Agenda item 2 is an evidence-taking session with the Association of Personal Injury Lawyers and the Faculty of Advocates as part of our scrutiny of the financial memorandum to the Courts Reform (Scotland) Bill.
I welcome to the meeting Ronnie Conway of the Association of Personal Injury Lawyers and James Wolffe QC of the Faculty of Advocates. Members will remember that a short time ago Mr Wolffe gave evidence to the committee in a slightly different capacity.
There will be no opening speeches. I am sure that both witnesses know how the committee works: after I ask some opening questions, I will widen the session to include committee colleagues, one of whom already has their name down for the first question. The witnesses should feel free to respond to any question that is asked; Mr Wolffe might or might not wish to come in on a question for Mr Conway, and vice versa.
Without further ado, I will ask Mr Conway the first question. Paragraph 3 of APIL’s submission, which refers to the proposed exclusive competence threshold of the sheriff court, says:
“APIL has recommended a limit of £30,000 based on evidence collected, and arguments outlined in the evidence to the justice committee. We refute absolutely the assumption at paragraph 75 of the financial memorandum that only 80 per cent of personal injury cases will move to the sheriff court as a result of this Bill”.
Can you give us a wee bit of information on your estimate of what the figure should be?
Yes. With the committee’s permission, I will begin by talking about the figures that the Government has used.
This matter goes back to the civil courts review. The critical figure is not the sum that is sued for but the settlement figure. Lawyers routinely inflate or—if you wish to use the word—exaggerate the sum that is sued for, because the court cannot award more than has been asked for. A nightmare for practitioners such as James Wolffe and myself is a judge saying, “I would have awarded such and such, but because the sum sued for was such and such, I cannot award that much.” As a result, the sum that is sued for is routinely around a third higher than the real value of the case. If the profession had known that civil servants were going to place such an emphasis on that, we might have adopted a different approach.
Originally, there were two sets of data. In the first set, which related to cases over a two-week period, only the sum that was sued for was looked at. After a certain scoping, it was found that around a third of those cases would have downshifted to the sheriff court under the proposed system.
The second set of data was produced by an insurer, whose response was based on its own files. It is fair to say that everyone who has looked at that data has done so with considerable reservations and caution. As the Scottish Parliament information centre briefing suggests, it is not clear whether that cohort is truly representative. Although the bill’s proponents seemed to want that data to be interrogated further, the Government told them that that was not possible because of confidentiality. Confidentiality might well attach to the names of the parties, but they could easily be redacted, and it is difficult to see on what other basis confidentiality could operate.
APIL commissioned its own research from Alex Quinn & Partners, which, as a firm of law accountants that routinely acts for both pursuers and defenders, does not hold the ring for any particular constituency. It looked at five or six firms that specialise in Court of Session work; they were told to submit all their cases over a period of a month, and those 53 cases formed a cohort and were followed through to their outcome. The details of that research have been sent to the Government and were attached to our submission to the Justice Committee, which took evidence yesterday.
Those figures are far more robust and reliable and can be interrogated. The only confidential aspect is the clients’ names, but other than those, we are quite happy to make the full details of those 53 cases available. Given that only two resulted in a settlement of over £150,000, we are looking at a downshift not of 80 but of 95 or 96 per cent.
It appears that a fear in the civil courts review is that pursuers’ firms will somehow subvert whatever legislation is made by simply exaggerating the sum that is sued for and thereby getting a ticket into the Court of Session. That is why—it is said—the limit should be as high as £150,000, which is much higher than that in any other jurisdiction in the United Kingdom and that in the Republic of Ireland.
The suggestion also seems to be that a pursuer’s firm could do that sort of thing with impunity. That is a misconception and a misrepresentation of the current situation, because, at the end of the day, the basis on which costs are awarded depends on the settlement figure.
I will give an example from the present system. In the case Brown v Sabre, which was heard last week in the Court of Session, the sum that was sued for was something like £15,000 and the case settled at £6,500. Lord Boyd’s decision was that the settlement figure indicated that the case should never have been brought in the Court of Session; he then reduced costs on the basis that it should have been raised in the sheriff court, and said that there would be no sanction for counsel. I do not directly know the personnel involved, but we can take it that the firm in question will not behave in that way again.
There is no doubt that there must be behavioural change. The proponents of the legislation are absolutely right to say that cases must be shifted out of the Court of Session because there are too many low-value cases in it. However, the limit is too high, and it means that the cases go straight from low value to high value. As I said yesterday to the Justice Committee, modesty is relative in every walk of life, but I suggest that, if you were to ask your constituents, “Is £50,000 a modest sum of money? Is £150,000 a modest sum of money?”, they would look at you as if you were mad. Our scoping suggests that the Government has consistently underestimated the downshift of cases.
We also think that the Government has overestimated the settlement rate of cases. When the settlement figure in the Court of Session was last checked in research carried out in 2008, it was found that 98 per cent of cases were settled, mainly at the door of the court. Certain procedural drivers for that settlement process just do not exist in the sheriff court. The first is the availability of counsel. Our position is not that there should be automatic sanction for counsel, but we feel that counsel should be sanctioned in appropriate cases. The fact is that they are a driver to settlement. In the Court of Session, there is a compulsory face-to-face meeting and a no-excuses, no-adjournment culture in which four days are allocated and people must be prepared and ready to turn up.
Our written submission to the Justice Committee highlights an analogous case—a low-value case in Hamilton sheriff court—that bounces around. Only one day was allocated to the case at the start of the process—the time is allocated about six months in advance—but when the case began, it became clear that a further two or three days were required. The day before those two or three days were due to commence, the parties were told that a criminal jury trial had run over and that the sheriff was obliged to deal with that, and the case had to call twice as a procedural hearing to get further dates allocated. The whole evidence-taking and submission procedure took over a year.
Every practitioner in the sheriff court knows that it is creaking under tremendous pressure, but the proposal is to pass the best part of 2,600 or 2,700 cases down to those courts without additional resources—and I wish to make it plain that this is about funding and resources. Our concern about the Government’s projections is that it appears to be throwing sixes at every point of the process. It is looking at the most optimistic downshift numbers—it appears to have ignored the April figures—and the most optimistic settlement figures. We think that the Government’s 80 per cent figure is an underestimate, but even if we were talking about 85 or 90 rather than 98 out of 100 cases, we would still need at least another five or six sheriffs.
I realise that I am speaking without written material, convener. Since we first saw the financial memorandum, we have been working on scopings and projections, which we would be happy to make available to the committee, if it would find that of interest.
Thank you for that detailed answer, Mr Conway.
I am sure that Mr Wolffe will wish to comment. On the basis of the evidence that has been collected, APIL has suggested a limit of £30,000. What is the view of the Faculty of Advocates?
I will pick up one or two of the points that Ronnie Conway made.
First, on the data on which the bill is based, the discussion of the statistics on page 19 of the SPICe briefing reflects the fact that the bill is based on one respondent’s comparison of 93 Court of Session cases and 94 sheriff court cases over a three-year period. To be fair, in a footnote that is quoted in the SPICe briefing, the civil courts review itself recognised the data’s statistical limitations—that is perhaps an understatement. I do not know what the numbers are, but over a period of three years thousands of cases must have gone through the system. We should therefore appreciate the limitations of the data.
On the £30,000 figure that has been suggested and the impact that it would have, one should, as Ronnie Conway observed, really look at the settlement figure rather than the sum that is being sued for. Our response to the Justice Committee includes data that was made available to us on a cohort of just over 1,000 cases that were raised in 2011 and 2012. According to that data, 70 per cent of those cases settled for £20,000 or less, which means that, if the settlement value was the relevant figure and was set at £20,000, 70 per cent of the cases in that cohort would have been shifted from the Court of Session to the sheriff court. That gives the committee a sense of the scale of what could be achieved with a significantly lower limit than the proposed £150,000.
