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Consultation on Expenses and Funding of Civil Litigation Bill

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Chapter 2: Proposals arising from Lord Gill's Scottish Civil Courts Review

A. MULTI-PARTY ACTIONS

Introduction

119. A multi-party action is relevant in a situation where a number of potential litigants have the same or similar rights. Multi-party action procedure covers a number of different categories:

  • public interest actions which are brought by public officials who seek redress

for the public at large, or for a section of it

  • organisation actions which are brought by an organisation, such as a consumer protection or environmental organisation, on behalf of its members or the public at large. These are sometimes known as 'external pursuer actions' since a group or association is granted standing to sue on behalf of consumers for damages suffered by them
  • class actions which are brought by a named plaintiff or pursuer who is typically the representative of a class (or group) of persons, and who seeks redress both for himself and for the other class members

120. Multi-party actions can take the form of either an "opt-in" or "opt-out" regime.

  • "Opt-in" means that the potential class of claimants is identified and members must opt in to claim before or during the proceedings (normally by a specific cut-off date.)
  • "Opt-out" means that the potential class of claimants is not necessarily identifiable at the start of proceedings. Consequently, a detailed description of the group is agreed or approved by the court and steps taken to publicise the proceedings so that claimants can be identified and advised of their right to opt out. The court may award "global damages" based on an estimate of the potential number of claimants. Those whose claims fall within the class but who do not actively opt out of the proceedings may have their rights determined without having participated in the proceedings.

121. The issue is complex and there are a number of different and sometimes competing policy aims in developing multi-party action procedure which range from assisting the efficiency of the courts and managing court business to deterring harmful behaviour on the part of businesses, facilitating collective redress and encouraging corporate social responsibility. In all scenarios, it is important that development of a procedure to facilitate multi-party actions is balanced against the desire to avoid encouraging an opportunistic litigation culture.

Background and current position in Scotland

122. There is currently no multi-party action procedure in Scotland. Up to now a pragmatic approach has generally been taken in relation to mass litigation. Cases raising similar issues have been sisted pending the outcome of a test case. In some situations this system has worked reasonably well, most notably in relation to single event disasters with an identifiable group of claimants such as Piper Alpha, the Ibrox stadium disaster or the Braer litigations.

123. Some recent mass litigation, for example, prisoners' "slopping out" claims or litigation relating to the lawfulness of bank charges has, however, shown the limitations of the current system. These are that despite the common issues raised by these actions there are no mechanisms whereby they can be transferred into a single court and managed as a group. In consequence, each pursuer has been required to pursue a claim individually resulting in unnecessary expense for both parties.

124. Discussion in relation to whether there should be a multi-party action procedure and what form that should take has been going on since 1979 when the Scottish Consumer Council (SCC) set up a Working Party to look into the matter[10]. This recommended the introduction of formal procedures for class actions and canvassed proposals to introduce actions by bodies such as consumer groups.

125. The Scottish Law Commission (SLC) considered the issue at the instance of the Lord Advocate and produced a report in 1996[11]. The SLC focussed on the third category of multi-party actions i.e. class actions and recommended that a procedure for multi-party actions be introduced. The SLC recommended that a procedure be introduced for the situation in which a number of persons have the same or similar rights. The procedure would, in so far as possible, follow that of an ordinary action but with certain special features. Special features would include a provision for court approval or "certification" that the proceedings meet certain criteria. The SLC favoured "opt-in" procedure.

126. More recently, the Scottish Civil Courts Review (SCCR) consulted on the issue. It found that a large majority of respondents were in favour of the introduction of some form of multi-party procedure but that there was a wide range of views as to what the aim of such a procedure should be. Some respondents were keen to see a multi-party procedure adopted primarily to enable the courts to deal with multiple claims in a more satisfactory way. Other respondents considered that collective redress mechanisms were necessary in order to deter unlawful behaviour on the part of businesses and encourage safer working practices. The SCCR endorsed the recommendations of the Scottish Law Commission and recommended that a multi-party procedure should be introduced in Scotland[12]. Its recommendations offer a number of principles which it is useful to consider in relation to designing a procedure.

