Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018

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02/08/2018

On 1 May 2018, the Scottish Parliament, by a unanimous decision, passed the Civil Litigation Bill (the Bill) and, on 5 June 2018, the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (the Act) received Royal Assent.

The introduction of this legislation is part of a significant process of reform within the Scottish courts which began with Lord Gill’s review on the Civil Courts in Scotland which was published on 30 September 2009.  Sheriff Principal Taylor’s review of expenses and funding of civil litigation followed in October 2013 and the Bill itself was introduced to the Scottish Parliament on 2 June 2017.

The main purpose of the Act is to ensure that litigants in Scotland will have a clearer understanding about the costs of pursuing a claim at court. The three main changes, all of which are designed to improve access to justice, are the introduction of:

  • damages based agreements (DBAs), more commonly known as ‘no win, no fee’ or ‘success fee’ agreements
  • qualified one way cost shifting (QOCS) in personal injury cases [1]
  • group proceedings, often referred to as ‘class actions’, which allow costs to be shared amongst pursuers whose claims involve issues which are the same, similar or related to each other, often making litigation more affordable. (Regulations concerning group proceedings are expected to follow, which should provide guidance on opt-in and opt-out proceedings [2].

WM Comment

This legislation aims to make civil litigation more accessible, and costs more predictable, for litigants in Scotland. In many ways it largely mirrors some of the changes to litigation financing and procedure which were brought about in England and Wales in April 2013 following Lord Justice Jackson’s review of civil litigation costs. However, in some ways – most notably in relation to DBAs – it is arguable that the new Scottish regime may be more effective than the English equivalent [3] and it is interesting to note that, in England and Wales, the Ministry of Justice is currently undertaking a review of those measures.

Much of the detail concerning the practical application of the Act is due to follow in secondary legislation, plus the Act has a built-in requirement that there be a review as to how various aspects of the legislation are operating in practice after five years, so the Act, with its potentially far-reaching implications for civil litigation in Scotland, is definitely one to watch.

Walker Morris will monitor and report on any key developments. In the meantime, if you would like any information or advice about civil litigation in Scotland more generally, please do not hesitate to contact Rob Aberdein.

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[1] This means that, except in certain specified circumstances (such as where a pursuer has made fraudulent representations or has behaved in a manner which falls below the standard reasonably expected of them in civil proceedings or which constitutes an abuse of process) the courts will not make an award of costs against a personal injury pursuer whose claim is unsuccessful.
[2] In ‘opt-out’ proceedings the claim can be brought on behalf of a defined group without the need to identify all individual pursuers (or, ‘claimants’ in England and Wales) because pursuers within the specified class are automatically included in an action unless they take specific steps to opt-out.  This circumvents the problem of locating all suitable pursuers and convincing them to join an action, which can be one of the major problems faced in the opposite ‘opt-in’ regime.
[3] The Act allows for what have been called ‘hybrid DBAs’, which allow solicitors to obtain some payment even if the client does not win.  This makes this funding option more attractive to solicitors and therefore potentially much more widely available than in England, where only ‘pure’ DBAs, (i.e. where the client pays nothing at all unless they win) seem to be allowed under the relevant regulations.

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