On Friday 30 January 2015, the Scottish Ministers published a consultation paper setting out their plans for draft legislation which will implement the recommendations of the Review of Expenses and Funding of Civil Litigation in Scotland (the 'Taylor Review').
Background
The report of the Taylor Review was published on 11 September 2013 and made 85 recommendations for extensive changes to the system of expenses and funding of civil litigation in Scotland. The Scottish Government has previously accepted all of the report's recommendations in principle.
Access to Justice
The consultation paper's proposals aim to improve access to justice by making judicial expenses more predictable, increasing funding options for those raising civil actions, and by creating an 'equality of arms' between both parties to a personal injury action.
Launching the consultation, Minister for Community Safety and Legal Affairs Paul Wheelhouse said:
"The Scottish Government agrees that the current situation where the unpredictability of costs represents a barrier to justice is not acceptable. I am convinced that the proposals in our consultation will go a long way to making the Scottish civil litigation system much more accessible to the people of Scotland."
The Proposals
The focus of the consultation paper is Sheriff Principal Taylor's recommendations for Damages Based Agreements (DBA's), Speculative Fee Agreements (SFA's) and Qualified One-way Costs Shifting ('QOCS').
The Scottish Government's proposals include:
- Introducing caps on SFAs – i.e. "no win, no fee" agreements with an additional "success fee" payable;
- Allowing DBA's, under which the solicitor's fee is calculated as a percentage of the sum awarded, to be similarly capped;
- Introducing a system of QOCS for personal injury cases, providing a degree of protection to pursuers against being found liable for defenders' costs;
- Disallowing ring-fencing of future loss from the success fee;
- Developing a non-statutory code of conduct applicable to everyone offering DBA's, which will encourage good practice and standardisation – although the Scottish Government does not intend to regulate claims management companies at present, it is intended that DBA's will be voidable if the body offering it does not comply with the rules.
In addition, the paper highlights plans for the introduction of provisions which will ensure that the Legal Aid Fund is used only as a "funder of last resort", and only directed at those who need it most.
Next Steps
Responses are invited to the consultation paper by the deadline of 24 April 2015, following which responses will be considered and decisions made.
The resultant draft legislation will certainly be of interest to all who are involved in civil litigation in Scotland.
The consultation paper can be found here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
