30th June 2021 sees the introduction of Qualified One Way Cost Shifting (QOWCS) in Scotland, which will change the way in which expenses are awarded in Personal Injury actions.
QOWCS originated from the recommendations in Sheriff Principal Taylor’s Report of the Review of Expenses and Funding of Civil Litigation in Scotland, with provision then being made for them in the Civil Litigation (Expenses & Group Proceedings) (Scotland) Act 2018, which were then amended in The Act of Sederunt (Rules of the Court of Session 1994, Sheriff Appeal Court Rules and Sheriff Court Rules Amendment) (Qualified One Way Cost Shifting) 2021; catchy.
So what is QOWCS?
Qualified One Way Cost Shifting or QOWCS is the prevention of expenses being awarded against a Pursuer in a personal injury court action. They apply to those raising actions of damages for personal injuries, including any disease or impairment of a person’s physical and mental condition; or the death of a person arising from personal injury.
Prior to QOWCS, the general rule in terms of expenses was that the successful party would be awarded expenses. This meant that there would always be a risk to those raising personal injury actions, that if they lost their case they would be liable to pay the winner’s costs, as well as there own legal costs. This therefore raised the issue that only those who can afford to can have access to justice.
So, QOWCS are ‘One Way’ in that the benefit the Pursuer, and they are ‘Qualified’ as they come with certain conditions and exceptions, which will apply to both pre and post litigation conduct:
Section 8 (1)(b) of the Civil Litigation (Expenses & Group Proceedings) (Scotland) Act 2018 states that QOWCS will apply where “the person conducts the proceedings in an appropriate manner”.
Section 8 (4) of the 2018 Act goes on to state that QOWCS will not apply when a person or person’s legal representative:
- Makes a fraudulent representation or otherwise acts fraudulently in connection with the claim or proceedings
- Behaves in a manner which is manifestly unreasonable in connection with the claim or proceedings
- Conducts the proceedings in a manner that the court considers amounts to an abuse of power.
With no definition of what is deemed to be an “appropriate manner”, “manifestly unreasonable” and an “abuse of power” it is expected that courts will be ruling on these issues over the next few years, with it being up to the Defender to make the argument that QOWSC ought not to apply.
There are further exceptions when it comes to Tenders. A Tender is a judicial offer with expenses implications. Generally if a Tender is rejected by a Pursuer and they then fail to secure a higher amount than the Tender, then they will be liable to pay expenses from the date the Tender was made until date they settle their case.
With QOWCS, this will still be the case, however the amount the Pursuer will now be liable for will be capped at 75% of the amount of damages awarded to the Pursuer, and will not exceed the amount of the Defender’s expenses incurred after the date of the Tender.
This will also apply if a Tender is accepted after “unreasonable delay”.
Further, a Pursuer can still be liable for expenses when they abandon an action.
Again this throws up the question of what is “unreasonable delay” and it is not confirmed whether the 75% will be inclusive or exclusive of recoverable benefits.
What Next?
QOWCS will apply to all personal injury actions, and appeals, raised and served after 30th June 201.
Whilst QOWCS does make for a landmark change in how the courts will award expenses in personal actions, the extent in which they will impact how personal injury cases are dealt with remains to be seen; although with the overriding factor of making justice more accessible can only be regarded as positive.
