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Making the agent pay

13 November 17

Latest civil cases, including expenses against a solicitor; other expenses decisions; recovery of possession; family actions; appeals; adults with incapacity

by Lindsay Foulis

Professional practice

The decision from Lord Boyd in Russell v Russell 2017 CSOH 137 (24 October 2017) could fall under the heading of expenses, but I feel the observations regarding professional practice might get lost there. 

The pursuer sought inter alia that the solicitor for the third defender should be found jointly and severally liable for the expenses of the action, taxed on an agent-client, client paying basis. 

Lord Boyd observed that it was clear that a solicitor should be open to an adverse finding if responsible for expenses caused by fault for which the client did not bear any blame. Instructing the raising or raising an action which was clearly unfounded, or using procedure not to establish a right but to delay the enforcement of an undeniable right, fell within that category. There was also a duty to see that the legal aid fund was not unnecessarily diminished. 

On the other hand, a solicitor acting on the instructions of counsel should not generally be found personally liable in expenses. Further, presenting a defence which might be pretty hopeless but was statable did not constitute an abuse of process. However, failing to respond to reasonable requests from other parties over a lengthy period was unacceptable. Similarly, failure to explain an obvious discrepancy in evidence regarding an important factual matter and a leisurely approach to the conduct of litigation were unacceptable, as was taking inadequate precognitions to address obvious points. 

None of these matters in themselves was sufficient to establish fault on the part of the solicitor. However, fault was established in the failure to instruct an expert properly and ensure they had all the relevant and necessary documentation. This was compounded by failure to read the subsequent report, which would have disclosed the lack of documentation. In all the circumstances, Lord Boyd found the solicitor personally liable in expenses for a restricted period, but that an enhanced basis for taxation was not justified.  

Expenses

The issue of expenses in family actions was considered by Sheriff Collins in NB v EL [2017] SC DUN 62 (28 February 2017). The action was one in which there were craves for residence/contact, molestation interdict, and orders relating to the former matrimonial home. He noted that in such actions the normal rule regarding expenses was modified. In addition, in actions in which there were financial craves, the fact that any offer was beaten was not of itself conclusive. Much depended on the parties’ conduct. Regard could be had to the nature of the real issues in dispute and the reasonableness or otherwise of the parties’ positions, their conduct, and whether the outcome constituted clear success. Modification of any award of expenses in terms of s 18 of the Legal Aid (Scotland) Act 1986 was a matter quite distinct from the issue of liability. 

Failure to lodge a legal aid certificate in terms of reg 3 of the Act of Sederunt (Civil Legal Aid Rules) 1987 did not prevent a motion for modification, albeit the requirement to lodge same gave notice to any opponent whether and to what extent a party was an assisted person. Whilst the failure invoked no sanction, it could be taken into account in considering modification. The question was whether prejudice had been suffered. Further, “house” in s 18(3) was not limited to property presently occupied by the litigant. 

In Kidd v Paull & Williamsons LLP [2017] CSOH 124 (26 September 2017) Lord Tyre was moved to order the defenders to pay £2,000,000 as an interim award of expenses. Significant awards of expenses had been made in favour of the pursuer but these had yet to be taxed. Lord Tyre ordered that the defenders pay £1,000,000 in an interim award. Such an application for payment of a specified figure was competent and could be made if special reasons existed. In Martin & Co (UK), Petrs [2013] CSOH 25 Lord Drummond Young had decided that reluctance to make payment and possible lack of liquidity satisfied that test. Lord Tyre considered that special reasons did not equate to exceptional circumstances. The defenders’ conduct of the litigation was not a factor, as that had already been dealt with by awards made on an agent-client, client paying basis. However, he took account of the likely level of the taxed award, the scale and complexity of the pending taxation process and the continued accrual of expense in the litigation, along with calculations from two law accountants as to the likely taxed figure. 

In McKenzie v McCormack [2017] SC EDIN 67 (19 October 2017) Sheriff Mackie considered a motion for sanction for counsel in a personal injuries action. The averments were brief. The mechanism of the accident was not complex or difficult. There was no complex medical issue regarding causation, or apparent issue regarding anxiety on the part of the pursuer. The settlement figure was below £5,000, albeit it was suggested the true value of the claim was over three times that figure. Sanction was refused. 

By the Act of Sederunt (Civil Legal Aid Rules Amendment) 2017 the rules governing applications for payment of expenses from the legal aid fund have been amended. Not later than 28 days before the appropriate motion is lodged or enrolled, the Scottish Legal Aid Board requires to be sent a completed notice form and any necessary documentation together with a copy of the motion. At the same time the motion must be lodged with copies of the notice and documentation. The Board has the right to appear and be heard. In applications for additional fees, intimation requires to be given at least 14 days prior to the hearing, with the account or estimate of expenses and the statement of grounds in support of the application. 

