On 30 June 2021 new rules will come into force which change the ability of Defenders to recover expenses from Pursuers in personal injury actions in Scotland. The rules allow for what is known as qualified one way costs shifting (QOCS).
Discussions about the introduction of rules of this type have been ongoing for some time. Their introduction will follow recommendations which were made for this in Sheriff Principal Taylor's Report of the Review of Expenses and Funding of Civil Litigation in Scotland. Provision was subsequently made for these in section 8 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018.
What are QOCS?
QOCS are a prohibition on the ability of a court to award expenses against Pursuers in personal injury cases. In particular, they apply when a person is bringing a claim for damages for (i) personal injuries (which includes any disease and any impairment of a person's physical or mental condition), or (ii) the death of a person from personal injuries.
For these types of cases, as long as the person conducts the proceedings in an appropriate matter, the court must not make an award of expenses against the person in relation to either (i) the claim, or (ii) any appeal in respect of the claim.
Which cases will they apply to?
QOCS will apply to personal injury actions, as defined above, raised in the Scottish courts. This could be in the Court of Session if the case is of a higher value, or the All-Scotland Sheriff Personal Injury court or a local sheriff court.
QOCS will apply to all cases which court proceedings are commenced (i.e. raised and served on defenders) on or after 30 June 2021
When will the rules not apply?
The test which a court will apply to determine whether QOCS should be disregarded in a particular case is to look at whether the Pursuer had conducted the case in an appropriate matter. A person will be deemed to have conducted the proceedings in an appropriate manner unless they or their legal representative, do any of the following:
(a) make a fraudulent representation or otherwise act fraudulently in connection with the claim or proceedings (which will be judged on the standard of proof of the balance of probabilities),
(b) behave in a manner which is manifestly unreasonable in connection with the claim or proceedings, or
(c) otherwise conduct the proceedings in a manner that the court considers to be an abuse of process.
If a Defender wants to persuade a court that a Pursuer should lose the protection of QOCS, they will need to persuade a court that the actions of either the Pursuer, or their representative, meet the above test.
How does this contrast with the position in England?
Rules to allow this type of costs protection for Claimants in personal injury claims in England were introduced, for personal injury cases, in 2013 following recommendations in a review carried out by Lord Justice Jackson.
There are various differences between the Scottish and English rules. The test which determines whether the protection of QOCS will be lost for an English case is different. In England, the test is one of "fundamental dishonesty", rather than "appropriate conduct of litigation" in Scotland.
In Scotland Pursuers can be penalised for not accepting a reasonable formal settlement offer which is made to them (known as a tender) if they choose to proceed with the action and recover less than the amount of the offer. The penalty limits the amount of legal expenses which can be recovered by the Pursuer.
The rules still allow a penalty to be applied to a Pursuer in a case where QOCS apply. If a tender is rejected and the pursuer does not subsequently obtain an award higher than the offer in the tender, or where there is an unreasonable delay before a tender is accepted, the Defender may recover expenses from him. In the new rules, there are some limitations on the amount the Defender can recover.
An award can also be sought where a Pursuer abandons an action or appeal.
What can we expect when QOCS are introduced in Scotland in June?
In many cases, we will see no difference. In his Review, Sheriff Principal Taylor considered evidence that expenses were recovered from unsuccessful Pursuers in fewer than 1% of cases. With these new rules, the percentage of cases in which Defenders do recover their expenses is likely to reduce. We are likely to see disputes about how that test is to be applied.
Some are predicting an increase in personal injury claims. Pursuers may be more willing to raise court actions, as the risk of expenses awards against them will be minimal.
The introduction of QOCS in Scotland is a development which we will watch with interest, to see how it impacts on the personal injury claims landscape in Scotland, and whether it ultimately improves access to justice for Pursuers.
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