I amplify Ronnie Conway’s observation about how the court deals with the reality that, for perfectly proper and good reasons, the sum that is sued for will often—and sometimes by some margin—exceed the settlement figure. The bill contains an obligation on the Court of Session to remit to the sheriff courts any case in which at any point it appears to the court that its value—assuming liability and no contributing negligence—is lower than whatever limit is fixed. As I understand it, it is envisaged that such cases will be called before and considered by a judge at an early stage, and if they feel that, on the most optimistic view, the case is not worth a figure that is over the Court of Session’s exclusive competence limit, it will be sent to the sheriff court. Pressure will also be brought to bear in the way expenses are dealt with.
As for personal injury cases, the £150,000 limit seems way beyond what is necessary. However, I want to make a point about non-personal injury cases. The driver for this part of the bill is very much the phenomenon that the Court of Session’s efficiency and effectiveness in its handling of personal injury cases has led to a significant volume of cases in the personal injury field that are at the lower end of the value scale being raised in the Court of Session.
11:00The proposal is to apply the same £150,000 limit in the non-personal injury field. I am not aware of any evidence that makes the case that non-personal injury cases, particularly commercial ones, are being brought inappropriately to the Court of Session. One of our concerns is that in the non-personal injury field, particularly on the commercial side, there is a real risk of compelling commercial and other litigants who for good reasons choose to come to the Court of Session to bring their cases to their local sheriff courts instead.
Like APIL, we recognise that it is appropriate to increase the limit and, again like APIL, we suggest that it would be appropriate to have a figure that equates to the £30,000 limit that they have in Northern Ireland. That limit was increased from £15,000 only in February 2013. The Northern Ireland comparison is an interesting one, because the system there operates in a different way. In Northern Ireland, if a case is worth more than £30,000, it has to go to the High Court.
Listening to Mr Wolffe, I am aware that I might not have answered your question properly. We started off considering the shape of the Court of Session as described in the civil courts review. Lord Gill, the review’s prime author, said that after the reforms 65 per cent of cases would be heard in the sheriff courts and 35 per cent in the Court of Session, and we felt, as a result, the Court of Session would be retained as a court of first instance. I will not repeat what was said to the Justice Committee yesterday about why that is so important.
We looked for a figure that, first, would commend itself to the public and secondly, and perhaps more important, would meet that projection and leave the Court of Session with about a third of cases at first instance. A histogram—I am told that it should, in fact, be described as a scattergram—that is based on settlement figures and which was attached to the submission to the Justice Committee makes it perfectly clear that a £30,000 limit would do the trick.
I am glad that there is some unanimity on that. That is clear evidence for the committee.
The financial memorandum notes that the number of cases heard at first instance at sheriff court level has decreased by 36 per cent since 2008-09. Mr Conway, you have spoken about the sheriff courts. In your submission, you used the phrase “creaking at the seams”, and you emphasised just a few minutes ago that that is the situation that the system is in. With a 30 per cent reduction, there is perhaps greater scope for such cases to be dealt with in the sheriff court. That is why neither you nor Mr Wolffe disputes the fact that some of the cases should move to the sheriff court; the question is about the level of cases that should go to the sheriff court.
I practise in the sheriff court and the Court of Session. I appreciate that this is only anecdotal, but the sheriff court is under huge time constraints. The analysis in the civil courts review was that the current legal system is “slow, inefficient and expensive”—too expensive. Only the first two aspects of that analysis—slowness and inefficiency—applied to the sheriff court. There is no dispute about the fact that the Court of Session is too expensive for low-value cases. It is a Rolls-Royce system.
The problem with the 30 per cent reduction is that we have to consider the make-up of the cohort of cases. It seems to us, from considering the civil judicial statistics, that probably around 50,000 of the cases in the sheriff court are debt or repossession cases. Those cases consume administrative resources, but they do not really consume judicial resources. Anything substantive, such as personal injury work, will involve a significant input of judicial resources.
I saw a comment in which one of the Government officials asked how the proposed shift in cases could possibly make any difference, given that it represents only 3 per cent of the overall case load. In relation to the number of cases that will come down to the sheriff court—2,500—I will not repeat what has already been said about the figures, but the cases that do not settle will require procedural input, as motions for sanction for counsel will become a matter of routine. Those do not appear to me to have been factored into the figures anywhere. There will be four days of proof allocated. All that would need to happen would be for a clinical negligence case to be brought—such cases routinely run to eight or 12 days—or a long-running personal injury matter involving some disease, and the system would be completely overwhelmed.
I have seen what the statistics say, and there is a reduction in litigation generally. However, concentrating on the top figures does not do justice to what is happening on the ground.
We unequivocally support the need for improvement in the way in which the sheriff court operates, particularly for contested and more complex litigation. Given the information that I have received from my members, I endorse what Ronnie Conway has said.
One general concern about the context of the bill that is before us—much of which I unequivocally support for the reason that I have just stated—is that the ultimate vision for improving the way in which the court operates involves a shift to what is described as active case management. That is described on pages 8 and 9 of the SPICe briefing, and it involves more active judicial engagement with cases. I have a general concern about how that will be achieved in the context of a financial memorandum that does not suggest that any more resource is to be put into the system.
In thinking about the sheriff court dealing with additional cases and the 3 per cent figure, it is important that we distinguish between personal injury cases and the others, because the expectation is that personal injury cases will go to a new national personal injury sheriff court. We can consider the proposed resourcing of that court—I suspect that Ronnie Conway is better placed than I am to speak about whether the anticipated resourcing of that court will be adequate.
Let us consider the non-personal injury cases, in particular the commercial cases. According to the civil courts review figures, about a quarter of the cases that were brought to the commercial court at the time of the review would be below the £150,000 limit. Those are cases that were brought to the commercial court, one anticipates, because the pursuer or, in some cases, both parties may have taken the view, on advice, that the nature of the case, the issues involved and the likely complexity of the dispute made the case suitable for bringing to the commercial court.
The bill implies that those litigants will be compelled to take the case to whatever local sheriff court happens to be the right one for it. One can assume that those cases are likely to be more complex and difficult, and one suspects that they are likely to be contested. They are precisely the sort of cases that, as I understand it, the sheriff court does not handle terribly well. By no means do I want to tar the whole sheriff court system with the same brush, but there are problems and they are not going to be helped by moving the cases in question to individual sheriff courts.
Ultimately, though, I am concerned about the litigants who currently choose, for good reasons, to go to the Court of Session for the particular service that that court can provide. At a time when everyone accepts that the sheriff court reform process will take 10 years and investment if it is to realise its aims, those litigants will be compelled from the outset to take their cases to the sheriff court.
Time is marching on and I want to allow committee colleagues to come in, so although I have a number of further questions, I will restrict myself to asking one.
Mr Wolffe, with regard to the financial memorandum, the submission from the Faculty of Advocates states:
“The estimated impact on the Legal Aid board (paras 94-97) is unlikely to be accurate.”
What do you believe that the impact will be?
The first point to make is that the overwhelming majority of personal injury cases are not funded out of public funds. Essentially, in the Court of Session—at least, as I understand it—the pursuer’s representatives act on the speculative basis of no win, no fee. Such cases are not supported by public funds. It is fair to say that Ronnie Conway is probably better placed to speak to this matter but, as I understand it, the cases that are funded by the Scottish Legal Aid Board tend to be the clinical negligence cases, the ones that are more complicated and the ones that, for one reason or another, are not supported through the speculative mechanism.