127. Sheriff Principal Taylor was tasked, in his review, with considering the related questions of expenses and funding. His consideration of the matter was limited by the fact that questions of expenses and funding cannot be separated from questions of procedure. He noted in his report that the new procedures necessary to permit multi-party actions in Scotland would have to be created before final decisions about how such actions should be funded could be made[13].

Consideration of issues in the current context

128. The Scottish Government committed in its consultation[14] on the Courts Reform Bill (now Courts Reform (Scotland) Act 2014) to address Lord Gill's recommendations in respect of multi-party actions in the context of its response to Sheriff Principal Taylor's review. The Scottish Government's response to the Taylor Review also made a commitment to give this further consideration with partners. Following on from this and the work undertaken by Lord Gill and Sheriff Principal Taylor, the issue of multi-party actions has been discussed in the Scottish Government's short life working group on Taylor implementation and with the Scottish Legal Aid Board and Which?

129. It is clear from those discussions that multi-party actions remains a multi-faceted issue and that the needs and expectations of the interested parties remains varied at best and at times conflicting. What is also clear is that while the recommendations made in the past may remain valid, the context in which they could be taken forward has changed considerably, that change will continue in the foreseeable future and that this must be factored into the consideration of this issue.

Context post Gill and Taylor

130. Lord Gill's Scottish Civil Courts Review set out the most comprehensive programme of reform of the civil courts in generations. The report was delivered to the Scottish Government in 2009 and a range of work has been taken forward to implement the recommendations of the Review.

131. First of all, the Scottish Civil Justice Council has been established with the remit of preparing draft rules of procedure for the civil courts and advising the Lord President on the development of the civil justice system in Scotland[15]. The Courts Reform (Scotland) Act 2014 has also been enacted. This Act will both enhance the role of the sheriff court and ensure that the Court of Session advised by the Scottish Civil Justice Council has wide powers to make rules to implement case management.

132. These structural changes create the framework which will enable the recommendations made by Sheriff Principal Taylor to be implemented. They also redefine the civil justice landscape and offer opportunities which may be relevant in the context of multi-party actions. For example, it would seem logical and appropriate for the Court of Session and Scottish Civil Justice Council to have some role in developing this area of law and procedure.

133. In addition the proposals for legislative change that have been outlined earlier in this paper and in particular the proposals to introduce a qualified one-way costs shifting regime in personal injury actions and to allow solicitors to enforce damages based agreements require particular consideration in the context of multi-party actions.

134. We have also considered how multi-party actions are addressed elsewhere and there have also been developments out with Scotland which are worth noting. In particular there have been relevant developments in England and Wales and at EU level.

England and Wales

135. Currently in England and Wales the Group Litigation Order ("GLO") provides for the case management of claims which give rise to common or related facts or law. The court may make a GLO on application of party or initiative of the court. Criticism has been levelled at the GLO procedure on the basis that it is not a full class action procedure with "opt-out" regime. In particular, the requirement for each claimant to issue proceedings before the claim can be entered in the group register is said to erect an expensive and unnecessary barrier to justice. This may explain the low rate of participation under the GLO regime (less than 30% of eligible claimants register a claim.)[16]

136. Separately, under section 47B of the Competition Act 1998, certain representative bodies may bring proceedings on behalf of individual consumers who have suffered losses as a result of specified infringements of competition law. To date, only one action by a representative body has been brought. In 2008, an action brought by Which? (formerly The Consumers' Association) against JJB Sports PLC in respect of the overcharging of consumers who purchased replica football shirts was settled. The damages claim was brought after JJB had been found guilty of participating in a price-fixing cartel between 2000 and 2001 involving seven other companies. The UK Government has expressed concern about the apparent difficulties of pursuing such actions, stating that the current regime does not provide adequate redress for consumers and businesses.

137. In its draft Consumer Rights Bill (which is currently before the Westminster Parliament and in its final stages) the UK Government has made provision to significantly extend the scope of the current Competition Act procedure. In particular, this will introduce a new collective action procedure for private actions in respect of breaches of competition law which may be brought on either an 'opt-in' or 'opt-out' basis.

Commission Recommendation 2013/396/EU[17]

138. The European Union published a recommendation of 11 June 2013 relating to collective redress mechanisms concerning violations of rights under EU Law although as a recommendation it is not legally binding on Member States.

