UK & Europe
Insurance & Reinsurance
Following our previous article, which confirmed the rules of Qualified One-Way Costs Shifting ("QOCS") in personal injury claims in Scotland had been agreed, taking effect on actions raised after 30 June 2021, the Act of Sederunt detailing those rules has been published.
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 can be found here. We have set out a summary of the rules below, as well as a brief comparison to the position in England and Wales.
Despite the publication of the rules, we expect that satellite costs litigation around the application of QOCS in Scotland is inevitable. Until a body of decisions across various circumstances is established, disputes will occur, and we will report on any significant decisions in this area.
Legislative basis for QOCS
Section 8(2) provides that courts “must not make an award of expenses against the person in respect of any expenses” relating to a claim or appeal.
Section 8(4) of the Act sets out exceptions to that principle in circumstances where a person, or their legal representative, may be held not to have conducted proceedings in an appropriate manner. Section 8(6) provides that further exemptions may be set out in an Act of Sederunt.
It is the aforementioned Act of Sederunt which had been the source of the delays in the implementation of QOCS in Scotland.
Instrument setting out the QOCS rules
The Act of Sederunt set out the extent to which QOCS will apply to those Actions raised after 30 June 2021.
The rules confirm that an applicant (likely to be the defender) may apply to the court for an award of expenses against the pursuer by inserting additional provisions to the Rules of the Court of Session, The Act of Sederunt (Sheriff Appeal Court Rules) 2015, the Ordinary Cause Rules and the Summary Cause Rules.
Those new provisions allow the applicant to seek an award of expenses in the following circumstances:
To pursue a clam for expenses, an application must be made in writing. The application must then be made by way of motion procedure (as is appropriate) in the Court of Session, the Sheriff Appeal Court and in ordinary causes in the sheriff court, and by way of incidental application in summary causes. The application must be made before an order finding a party liable in the expenses of the action or appeal has been made.
Extent of order for costs
In the event that an award of expenses is made against the pursuer, such an award will be limited:
Comparison to England and Wales
QOCS was introduced in England and Wales in 2013 as part of the Jackson costs reforms. Per CPR 44.14 (subject to the exceptions set out below), costs orders against claimants can be enforced with the permission of the court but to a limited extent. The amount of the costs must not exceed the total damages and interest awarded to the claimant, compared to Scotland where the costs must not exceed 75% of the awarded damages.
Exceptions to QOCS where permission is not required
Costs orders can be enforced against claimants without the permission of the court, per CPR 44.15, if the proceedings were struck out for the following reasons:
Exceptions to QOCS where court permission is required
Costs orders against claimants can be enforced to their full extent only with court permission, per CPR 44.16, in circumstances where: