Costly Changes

The Act of Sederunt (Taxation and Judicial Expenses Rules) 2019 may look like a relatively run of the mill Scottish statutory instrument that does not need to be read.  However, it contains a couple of very important points for anyone who litigates in the Scottish Courts.

If a party raised an action in the Sheriff Court up until 29th April 2019, they frequently would instruct an advocate to provide advice, draft pleadings and undertake the advocacy, in the more complex and high value cases. Sometimes advocates (both junior and senior Counsel) would provide advice on discreet parts of the case. The other side in the litigation may not have known about Counsel’s involvement or only find out about it at a very late stage. If the party instructing Counsel was awarded expenses, they could ask the court to grant sanction for the employment of Counsel (and so recover the reasonable costs of that involvement). In terms of Section 108 of the Court Reform (Scotland) Act 2014, the court has a statutory test to apply. If the court considered that it was reasonable in all the circumstances to instruct Counsel (that test being an objective one taking into account various factors set out in the act) sanction should be granted.

The 2019 Regulations change the position. It will only be possible to recover the costs of Counsel if there has been prior sanction for Counsel to be involved either for the whole case or for a particular stage before counsel is involved (in which case as is the case at present, the auditor of court will be responsible for determining whether their precise involvement and fees were reasonable).

If for some reason, perhaps at the beginning of a case, Counsel is instructed without sanction, their fees will only be recoverable if the court grants retrospective sanction for Counsel’s involvement; in terms of the 2019 Regulations, the court has the power to do so ‘on cause shown’. In other words, a party will need to explain to the court’s satisfaction why there was not prior authority for the instruction of Counsel.

By definition, these sections affect Sheriff Court litigation because Counsel or Solicitor Advocates are required as a matter of course in the Court of Session.

However, the 2019 Regulations also affect Court of Session litigation, because changes were brought in for the certification of expert witnesses.  Much like Counsel, an expert witness’ fees were generally recoverable on the basis that the successful party at the end of the case would move to have their witness certified as a skilled witness. However regulation 5.3 (5) provides “the Court may only determine that the certification has effect for the purposes of work already done by the person where the court is satisfied that the party applying has showed cause for not having applied for certification before the work was done.”  Again therefore, if an expert is involved without prior authority from the court there will need to be an application to have them retrospectively certified as a skilled witness.

This all means that for actions raised from 29th April 2019, or for appeals noted from that date, it will be necessary for litigants to be more proactive about seeking authority from the court. The policy of the court seems to be to manage visibility of costs better. It will, however, have a tactical impact in some cases where ordinarily it may not be the desire of a party to reveal that Counsel has been involved to advise on some particular issue. Parties now may need to take a view between maximising chances of recovery of particular costs, or retaining the tactical advantage of obtaining expert reports on input from Counsel without disclosing the position to the other side.

Eric Baijal is Head of Litigation at BBM Solicitors.