The main features of the Recommendation are:

  • it recommends that Member States allow groups of natural and legal persons to seek court orders to cease infringements of their EU rights ("injunctive collective redress") and to claim damages for the harm caused by such infringements ("compensatory collective redress")
  • it applies to all situations where rights granted under EU law are violated and have caused or are likely to cause prejudice to natural and legal persons
  • it should, at the very least, extend to consumer protection, competition, environment protection, protection of personal data, non-discrimination and financial services and investor protection; and it should follow the common principles set out in the Recommendation

Some interesting features of the proposal are:

  • it provides that legal costs should be reimbursed by the losing party. While in Scotland the general principle in litigation is that expenses follow success, the proposed introduction of qualified one-way cost shifting qualifies that principle
  • 3rd party bodies are included
  • claims for compensatory relief should be on the opt-in model, unless other models are justified by reasons of sound administration of justice. While "opt-in" is the default position under the Recommendation "opt-out" is not entirely excluded
  • Member States are to ensure that lawyers remuneration does not create and the method by which it is calculated does not create any incentive to litigation that is unnecessary from the point of view of the interest of any parties

Significance of developments in England and Wales and in EU Law

139. As GLO procedure and section 47B of the Competition Act 1998 have to date failed to provide effective remedies in practice, the current reforms (both in England and Wales and EU level) signify a move away from the traditional blanket dismissal of "opt-out" collective redress mechanisms which has prevailed in the English and Welsh context up to now. This forms an important backdrop to whatever procedure is developed in Scotland.

Background and context post Gill and Taylor - conclusion

140. The issue of multi-party action procedure has been considered in a number of contexts over the years and recommendations have been made by the Scottish Law Commission and the Scottish Civil Courts Review that some form of procedure should be introduced. Discussions in the context of the work of the SLC and SCCR and more recently in the context of the Taylor short life working group show that there has been historically and remains a wide range of views as to what the purpose of such a procedure should be. In order to progress this matter, it is necessary for the Government to understand whether there is still a need for some form of multi-party procedure in the post Gill and Taylor context and to be clear about the overriding policy objective that it should be pursuing.

141. The following sections set out three potential options for change, each with a different policy aim. Through these options the Scottish Government aims firstly to gain a better understanding of whether some form of multi-party action procedure is still required in the post Gill and Taylor landscape and what the overriding policy aim of such a procedure should be. Secondly, the Scottish Government wishes to gather views on some of the tests and challenges involved in developing a procedure.

OPTION 1

142. The first and simplest option would be to introduce a "case management" procedure for mass litigation in the situation where a number of cases already before the courts give rise to similar issues of fact or law. It would be similar to the "GLO" procedure in England and Wales. The procedure envisaged would be an "opt-in" procedure and could include a number of elements recommended by Lord Gill.

These might include:

  • the criteria recommended by Lord Gill in relation to "certification" of the action as being suitable for multi-party procedure (Gill recommendations 158, 159) This would include matters such as the applicant being one of the group and being an appropriate person to adequately represent the group including in relation to the common issues
  • the transfer to multi-party action procedure can occur on the initiative of the parties or by the Court deciding itself (Gill recommendation 169)
  • a rule that the case will transfer out of group procedure where the certification criteria are no longer met (recommendation 162)
  • other circumstances in which a case should transfer in/out of group procedure
  • the multi-party procedure should be a procedure of last resort when there are no other available procedures (recommendation 160)
  • the judge should have case management powers
  • rules about which court a multiparty action could be raised in
  • rules about publicising the case and "cut off dates" for joining the action
  • provision with regard to appeals

143. There would be no requirement under this option to make any change to funding mechanisms. Under this option each litigant would be required to raise proceedings on an individual basis.

144. The range of private funding mechanism could therefore continue to operate in the normal manner. Legal aid could continue to be dealt with on the basis of individual application.

145. It may be possible for this option to be progressed through court rules and without further primary legislation.[18]

Option 1 - analysis

146. A number of issues of detail would need to be resolved before option 1 could be taken forward. These include matters such as how to deal with dissent within the group (for example, what is to happen when some members of the group wish to settle but others do not or some members wish to appeal but others do not.)