Heritable cases

The decision in NRAM v Cordiner [2017] SAC(Civ) 27 (1 September 2017), from Sheriff Braid sitting in the Sheriff Appeal Court is an interesting one. The defenders had lodged defences to an application to recover possession under a standard security. They were represented at the first calling. As is often the case, there were numerous continuations for payment etc. An evidential hearing was eventually assigned, at which the defenders through their solicitors consented to decree with its effect being suspended pending payment. Eighteen months later the pursuers obtained recall of that decree and sought to amend the application. After further procedure, the defenders’ agents withdrew, and at a peremptory diet decree was granted of new. The defenders lodged a minute for recall in terms of s 24D of the Conveyancing and Feudal Reform (Scotland) Act 1970. This was refused as incompetent. The defenders appealed. 

One issue which troubled the Appeal Court was whether the decision could be appealed in terms of s 110 of the Courts Reform (Scotland) Act 2014. It was submitted that reference to refusal of a reponing note included a s 24D minute for recall. The court tentatively expressed the opinion that as both procedures were to recall decrees in absence and in the event of refusal the decree was final and unchallengeable, the appeal was competent notwithstanding the grant of a minute for recall was mandatory and a reponing note discretionary. However, considering the procedural history, the decree was one pronounced in foro, the defenders having appeared and been represented in the proceedings. They were thus prevented from employing the minute for recall procedure by s 24D(2)(b). The court observed that litiscontestation, which was crucial in determining whether a subsequent decree was one pronounced in foro, certainly occurred when, as here, defences were lodged. However, in summary applications it might occur even although no defences were lodged. It might occur on appearance at the first calling when representations were made. Macphail suggested that litiscontestation occurred when a notice of intention to defend was lodged in an ordinary action.  

Expert evidence 

This is a topical subject in light of the Supreme Court decision in Kennedy v Cordia (Services). Readers may accordingly be interested by the text of Lord Hodge’s speech, which can be found online at the Supreme Court's website (PDF download)

Family cases

In Ray v Ray [2017] SC BAN 60 (5 September 2017) Sheriff Mann followed the decision of Lord Murray in Duncan v Duncan 1986 SLT 17 in allowing a minute of amendment altering the basis for divorce from unreasonable behaviour to non-cohabitation for two years. The action had been raised before that period expired but the amendment was proposed after that. Sheriff Collins in McNulty v McNulty 2016 Fam LR 145 had queried whether such a course was correct. Sheriff Mann considered that s 1(2) of the Divorce (Scotland) Act 1976 set out four separate grounds by which a court could determine that a marriage had broken down irretrievably. By allowing the amendment the court allowed the action to be abandoned on the original ground and a new action to be brought.

Appeals

In Bradley v Bradley [2017] SAC (Civ) 29 (21 September 2017) the Sheriff Appeal Court made certain observations regarding appeals. A number of points had arisen which had not been argued at first instance or explored in the judgment under appeal; these had not been in the grounds of appeal nor had there been any challenge to the findings in fact. The court was not the forum for a new discussion of the facts except in limited circumstances, nor was a rerun of submissions before the court at first instance a legitimate use of the appeal process. Finally, in cases seeking to invoke s 16 of the Family Law (Scotland) Act 1985, the pleadings should propose a solution. The party required to plead the practical consequences, financial and other, of the existing arrangement, why it was not fair and reasonable at the time, that the consequences were not offset by disadvantage to the other party, and what practical solution would alleviate the situation. 

All appeals in civil matters commenced in the sheriff court go to the Sheriff Appeal Court. Section 113 of the 2014 Act allows leave for further appeal to be granted in limited circumstances, an important point of principle or practice or some other compelling reason. In refusing an application for leave to appeal in Mitchell v Somerville [2017] CSIH 60 (4 October 2017) Lady Clark indicated that even arguable grounds of appeal do not satisfy the provisions of s 113. 

In General All Purpose Plastics v Young [2017] SAC(Civ) 30 (29 September 2017) the defender appealed the grant of decree by default as a consequence of his failure to lodge defences timeously. At the hearing of the motion for decree, the defender did not appear nor was he represented. Sheriff Principal Stephen concluded that whether to grant the appeal against a decree by default involved the appellate court exercising its own discretion having regard to all the circumstances. This involved considering whether it was in the interests of justice to allow the decree to be reponed. Consideration would be given to the explanation for the default and whether there was a prima facie defence and its strength and substance. In this instance she was not so satisfied. She also observed that the rules of court had as their objective the regulation of procedure and to provide litigants with a just resolution of the dispute. Non-compliance undermined these objectives and caused delay and expense for the party endeavouring to litigate in the correct manner.

Adults with incapacity

In Aberdeenshire Council v JM [2017] CSIH 65 (18 October 2017) [discussed more fully at this briefing] Lady Dorrian determined that in an application for the appointment of a guardian in circumstances where there was no dispute that the appointment of a guardian was appropriate and the issue was the identity of the guardian, the matter could be put in issue by appropriate averments being made in the answers to the application. In such applications, there were two issues to be determined, first whether the appointment of a guardian was necessary and secondly, the identity of that guardian. The suitability of the alternative proposed guardian would normally be supported by the preparation of a report from the mental health officer.

Lindsay Foulis, sheriff at Perth

Update

Since the last article Collie v Tesco Stores Ltd (November 2016 article) has been reported at 2017 SCLR 401.

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