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Holyrood waves Civil Litigation Bill through at stage 1

17 January 2018

The bill to reduce the financial hurdles facing people seeking to bring a court action in Scotland, especially for a personal injury claim, was given an unopposed passage after its stage 1 debate in the Scottish Parliament yesterday.

There was cross-party backing for the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, the three main reforms of which introduce a sliding scale of caps on success fees, allow solicitors to offer damages-based agreements (under which their fee is calculated as a percentage of any award), and prevent expenses awards being sought against unsuccessful personal injuries claimants except in limited circumstances – qualified one-way costs shifting or QOCS.

Opening the debate, Legal Affairs Minister Annabelle Ewing said the bill "will make the cost of civil litigation in Scotland more predictable and hence increase access to justice". Referring to a concern that the bill does not make provision for the regulation of claims management companies, which it has been argued is necessary to prevent misuse of its provisions, she confirmed that following discussions with the UK Government, the Financial Guidance and Claims Bill at Westminster has been amended to extend to Scotland the regulation of claims management companies by the Financial Conduct Authority.

"Claims management companies will therefore be regulated in Scotland more quickly than would have been the case through our initial approach, which would have involved relying exclusively on the work of the Esther Roberton review of legal services regulation." She could not give a definite date when the Westminster legislation would be implemented, but suggested that "first, if there is to be a gap, I think that it will be very short and, secondly, we should remember that many claims management companies already operate subject to regulation, be it through their solicitor ownership or through the Ministry of Justice".

She further stated that the Government would "consider amendments at stage 2 to make it clear that trade unions and providers of success fee agreements will not be liable for expenses" – exempting them from a provision for the potential payment of expenses by third-party funders, which is intended to ensure that venture capitalists, whose only interest in a case is commercial, will be subject to adverse awards of expenses.

For the Conservatives, Margaret Mitchell, convener of the Justice Committee, urged the Government to add provision for post-legislative scrutiny of the bill, in case the QOCS measures led to "adverse unintended consequences" and facilitated a "compensation culture in Scotland". She wanted claims management companies to be regulated before the bill was implemented, and that damages for future loss should be "ring fenced" against calculation of the success fee in a damages-based agreement. She was supported in this by her colleague Liam Kerr, a practising litigation solicitor, who also argued that the bill "should make it clear that the benefit of QOCS would be lost in fraudulent situations when the pursuer fails to beat a tender and when a pursuer’s claim is summarily dismissed".

Ms Ewing said that amendments would be proposed to make it clearer that the "Wednesbury" test of reasonableness would apply in determining whether the benefit of QOCS should be lost, but advocate Gordon Lindhurst (Conservative) argued that that was equally as difficult a standard to meet as fraud, which the bill currently proposes.

For Labour, Daniel Johnson called on the Government to consider making court fees payable only at the end of litigation, and then only if the case was successful, with fees being recovered from an unsuccessful defender. He also called for more information on the potential cost to the public purse of more actkions being brought against the NHS and other public bodies as a result of the bill.

Click here to view the official report of the debate.

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