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Taylor Review: Review of Expenses and Funding of Civil Litigation in Scotland

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Chapter 1 Introduction

The remit of the Review

1. In his Report of the Scottish Civil Courts Review, the then Lord Justice Clerk, the Rt Hon Lord Gill, recommended that a review be undertaken into the costs and funding of civil litigation in Scotland. On 4 March 2011, the Minister for Community Safety, Fergus Ewing MSP, announced that such a review was to be undertaken under my chairmanship. The remit of the Review is as follows:

To review the costs and funding of civil litigation in the Court of Session and Sheriff Court in the context of the recommendations of the Scottish Civil Courts Review, and the response of the Scottish Government to that review. In undertaking this review, to:

  • consult widely, gather evidence, compare our expenses regime with those of other jurisdictions and have regard to research and previous enquiries into costs and funding, including the Civil Litigation Costs Review of Lord Justice Jackson;
  • consider issues in relation to the affordability of litigation; the recoverability and assessment of expenses; and different models of funding litigation (including contingency, speculative and conditional fees, Before and After the Event insurance, referral fees and claims management);
  • consider the extent to which alternatives to public funding may secure appropriate access to justice, and pay particular attention to the potential impact of any recommendations on publicly funded legal assistance;
  • have regard to the principles of civil justice outlined in Chapter 1, paragraph 5 of the Civil Courts Review;
  • consider other factors and reasons why parties may not litigate in Scotland; and
  • to report with recommendations to Scottish Ministers, together with supporting evidence within 18 months of the work commencing.

2. The Scottish Civil Courts Review identified a number of matters for further consideration, including judicial expenses and the implications for Scotland of recommendations made by Jackson LJ in his Review of Civil Litigation Costs in England and Wales.[1] These matters have been addressed by this Review.

3. It is not within the remit of the Review to undertake a major review of publicly funded legal services. The Scottish Government published its plans for the future of legal aid in 2011, with the aim of putting expenditure onto a sustainable footing by 2014-15[2]. This Review is charged with considering legal aid only with respect to how alternatives to public funding may secure appropriate access to justice.

The Reference Group and the Review Team

4. The Review of Expenses and Funding of Civil Litigation in Scotland began its work in May 2011. In carrying out the Review, I have been assisted by a Reference Group comprising individuals with particular knowledge and expertise in various aspects of civil litigation, and legal and research support has been provided by a Review Team.

5. In November 2011, we published a Consultation Paper on the Review's website http://scotland.gov.uk/About/Review/taylor-review. Responses were requested by 16 March 2012. We received 71 responses from a broad spectrum of consultees. All of the responses, apart from those which are confidential, were published on the Review's website.

6. During the consultation period the Review Team and I held a number of meetings with interest groups, practitioners and the judiciary. We also undertook a fact finding visit to gather information regarding the costs management regime which was in place in the Mercantile and Technology and Construction Courts in Birmingham. Meetings also took place in London with representatives from law firms, economists, legal expenses insurers, the Civil Justice Council, the Ministry of Justice, Professor Dame Hazel Genn, QC and Lord Justice Jackson. In the course of the Review, we held eight meetings with the Reference Group in order to discuss the various topics and issues which have been examined by the Review. Details of the various visits undertaken and meetings held are provided in Appendix 1.

Principles underpinning the Review

7. The principles of civil justice to which this Review has had regard were outlined in the Report of the Scottish Civil Courts Review and may be summarised, as follows:

  • The civil justice system should be fair in its procedures and working practices.
  • It should be accessible to all and sensitive to the needs of those who use it.
  • It should encourage early resolution of disputes and deal with cases as quickly and with as much economy as is consistent with justice.
  • It should ensure that justice is secured in the outcome of dispute resolution.
  • It should make effective and efficient use of its resources by allocating them to cases proportionately to the importance and value of the issues at stake.
  • It should have regard to the effective and efficient application of the resources of others.

8. The Scottish Civil Courts Review had regard to these principles in its consideration of Scotland's civil courts and made its recommendations mindful of these principles. In considering the expenses and funding of civil litigation in Scotland this Review has done the same.

Form and content of the Report

9. The Report contains Chapters 2 to 13 with their associated Annexes and one Appendix.

10. Chapter 2 is concerned with the cost of litigation as it relates to judicial expenses. Specifically, this Chapter examines the recovery of judicial expenses and interest on judicial expenses.

11. Chapter 3 is concerned with the cost of litigation with regard to outlays. Specifically, this Chapter contains proposals in relation to counsels' fees and the fees of expert witnesses.

12. Chapter 4 is concerned with the issue of predictability. In this regard, this Chapter contains proposals for fixed expenses, summary assessment of expenses, and expenses management.

13. Chapter 5 contains proposals regarding Protective Expenses Orders.

14. Chapter 6 is concerned with Before the Event insurance.

15. Chapter 7 is concerned with speculative fee agreements and After the Event insurance.

16. Chapter 8 contains proposals regarding qualified one way costs shifting.

17. Chapter 9 contains proposals for damages based agreements.

18. Chapter 10 contains proposals regarding referral fees.

19. Chapter 11 is concerned with alternative sources of funding. Specifically, this Chapter contains proposals relating to third party funding, legal aid for family actions, self-funding schemes, and pro bono funding.

20. Chapter 12 contains proposals in relation to the special procedure for multi-party actions which was recommended in Chapter 13 of the Report of the Scottish Civil Courts Review.

21. Chapter 13 contains proposals for the regulation of civil litigation in Scotland.

22. A full list of the recommendations which have been made can be found at the end of this Report.

Acknowledgments

23. In the Foreword, I extended my thanks to the members of the Reference Group who have been of enormous assistance to me. They have played an important role in helping to develop the recommendations for reform. Their expertise has been an invaluable resource. However, the recommendations that have been made are mine alone.

24. The Review Team and I would also like to extend our thanks to the many individuals and organisations who responded to the consultation and who made time to meet with us. Their input has been of great assistance in identifying and understanding the issues, and in providing information and ideas which have aided in the formulation of the recommendations contained in my Report.