In a case where settlement discussions between the parties have been unsuccessful, it will often be necessary to raise court proceedings in order to recover the appropriate level of compensation on behalf of a client.
The position before 3 April 2017
Clients often ask, “how long will the court action take?” and most solicitors would quite correctly advise that it is very difficult to provide an accurate estimate regarding timescales. Much would depend on when the solicitors acting on behalf of the other party made an offer to settle the claim.
Once a court action was up and running the Pursuer (individual making a claim for damages) would quite simply have to wait until an offer or tender (a formal offer lodged with the court) was received from the other side before any real prospect of settlement existed.
The position from 3 April 2017
From 3rd April 2017, a Pursuer is able to make an offer in any Court of Session and Sheriff Court Ordinary Action where the summons or initial writ includes a crave seeking damages.
For the impatient Pursuer, this will be an opportunity to make an offer to the Defenders at an early stage indicating the sum that they would accept to conclude matters. The Defenders will thereafter have “a reasonable period” to either accept or reject the Pursuer’s offer. If the offer is accepted by the Defender then a decree (court judgement) will be awarded against the Defender for the sum offered by the Pursuer together with expenses in the Pursuer’s favour.
If the Defender accepts the Pursuer’s offer but delays in doing so the Defender will have to pay a further sum amounting to 50% of the Pursuer’s expenses for the work carried out from the date on which the Pursuer’s offer could have been accepted until the date when it was actually accepted. Therefore, the prudent solicitor will have to consider the offer and take instructions as early as possible to avoid expenses implications.
Rejection of a Pursuer’s Offer
If the Defender considers the Pursuer’s offer to be excessive, they can simply choose to reject the offer. If there were no further settlement negotiations then the matter would proceed to proof (a civil trial) and the court would determine the appropriate level of the Pursuer’s compensation.
If the Pursuer is ultimately awarded more by the court than the sum that was rejected by the other party then again the Pursuer will be entitled to an additional 50% of expenses for the period from the date on which the offer was made until the date on which the case concluded. If, however, the court decides that the case is worth less than the figure contained within the Pursuer’s offer then expenses from the date of the offer would be awarded to the Defenders.
Proceed with Caution
The introduction of Pursuers’ Offers represents an interesting development in court actions and will require the Pursuer’s solicitor to be able to accurately value the Pursuer’s claim and discuss the reasoning behind their valuation with the Pursuer. Both the solicitor and client should be agreeable with the level of the settlement offer before it is lodged with the court and intimated to the other party.
In Personal Injury cases, the Pursuer’s solicitors are required to lodge a Statement of Valuation of claim, which in many cases, represents a best-case scenario and does not take into account the risks that exist in all court actions. This valuation is not binding on a Pursuer. In practice, it would be fairly rare for a Defender to settle a Pursuer’s claim based on the Statement of Valuation as they would consider it to be an exaggerated value of what the Pursuer would likely receive in court.
Therefore, the aim of Pursuers’ Offers will be to encourage early settlement but will also require a careful analysis of litigation risk factors by the Pursuer’s representative before any offer is made.
Who dares wins!
There will be no requirement on the Pursuer to make an offer in a Court of Session or Sheriff Court Ordinary Action in the same way that there is not any obligation on the party defending the action to make an offer or lodge a tender.
In some cases, the status quo will remain and the Pursuer will not make any offer and will wait to receive proposals from the Defenders. Nevertheless, the Pursuer’s solicitor, who is confident in his valuation should the matter proceed to court, will no doubt consider making an early offer on behalf of his client to put pressure on the Defenders to settle or at the very least to ensure an increase in expenses should the Pursuer ultimately receive more than the offer.
Jackson Boyd will monitor how the introduction of Pursuers’ Offers develops in practice in the coming months and will produce further articles on this interesting area.
Contact our Personal Injury Solicitors Glasgow & Edinburgh
Jackson Boyd deals with both Court of Session and Sheriff Court actions in relation to personal injury, clinical negligence, property and contract disputes and are happy to discuss your case with you. Please contact us on 0141 249 6903 or via our online contact form.