The Legal Aid Board is rightly quite cautious about the way in which it puts the estimate. If I recall correctly, it says that the saving could be up to £1.2 million, but it rightly observes that that is likely to kick in only over a period of time. The issue for me is that, if the board is currently supporting the more complex and difficult cases, they are the very cases in which one would have thought it likely to be true that the involvement of counsel will continue to be justified. I therefore think that there must be a question mark, at the very least, about the validity of the assumption that there will be a 50 per cent saving.
Mr Conway, APIL said in its written submission:
“The costs in the financial memorandum are barely penetrable”.
Can you respond to the question that I have asked about the Legal Aid Board?
Indeed. I am very grateful to you, because APIL has a constant problem with the figures. I am reluctant to be too dogmatic about matters, because we do not appear to have access to the back-story research, so to speak. However, the idea that £1.2 million will be saved to the public purse is complete smoke and mirrors. If a substantial saving is to be made, it will be made to the insurance industry. With regard to the figures in paragraphs 94 to 97 of the financial memorandum, the Legal Aid Board does not pay £2.4 million to the Faculty of Advocates, except in an accounting sense—it is an accounting protocol.
As Mr Wolffe indicated and as the figures show, at least nine out of 10 of the cases in question are successful. The Legal Aid Board says that the figure is 85 per cent. It complains that it gets dumped with the hardest cases, so if 85 per cent of the hardest cases are successful, we can imagine what is happening with the rest of them.
11:15As an accounting protocol, let us say that I sue Mr Wolffe in his capacity as an insurer and I get £100,000. I am legally aided and I get £25,000 of costs. I will have to send that £25,000 of costs to the Legal Aid Board, which will pay it back to me as fees. Again, the caveats are in the submission. According to the figures in the financial memorandum, £4.9 million in total was paid out by the Legal Aid Board. That is not a net figure. The true cost of the whole reparation budget is 15 per cent of that, or £735,000.
Of course, the Legal Aid Board has a stringent list of occasions on which legal aid might be available. First, in the Court of Session, legal aid is available only if someone meets the quite stringent requirement that the case is worth more than £50,000. The Legal Aid Board is the gatekeeper as far as that is concerned.
In the sheriff court, the test is much tougher, both in theory and in practice. The idea that savings will be made to the public purse even out of that £735,000 is illusory. In my view, it is completely wrong. It is not acceptable for the Legal Aid Board to suggest to members of this committee, the Justice Committee and the wider body of MSPs that there will be a saving to the public purse. There might be savings in the sense that counsel will be excluded in some low-value or modest cases, but the saving will be made by the insurance industry, not the public.
Thank you for that clear response. I open up the questioning to members.
I was going to structure my questions around costs first and then savings, but as we are on legal aid, which I have asked about, let us do it the other way around and see what savings we can establish from the bill. Clearly, Mr Conway is saying that the legal aid savings will not materialise, and I understand that there are two reasons for that: a recovery of costs issue; and the fact that counsel will still be required.
Perhaps this question is for Mr Wolffe. To what extent do you think that there will be less use of counsel as a result of the changes, or do you not see a significant change in that regard?
It is difficult because, as Mr Conway has said, one does not know precisely how the figures have been reached. As I understand it, legal aid in the personal injury world is supporting the more complex cases that are likely to be the ones in which counsel will continue to be required if they are to be conducted properly.
In its submission to the committee, the Legal Aid Board recognises that there will be an issue with the recovery of costs and is quite cautious about the savings. It says that
“the savings in a full year could range from £800,000 to £1.2m”
and
“the savings may be lower in the first few years”.
I just question how robust any of these numbers are, given the nature of the cases that the board is supporting.
This is going to put more pressure on the sheriff courts, which Mr Conway has suggested are already under pressure, in terms of costs and staff. Mr Conway, is it your assumption that there will be additional costs for the sheriff courts? Are you assuming that more staff will be required?
My understanding from the financial memorandum is that existing administrative staff will be deployed. There seems to be some suggestion that Court of Session clerical staff might be downshifted to the sheriff court—and be paid a bit less. I am not sure what they think of that, but that is what the assumption appears to be. From an admin support point of view, we do not have major concerns.
We do, however, have major concerns about the information technology support. The civil law review was scathing about the technological situation in the sheriff court. If any of you ever visit your own local sheriff court, you will see that we are barely in the analogue age, never mind the digital age. One of the big advantages in the Court of Session is what are called the e-motions. There are electronic communications with the court and between parties; procedural decisions are sent out immediately to the parties electronically; and there is electronic recording of evidence. We are dismayed, to put it no higher, to find that the whole IT budget for the new specialist personal injury court and 16 specialist personal injury centres in various sheriffdoms is £10,000. There is no back story to that. On the face of it, it seems an extremely economical estimate.
The very short submission that you have from the Sheriffs Association expresses concern that the pressure of increased business in the sheriff court has been underestimated. It points to other pressures that might be coming sheriffs’ way arising from the abolition of corroboration. One does not want to get into other areas of controversy, but it is worth looking at the very short submission that you have from the Sheriffs Association.
I want to pick up Mr Chisholm’s question about the use of counsel, which I took to be directed specifically to the legal aid number. There is of course the much broader issue of the impact that the shift of business into the sheriff court might have on counsel more generally and, ultimately, of the loss to pursuers, who currently have the benefit of counsel acting on a speculative basis, of the ability to instruct counsel in personal injury work. I thought that your question went more to the legal aid number than to that issue.
Is it your assumption that there will be a requirement for additional sheriffs in the sheriff court, Mr Conway?
Yes, Mr Chisholm—I should have said that to you the first time round. On our scoping figures, we will need between four and six additional sheriffs, depending on what the downshift is and what the settlement figures are. Our suggestion is that there should be a specialist personal injury court in Edinburgh and one in Glasgow, which would need to be funded. The Government would need to take into account additional judicial salaries at the sheriff rate. We have no argument with the idea that summary sheriffs would result in a saving to the Government. At present, it appears that it would work on a one-person-in, one-person-out basis. There would be no significant short-term saving, but the scoping over 10 years appears to us to be right.
In many respects, I have to say that the idea of a third judicial tier is a masterstroke and it should be implemented even as a stand-alone measure. However, to start with the civil courts review, which identifies precisely the problems with the legal system that exist in the sheriff court, and then say, “Here are another 3,000 cases with no new resources and no IT funding,” is counterintuitive, to put it at its mildest.
Are you saying that you will need summary sheriffs plus extra sheriffs?
Yes, plus extra sheriffs to deal with the ordinary cases.
Paragraph 83 of the financial memorandum suggests that using personal injury sheriffs, as against judges, would save money, but is there any proposal to reduce the number of judges in the Court of Session as a result of the bill?
That is an excellent question. The financial memorandum seems to scope in some kind of judicial saving but, as you pointed out, no judicial savings will be made while the number of judges is the same. Some scoping has been done on the introduction of summary sheriffs over 10 years. Given that all judges have a specific retirement age, it would not be difficult to spell out the intentions for the Court of Session. If the same number of judges sit in the Court of Session, no savings will be made there.
It would interest members of the legal profession and the public to know what the proponents of the legislation have in mind for the Court of Session. Is it to have 35 judges in the next 10 years or so? The policy memorandum and the financial memorandum are silent on that, although it is something that we should know.
You say in your submission that the Court of Session will lose fee income from personal injury cases, which I presume could be a financial problem, too.
That is the major black hole in the financial proposals. The figures that APIL has obtained under freedom of information rules show that the total fees fund income—that is, the amount that parties pay; it is the price of admission into court, so to speak—in 2011-12, which provides more or less representative figures, was £4.6 million. Of that, personal injury cases contributed something like £2.3 million, which is 50 per cent of the fees fund dues.
The analogous figure in the sheriff court, for a similar number of cases, is £804,000. I would be happy to send details on that. On average, a Court of Session case generates about £750 for the Scottish Court Service, while a sheriff court case generates about £238. If that is multiplied by 2,000 or so cases, the difference is huge.
