In a previous article I looked at Simple Procedure Rules have been applied in practice over the past year and the likely course of action that may follow from raising an action under the value of £5,000 for the payment of a sum of money, return or delivery of goods or the completion or performance of a service. Another important point to consider prior to raising this type of action is whether you are likely to recover expenses.
The expenses for simple procedure actions are currently set out in Sheriff Court Simple Procedure (Limits on Award of Expenses) Order which states that expenses will not be awarded where the value of the claim does not exceed £200, will be awarded at a maximum sum of £150 where the claim is between £200 and £1,500, will be capped at a maximum of 10% of the value of the claim where the value is between £1,500 and £3,000 and where the claim exceeds £3,000 the successful party may be entitled to uncapped expenses as assessed.
Although this appears to be a simple way of managing expenses, we are continuing to review Sheriff Court Decisions as the rules are enforced in practice.
In a recent case simple procedure case where the action was initially defended and then settled when the Claimant accepted a £3,000 tender before the final hearing, the Sheriff considered whether the Claimant was entitled to the expenses of process as assessed or whether they should be capped at 10% of the sum decerned for.
The Claimant lodged an application for an account of expenses on the basis that the action was not one to which capped expenses applied and submitted that the acceptance of the minute of tender in an unqualified form set up an “enforceable obligation” on the respondent to pay “the taxed expenses of process.” The Claimant relied on section 81 of the Courts Reform (Scotland) Act 2014 (“The 2014 Act”) which notes that the restriction on expenses shall not apply in a case where the Respondent, having stated a defence, has not proceeded with it.
The Respondent opposed the motion arguing that the expenses should be restricted to 10% of the sum decerned for in terms of the Sheriff Court rules. The Respondent relied on the fact that the case was settled by way of a Tender and noted that the argument that a defence had not been proceeded with, disregarded both the terms and effect of the Tender which had been made without prejudice as they still intended to run the defence had this been rejected.
The Sheriff agreed with the respondent that the “sum decerned for” meant the sum for which was decree was granted, but otherwise agreed with the Claimant’s position, stating that the fact that the case was settled by tender and acceptance made no difference, as the tender had carried an offer to pay expenses. The Sheriff found that the case of Tallo v Clark 2015 was highly persuasive, where the pursuer was entitled to expenses on the summary cause scale after the defender “having stated a defence, has not proceeded with it” and therefore to cap expenses at 10% in this action would be to “ignore completely the meaning and effect of section 81(4) of the 2014 Act.”
The crucial point was the meaning of the phrase “has not proceeded with”, which was “definitively determined” to mean “not proceeding with the hearing on evidence and obtaining a decision or judgment of the court”.
The case does provide some clarity as to how this issue will be dealt with under the Simple Procedure Rules and shows that Respondents’ Agents will now have to bear this in mind when considering negotiating a settlement where a defence has already been lodged.
If you are involved in a dispute and are considering raising court proceedings in a simple procedure action or if you are defending an action against you we understand that the court process can be daunting especially when faced with court deadlines and a long list of rules to follow. At Jackson Boyd Lawyers, we are more than happy to assist you. We have an experienced team of lawyers who are on hand to answer any questions you may have
If you require any advice or assistance please contact us online by clicking here or speak to a member of our specialist team on 0333 222 1855.