Courts Reform (Scotland) Act 2014 and Expenses and Funding of Civil Litigation Bill

05 Feb 2015
The Lord President has announced that implementation of the key features of the Court Reform (Scotland) Act 2014 is scheduled for September 2015.
The Scottish Government has announced a consultation on proposals for primary legislation on the expenses and funding of civil litigation in Scotland.
The consultation can be accessed at:
Courts Reform (Scotland) Act 2014
From September 2015:
  • The new Personal Injury Sheriff Court will be established in Edinburgh (with Scotland wide jurisdiction)
  • Actions with a value up to £100,000 will have to be raised in the Sheriff Court, rather than in the Court of Session
  • A new Sheriff Court appeal court will deal with criminal cases
From January 2016 the new Sheriff Appeal Court will also deal with jurisdiction in civil cases.
The aim of these changes is to increase access to justice while also lowering costs. Many have raised concerns, however, that the pressure of this increased business will cause cracks to appear in the Sheriff Court system. We may expect to see a surge in litigated cases in coming months as claimant firms who have traditionally preferred to issue proceedings in the Court of Session, look to beat the September deadline.
It is likely that insurers may see a drop in spend on costs for the more straightforward claims post-September 2015. In particular, lower value road traffic accidents may be substantially cheaper to litigate as it is most unlikely that sanction for counsel would be granted by a Sheriff for such cases. There have been hints, however, that the Sheriffs will look favourably upon requests for sanction for counsel, for example, in employers’ liability cases.
Consultation on legislation on expenses and funding of civil litigation
Following the publication of Sheriff James A Taylor’s Review of Expenses and Funding of Civil Litigation in Scotland in September 2013, the Scottish Government has announced plans to introduce legislation to “create a more accessible, affordable and equitable civil justice system for Scotland.“
The consultation on proposals for primary legislation on the expenses and funding of civil litigation was published on 30 January 2015. It can be accessed at:
The consultation paper includes the Scottish Government’s plans to:
  • Introduce a capping mechanism for speculative fee agreements
  • Allow damages based agreements to be offered to clients by solicitors in Scotland and to be capped to the same extent as speculative fee agreements
  • Introduce a system of qualified one-way costs shifting in personal injury cases
  • Introduce technical powers to enable the Scottish Civil Justice Council to implement some aspects of Sheriff Principal Taylor’s review
  • Make provision for legal aid in relation to “funder of last resort” and the availability of legal aid for legal persons in certain circumstances
  • Confer on the Court of Session the power to develop a table of fees for counsel.
The consultation also seeks views on some outstanding recommendations from Lord Gill’s Scottish Civil Courts Review (2009), including the potential to introduce a procedure for multi-party actions and provisions relating to the Auditor of Court and Sheriff Court auditors.
Currently, solicitors in Scotland are prevented from entering into an agreement to conduct litigation in exchange for a share of any damages recovered. Sheriff Principal Taylor recommends solicitors should be free to enter into such an arrangement, subject to a cap on the percentage of damages.
Unlike Lord Justice Jackson, Sheriff Principal Taylor has no difficulty with referral fees and has recommended that these continue to be paid.
Sheriff Principal Stephen had indicated that, in her view, the current Scottish voluntary pre-action protocols in personal injury actions should be moved to a compulsory footing prior to transfer of work from the Court of Session to the Sheriff Court. Such a move may reduce the volume of cases becoming litigated.
The biggest proposed shake up is the suggestion of qualified one way cost shifting (QOCS) applying to all personal injury cases. Even if a pursuer failed after proof (trial), it is proposed that he would not have to pay the defenders’ costs. Part of Sheriff Principal Taylor’s rationale for that recommendation is that insurers very rarely recover expenses from unsuccessful parties anyway. Sheriff Principal Taylor suggests, however, that a defender should be able to apply to strike out an action which has no real prospect of success prior to parties going to the expense of hearing evidence. In addition, if there has been fraud on the part of the pursuer he should lose the benefit of QOCS.
BLM will be responding to the consultation which closes on 24 April 2015.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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