147. Another question relates to expenses. The general principle in litigation is that expenses follow success. As we have set out in an earlier part of this consultation paper we intend to introduce a system of qualified one-way costs shifting in personal injury cases. The reasoning behind introducing such a system relates to the inequality of arms between the pursuer and defender which tends to exist in such litigations. There is a question as to whether inequality of arms applies in the same way in the context of multi-party actions and whether it is therefore fair to introduce such a system in this context particularly when the expenses are likely to be much greater than in an individual action.[19] Despite this however, option 1 could be introduced more easily than any of the other options as changes to legal aid would not be required and it may be possible to take this option forward through court rules rather than primary legislation.

148. Overall, however, the Government's view is that option 1 is only likely to be of real value in limited situations, where cases are already before the courts and it is desirable to transfer them to a single court and manage them as a group. What is proposed under option 1 is similar to the "GLO" procedure in England and Wales which is underused and has not proven to significantly increase access to justice due to the requirement that proceedings continue to be raised individually with the expense for both the private and the public purse which that brings.

Option 1 - conclusion

149. The Scottish Government's view is therefore that while option 1 might be the easiest model to implement it would be likely to have limited effect in facilitating access to justice.

Questions

36. What would the impact be on access to justice of introducing a procedure along the lines of option 1?

37. Who would be most affected and what would that impact look like?

Please give reasons for your answers.

OPTION 2

150. The aim of this option would be to introduce a full class action procedure. It would allow cases to be brought in the same circumstances as option 1 but with the following additional features:

  • as with option 1, the applicant would be a member of the group meeting the certification criteria outlined under that option. However, the applicant could bring the case on behalf of members of the group where those individuals had not yet initiated proceedings
  • the Court could be given power to decide in a particular case whether procedure should be "opt-in" or "opt-out"
  • the Court could be given a power to make a global award of damages and for the disposal of any undistributed residue of an aggregate award (Gill recommendation 165)
  • if opt out procedure is allowed then consequential amendment to prescription and limitation legislation will be required (Gill recommendation 164)

Option 2 - analysis

151. The Scottish Government's view is that option 2 has the potential to provide a more effective model for mass litigation. It provides an opportunity to potentially lower the cost of mass litigation from the perspective of those funding litigation both privately and publicly. It means that there would be no need to raise proceedings on an individual basis with the expense which that brings. It presents the opportunity to consider the public funding of mass litigation in a different way. However, it also brings with it a number of difficult questions. It raises the same questions as option 1 with regard to how dissent within the group should be dealt with and the applicability of qualified one-way cost shifting.

152. Further technical issues are raised by the possibility of having an "opt out" model under which there may be an unascertainable number of claims. This option involved the possibility of individuals who fall within the class but who fail to opt out of the class action having their rights determined without having participated in the process and the complexities which that brings with it. While damages could be dealt with by giving the court power to make a "global" award of damages, expenses become extremely complex. If there is to be scope for expenses to be made against the multi-party fund then a question arises as to how expenses are apportioned between the members of the group when the extent of membership itself may be unclear. As discussed under option 1, because cases have to be raised individually private and public funding could simply be continued on the current basis. Under option 2, however, one action would be raised on behalf of a number of parties and both private and public funding will have to be considered on that basis.

153. In terms of private funding, Sheriff Principal Taylor recommended that no formal restrictions should be placed on the funding options available to parties. He therefore recommended that damages based agreements should be available for use in multi-party actions subject to the same restrictions as set out for such agreements in individual cases (Taylor recommendation 82).

154. As far as public funding is concerned, legal aid currently works on the basis of an individual grant of funding with recovered expenses payable to the legal aid fund, along with, in certain circumstances, some or all of property recovered or preserved in the case. This system will not work in the context of option 2.

155. Lord Gill recommended (recommendation 175) that there should be a special funding regime for multi-party actions to be administered by the Scottish Legal Aid Board. The Scottish Government response committed to exploring this recommendation with the Scottish Legal Aid Board. The delivery of this recommendation is dependent on how multi-party actions will be taken forward. We will look to move forward with this as part of our more detailed considerations of multi-party actions.