We have calculated that the fees fund loss to the Scottish Court Service will be just short of £1 million, which appears nowhere in the financial memorandum. There is a hint of a suggestion that the reforms will be financed by fee income. Am I being unduly cynical in thinking that the sheriff court fees will have to be more than doubled to make up for the lost fee income? They will have to be doubled for a product that I suggest is of markedly inferior quality. Whether or not that is right, we should know what is in mind.
It is a good job that we have the bill team to follow. We will ask it all these questions.
I do not know whether Mr Conway’s copy of his submission has numbered paragraphs. Do you have paragraph 10, under “Savings to the Scottish Legal Aid Board”?
Yes.
I think that this is just a typographical error, but some of the millions in that paragraph might not be the right figures. The fifth line of that paragraph refers to “£6,337 million”, which I suspect is meant to be £6.337 million.
You are right.
There are a few figures like that. Perhaps we can correct that for the record.
Thank you for reading that into the record.
We are talking about dots and commas and things like that.
Yes.
11:30
It has been suggested that we should invest quite a lot more in IT and that, compared with other areas of life, £10,000 seems small. Could some of that be self-funding? I presume that shorthand writers come at quite a cost and that, over time, there would not be an extra cost but a saving if we invested in IT?
Yes, we want investment in IT. You are absolutely right to make that point. At present, in the sheriff court, on all matters with a value of more than £5,000, the parties have to employ and pay for a shorthand writer.
Who would make the decision to change that and put in a lot of investment? Would it be Government money? Would the Government have to take the initiative or could the situation be changed in another way?
It has to be the Government that takes the initiative. It has already done so in the Court of Session. A few years back, the Government spent a considerable amount on upgrading the Court of Session. Electronic recording equipment needs to be provided. At present, parties pay for a shorthand writer, but I do not think that it would be workable for parties to pay for electronic recording of evidence. I go back to my original point that we cannot be too dogmatic about the issue. It might be decided just to transfer the existing case management system in the Court of Session to the specialist personal injury court, and there will be no further cost. That is a possibility, but the financial memorandum does not say that, and nor does it deal with the equipment problems and the other 16 specialist centres.
We have heard that the court system as a whole is slow, inefficient and expensive and that the sheriff courts are the slow and inefficient bit. We have also heard that a clinical negligence case can take eight to 12 days, although I am not sure whether that is in all types of court. Has that changed over time? Those in other professions, along with cleaners and everybody else, have to do things more quickly than they did 20 years ago. We are told that the sheriff courts are under considerable pressure, but are things done more quickly than they were 20 years ago, or is it just the same?
That is a big question. I have been in practice for more than 20 years. Are things exactly the same? A personal injury case involves fact-based work. There has to be an interrogation of the factual questions through examination and cross-examination of witnesses. I am speaking on the hoof here, but there has certainly been an injection of expert evidence into the area at all levels. We now have experts talking about health and safety and medical situations. The process is now much more complicated, which is of course why the civil courts review talked about specialisation. The answer is that things are not done any more quickly.
There is pressure on costs right across the board. For example, people are in hospital less than they used to be, so someone might stay in hospital for one night, whereas previously it would have been four. I am not from a legal background, so I speak as an outsider but, before I recommended spending more money on the system, I would want to be convinced that costs are being pushed down and that things are being done more efficiently than they were in the past and are being speeded up. Everybody else is speeding up, and I wonder whether the courts and the legal profession have been left behind.
It is certainly an interesting point. I am not trying to dodge it, but I take refuge in the analysis in the civil courts review, which did not see any basis for the kind of speeding up of process that you describe. I have to say that it does not really exist in any other jurisdiction.
I am certainly not supporting Portuguese lawyers against Scottish ones, for instance.
No, I am sorry—I should have said “in any other UK jurisdiction.”
As I say, that is an interesting point, and I have not really given it a great deal of thought. I take refuge in the fact that better minds than mine have spent a lot of time analysing the system and have failed to find the kind of savings that you have described.
There have been substantial changes in certain parts of the system, which illustrates that a great deal can sometimes be achieved by reform to the way in which we go about things.
In the personal injury field, the chapter 43 procedure, which is the specialist personal injury procedure in the Court of Session, works extremely efficiently, as I understand it. One of the reasons for that is that a timetable is fixed right at the outset of the case. Included in that timetable is a compulsory meeting ahead of any hearing of evidence, at which the parties are expected to come along and discuss the case. Mr Conway can speak about the practicalities of that, but my understanding is that that has been a very effective way to encourage cases to settle at an earlier point.
One of the proposals that are currently on the table for personal injury work is the introduction of what is called a pre-action protocol. In effect, that is a compulsory procedure that parties need to go through before they raise an action. The aim is to encourage cases to settle at as early a stage as possible. The pre-action protocol could create an environment in which one would hope and expect that defenders would settle a case promptly if they saw that there was merit in it and if that is what they wanted to do, thus avoiding the expense of litigation.
Under the inner house appeal court procedure, there was a time not all that long ago when practitioners would have to say to clients that, once a case was in the inner house, it would take far too long before getting to a hearing. It is the perception of the profession that the inner house has substantially improved the system, through a series of practical procedural reforms that front-load the work. It is not necessarily cheaper for the litigant, but a lot of work is now done earlier in the process of an appeal—for example, drafting notes of argument and preparing the papers. The aim of that is to save time in court, ultimately. My impression is that those reforms have been very effective.
There are things that can be done, have been done and are being done to make the court part of the process work more efficiently. As I have said, that does not always save costs to the litigants. The inner house reforms are a good example of saving time in court and loading the cost in at a different stage in the process.
That sounds extremely positive to me.
Absolutely.
We are being told that it is the court time that is clogged up in the sheriff courts so, if you could repeat the process in the sheriff courts, you might make some progress.
It would be wrong for the committee to get the impression that the courts operate in an antediluvian or Victorian way in which nothing has been done or can be done. Things have been done and are being done. The civil courts review has a vision of a sheriff court working much more effectively, using specialist sheriffs and case management. The third judicial tier, as Ronnie Conway says, is a masterstroke of dividing up the specialisation of the business. The question that one has to ask, particularly in considering active judicial case management, which will necessarily involve more judge time in examining a case at an earlier stage, is whether that can really be achieved within a budget that remains constant.
It seems from what you were saying earlier that the practicalities are such that, because the sheriff courts are dealing with a mixture of cases, a criminal one can go over time and throw the whole system.
A very important point, which relates to what to some degree is the elephant in the room for the civil courts proposals, is that our courts deal with both criminal business and civil business and, for very good reasons, criminal business has to be given priority in the system. We are proud of our time limits for the swift dispatch of criminal business and one would hate to see those change. That has an impact on the ability of the system to deal with the civil business. It is a difficult management exercise, which those within the system handle well. It is part of the system that, if a sheriff is sitting doing a criminal trial, he is not available to do anything else until that is finished.
I am grateful to my friend, because he has reminded me of what I should have known already. Since antediluvian days, there has been, first of all, a pre-action protocol. At present, that is a voluntary scheme that parties have to opt into, but most insurers and almost all claimant lawyers are in favour of it. It involves, before any court action is raised, a cards-on-the-table approach being taken to what the case is about. It is extremely successful. The civil courts review’s recommendation is that it should be compulsory and my understanding is that the Scottish Civil Justice Council will take steps to make it compulsory. APIL is absolutely in favour of that. That first sift seeks to prevent cases from ever getting near a court.
