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Levelling the land: pro bono expenses orders

14 May 18

The now-passed Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill allows recovery of expenses where representation was pro bono. The author discusses the impact of this change

by Malcolm Combe

The concept of pro bono publico – for the public good – legal work is well known. Solicitors and advocates have been known to take time, and moneymaking potential, out of their working days to help people unable to access help elsewhere, including through legal aid. Support might also come from law students, who can play a representative role through law clinics alongside their studies in appropriate areas, with that work sculpted by suitable disclaimers and supervision (See Combe, “Perspectives”, Journal, July 2015, 5).

Pro bono support can allow a worthy action to proceed where it might otherwise have stumbled. To that extent, the other party in an action brought with pro bono support might grudge the support (for self-interested reasons). What such a party will not grudge is the fact that a blunt application of the “expenses follow success” rule treats them kindly. After all, what are the expenses of someone who has been getting support for free?

The case for, and the road to, a pro bono expenses order

There are essentially three knock-on effects where there is no need for an unsuccessful litigant to make any payment when an opponent has not paid for legal representation. In such a situation – which a party to litigation has no control over – a litigant could find themselves benefiting from a windfall, or at least not being hit by a liability. The absence of any potential need to cover what would have otherwise been classed as expenses also changes the dynamic of any negotiation towards settlement. Away from those direct considerations, there is a related, wider point. Any money that does not have to be paid is, by definition, not moving anywhere. If it had been payable, it might have been used to support other worthy causes that seek to address access to justice issues.

In 2010, this was discussed in an article by Emma Boffey, who was (at the time) a student at the University of Strathclyde Law Clinic (“On level ground?” Journal, May 2010, 9). She reflected on a case where law students, solicitors and advocates teamed up to successfully represent a client in an appeal before the Court of Session. At that time, no claim for “expenses” could be made, which Boffey contrasted with the position of pro bono costs (equivalent to expenses) orders in England & Wales in terms of the Legal Services Act 2007.

Section 194 of that legislation introduced a power for the Court of Appeal, the High Court, and any county court to make a pro bono costs order. This provision was later amended by s 61 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and article 25 of the Crime and Courts Act 2013 (Family Court: Consequential Provision) Order 2014, which respectively allowed the UK Supreme Court and the family court to make pro bono costs orders. Any payment that is ordered is to go to the “prescribed charity” rather than directly to anyone providing representation. The prescribed charity is the Access to Justice Foundation. The Foundation explains on its website how monies received through pro bono costs orders are applied. (This will be explained further below.)

The Scottish case for a pro bono expenses order was then considered by Sheriff Principal Taylor. In his 2013 Review of Expenses and Funding of Civil Litigation in Scotland, after discussing the tradition of pro bono and how it should feature in the modern legal services mix (paras 128-143 of chapter 11), he suggested Scottish courts should have the power to oblige an unsuccessful party in civil litigation to pay judicial expenses where the successful party was represented pro bono, and also considered to whom should such a payment should be made. It was noted (at para 145) that the “vast majority” of respondents to the related consultation paper were in favour of such an express power, and further that the absence of the power could lead opponents with knowledge of a pro bono situation to be obdurate or spin out proceedings unnecessarily (para 148). As to the beneficiary of an order, it was recommended that this would be a suitable charity.

A bill with a provision to allow for this followed. The case for pro bono expenses orders was further developed in the Scottish Government’s Final Business and Regulatory Impact Assessment on the bill (published June 2017), which highlighted that the power would provide “equality of treatment to litigants who are represented pro bono” and, in a section headed “Costs and benefits”, no costs were noted. Benefits relating to deterring a litigant whose claim was without merit and making a party more open to settlement were noted. Meanwhile, the Law Society of Scotland supported the introduction of pro bono expenses orders in its evidence on the bill at all stages, offering the alternative name of “legal volunteering expenses orders” in the process.

Some 11 years on from the comparator legislation hitting the statute books and eight years after the issue was raised in the Journal, Scotland is finally making a change to bring its own brand of pro bono expenses orders into being. The legislation which does this, the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, was passed by the Scottish Parliament – without opposition – on 1 May 2018.

The new regime

Part 2 of the 2018 Act is entitled “Expenses in civil proceedings”. It deals with matters such as the insulation of pursuers from expenses in personal injury matters where they behave appropriately (that is to say, they are not fraudulent, manifestly unreasonable, or engage in an abuse of process) (s 8; references pending Royal Assent are to the bill as passed), and third party funding of civil litigation (s 10), with any such funding needing to be disclosed, alongside a disclosure of any financial interest a funder has in the outcome of proceedings. Important as such measures are, this note will focus on s 9 only, which is headed “Representation free of charge”. This is reproduced below.