156. It is envisaged that funding would take the form of a SLAS (Supplementary Legal Aid Scheme) rather than a CLAF (Contingent Legal Aid Fund.) Both of these are self-funding schemes in terms of which a levy is payable out of the proceeds of successful litigations funded by the scheme. A CLAF is an independent commercially run scheme that is intended to be fully self-financing although not necessarily for profit.[20] A SLAS is built onto or added onto an existing publicly funded legal aid scheme and administered by the relevant legal aid authority. The normal beneficiary of such a scheme is the claimant although it could also be used by a defender with a counterclaim.

157. In any given situation which may be susceptible to multi-party action procedure, individual action by any person potentially in the group would be possible. Some members of the group may qualify for legal aid under the current regime if they made an application on an individual basis but others may not. It is likely that the public funding arrangements for multi-party actions, however constituted, would have to look at the multi-party action as a whole and the membership of the group, and have regard, amongst other things, to the extent to which any shortfall in the case as a whole should be funded by public money.

158. There would have to be clear demarcation between public funding of individual cases (under the existing regime) and public funding of multi-party actions (under the new regime). Measures would be required to avoid "double-funding." This would be most likely to arise in a situation where a person commences an individual action at a time when the use of multi-party action procedure may not be indicated or obvious but then changes to multi-party action procedure when it becomes so.

159. Provision would also have to be made for the converse situation, where someone opts out of multi-party action procedure and wishes to proceed with an individual case. The public funding mechanisms will require to ensure that appropriate controls exist to ensure that the most cost effective approach, and only that approach, is funded publicly. There will also require to be appropriate measures to ensure multi-party action funding does not create adverse financial impacts for the legal aid budget overall.

160. Overall, it is clear that detailed financial modelling work would require to be undertaken in order to ensure that the proposed multi-party fund was financially viable. It would also mean a cultural change in terms of the way legal aid is considered by the general public and administered.

161. The final general issue which should be raised in the context of option 2 is that a generic right of class action has to be balanced against the desire not to create an overly litigious culture - particularly if damages based agreements are to be available. Before taking forward this option the Scottish Government considers that a detailed impact assessment would be required in order to ascertain what categories of potential claimant might look to take advantage of a procedure of this nature and to consider the safeguards which require to be built into this system.

Option 2 - conclusion

162. A full class action system as envisaged under option 2 has the potential to increase access to justice in Scotland. It brings with it, however, a number of extremely complex technical and funding issues which would require to be resolved and which it will take time to work through. In addition, the Scottish Government's view is that it would be unwise to take forward this option without carrying out a detailed impact assessment of what the likely effect of introducing a model like this would be as well as detailed financial modelling in respect of funding arrangements.

Questions

38. What would the impact be on access to justice of introducing a procedure along the lines of option 2?

39. Who would be most affected and what would that impact look like?

40. Do you have any observations on the technical and funding issues raised in relation to option 2?

Please give reasons for your answers.

OPTION 3

163. The proposal under this option is to have a full class action procedure as under option 2 but with the added element of allowing 3rd party bodies, without a direct legal interest - for example, an environmental or consumer organisation - to bring cases on behalf of groups which they represent.

164. This would be the most ambitious option and in policy terms would be aimed at fulfilling the wider aim of encouraging corporate social responsibility and responsible behaviour on the part of businesses, and facilitating collective redress. Option 3 would allow cases to be brought in the same circumstances as option 2 but with the following additional features:

  • procedure would always be "opt-out"
  • in order to ensure that only suitable bodies were able to bring cases "designated bodies" could be specified in regulations or courts rules. An alternative approach would be to allow the court to act as gatekeeper deciding whether a body was suitable in a particular case in accordance with criteria
  • it would be a last resort procedure where other enforcement mechanisms had failed.

Option 3 - analysis

165. Option 3 is the most ambitious of the three options. A fundamental question relating to option 3 is whether there is at this time in Scotland a need for such a procedure to be available. The Scottish Government believes that in this context court procedures should be seen as a last resort and only used after more appropriate means have been exhausted - for example, action by a statutory body, codes or practice, ombudsman schemes and alternative dispute resolution mechanisms.

