UK & Europe
Insurance & Reinsurance
Following the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act receiving Royal Assent in 2018, the Justice Committee recently considered the draft Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (Success Fee Agreements) Regulations 2020 and recommended they be approved. The Regulations will come into force on 27 April 2020.
The draft legislation can be accessed here.
The purpose of the Regulations is to:
The term "success fee agreements" includes speculative fee agreements and damages based agreements. The success fee will be a percentage of the damages awarded or agreed and will be paid where the plaintiff is successful. When unsuccessful there will be no fee, or a lower fee, payable. “No win, lower fee” agreements will not apply to personal injury cases.
Capping success fees will provide greater certainty to plaintiffs entering into success fee agreements and help them to find the best value representation to meet their needs.
Regulation 2 sets the following caps on success fees:
|Type of case||Cap (all caps include VAT)|
|Personal injury cases||
Up to 20% of the first £100,000 of damages
Up to 10% for the next £400,000
Up to 2.5% of damages over £500,000
|Employment tribunal cases||Up to 35% of the monetary award recovered|
|Commercial and all other actions||Up to 50% of the monetary award recovered|
It is stressed that these caps should be seen as the maxima and not the “going rate”.
As in England and Wales damages based agreements will not be available in family proceedings in Scotland. It is noted that it is much more difficult to define success in these cases as the court may be required to make a range of different orders. Regulation 3 therefore excludes the use of damages based agreements from family proceedings.
The Official Report of the Committee’s meeting can be accessed here.