that the Law Society of Scotland should be responsible for providing that client protection. However, as the Law Society lobbies in the best interests of its members, it is not best placed to set out what form that protection would take after the bill has been passed. By contrast, amendment 34 would set out provisions in the bill to ensure transparency and openness in a success fee agreement, and that an injured pursuer has the necessary information to enable them to make an informed choice as to whether to accept the agreement. As such, the amendment will provide checks and balances that will serve to protect solicitors and clients from any underlying potential conflict of interest.
I move amendment 34.
Daniel Johnson (Edinburgh Southern) (Lab)
I share many of Margaret Mitchell’s concerns, and it is important to note her comment on the proposals in the bill being about increasing access to justice. It is important that individuals who bring forward cases do so with the fullest possible knowledge and that their interests are protected. However, we do not support amendment 34, first and foremost because it would introduce an unnecessary layer of bureaucracy. Requiring the arguments and reasons to be set out in writing would not necessarily protect clients’ interests in the way that Margaret Mitchell has set out. Critically, some in the legal profession have argued that the approach would prevent so-called at-the-court-door settlements, which are often in the client’s best interests in preventing court action and arriving at an agreement that ensures that their interests are looked after.
On Margaret Mitchell’s comments on the Law Society and who is best placed to look at the matter, in the final analysis lawyers are in a highly regulated profession. Solicitors undergo a great deal of scrutiny and are required by law to uphold their clients’ best interests. If there is an issue, it is a much wider issue relating to the profession that would be best looked at from a regulatory point of view, rather than through the specifics of the bill.
For those reasons, we will not agree to amendment 34.
Liam McArthur (Orkney Islands) (LD)
Like Daniel Johnson, I think that Margaret Mitchell very fairly identified an issue. Access to justice is predicated on there being a level of transparency and predictability about what any litigant might expect from the process. However, I share Daniel Johnson’s concerns about the amendment putting in place something that would, in practice, come to be seen as fairly cumbersome and not necessarily in the best interests of the individual.
As Margaret Mitchell rightly said, the Law Society is developing proposals. With a five-year review provision built into the bill, there will be an opportunity to keep under review whether the processes that the Law Society has undertaken are fit for purpose. On that basis, and for the reasons that Daniel Johnson has identified, we will not support amendment 34.
The Minister for Community Safety and Legal Affairs (Annabelle Ewing)
I refer members to my entry in the register of interests. Members will note that I am a member of the Law Society of Scotland and that I hold a current practising certificate, albeit that I am not currently practising.
Amendment 34, in the name of Margaret Mitchell, would include in the bill certain requirements for a success fee agreement to be enforceable. I ask members not to agree to the amendment, as it would undermine the principle of an independently regulated legal profession. The provisions in the amendment are also unnecessary—I will deal with that in a moment.
Turning to the first point, the amendment would mean that substantial provisions about solicitors’ professional obligations would be fixed in primary legislation rather than in Law Society rules, which, aside from any other consideration, are much more flexible when it comes to updating and so forth. The amendment therefore appears to strike at the heart of an independent Law Society and does not take account of the principle that professional rules are best made by a professional body.
Sheriff Principal Taylor has commented that he believes that the second part of the amendment in particular is impractical. As Daniel Johnson mentioned, a number of cases still settle at the eleventh hour and at the door of the court. Sheriff Principal Taylor believes that paragraphs (b)(i) and (b)(ii) of the amendment would be difficult to comply with, and points out that a solicitor is already under an obligation to comply with the provisions in paragraphs (b)(iii) and (b)(iv), which the amendment would require to be certified. If the provisions are inserted into primary legislation, there is also a question of who will be responsible for regulating them. As it stands, it is not clear from the amendment that the Law Society would have that responsibility, so that is a matter of uncertainty.
It is a fundamental principle of maintaining an independent legal profession that no state interference or influence is exerted. The Scottish Government is committed to the principle of an independent profession, and I ask the Parliament to support that principle. It is well known that, as I said, Scottish solicitors are already required to act in the best interests of their clients at all times and must ensure that their clients understand fee arrangements and give informed consent.
Success fee agreements are not new; indeed, they have been in place in some form since the 1990s, and any theoretical conflicts and other issues have not prevented speculative fee agreements from being rolled out since that time. Where the provider of relevant services is a claims management company, it will of course fall under the regulation of the Financial Conduct Authority.
The Law Society has set up a working party that is considering success fee agreements, what provision should be made in Law Society rules and guidance to govern their terms and any other relevant issues. I understand the motivation behind Margaret Mitchell’s amendment 43, and I undertake to write to the Law Society to draw its attention to the points that the amendment raises. The Scottish Government will of course work with the Law Society as the bill is implemented to seek to ensure that the provisions relating to success fees are implemented in a way that best gives effect to the principles of the bill.