The scheme is similar to that in England & Wales, applying in civil proceedings where some or all of a party’s representation in civil proceedings is provided free of charge by a legal representative (s 9(1)) and allowing an order to be made to a suitable charity. It largely proceeded from stage 1 to stage 3 of the legislative process without major changes, but one of the amendments at stage 2 was introduced (by Annabelle Ewing MSP) to mirror the position in England & Wales (in s 194(4) of the 2007 Act).

It did this by inserting a provision that makes clear: (1) that an order will only be made in circumstances where similar paid representation would have resulted in an order; (2) the size of the payment to charity should then be decided by the court on the same basis as it would have been if the representation had not been free of charge (see the Official Report of the Justice Committee on 6 March 2018, at column 8). Relatedly, it can be noted that s 9 does not actually rule out making an order in actions where expenses would not have been payable (such as in terms of the Sheriff Court Simple Procedure (Limits on Award of Expenses) Order 2016/388), but the court's duty to have regard to equivalent proceedings undertaken with fee-commanding representatives would still apply.

One difference to England & Wales relates to transparency, as a result of another stage 2 amendment. This requires disclosure to the court of the fact that some (or all) representation is provided free of charge. Although this was only introduced to the drafting later at stage 2, it was presaged in the Taylor report (at para 159 of chapter 11), where it was recommended: “in the interests of transparency, the arrangements as to how a litigation is to be funded must be disclosed to the court and intimated to all parties at the stage when proceedings are raised or notification given that a cause is to be defended. This applies equally to cases where legal representation is provided on a pro bono basis”.

In introducing the amendment, Ewing noted the overarching rationale for the disclosure of funding arrangements to facilitate earlier settlement of a case, and also that s 10 already requires third-party funding to be disclosed and it was fair to have a complementary provision in relation to pro bono assistance. The convener (Margaret Mitchell MSP, at column 9) commented that this and other amendments seemed to improve transparency. This seems fair, albeit an argument might be constructed that forcing disclosure of pro bono assistance might lead to stigmatisation in some (less enlightened) quarters.

Be that as it may, the need for transparency could avoid an issue that has arisen south of the border. Writing five years after the English & Welsh provisions hit the statute books, Tristan Jones noted that, “Practitioners need to know not only of the existence of the s 194 power, but also how to use it”, citing a “salutary tale” from the case of R (Bewry) v Norfolk County Council [2010] EWHC 2545 (Admin); [2011] 1 FLR 945 where an application for a pro bono costs order failed for “having been raised for the first time at the end of a long day in court and in circumstances where neither the judge nor opposing counsel had ever heard of s 194”. (“Pro Bono Costs Orders” (2012) 17(2) Judicial Review 120 at 120.) Whilst his point that practitioners need to know of the power for it to have any use will undoubtedly apply in Scotland, the situation he describes about disclosure literally only happening late in the day might at least be averted by the Scottish requirement for disclosure.

As noted above, an order can be made where someone has had the services of a legal representative for free. Under s 12A, “legal representative” is a defined term, which means: (a) a solicitor who is on the roll kept under s 7 of the Solicitors (Scotland) Act 1980, (b) a member of the Faculty of Advocates; or (c) any other person who may exercise a right of audience or conduct litigation in civil proceedings on behalf of a party to the proceedings. This third limb opens up the possibility of an award for the services of someone beyond the traditional branches of the Scottish legal profession.

Incidentally, this definition of “legal representative” also applies to s 11, which allows a court to make an award of expenses against a legal representative where the court considers that they have committed a serious breach of their duties to the court. Whilst this will ensure that pro bono legal agents do not play fast and loose in proceedings, hopefully it will not act as a disincentive to well-meaning would-be volunteers, either personally or as a result of insurance implications.

One final point to explain in the drafting is the provision that relates specifically to the Equality & Human Rights Commission. This came about as a result of another stage 2 amendment, prompted by a query from the EHRC about how the new provision would interact with s 28 of the Equality Act 2006 (which allows it to provide assistance in civil proceedings concerning equality law). Section 9 makes clear that the EHRC will still be able to claim expenses in such cases.

Show me the money

Finally, a word on the potential economic impact of this measure. It seems fair to say we should not get too carried away. The most recent accounts of the Access to Justice Foundation available at Companies House noted that £220,757 was slated to come its way in terms of pro bono costs orders. Some of this was non-recoverable, so only £144,231 was actually ingathered. 2015 presented more modest figures of £124,413 in orders, with £74,060 recovered, whilst in 2014 it was £113,816 in orders and £107,750 recovered.