Once cases get to the court, the technical answer is that the process that is followed is what is known as chapter 43 procedure, which was introduced in the Court of Session seven or eight years ago, I think. There is no judicial case management; it is what is known as a case-flow model. Parties have to put their full case on the table. There is no trial by ambush and there are no surprises. There has to be a face-to-face settlement meeting. That is what has achieved a 98 per cent settlement rate in cases in the Court of Session. Elaine Samuel carried out an evaluation of chapter 43 procedure for the Scottish Government. I appreciate that I have given a technical answer, but we do things much better than we did 20 years ago.
It is perhaps important to note that the Government has established the Scottish Civil Justice Council precisely to drive all of that through. We are always supportive of these sorts of reforms.
Most of my issues have been covered. The one that has not is that paragraph 12 of the Faculty of Advocates submission states:
“the involvement of counsel can facilitate settlement of cases; and it is possible that more cases will, in fact, run to proof if counsel are less frequently used.”
Is there any empirical evidence that backs that up? Can you point the committee towards anything that backs up the suggestion that that may happen if counsel are used less frequently?
I should say that I do not personally practise in the field of personal injury, but it is reported to me that in the sheriff court we now have what is in effect the equivalent of chapter 43. It is reported to me by my members that that has not replicated the same level of efficiency as has been achieved in the Court of Session. It is reported to me that part of it is to do with the culture of the way in which counsel deal with cases. If counsel are involved at an early stage, they will identify the key issues and the evidence that is required and they will advise what investigations are required. If skilled counsel who are experienced in the field are talking to one another, they all know exactly what the law is and where the issues are. That process of experts who understand exactly how the system works talking to one another facilitates settlement. Ronnie Conway is probably better placed than I am to comment on the matter.
It is a very good question to ask whether there is empirical evidence. There is no empirical evidence one way or another. Interestingly, the author of the research that I just mentioned, Elaine Samuel, suggested that, for reasons outlined by Mr Wolffe, the sheriff courts would not achieve the same settlement levels. My feeling is that they do not, but I do not have empirical evidence. No one has.
11:45
That concludes questions from the committee. Are there any final brief points that you would like to make before we wind up the evidence-taking session?
I have one point to make. I appreciate that the committee has been focusing on the costs and savings to the public purse. Another issue is the cost to litigants.
I ask you to note table 3 in the SPICe briefing, which sets out figures on the ratio of total expenses to value of settlement in the Court of Session. If one looks not to the sum sued for but to the average value of the settlement as the relevant figure, for the reasons that we have already discussed, the costs involved start to exceed the value of the settlement below £20,000. When looking at those figures, one always has to appreciate that, to an extent, there is a fixed cost in running a case at all, which one has to factor in. Therefore, inevitably, as one gets to the lower-value end of cases, the ratio of what the case costs to its value will be greater.
The only point that I wish to make relates to the sheriff appeal court. It is partly a policy point, but it is also a finance point.
At the time of the civil courts review, the suggestion was that there would be an appeal court that would have a bench of three sheriffs principal to deal with appeals from the sheriff court. It would be a national appeal court and it would be very difficult to take a further appeal from that court to the inner house of the Court of Session. The civil courts review said that that would provide a quality appellate structure that would involve a body of persons—three minds being better than one—at minimal cost and expense.
However, the appeal court of three sheriffs principal has disappeared from the proposals. We are now talking about an appeal to a single person who does not even have to be a sheriff principal but may be a sheriff of one year’s standing; an onward appeal from there to the Court of Session being granted only in exceptional circumstances; and, further, business operations or business exigencies in the Court of Session being a factor in whether the appeal will be allowed to go forward.
It seems to me that someone has crunched the numbers on the proposals somewhere. They do not add up and we are looking at cheese paring right across the board. You will take it that I do not think that that is acceptable as a matter of policy, but it is also an illustration of the difficulties that the proponents of the bill have in finding a financial basis for it.
I am very grateful to you.
Thank you. The committee is very grateful to both of you for your comprehensive evidence.
I will now call another short break for members before we start our final evidence-taking session of the meeting.
11:49 Meeting suspended.
We continue our consideration of the financial memorandum to the Courts Reform (Scotland) Bill by taking evidence from the Scottish Government bill team. I welcome to the meeting Cameron Stewart, bill team leader; Jan Marshall, deputy director, civil law and legal system division; and Ewan Bruce, finance directorate.
As there will be no statement from the bill team, we will go straight to questions. As usual, I will ask the opening questions and then open out the session to colleagues. The witnesses will have heard much, if not all, of what was said in the previous evidence session, so I will first ask some questions that are based on that.
My first question relates to the additional burden—if I can put it that way—on the sheriff court system. The very brief submission from the Sheriffs Association, which was referred to, says:
“the abolition of corroboration and the move toward a reduction in level discretion afforded to the crown in relation to marking cases is likely to result in a significantly greater increase in the number of prosecutions than is currently estimated.”
We know that the financial memorandum talks about a 36 per cent reduction in cases over the past five years. Notwithstanding that, additional cases will almost certainly arise through the abolition of the requirement for corroboration and the Courts Reform (Scotland) Bill. How will the sheriff court system be able to cope? What will be the bill’s cost implications in that regard?
First, the 36 per cent reduction that we talk about is to do with the civil case load in the sheriff court. Obviously, the provisions on corroboration in the Criminal Justice (Scotland) Bill affect the criminal case load.
But there is still an impact on the sheriff courts.
There is still an impact on the sheriff court system as a whole, of course. Obviously, because we deal with civil court reform, we focused on the civil case load. That is why we put that information in the financial memorandum.
We have had discussions on the Criminal Justice (Scotland) Bill—on which I know that the committee also took evidence—and the increase in criminal cases that we saw was not fundamental: I think that there was a 6 per cent increase in solemn cases and around a 1 per cent increase in summary cases. Taking into account the reductions in the civil case load that have been discussed, we would not see that increase really having an effect on the management of business in the sheriff court.
Okay. APIL says that, in order to transfer work effectively from the Court of Session to the sheriff court, another half a dozen or so sheriffs would really be needed, but you do not accept that.
No, we do not. We expect the vast majority of cases that come out of the Court of Session to be heard at the new specialised personal injury sheriff court, so they will not really be affected by criminal business. That will be a separate court that deals only with that personal injury business, so we do not accept that further resource will be required.
May I pick up on a point, convener?
Of course.
We heard the evidence from APIL and the Faculty of Advocates, and there was a lot of discussion about settlement. It is important to have a sense of perspective on the volume of cases that are likely to have to be processed through the sheriff court and, in particular, the volume of cases that are likely to come to proof. We have heard this morning that approximately 98 per cent of cases that are raised in the sheriff court settle and do not come to proof.
I refer to the financial memorandum. It is expected that, with the reforms, around 2,700 cases may be passed on to the sheriff court, of which I believe around 2,000 will be personal injury cases. The vast majority of those cases are likely to settle. Currently, around 30 cases proceed to proof in the Court of Session—I think that that information is in the financial memorandum. Given the statistics from the Scottish Court Service, we believe that less than 4 per cent of cases that go through the sheriff court proceed to proof. It is important to keep a sense of proportion on the volume. A substantial volume will transfer from the Court of Session, but that does not represent a substantial volume going to proof, given the statistics on cases that are already in the sheriff courts. It is also worth mentioning that 67 per cent of all personal injury cases are already heard in the sheriff court.
There is another point that I want to make about the ability of the sheriff court to cope with an increase in volume. Again, that has to be put into context. It is not the case that the reforms are transferring a substantial volume of cases out of the Court of Session for no good reason, because the reforms will drive efficiencies.
12:00For example, there are proposals to introduce a case management system, and I anticipate that we will hear more about what is proposed for IT systems. There is the idea that we will also increase efficiencies by having judicial continuity. The sheriff court rules will be changed to accommodate those efficiencies and the better management of cases. There is also the proposal to introduce the summary sheriff system, which will allow cases to be dealt with at the tier of the judiciary that is appropriate to the value and complexity of the case.
