Qualified One Way Cost Shifting Rules for Scottish courts from today

From today, the 30th June 2021, new rules limiting a Defender’s ability to seek expenses against a Pursuer in Scottish personal injury cases, come into force. These new rules are known as ‘qualified one way costs shifting’ (QOCS) and they apply in the Court of Session, Sheriff Court and Sheriff Appeal Court.

The objective of the rule changes is to widen access to justice for personal injury claimants. Pursuers will now be able to contemplate personal injury litigation, without fear of expenses being awarded against them if they are ultimately unsuccessful. Iain Nicol, Convener of the Law Society of Scotland’s Civil Justice Committee, notes: “They (QOCS), help to remove significant barriers to those seeking to vindicate their rights in the civil courts”.

The standard court rules regarding expenses, which still apply more broadly to Scottish litigation, favour the award of expenses at the discretion of the court, expenses tending to follow the successful party i.e. the winning party is awarded expenses and the losing one is liable for them.  

Effect:

The effect of the QOCS, implemented by the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018, is to effectively prohibit the courts from awarding expenses against Pursuers in personal injury cases. The prohibition will apply in cases where an individual is bringing a claim for damages for (i) personal injuries (including any disease and any impairment of a person's physical or mental condition), or (ii) the death of a person resulting from personal injuries. It is important to note that the QOCS rules also apply to appeals. 

Exceptions:

The legislation qualifies the general prohibition against awarding expenses against the Pursuer in instances where they, do not conduct the claim in an appropriate manner. This includes:

  1. Where the Pursuer makes fraudulent representation or otherwise acts fraudulently;
  2. Where the Pursuer behaves in a manner which is manifestly unreasonable in connection with the claim or proceedings; or
  3. Where the Pursuer otherwise, conducts the proceedings in a manner that the court considers amounts to an abuse of process.

Consequently, a Defender wishing to persuade the court that the QOCS should not apply and expenses should be awarded in their favour, will have to prove one of the above in relation to the pursuer’s actions throughout the case. It is expected this will prove difficult.

England & Wales:

Similar QOCS rules for personal injury have applied in England & Wales since 2013, following a review carried out by Lord Justice Jackson.

There are subtle differences between the rules North and South of the border. For example, in England & Wales the exemption to the QOCS prohibition, is applied in instances where the pursuers can be shown to have been “fundamentally dishonest”, in their pursuit of damages.

Minutes of Tender:

A Minute of Tender, akin to a Part 36 Offer in England & Wales, is a formal offer put forward by the Defender, which, if rejected by the Pursuer, can ultimately come back to penalise them. This is done in cases where a Pursuer “fails to beat the Tender”, i.e. the court awards them less than the amount originally offered by the Defender. In such cases, it is common for expenses from the date of the tender to be awarded to the Defender.

The new QOCS do not significantly alter this judicial device designed to encourage early settlement. Consequently, courts will still award expenses against a Pursuer in these circumstances, however under the new QOCS rules, there are certain limits:

  • The pursuer's liability in expenses is not to exceed the amount of expenses the defender has incurred after the date of the Tender.
  • The pursuer's liability in expenses is capped at 75% of the damages awarded to the pursuer.
  • The pursuer's liability in expenses is not to exceed the 75% cap, even if the Auditor of Court assesses a greater sum being due, or if there has been any modification of an award of expenses.

An award can also be sought where a Pursuer abandons an action or appeal.

Information:

For more information on the qualified one way cost shifting rules now applicable to personal injury actions, please don’t hesitate to get in touch with our Commercial Dispute Resolution Team.

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