In summary, amendment 34 provides for matters that should not be set out in primary legislation, that risk undermining the principle of an independently regulated legal profession and that are more appropriately handled in rules and guidance that are provided by the Law Society of Scotland in its capacity as regulator of solicitors. Hence, I ask Margaret Mitchell to consider withdrawing amendment 34.
Margaret Mitchell
A number of points have been raised. Daniel Johnson said that the amendment might prohibit settlements at the court door, but there is nothing to prevent a pro forma being available for the client to use. That would be against a strengthened background should the amendment be agreed to.
The need to ensure that the pursuer has made a fully informed choice outweighs anything that might be seen to be cumbersome. Let us not forget that, as was argued during stages 1 and 2, these cases often involve complex needs and essential care. It is not as if lawyers do not have another way of being remunerated. If such agreements are being written in, that could have adverse effects on the pursuer in an injury claim. Although all lawyers have a duty to act in good faith and in the objective interests of their clients, sadly, that does not always happen.
I believe that, rather than wait until some time in the future to see what the Law Society may or may not come up with on success fee agreements, it is important to include in the bill the protection that amendment 34 would provide.
The Deputy Presiding Officer
The question is, that amendment 34 be agreed to. Are we agreed?
Members: No.
The Deputy Presiding Officer
There will be a division. As this is the first division of the stage, the Parliament is suspended for five minutes.
14:44 Meeting suspended.14:49 On resuming—
The Deputy Presiding Officer
We will proceed with the division on amendment 34.
For
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mason, Tom (North East Scotland) (Con)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Scott, John (Ayr) (Con)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Wells, Annie (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
Against
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Constance, Angela (Almond Valley) (SNP)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hepburn, Jamie (Cumbernauld and Kilsyth) (SNP)
Hyslop, Fiona (Linlithgow) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McArthur, Liam (Orkney Islands) (LD)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rowley, Alex (Mid Scotland and Fife) (Lab)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Russell, Michael (Argyll and Bute) (SNP)
Sarwar, Anas (Glasgow) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Deputy Presiding Officer
The result of the division is: For 29, Against 84, Abstentions 0.
Amendment 34 disagreed to.
Section 4—Power to cap success fees
The Deputy Presiding Officer
We come to group 2. Amendment 5, in the name of the minister, is grouped with amendments 6 to 8, 13 and 14.
Annabelle Ewing
Amendments 5 to 8 are technical in nature. We have been working with Her Majesty’s Treasury on the United Kingdom Financial Guidance and Claims Bill, which will now regulate claims management companies in Scotland. The Treasury envisages success fee caps being imposed by professional rules. Those will be rules of the Financial Conduct Authority in the case of claims management companies, or rules of a legal services regulator in the case of solicitors.
It is thought at present that there is little likelihood that success fee caps in professional rules and success fee caps under section 4 of the bill will interact. Success fee caps in professional rules could, however, interact with success fee caps under section 4 if the Westminster secondary legislation on claims management companies changes at some point in the future.
In addition, the current legal services review that the Scottish Government has instructed could lead to changes in legal profession regulation that change the extent or nature of professional rules applied to solicitors.
Therefore, in effect we are seeking to provide future proofing. Specifically, the Financial Services and Markets Act 2000, which is to be amended by the UK Financial Guidance and Claims Bill in order to regulate claims management companies, will allow the Treasury to make regulations to give power to the FCA to make professional rules. Such rules would be tertiary legislation.
Amendments 5 to 8 will amend section 4(3)(b) and section 4(4) of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill to ensure that success fee caps made in professional rules in accordance with an enactment will be treated the same as success fee caps made in an enactment. The policy in section 4 has always been that where there are two sets of fee caps, the lower one has effect.
The amendments reflect that a fee cap in professional rules might not count as a fee cap in an enactment and, therefore, the relevant text will become
“by, or in accordance with, an enactment”.
I reiterate that we do not expect the Westminster fee caps as currently proposed by the Treasury to interact with those to be provided further to this bill.
Amendments 13 and 14 are also technical drafting amendments. Amendment 13 combines section 10(2B) and section 10(3A) into one subsection that indicates the circumstances in which subsection (2A) does not apply. Thus, there will be a single subsection providing that the providers of success fee agreements and trade unions and staff associations will not be at risk of an award of expenses. Amendment 14 is a technical drafting amendment that ensures that the first reference to the Lord President of the Court of Session in section 13A uses the Lord President’s full title, which is already used in section 9(3). Given that both amendments are minor and technical, they do not make any substantive changes to section 10 and section 13A.
I move amendment 5.
Amendment 5 agreed to.
Amendments 6 to 8 moved—[Annabelle Ewing]—and agreed to.
Section 6—Personal injury claims
The Deputy Presiding Officer
We move to group 3. Amendment 1, in the name of Daniel Johnson, is grouped with amendments 2, 2A, 3 and 4.
Daniel Johnson
I will speak to amendments 1 to 4 in my name and against Margaret Mitchell’s amendment 2A.
I apologise in advance, Presiding Officer, as these are complex amendments and it may take some time to rehears