A general uptick in costs

Under the personal injury procedure, costs in Scotland are calculated at the end of a case. There is no active budgeting or advance approval for the use of experts, for example. Claimant’s costs are calculated in reference to a set scale (for example, £X per page of a witness statement; £Y per 15 minutes of a court hearing) and there is no hourly rate to haggle over as there is in England & Wales. Over recent years the overall costs bill presented by claimants has increased as court outlays and as £X and £Y increase following periodic review. Expert and Counsel fees have also seen a general upward trend. This has the knock-on effect of increasing claim spend and reserves held.

Case law on uplift to costs

Upon settlement, a claimant can seek a percentage uplift in claimant costs (not the outlays) on one or more of seven statutory grounds. These include complexity, value and importance to the claimant. The level of uplift is a negotiation point and, if not agreed, is determined by the court. Claimants typically sought an uplift of 25-40% for each head of additional fee awarded.

In the case of Centenary 6 Ltd v TLT Ltd (see here should you be keen for a deep dive into the wider legal issues in this professional negligence case) the court was required to determine what additional fees should be awarded to the claimant. They were granted an additional fee under five heads for the first instance trial and an uplift under two heads for the appeal. The uplifts awarded were 75% and 30% respectively. This is as opposed to the 300% and 250% sought by the claimant. 

This case does not create a binding “15% per head” rule, but it is a very helpful tool for defendants in resisting far more significant additional fees. 

QOCS 

No Scottish costs update would be complete without a review of QOCS. The most significant recent change to Scotland’s cost regime is the introduction of Qualified One-Way Costs Shifting. This change limits the circumstances in which a defendant can recover costs from an unsuccessful claimant in personal injury litigation. To be awarded costs the defendant is required to establish that the claimant has: (a) made a fraudulent representation or otherwise acted fraudulently in connection with the claim or proceedings, (b) behaved in a manner which is manifestly unreasonable in connection with the claim or proceedings, or (c) otherwise, conducted the proceedings in a manner that the court considers amounts to an abuse of process. There are also some additional limited exceptions relating to a claimant failing to beat a Tender (part 36 offer). 

There has been a flurry of case law regarding when QOCS should be disapplied. Most of the litigation is in the context of low-value, volume claims and the cases themselves are rarely interesting on their facts. For now, we share some headlines which can be drawn from the cases.

• If a claimant abandons a claim (i.e. drops it before trial) then the rebuttable assumption is that costs will be awarded to the defendant without the need to establish unreasonable behaviour, etc. The same applies if the case is dismissed by “summary decree” because it obviously has no realistic prospect of success. 
• The bar for establishing fraudulent representation is high. The court will be required to determine whether, on the balance of probabilities, the claimant and/or solicitor acted intentionally to mislead the court. There will require to be a relevant finding in fact by the court.
• If the claimant is found not to be credible when giving evidence, that does not necessarily entail manifestly unreasonable conduct. Equally, if a claimant’s witness is not reliable, that does not necessarily reflect on the claimant’s own conduct. However, ‘manifestly unreasonable’ means ‘obviously unreasonable’ and it is obviously unreasonable for a party to an action knowingly to seek to rely on a witness whose testimony is completely untrue.
• However, manifestly unreasonable behaviour can include where the claimant is found to have intentionally misled the court. This is beyond the court merely preferring another witness’ evidence over the claimants.
• If a claimant’s conduct reflects their legal advice, that is unlikely to amount to manifestly unreasonable conduct. 
• There are now many instances where the court has restricted claimant costs where there has been a failure to act reasonably by the claimant during the pre-litigation stage, including premature litigation.

With costs becoming an increasingly significant part of overall claims spend, it is important that a robust approach is taken and the appropriate cases selected to try and recover costs where the conduct by the claimant has been poor. 

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