It is important that we do not look at only one aspect of the proposed reforms in isolation, because all the proposed reforms will have an impact and help to deliver the objectives of the overall court reform agenda.
Thanks very much for that helpful response.
The bill will increase the limit for the sheriff court’s privative jurisdiction—to be retitled “exclusive competence”—from £5,000 to £150,000. The financial memorandum describes that as
“a pragmatic driver to shift business from the Court of Session to the sheriff courts.”
You heard the evidence from the Faculty of Advocates and APIL, which both believe, for reasons that they explained, that £30,000 would be a better parameter for that. Why did you pick the specific sum of £150,000? What is your response to the earlier evidence that you heard on that issue?
One of the main drivers of Lord Gill’s review was the proposal to transfer a substantial part of the business from the Court of Session. The key aim was to remove lower-value cases, because the Court of Session is not thought to be the appropriate forum for such cases. Table 12 in the financial memorandum shows different models based on where the privative jurisdiction limit is set. It was felt that if, as part of the reform, the Court of Session dealt only with cases with a value in excess of £150,000, that would remove a substantial part of the Court of Session’s business. That is the intention of the reform.
Okay.
I think that Jan Marshall touched on this in her previous answer, but the £30,000 figure used by APIL and the Faculty of Advocates is based on the settlement figure at the end of a case, whereas we based our figures on the sum sued for at the start of a case. We did so because the pursuer’s suggestion for how much the case is worth makes the jurisdiction to which the case should go obvious right at the start. In comparing the sum sued for and the settlement figure, we are comparing two slightly different things. We based exclusive competence and our reforms on the sum sued for figure of £150,000.
Why did you pick that route?
We picked it because it is not known at the start of a case what the case will settle for, so the forum to which the case should go could not be chosen on that basis. The only figure that we have at that point is the sum sued for, which is why that figure was picked as the basis for making that choice.
Okay.
You will have heard in the earlier evidence that £1 million in fees could be lost if cases are transferred from the Court of Session, where the fee is £750, to the sheriff court, where, according to Mr Conway, the fee is £238. According to my arithmetic, that gap could be bridged only if the sheriff court fee were trebled. If 67 per cent of personal injury cases are already dealt with in the sheriff court, perhaps we are not talking about an overall trebling, but we could still be talking about a significant increase across the board in sheriff court fees, which would obviously impact on the two thirds of personal injury cases that go to the sheriff court at the moment. What is your view on that impact?
Court fees in general, including sheriff court fees, are set in Scottish statutory instruments. The most recent SSIs, which set fees for the following three years, went through in 2012. The fees are based on historical decisions taken on fee levels that are recommended by the SCS; ultimately, they are agreed by the Scottish Parliament. The SCS is looking at court fees post reform and at the three-year cycle for fees. The SCS will consult at some point next year on the next fee levels, so it will take the issue into account in its decisions post reform.
Fees are set on the basis of the SCS’s modelling work and decisions, put to public consultation and then brought to Parliament to be voted on. That will continue to be the process. We do not know what effect changes to different business levels might have on future court fees, but the SCS will fully consult on the matter at an appropriate time.
The point that Mr Conway made, and which I will raise, is that if business is being transferred from the Court of Session to the sheriff court, which means that the fees are being lost to the public purse, how will a saving to the public purse be made? As things stand, the transfer would have the effect of reducing fees by a seven-figure sum.
I have not looked at the APIL figures in detail, so I will not comment on them.
In general, surely it will have an impact on the public purse if people do not pay fees to the Court of Session because their cases are transferred to the sheriff court, where the fee is less than a third of that in the Court of Session. In each instance, the fee will be £500 or so less. When that is multiplied by the number of cases that are transferred, surely that will have an impact on the public purse.
The fees are used to cover the costs of cases. The assumption is that, when cases go down to the sheriff court, the costs are lower, so the fees are lower, although fees must cover some static costs, such as estate costs. In a future fee round, that might have to be looked at. However, we do not expect a substantial effect.
Fair enough.
I will raise another point that was made in evidence this morning. This is my final question before I open out the session to colleagues, who probably have lots of questions and will want to follow up in depth on things that I have mentioned.
APIL’s submission says:
“There seems no correlation anywhere with the figures in the financial memorandum which say that the Board paid out a total of £4.9 million, of which £2.4 million was paid to counsel”.
That refers to paragraph 97 of the financial memorandum. Mr Conway suggested that the real figure that was paid to counsel was about £735,000. How did you come to your figures? We want to reconcile the different viewpoints.
We must make the point clearly that the figures were provided to the Scottish Government by the Scottish Legal Aid Board. In working on the reforms and preparing the accompanying documents, we worked with our justice delivery partners. The information on the legal aid contribution came from the Legal Aid Board.
The fair point was made in this morning’s evidence that the figures that the board provided are set out tentatively. In its submission to the committee, the board made it clear that a range of savings could be made.
As I said, the figures came from the Legal Aid Board. If the committee wishes to have further information on the specifics, we could arrange for the board to write to it, or the committee could write direct to the board.
Were our previous witnesses correct when they said that court fee income is not covered at all in the financial memorandum?
In the financial memorandum, we covered how the reforms would be funded, but we did not go into great detail on the level of fee income. The section on court fees, which starts in paragraph 26, outlines how the reforms will be funded. The most recent court fee orders were passed in 2012. As part of that process, the Parliament agreed to an increase of 1 per cent on top of the inflation rate. That increase is being used to fund the reforms.
Does what the earlier witnesses said about the bill’s impact on court fee income have resonance? They contend that approximately £1 million per annum in fees would be lost to the Court Service if fee levels were unchanged. Have you looked at that? Does that figure sound accurate? Is it miles off the mark? What is the bill team’s official position on the £1 million figure that was cited to the committee?
We have looked at the effect that the level of court fees would have on the parties, but the witnesses are correct that we have not looked at the overall effect on the public purse. Therefore, I cannot say right now whether that £1 million figure is correct, but I am happy to get back to the committee on that.
Is that a commitment?
Yes—definitely.
From table 2 in the financial memorandum, which is on potential recurring costs and savings, it seems that pretty much everything is a saving, apart from the cost of £8,000 for the initial judicial structures and £29,000 for the Crown Office and Procurator Fiscal Service. A £1 million loss per annum would be pretty significant in relation to the potential recurring costs and savings.
Obviously, the fee income reflects the court cases that take place at the time. The fees are charged to recover the costs of cases. I do not think that the position would be as stark as suggested.
We are reliant on a third party—the Scottish Court Service, which is another of our justice delivery partners—to provide us with the information on fee income and its funding. Paragraph 31 in the financial memorandum, which was prepared in collaboration with our partners, makes it clear that the Court Service has told us that
“the current fee income is on track to ensure that the costs of the reforms can be met.”
If additional information is required about the impact of the reduction in overall fee income on the delivery of the reforms, we would have to go back to the Scottish Court Service for that.
For clarity, will the bill team provide that information to the committee?
Yes.
Thank you.
The IT set-up costs for the personal injury court have been set in the financial memorandum at £10,000, but earlier witnesses suggested that that figure is low. Can you explain how it was reached?
That £10,000 is just to update the current database to ensure that it can be used. However, the SCS has a separate project to totally revamp civil IT systems across the sheriff court estate. That is separate from the bill, so it is not covered in the financial memorandum. It is a separate part of the reforms that are being taken forward through the making justice work programme.
So the only IT costs relating to the personal injury court and resulting directly from the changes that will be brought about by the bill will be £10,000.
That is for minor upgrades to the current IT system, before the new one comes on stream at a later date.
