Civil Litigation Bill passed through Stage One of the Scottish Parliamentary process

The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill which focuses on payments by clients to their own solicitor and expenses in…

Executive summary

The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill (“the Bill”) which focuses on payments by clients to their own solicitor and expenses in civil litigation passed through Stage One of the Scottish Parliamentary process on 16 January 2018.

The Bill

The Bill, introduced on 1 June 2017 by Cabinet Secretary for Justice, Michael Matheson MSP, proposes significant reforms to litigation expenses and funding of civil litigation in Scotland. The Justice Committee has now reported on the Bill having received evidence during 2017, both oral and written on the Bill’s content. The Justice Committee recommended amendments to the Bill to include:

  1. The introduction of a clinical negligence pre action protocol;
  2. Extension of the personal injury pre action protocol to include claims valued up to £100,000;
  3. The introduction of damages based agreements but the ring fencing of future loss damages from a solicitor’s success fee and only regulated bodies being permitted to offer success fee agreements;
  4. Introduction of qualified one way costs shifting (“QOCS”) for personal injury cases (as is already in operation in England);
  5. The loss of QOCS protection where the pursuer has acted fraudulently in connection with the proceedings or where the pursuer fails to beat a tender or offer during or prior to litigation and where a claim without merit is summarily dismissed;
  6. Further consideration by the Scottish Government of statutory provision ensuring caps on success fees;
  7. Commitment by the Scottish Government to post legislative scrutiny to analyse the impact of the imposition of QOCS; and
  8. The creation of salaried auditors of court who would be employed across the Scottish Courts and Tribunals Service.

Importantly, the Justice Committee recommended the Bill should not be passed by the Scottish Government until the UK Parliament has passed the Financial Guidance and Claims Bill (“the UK Bill”) which will bring into force changes to the regulation of Claims Management Companies (“CMCs”). The UK Bill will, if passed, extend the regulation of CMCs from England to Scotland. The Justice Committee is keen to ensure that if the Bill is passed, it is done at a time when regulation of CMCs in Scotland has been implemented.

Whilst the Justice Committee proposed the above amendments, it did recommend the general principles of the Bill. Despite the concerns raised about the regulation of Claims Management Companies the Government Minister responsible for the Bill has advised that the Scottish Government does not consider the Bill should be delayed until such time as CMCs are regulated. The regulation of CMCs was said to be imminent and any gap between implementation of the Bill and regulation of CMCs was unlikely to be unduly long. The Minister also warned that if CMCs are considering setting up an operation in Scotland they ought to be aware that regulation is imminent.

Comment

The Bill has provoked concern both from potential defenders and insurers notwithstanding the call for evidence by the Justice Committee, QOCS remains high on the agenda of defenders who believe, in the absence of further amendment to the Bill, the Scottish legal system ought to anticipate an increase in pursuers’ claims as the costs risks will have been removed.

However, given the general consensus of support proffered at Stage One of the parliamentary process, the enactment of the Bill appears inevitable.

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