Question

41. Is there a need for 3rd party bodies without a direct legal interest to have the right to bring class actions on behalf of the group they represent or are existing regulatory mechanisms sufficient? Yes or no

Please give reasons for your answer

166. It should also be noted that option 3 raises the same questions as option 2 in relation to the technical difficulties of adopting an "opt-out" model and the issues raised under option 2 as to funding.

167. As with option 2, the Scottish Government considers that detailed impact assessment including financial impact assessment would be required before introducing a model along the lines of option 3 in order to evaluate the likely effect of such a proposal.

168. There are further issues arising under option 3. Lord Gill in his report recommended that funding could be made available from the proposed multi-party action fund on a different basis from representative bodies. It was envisaged that the representative bodies would have to meet a public interest merits test (Gill recommendation 182).

169. Again, however, there is a fundamental policy question which is whether public funding should be open to such 3rd party bodies through a proposed multi-party action fund. It could be argued that it might be more appropriate for "designated bodies" to receive funding in another manner such as grant funding.

Question

42. Should 3rd party bodies without a direct legal interest have access to public funding for litigation through the proposed multi-party action fund? Yes or no

Please give reasons for your answer

Option 3 - conclusion

170. If there is need for rights of standing to be given to 3rd party bodies without direct legal interest in a case then option 3 has the potential to increase access to justice in Scotland. It brings with it, however, a number of extremely complex technical and funding issues which would require to be resolved and which it will take time to work through. In addition, the Scottish Government would not wish to take forward this option without carrying out a detailed impact assessment of what the likely effect of introducing a model like this would be and detailed financial impact assessment.

Questions

43. What would the impact be on access to justice of introducing a procedure along the lines of option 3?

44. Who would be most affected and what would that impact look like?

45. Do you have any observations on the technical and funding issues raised in relation to option 3.

Please give reasons for your answers.

Question

46. Do you support option 1, option 2 or option 3?

Please give reasons for your answers.

Conclusion - multi-party actions

171. The Scottish Government wishes to use this consultation to gain an understanding, in the post Gill and Taylor landscape, as to whether there is still a need for multi-party action procedure and whether there is any consensus around how a procedure might be constructed and what it would achieve. At this time, it seems unlikely that any provisions on multi-party actions will be included in the package of proposals we are developing in response to the Taylor Review. It would seem sensible to allow the other changes to bed in and take stock on what would be achievable and effective in the context of reformed civil courts and the availability of more accessible civil litigation funding. However, we will review that position in light of responses received to this consultation and report the outcome in our consultation report.

B. AUDITORS OF COURT

Current Arrangements

Auditors of Court

172. Auditors of court are independent persons of skill who are appointed by the Scottish Ministers or senior judges, primarily to "tax" or officially determine the total amount of legal fees and outlays which have been appropriately incurred by parties in a civil litigation.

173. The Auditor of the Court of Session is appointed by the Scottish Ministers on the nomination of the Lord Advocate and the appointment is under Section 25 of the Administration of Justice (Scotland) Act 1933. The appointment process is governed by regulations made by the Scottish Ministers after consultation with the Lord President.

174. The Auditor taxes judicial accounts of expenses incurred in civil litigation; agent and client accounts where the account relates to litigation or the solicitor is suing for recovery of fees; accounts referred by the Scottish Legal Aid Board where it is in dispute with a solicitor or counsel acting for a legally aided client; and accounts in relation to judicial factors, trustees in bankruptcies and liquidators of companies. The Auditor may also conduct extra-judicial taxations, whereby a solicitor and client agree to remit the solicitor's account to the Auditor for taxation.

175. The Auditor receives a stipend in relation to his appointment and is entitled to retain fees payable in respect of taxations which he carries out and from which he also defrays the cost of running his office.[21]

176. Auditors in the sheriff court hold a commission and are appointed by the sheriff principal. In most courts a sheriff clerk is appointed as the auditor, although in Edinburgh and Glasgow the commissions are held by independent practitioners. In the case of sheriff court auditors who are serving sheriff clerks, the fee fund dues payable in respect of judicial taxations are paid into public funds. It is understood that sheriff clerk auditors no longer carry out extra judicial taxations. Those auditors who are independent practitioners are entitled to retain the audit fees for all taxations or assessments undertaken by them.