As Cameron Stewart said, the reforms in the bill are part of a wider reform agenda that the Scottish Government is participating in, along with our justice delivery partners. As Cameron mentioned, the overall programme is called making justice work. As part of that programme, there is a digital strategy workstream. The Scottish Court Service has ambitious aims and objectives for introducing IT and reforming and refreshing its IT system, which I understand involves a multimillion pound investment. That takes me back to my original point that we cannot look at a particular aspect of the reform in isolation and have to look at things in the round. As I say, the reason why we will be able to deliver efficiencies is that other things are happening elsewhere as part of the overall reform package.
The convener asked why the threshold below which cases will go to the sheriff court has been set at £150,000, rather than the £30,000 that other witnesses have suggested. If the threshold was set at £30,000 rather than £150,000, what impact would that have on the financial memorandum?
We did not consider the effect of a £30,000 threshold. Table 12 in the financial memorandum sets out that, with a £50,000 threshold, only 960 cases would be affected, which would be a huge difference from the more than 2,000 cases that will be affected by a £150,000 threshold.
Again, as Cameron Stewart said earlier, the Scottish Government is proceeding on the basis of considering the value of the claim as raised in the court action. The evidence that was given this morning proceeded on the basis of the settlement value of the claim. That means that we are not dealing with similar things.
12:15
If not as many cases were being taken out of the Court of Session, there might not be a business driver for having a specialist personal injury court. If there were not enough cases for that court to work with, the savings from that level of business would not come through. Moving that substantial amount of business from the Court of Session to the sheriff courts is one of the major reforms.
I have a question about the costs of sheriffs or judicial deployment within sheriff courts, which relates to table 5 of the financial memorandum. You give a figure of 29,135 for the number of sitting days, based on 2011-12 deployments. You have various scenarios on the split between sheriffs and summary sheriffs but, regardless of how that is split, the number of sitting days will be 29,135. What is your central scenario for the number of additional cases going to the sheriff court?
Again, that must be considered in relation to the declining civil case load. We are moving 2,700 cases down. Last year, there were just under 8,000 fewer cases in the sheriff courts. It is a small number of the majority of sheriff court cases that are heard.
Also, on sitting days, as you have already heard from the previous panel, a lot of the cases will not get to the stage of going to court, so I think that the financial memorandum suggests that we should expect a figure of 30. On the modelling that we have done with the Scottish Court Service, we do not expect there to be any requirement for an increase in sitting days to deal with that level of transfer of work.
In terms of your central scenario, how many cases do you think will be transferred to sheriff courts?
From the Court of Session?
Yes. You have various models but, under your central scenario, how many do you think will be transferred?
About 2,500.
So your position is that you can transfer 2,500 cases to the sheriff courts, but the overall number of sitting days will remain the same, at 29,135.
Yes.
There would be no impact on the number of sitting days.
The level of business is going down anyway, and the number of cases that get to court is very small. The modelling that we have considered does not suggest a requirement for an increase in sitting days. SCS will be able to give you more information on this in terms of business planning, but the number of sitting days is not generally driven by the total number of cases; it is more to do with the number of cases that get to proof stage and so on. The modelling work suggested that that level of business could be handled within those sitting days.
I just wanted clarity around that. I am not an expert on the matter at all. It just struck me as counterintuitive that that number of cases could be transferred without increasing the number of sitting days by even one day. However, that is your position.
Again, it must be borne in mind that things will be done differently. The anticipation is that the personal injury cases that come out of the Court of Session will go to the new personal injury court and there will be increased efficiency. It is not that we are drawing down 2,500 cases from the Court of Session and putting them into the existing structure in the sheriff courts.
In response to my questions and those of Gavin Brown, you have said that information has come from third-party partners. However, obviously, the bill team has to come here and answer the Finance Committee’s questions and the third-party partners do not. What steps have you taken to interrogate the figures that have been given to you by those third-party partners? On fees, there is clearly a gap in the sums that we have been discussing. Is it the case that you have asked your partners a question and they have come back with an answer and you have said, “That’s fine”? How have you ensured that the figures that have been given to you are robust?
Throughout the past year, we have worked with our partners to build up business cases for different parts of the reforms—we have worked with the SCS and the Scottish Legal Aid Board over a long period of time. Those business cases are what fed into the Government’s position.
I agree that the fee income is one part on which we need to get more information, but we are happy to answer any questions on the rest of it. We would probably have to go back to the partners for any extra bit of detail or background work, but we worked with them to draw up the information. We have not simply received the information and included it without involving them.
It is just that fees seem to be a significant part of the overall finances in the financial memorandum—not a few thousand pounds but a huge chunk of the potential saving to the public purse. That is why I am particularly concerned about that area.
As I say, we are happy to look into that in more detail and get back to the committee as soon as possible on it.
I emphasise yet again that the driver of the reforms is not the savings to the public purse but improving efficiencies and access to justice for court users.
I accept that last point, but the committee’s job is to try to work out the financial implications of the proposals. Am I summarising your position correctly if I say that in spite of the extra work going to the sheriff court—quite a lot of which the previous witnesses said would be complex—you are saying that you can have the same number of staff and can substitute sheriffs with summary sheriffs over the next few years? Is that your basic position?
That is the position, yes.
Therefore, the significant savings in table 5 in the financial memorandum, at page 58, are because of summary sheriffs taking over from sheriffs. Is that right?
That is right. The salary is different.
So that is £2.4 million.
If we went to a 50/50 split.
Are you absolutely confident that, under equal pay legislation, you will be able to pay summary sheriffs significantly less than sheriffs?
We have set out that the limit will be set by an independent body—the Senior Salaries Review Body. We have looked at what an equivalent judge in England gets and it is the lowest grade on the scale. We expect that, given the jurisdiction and competence of a summary sheriff, that is where the SSRB would place that role, which is a tier below the sheriffs. That is what we have based our planning assumptions on.
Have you taken legal advice on that?
We are comfortable that the SSRB will propose a salary that is sensible for summary sheriffs. Once that happens, we will consider it in detail.
One of the major critiques of the financial memorandum from the previous witnesses concerned the assumptions on legal aid. Those were questioned on two grounds: that they did not seem to take account of recovery of costs, which covered a large part of it; and that there was an assumption that half of the legal aid payments to counsel would disappear, which was questioned in terms of what would happen in the sheriff court. What is your response to those points?
As you know, the Scottish Legal Aid Board submitted evidence to the committee as well. It is confident—as are we—that the assumptions on legal aid include recovery of costs and the other issues that were raised. It took all those into account when building up the figure of between £800,000 and £1.2 million to which it came.
So you just accepted the Scottish Legal Aid Board’s figures.
We worked with it, but it holds the data and, therefore, is able to find that out for us.
Has it taken account of the recovery of costs in giving you those figures?
Yes, it has.
Yes, in its evidence, it has said that it has taken into account contributions, recoveries and judicial expenses. It has explained that it has to make assumptions when forecasting and that that can be particularly complex in legal aid cases. It makes the point that it does not always make a recovery.
However, it usually does.
What about the assumptions about half of the legal aid payments to counsel disappearing? What are they based on?
SLAB examined the cases that it would expect to be in the tranche that would be transferred and considered the difference in what the counsel costs might be. As it admits in its submission, the latter is fairly complex and SLAB has to make a lot of assumptions. However, it has tried to examine the cases that would be affected, examine how much they cost it and consider how much of a saving would be made.
What about the future of the Court of Session, which is obviously part of the costs? I raised that with the previous witnesses. Are those 34 judges still going to be there but not doing quite as much as they do now?
The level of judges will be reviewed over time. There is no policy incentive to reduce the number of Court of Session judges but that will be under constant review.
Will the reduction in fee income from the loss of personal injury fee income be a problem for the Court of Session?
We will get back to you with more detail on fee income, but obviously that relates to recovery of the costs of a case. If there are fewer cases, there will be less need to raise that income.
