Weightmans success: Pursuer’s agent found to have acted in a manifestly unreasonable manner, expenses awarded

Introduction

Since 30 June 2021, pursuers have benefitted from Qualified One-way Cost Shifting (QOCS) in Scotland (The Act of Sederunt (Rules of the Court of Session 1994, Sheriff Appeal Court Rules and Sheriff Court Rules Amendment) (Qualified One Way Cost Shifting) 2021 and s.8 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018.

Circumstances in which cost protection may be lost

s.8(4) of the 2018 Act provides three exceptions:

1. If the pursuer or their legal representative makes a fraudulent misrepresentation or otherwise acts fraudulently in connection with the claim;
2. If the pursuer or their legal representative behaves manifestly unreasonably in connection with the claim; or
3. If the pursuer or their legal representative commits an abuse of process.

The rules provide four further exceptions:

1. Where the pursuer fails to beat a minute of tender;
2. Where the pursuer has unreasonably delayed in accepting a minute of tender;
3. Where the pursuer seeks to abandon the action by way of decree of dismissal or decree of absolvitor in favour of the defender;
4. Where the defender has applied for and obtained a summary decree against the pursuer and is granted decree of absolvitor or dismissal.

On 07 November 2023, the All-Scotland Personal Injury Court released a written decision in the case of Harvie v Avarameoru & Anrs which found that QOCS protection was lost in relation to one of the defenders in the action. This is a welcome decision and adds to the growing body of case law where QOCS is being disapplied due to poor behaviour by pursuers and their agents. 

Background

This action arose from a road traffic accident where the pursuer sought damages for personal injury and uninsured losses.

The first defender, Avrameoru, was the driver of the at-fault motor vehicle.  He was an employee of the second defender, Amazon UK Services Limited.  At the time of the accident, the vehicle was on hire by Amazon from Enterprise Holdings and was insured under Amazon’s policy with Zurich Insurance.

Weightmans acted for the third defender, AIG, who was sued on the basis that they insured the vehicle at the time of the accident.

Pre-litigation, Enterprise wrote to the pursuer’s agent confirming the motor insurer for the vehicle at the time of the accident was Zurich Insurance. Zurich Insurance also paid the insured losses pre-litigation. 

We entered process for AIG and thereafter regularly contacted the pursuer’s agent by both e-mail and telephone seeking to be released from the action. We received no response to these communications.

The Record closed, a Proof was fixed, and we served a Notice to Admit on the pursuer in the following terms:

1. The third defender is not the motor insurer of the first or second defenders.
2. The motor insurer of the first and second defenders is Zurich Insurance plc.
3. The pursuer was informed that the third defender was not the motor insured by e-mail dated 01/08/2022.
4. The third defender has been incorrectly sued.
5. The third defender is not liable to make reparation to the pursuer.

In response to receipt of that Notice to Admit, the pursuer’s agent confirmed in writing that they intended to release AIG from the action. They failed to formally respond to the Notice to Admit.

The pursuer sought to release AIG by lodging a Motion for abandonment with no expenses due to or by. That Motion was opposed and we also lodged a motion for a summary decree with expenses as taxed which was opposed.

The hearing

Both opposed motions were heard together. We sought to disapply QOCS and relied upon three of the exceptions referred to above:

1. Abandonment of the cause in terms of rule 23.1(1), or at common law;
2. The pursuer or his agent’s manifestly unreasonable behaviour; and
3. A decree of absolvitor or decree of dismissal has been granted in terms of rule 17.2(3)(b).

We submitted that the pursuer sought to assoilzie the third defender from the craves of the initial writ, therefore as a matter of procedure, the pursuer sought to abandon the action against the third defender in terms of Rule of Court 23.1. This is an exception to the application of QOCS as per Chapter 31A.2(2) of the Court Rules. As QOCS does not apply, we submitted that expenses should be found against the pursuer in the traditional manner where expenses follow success.

In relation to the pursuer’s agent’s manifestly unreasonable behaviour, we submitted that:

1. They raised this action against the third defender when they knew they were not the motor insurer,
2. They failed to engage with the third defender’s agents to provide an explanation for why the third defender was sued, and
3. They failed to acknowledge and rectify this issue at the earliest reasonable opportunity.

In support of the award of summary decree, we submitted that:

1. The pursuer had admitted that the third defender was not the motor insurer of the first and second defenders;
2. The pursuer had admitted that the third defender had been incorrectly sued;
3. The pursuer had admitted that the third defender was not liable to make reparation to the pursuer; therefore
4. The action as pleading against the third defender was doomed to fail.

The judgment

Sheriff Nicol stated that the pursuer’s agent’s failure to act upon the e-mail of 01 August 2022 providing the correct insurance details and conduct further investigations was “clearly consistent with behaviour which is manifestly unreasonable”.  The pursuer was found liable to pay the third defender’s expenses of process as taxed, or otherwise agreed, from 01 October 2022 including the expenses of the opposed motion hearing on 30 October 2023.

Given the foregoing position, the court found it unnecessary to consider our motion for summary decree.

Comment

Each case is decided on its own merits. In this matter, the chronology of correspondence was crucial to the court’s decision making. Nevertheless, even if the court agrees that QOCS should be disapplied, the award of expenses is still a matter of the court’s discretion. 

Decisions such as this one are a reminder to pursuers that simply because they have the benefit of QOCS, that benefit will not protect them when their behaviour becomes obviously unreasonable, and courts are ready and willing to disapply QOCS in these circumstances.