QOCS for Scots – July 2017

QOCS for Scots - July 2017Brian Castle

Brian questions whether QOCS for Scots is a good thing for victims of road traffic accidents in Scotland

So the long heralded changes to civil litigation funding and expenses in Scotland are a step closer with the recent publication of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. The declared aim of the Bill (per the explanatory notes) is to increase access to justice in civil actions in Scotland by making civil court costs more predictable; increase funding options for those pursuing civil actions; and introduce a greater level of equality to the funding relationship between pursuers and defenders in personal injury actions.

The driver for these proposed changes was of course the findings of Sheriff Principal Taylor in his Review of Expenses and Funding in Civil Litigation published in 2013. Out of that review came a perception that many injured people with valid claims for damages in Scotland were prevented or dissuaded from asserting their right to recover appropriate compensation because of the potential costs implications in doing so, and the inequality of arms in any dispute against a defender and his insurance-backed and funded legal team. There was also clearly a desire to have a level playing field with the position of injured claimants in England and Wales following the introduction of rules there on Qualified One-Way Costs Shifting (QOCS) and where the general proposition is now that an injured claimant does not require to pay costs to a defendant even if his claim is unsuccessful in court.

So is QOCS a good thing for a Scottish person injured in road traffic accident through the fault of another party? Possibly, although (as usual) the devil is in the detail. As a pursuer (claimant) lawyer, my first instinct is to welcome any measure which seeks to address the inequality of arms between an injured accident victim and the might of the insurance industry in the battle to secure full and proper compensation. One concern is that there appears to have been little or no proper analysis of whether the relatively recent introduction of QOCS in England has delivered the proposed benefits to claimants, and whether anything can be learned from the English experience. As an interested observer looking at the English experience from afar, one concerning development appears to be the concerted effort of insurer-backed defendant firms to try and have claims declared fundamentally dishonest (both in the course of the court action itself and also post-judgement) in order to have QOCS disapplied. A review of these cases suggests that defendant firms are seeking to have the benefit of QOCS removed in circumstances falling far short of what one would ordinarily consider to be “fundamentally dishonest” conduct. If the price of QOCS is going to be a substantial increase in challenges to pursuers on conduct grounds, I cannot see that this will be of benefit to the Scottish civil litigation process.

Moreover, Part 2 of the Bill seems to go further than the position in England and must put a question mark over how QOCS will apply in practice for many Scottish claimants. The Bill as it stands provides that an award of expenses may be made against “another person” (i.e. not a party to the proceedings) who provides “financial assistance” to the pursuer and “has a financial interest in respect of the outcome of the proceedings”. Financial assistance and financial interest are not further defined in the Bill. To my knowledge, no similar provision exists in the current English QOCS rules. This provision appears to have been included as a result of representations by defendant firms and insurers to the effect that there is no inequality of arms where the pursuer’s claim is backed by an accident management company or the pursuer has elected to take out after the event insurance, for example.

The provisions as they stand might have the practical effect of rendering QOCS irrelevant in a great many cases. For example, where a solicitor agrees to act speculatively for an injured claimant, would that be caught by the proposed provisions as being a situation where another person has a “financial interest in respect of the outcome of the proceedings”? If so, that would be likely to remove the availability of QOCS in many Scottish cases which appear to be contrary the declared general aims of the Bill as already outlined. Clearly more definition is required here.

The Bill also seeks to introduce further regulation on success fee agreements entered into by Scottish civil litigants and further regulation of the powers of Auditors of Court. Finally, the Bill introduces welcome and overdue provisions to permit the raising of group proceedings through the Scottish Courts.

The Justice Committee has asked for submissions from interested parties on the Bill by 18 August 2017 and MASS Scotland will be taking the opportunity to do so. Watch this space for updates on further developments!

Brian is MASS Regional Co-ordinator for Scotland and a Partner at Digby Brown

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