These sums are not huge in the grand scheme of things, or even the overall accounts of the Access to Justice Foundation. With the population of Scotland, it is fair to assume the Scottish sums will be smaller. That said, and to adapt a slogan of the Foundation, this isn’t peanuts. Any money raised will have a non-zero effect towards worthy causes that support access to justice, whether on a “just in time” basis (through advice and representation) or on a “just in case” basis through public legal education.

In terms of how monies are distributed in England & Wales, whilst the Foundation is the central recipient of funds, it distributes the money received to agencies and projects that give free legal help to those in need, with “front line” agencies who are responsible for obtaining orders expecting to receive “up to 50% of the costs recovered”. In its guidance, it also notes that those associated with a successful pro bono costs order may express a preference as to the distribution of the pro bono costs sum, and that regard will be had to any such preferences, but “in order to maintain a strategic approach, is not bound by them”. This seems a sensible model for the Scottish prescribed charity.

Further, the figures in those accounts do not, indeed cannot, quantify how much the threat of a pro bono costs order has driven a party who might otherwise have litigated against a party with free legal advice to settlement, with all the associated benefits of freeing people from court proceedings and indeed saving court time. The existence of these orders removes a tactical negotiation advantage that could accrue to the other side, although one curious potential side-effect (as alluded to by Jones, at p 123 of his note) is that where a client is keen that his or her representative’s efforts should assist the charity, it may be desirable to keep the question of pro bono costs separate from any wider settlement discussions. Settlements might evolve in a slightly esoteric way. Indeed, one strange possibility that ought to be considered is that a pro bono represented party might even be less minded to settle in order to get a better “deal” for the charity, but there will be a variety of situations where that seems unlikely, not least that a court getting wind of that would take a dim view, and it also assumes that a pro bono representative has unlimited time to allocate to the case rather than settle.

Need to use

In her important article, Boffey sought a level playing field for litigants who were supported by pro bono services. Whilst it has taken some groundwork to get there, these provisions do have the effect of levelling the land. As such, they are to be welcomed, and the levellers are to be applauded. But having new rules of the game will not be enough. The one way for the provisions to be effective is for them to be deployed by those fighting for another man’s cause, in the words of the Levellers song (which appears on the album which inspired the title of this article). Only then will there be a benefit for individual cases, and a potential wider benefit for Scottish society from any funding that is strategically directed to worthy causes.

Postscript

The Scottish Government recently consulted on court fees, in a consultation which closed on 12 January 2018.

The relevant online landing page for the consultation stated: “It is necessary to increase fees in line with inflation in order to continue to achieve full cost recovery.” The necessity of full cost recovery – that is to say, users of a service paying for it so as to leave no cost on the state – was not made out, and there is an argument to be had about this. To some, justice is one of those things that cannot really be categorised like other commodities (this being something that was discussed in the UK Supreme Court in UNISON v Lord Chancellor [2017] UKSC 51, in relation to employment tribunal fees).

The Access to Justice Committee of the Law Society of Scotland put in a response to this consultation, reiterating its resistance to a move towards full cost recovery (having also made the point in 2016). Before going on to consider the individual points raised in the consultation, the committee noted: “A properly funded court system is an essential part of our civilised society and respect for the rule of law, and it is in the public interest to maintain a robust and respected system for resolving disputes. It is the proper responsibility of the state to fund that system.”

The Scottish Government has now responded to this consultation, noting (in its executive summary) the following: “Having considered the consultation responses fully, the Scottish Government intends to increase fees generally to allow for the predicted inflation figures outlined in the consultation document.” There may be further discussion to be had about this in the future, but that is probably enough for the moment.

Malcolm Combe is a senior lecturer in law in the School of Law, University of Aberdeen

Section 9: Representation free of charge

(1) This section applies in civil proceedings where –
(a) a party to the proceedings is represented by a legal representative, and
(b) some (or all) of that representation is provided free of charge.

(1A) The party must disclose to the court the fact that some (or all) of the representation is provided free of charge.

(2) The court may order a person to make a payment to the charity designated under subsection (3) in respect of the representation which was provided free of charge.

(2A) In considering whether to make an order under subsection (2) and the terms of such an order, the court must have regard to –
(a) whether, had the representation not been provided free of charge, the court would have awarded expenses in respect of the representation, and
(b) if so, what the terms of the award would have been.

(3) For the purposes of subsection (2), the Lord President of the Court of Session must designate a charity which –
(a) is registered in the Scottish Charity Register, and
(b) has a charitable purpose (however described) of improving access to justice in respect of civil proceedings in Scotland.

(3A) Subsection (2) does not apply in relation to representation provided under section 28 of the Equality Act 2006 (legal assistance).

(4) In this section, “free of charge” means otherwise than for or in expectation of a fee, gain or reward.

 

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