Hollyrood Lays Down Comprehensive Rules on Scottish QOCS and Exceptions to the Regime

A fortnight ago (here), we reported that the infrastructure for introducing qualified one-way costs (QOCS) protection in Scottish claims involving personal injury (PI) or death, under s.8 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018, was being activated through the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (Commencement No. 4 and Transitional Provision) Regulations 2021.

In respect of claims commenced on or after 30 June 2021 (and proceedings arising from those claims, including appeals), a pursuer’s liability for their expenses will be restricted, unless [subject to s.8(4) of the 2018 Act] they:

  1. Make a fraudulent representation or otherwise act fraudulently in connection with the claim or proceedings;
  2. Behave in a manner which is manifestly unreasonable in connection with the claim or proceedings; or
  3. Otherwise, conduct the proceedings in a manner that the court considers amounts to an abuse of process.

Under s.8(6) of the 2018 Act, it is stipulated that further exemptions may be set out in an ‘Act of Sederunt’, which would provide a comprehensive set of supplementary court rules.

We previously reported that such an Act (akin to CPR 44.13 to CPR 44.17), had not yet been published.

Now, though, we can confirm that the Act of Sederunt (Rules of the Court of Session 1994, Sheriff Appeal Court Rules and Sheriff Court Rules Amendment) (Qualified One-Way Costs Shifting) 2021 has been laid before Ministers at Holyrood (the devolved Scottish Parliament) and is accessible here.[i]

The 2021 Act amends the Rules of the Court of Session 1994, the Act of Sederunt (Sheriff Appeal Court Rules) 2015, the Ordinary Cause Rules 1993 and the Summary Cause Rules 2002 by adding new chapters, entitled ‘QUALIFIED ONE-WAY COSTS SHIFTING’, as follows:

  • Chapter 41B in the Rules of the Court of Session.
  • Chapter 19A in the Sheriff Appeal Court Rules.
  • Chapter 31A in the Ordinary Cause Rules.
  • Chapter 23A in the Summary Cause Rules.

These Chapters spell out the correct procedures for handling court applications for an award of expenses made against the pursuer, thereby enabling the effective operation of Scotland’s QOCS regime.

They also add further exceptions to QOCS, beyond those already outlined in s.8(4) of the 2018 Act. For instance, where a pursuer:

  • Fails to obtain an award of damages greater than the sum offered by way of a tender (Scottish Part 36 Offer) lodged in process.
  • Unreasonably delays acceptance of a sum offered by way of a tender lodged in process.
  • Abandons the action or the appeal, in terms of the appropriate rules, or at common law.
  • Has a decree of absolvitor or decree of dismissal granted against them (e.g. if the pursuer lodges an incidental application to abandon their action), in terms of the appropriate rules.

Applications for expenses must be made in writing and by way of motion procedure in the Court of Session, the Sheriff Appeal Court and the Sheriff Court (ordinary causes), or by way of incidental application in summary causes. They must also be made before the pronouncing of an interlocutor disposing of the expenses of an action (or an appeal), i.e. before an order finds a party liable for expenses.

What if a court makes an award of expenses on the grounds that a pursuer has failed to beat a tender, or unreasonably delayed in accepting one?

Unlike in England and Wales, where a defendant cannot be awarded costs that surpass the value of damages (plus interest) awarded to a claimant who fails to beat a Part 36 Offer, Scottish defenders will be limited to the extent that liability (1) may not exceed expenses incurred by the defender after the date of tender and (2) is limited to an aggregate sum of 75% of the amount of damages awarded to the pursuer.

All in all, legal professionals are of the opinion that satellite costs litigation on the application of QOCS in Scottish PI claims is ‘inevitable’, in spite of the new Chapters comprised in the Act of Sederunt.[ii]

 

[i] ‘New act of sederunt to supports QOCS regime’ (2 June 2021 Scottish Legal News) <https://www.scottishlegal.com/article/new-act-of-sederunt-to-supports-qocs-regime> accessed 4 June 2021.

[ii] Gordon Keyden and Vikki Melville, ‘Scotland: QOCS rules confirmed in Act of Sederunt’ (2 June 2021 Clyde & Co) <https://www.clydeco.com/en/insights/2021/06/scotland-qocs-rules-confirmed-in-act-of-sedurunt> accessed 4 June 2021.