Yes, but we will still have the costs of the Court of Session.
Yes, there are still static costs. As I say, we will get back to you with more detail.
Gavin Brown covered quite extensively the issue of fee income but I want to be clear in my own head and I am not quite sure what your final position is. There is going to be a loss of £1 million of fee income. Do you believe that it will cost less to do all of this in the sheriff court or, if the fees stay the same, is there going to be some cost to the public purse? Is your assumption that it is going to cost £1 million less in the sheriff court than in the Court of Session?
Yes, our general line is that it costs less to take cases through the sheriff courts than to take them through the Court of Session. That is why the sheriff court fees are lower than those for the Court of Session.
Okay. I will let others take over.
I am tempted to jump in but I want to make sure that everyone else has an opportunity.
I just have one point because we have covered quite a lot of ground already. In its submission, the Faculty of Advocates questions the general principle
“that parties should bear the cost of civil actions through the setting of court fees at a level which recovers the costs to public funds”.
Is it the case that the parties should cover 100 per cent of the costs? With the railways, for example, we say that the public purse will pay 50 per cent and the user will pay 50 per cent.
It is not currently the case that full cost recovery has been reached. It is the policy that that will be the case in future. Currently, about 80 per cent of costs are recovered through fees. That is looked at every time that the fee orders are consulted on and put before Parliament. We are always moving towards the full cost recovery stage.
What about the argument of the Faculty of Advocates and others that this is a public service and so it should have a subsidy? Has that been discounted?
That is not an issue for this bill; it is a wider policy issue.
But it is an assumption in this bill.
It is an assumption in the bill because it is current policy.
Ronnie Conway used the word “disappearance” about the appeal court, where there were three sheriffs principal and now there is one. I just wanted to ask about that.
Also, looking at the level of business going into sheriff courts, he first of all said that there would require to be an extra five or six sheriffs, but later he said that the figure would be four or five. Could you just explain the reasoning behind those changes and the declaration that you need more staff, not less?
Mr Conway was correct in saying that Lord Gill suggested that there should be three sheriffs principal in the sheriff appeal court. The Scottish Government did not agree with that. We thought that one appeal sheriff would be sufficient because it replicates the current situation with civil appeals, which are generally heard by a sheriff principal on their own.
We put the Scottish Government’s position out to consultation and the majority of respondents agreed that they like the benefits of a quick appeals system through a sheriff principal. The point of the sheriff appeal court in the bill is to replicate in the civil structure the benefits of having one appeal sheriff. The decision was not driven by costs, although obviously there will be an effect.
I have forgotten the second part of your question.
Well, I was really asking you to explain someone else’s statement. Ronnie Conway made the point that we require five or six, or four or five new sheriffs.
We do not agree. Mr Conway’s point was a general one, and we have covered that issue in response to Mr Brown’s questions. We think that the current level of sheriffs is enough to handle the level of business.
The sheriff appeal court will be staffed by sheriffs principal and some experienced sheriffs of five years, working as a kind of pool and being used as and when necessary. We do not see a need to recruit any extra sheriffs.
12:30
You have both said that refreshing the IT is important. The budget of £10,000 seems very small. Presumably, there is a bigger game plan to introduce new IT.
The SCS has undertaken a separate project for its IT systems. It is doing a multimillion-pound project to introduce a brand-new civil IT system across sheriff courts. The £10,000 is only to update what it is currently using until the new system is ready to come on stream—it is only for really minor modifications to the current system. The full IT system is a multimillion-pound project—it is a lot bigger.
That concludes questions from committee members, I think, but I have some more brief questions to ask myself.
The Law Society of Scotland states in paragraph 16 of its submission:
“The financial memorandum suggests ‘one off’ costs of £10,000 and £20,000, for instance, for the design and set up of the personal injury court and the sheriff appeal court respectively, developing the process, creating the training programme for appeal sheriffs and staff and confirming the operating model (paragraphs 138, 139). We believe that there will be significant ‘one off’ costs in creating a new training programme for specialist sheriffs, and continuing costs to train specialist sheriffs in their areas of expertise.”
On how you came up with those sums, there must surely be on-going training costs, rather than just one-off costs. Sheriffs must be replaced, and surely new sheriffs have to be trained.
Yes, that is true. Sheriffs obviously get a lot of training. We do not expect there to be a need for that training to increase. The planning assumption is that a summary sheriff will be recruited as a sheriff retires or leaves the bench. If it was not for the reforms, that sheriff would be replaced by another sheriff, not by a summary sheriff, and that sheriff would go through training as a summary sheriff will. We do not expect there to be an increase in the requirement for training; those concerned will need the same level of training as a sheriff currently gets.
How were the sums of £10,000 and £20,000 arrived at?
They took account of all the various factors that have been pointed out—designing a training programme and so on. They are ballpark figures for what would be required to do all the work.
Fair enough.
I quote from the submission from the Faculty of Advocates:
“Paragraphs 18 and 155 of the Financial Memorandum are inaccurate and misleading. These state:
‘In addition, the Faculty of Advocates have also expressed concern due to the reduction in cases in the Court of Session and the High Court as a result of these reforms, as advocates have exclusive rights of audience in these courts.’”
It continues:
“This statement is inaccurate and misleading in at least two respects:-
Advocates do not have exclusive rights of audience in the Court of Session and the High Court. Solicitors with higher court rights of audience also have rights of audience in those courts.
The Faculty of Advocates has expressed concern about two features of the Bill: the increase in the exclusive competence of the sheriff court and the creation of a sheriff appeal court. Although those features of the Bill will have a direct impact on the Faculty of Advocates”—
blah-blah-blah. Do you agree with the faculty that there are inaccuracies in the financial memorandum in those respects? If so, have you identified other inaccuracies in the financial memorandum since it was published?
On those specific sentences, we would agree with the first point about “exclusive rights of audience”. The faculty is right: solicitor advocates also have rights in the Court of Session.
That is clear from other paragraphs in the policy memorandum. That was simply an error.
In paragraphs 85 and 132 of the financial memorandum, we make it clear that solicitor advocates also have those rights. That was an error on our part.
On your second point, we believe that the rest of the financial memorandum is accurate.
That is reassuring. There might be disagreement on whether it is, but it is interesting that you are of the view that everything else is correct.
Do you wish to point out anything else to the committee before we wind up this evidence session?
I will make one point regarding the policy intention and what the Government is trying to achieve. This does have a bearing on the financial impact, although it concerns the users of court services.
Part of the driver for the reforms is that, as Lord Gill identified in his review, parties who litigate in the Court of Session incur disproportionate costs. We picked that up in paragraph 83 of the policy memorandum, which says:
“At present, the amount paid to the lawyers on both sides of a low value claim in the Court of Session almost invariably exceeds the settlement figure of a claim or the amount awarded by the Court.”
We have not really heard anything today about the benefits to court users. I would like to make the point—
I am sorry to interrupt, but that was touched on at the beginning of the previous evidence session. That is why both previous witnesses suggested that the limit should be £30,000. Below that, the criteria are satisfied. I think that Mr Conway talked about that just before you came into the room. The Faculty of Advocates and APIL agree that there should be a transfer to the sheriff court; their point is about the level at which the transfer should take place.
It is fair to say that all respondents to the consultation supported the proposed reforms, but there was disagreement about the level. I have discussed the different approaches to fixing the level—whether it is based on the settlement figure or the sum that was sued for. I simply wanted to put a marker down that the initiatives are being taken forward to benefit efficiency generally and access to justice for court users.
Mr Wolffe questioned whether there would be a financial benefit in transferring non-PI cases from the Court of Session. I put on the record the point that we have had quite a bit of support from consumers and small businesses for the changes and for bringing such cases in the sheriff court.
Thank you—that is helpful.
Meeting closed at 12:37.