March 14, 2019

QOCS in Scotland: Civil Litigation (Expenses and Group Proceedings) (Scotland) Act

The Civil Litigation (Expenses Group) Proceedings (Scotland) Bill, introduced into the Scottish Parliament on 1 June 2017, received Royal Assent on 5 June 2018. Although the intention of the Act is to implement the recommendation for the introduction of Qualified One-Way Costs Shifting (QOCS) in the Taylor report published in September 2013, the Act has still to come into force largely because of a need to introduce rules of court which will take account of the fact that the Act allows for further exceptions to the costs protection afforded to claimants by Section 8 of the Act. 

Currently the Act identifies exceptions to cost protection in the circumstances where the claimant conducts the proceedings in an inappropriate manner. These circumstances are defined in Section 8(4) of the Act as:

  • the making of a fraudulent representation or otherwise acting fraudulently in connection with the proceedings;
  • behaving in a manifestly unreasonable manner in connection with the claim or proceedings;
  • conducting the proceedings in a manner which the court considers amounts to an abuse of process;

However, it has been recognised by the Scottish Government in conjunction with the relevant committees of the Scottish Civil Justice Council that it is necessary to provide for a further exception to the cost protection in circumstances where a pursuer fails to beat a judicial tender lodged by a defender. There would of course be little purpose in tendering if, as a consequence, there was no sanction in expenses in the event that the pursuer failed to beat such a tender.

The Personal Injury Committee of the Scottish Civil Justice Council considered this matter in October 2018 and recommended that there should be an exception to costs protection for post tender expenses but that the pursuer’s liability in expenses should be capped at 75% of the damages awarded. The rules implementing that recommendation have still to be further considered by the Personal Injury and, Costs and Funding Committees. It is anticipated that the necessary rules are likely to be introduced by the autumn of 2019.

The possibility for providing for a further exception by reference to the defender’s status or circumstances (for example, if they are an uninsured individual) or where the pursuer has entitlement to be indemnified against any potential liability in expenses (such as under legal expenses insurance) has been considered and the case for such exceptions is to be kept under review.