At the conclusion of any court action, the court has the discretion to make an award of expenses, usually in favour of the successful party. The default position in almost all civil litigation claims in Scotland is that expenses should follow success.
Section 8 of the Civil Litigation Expenses and Group Proceedings) (Scotland) Act 2018 (“The 2018 Act) formed the foundations for the principle of Qualified One-way Costs Shifting (QOCS) in Scotland, provided that where a pursuer or their legal representative brings an action for personal injury, including fatal claims, has conducted such proceedings in an “appropriate manner”, the court must not make an award of expenses against the pursuer. QOCS effectively offers a pursuer protection in respect of their liability relating to expenses.
The rules of QOCS are contained within 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 (“the Act). The Act was placed before the Scottish Parliament on 1 June 2021 and came in to effect on 30 June 2021. The Act amends the relevant court rules to support the implementation of Section 8 of the 2018 Act.
The exceptions to QOCS protection are as follows:
- Where the pursuer or their legal representative has made a fraudulent representation or acted fraudulently in connection with the claim;
- Where the pursuer or their legal representative has behaved in a manifestly unreasonable manner in connection with the claim;
- Where the pursuer or their legal representative has conducted the proceedings in a manner considered by the court to be an abuse of process;
- Where there is a failure by the pursuer to obtain an award of damages equal to, or greater than, the sum offered by way of a tender lodged in process;
- Where there has been an unreasonable delay on the part of the pursuer in accepting a judicial tender;
- Where the pursuer abandons their action or the appeal pursuant to the appropriate rules or legislation, or at common law; and
- Where a decree of absolvitor or decree of dismissal has been granted against the pursuer under the Ordinary Cause Rules.
In order for an applicant to pursue a claim for expenses against a pursuer, an application must be made in writing. The application must then be made by way of motion procedure in either the Court of Session, the Sheriff Appeal Court, in the Sheriff Court for ordinary actions (where the value of the claim exceeds £5,000.00) or by way of incidental application in summary cause actions (where the value of the claim does not exceed £5,000.00). The application must also be made before an order finding a party liable in the expenses of the action or in cases where an appeal has been made.
Although determination of an application for an award of expenses on the basis of one of the exceptions at the discretion of the court, the Act sets out a number of limitations to that discretion where it is founded on a tender.
In particular, a pursuer’s liability in relation to expenses where they fail to beat a tender or unreasonably delays in accepting a tender, must not exceed 75% of the damages awarded to the pursuer.
The question of what constitutes an “unreasonable delay” on the part of the pursuer when accepting a tender will likely become the basis of an argument at some stage and also the issue of whether or not the 75% cap on expenses should be gross or net of any payments due to the Compensation Recovery Unit (CRU).
At present, there have not been many decisions issued in respect of QOCS. However, a decision was recently issued in the case of Helen Lennox v Iceland Foods Limited.
In this case, the pursuer tripped over shopping baskets that had been left at the head of a checkout in one of the defender’s stores. Evidence was led by only the pursuer and her daughter. The pursuer argued that the defender had failed to adhere to their own policies by not removing potential hazards. However, no evidence was led by the pursuer or their daughter in respect of this. The basis of the pursuer’s claim relied entirely on CCTV footage and argued that the defender had breached their obligations under the Occupiers’ Liability (Scotland) Act 1960, which has provisions for where there is a failure to take reasonable care to keep the store free from hazards. The Sheriff found that this CCTV footage did not demonstrate a lack of reasonable care on the part of the defender as the footage showed one of the defender’s employees inspecting the surrounding area approximately 3 minutes prior to the incident and prior to the baskets being placed at the head of the checkout.
The pursuer was ultimately unsuccessful at proof and the defender subsequently sought to disapply the protection of QOCS.
The defender sought to argue that the pursuer had acted in a manner that was manifestly unreasonable and that they had conducted proceedings in a way that was an abuse of process.
The Sheriff opined that the term “manifestly unreasonable” is not complicated and is something that is “obviously unreasonable”. The test of proving that a party has acted in a way that is considered manifestly unreasonable by the court is not easy to satisfy and the circumstances to prove this are likely to be exceptional and should be distinguished from the issue of abuse of process.
In this case, the Sheriff held that the pursuer had not acted in a manner that was manifestly unreasonable on the basis that the CCTV footage was open to interpretation and a different interpretation from the court have could have seen the pursuer successful in her claim.
Furthermore, the Sheriff did not consider that the case had no prospects of success. He therefore found that there had also not been an abuse of process on the part of the pursuer. The defender therefore failed in their application to disapply the protection of QOCS.
It will be interesting to see how the introduction of QOCS in Scotland impacts personal injury claims going forwards, as it is evident that it is not a simple for a defender to argue that a pursuer should not benefit from the protection of QOCS.