177. The fees payable for judicial taxations are set by act of sederunt and are based on a percentage of the gross account as submitted, not on the value of the account as taxed. The auditor accordingly has no financial interest in upholding or rejecting any points of dispute in relation to the account. However, in the Court of Session, where the Court may remit a motion for an additional fee to the Auditor and where the Auditor fixes the amount of the percentage increase, it could be said that there is a financial interest in deciding whether an additional fee should be awarded and in its amount, as an increase in the gross account will result in a higher audit fee. The paying party is normally responsible for payment of the Auditor's fees but, at the Auditor's discretion, they may be apportioned between the parties where significant sums have been taxed off the account.

Scottish Civil Courts Review - consideration of issues relating to the Auditor of Court

178. Lord Gill drew on the earlier work of the Research Working Group on the Legal Services Market in Scotland[22] which had previously considered the position of auditors as well as consultation.

179. The Scottish Civil Courts Review ("SCCR") found that there was considerable concern about the arrangements for taxing accounts of expenses. One of the main problems described is that the appointment processes in both the Court of Session and the sheriff court do not conform to standard appointment procedures. While sheriff clerks are appointed under civil service procedures on fair and open competition, there is no formal assessment of their skills to carry out the role of auditor and concern has been expressed about whether sheriff clerks have the necessary skills and training. A further major problem is the inconsistency of approach between the Auditor of the Court of Session and sheriff court auditors and between individual sheriff court auditors and a general lack of transparency of arrangements. [23]

What Lord Gill recommended

180. The SCCR expressed the view that it is undesirable in public policy terms that the holder of a public office should, by virtue of that office, be able to make a profit from undertaking what should be a public service: the taxation of accounts under judicial scrutiny.

181. The SCCR considered that the taxation of judicial accounts should be part of the service provided by the civil court system and that the fees payable for taxing such accounts should be based on the cost of providing the service rather than on the value of the account as submitted. Consequently, the SCCR recommended that the offices of Auditor of the Court of Session and sheriff court auditors should be salaried posts; that the status of the Auditor of the Court of Session as a member of the College of Justice should continue; and that fees payable for extra-judicial taxations and assessments should be paid into public funds.

The SCCR also recommended that:

  • for sheriff court auditors, commissions should be granted only to those holding qualifications as solicitors or law accountants and with relevant skills and experience;
  • greater use should be made of information technology so that taxations can take place by telephone or videoconference and filed with the auditor electronically
  • small claims and summary cause assessments are carried out by the sheriff court auditor, not by the sheriff clerk
  • the Auditor of the Court of Session to have a role as 'head of profession'
  • the Auditor of the Court of Session should have jurisdiction over taxations in actions raised in the allScotland personal injury court
  • where a party wishes to recover counsel's fees, the account should be supported by detailed fee notes, disclosed to the paying party on request. If objection is taken to the reasonableness of counsel's fees, paying parties should specify what sum, in their view, would be appropriate. There should be a similar obligation where objection is taken to the fees payable to expert and other witnesses
  • the procedure in the Court of Session whereby specific points of objection require to be intimated in advance of the diet of taxation should be extended to the sheriff court. The period of notice, which at present is three working days prior to the diet of taxation, should be lengthened
  • it should be open to parties to agree elements of an account and to restrict the taxation to only those items of the account that are in dispute

What are we proposing to do and why?

182. It is expected that the combined effect of the Courts Reform (Scotland) Act 2014 and the implementation of Sheriff Principal Taylor's Report on the Expenses and Funding of Litigation will be to make the cost of litigation more predictable. It is nonetheless also accepted that disputes about expenses are always likely to arise in the context of litigation. Access to justice, in the Scottish Government's view, therefore includes the concept that taxation of accounts is a public service to which litigants should have access and that the fees that they are charged should be based on the cost of providing the service rather than on the value of the account.

183. The Scottish Government therefore accepts in principle the recommendations made by Lord Gill. Above all, it is accepted that holders of public office should not, by virtue of that office, be able to make a profit from undertaking what should be a public service and that the Auditor of the Court of Session and auditors in the sheriff court should therefore hold salaried posts. The Scottish Government is also of the view that it is perfectly possible for the posts to become salaried without compromising the independence of auditors. Judges, for example, are salaried but nonetheless judicial independence is protected.

184. There are, however, some issues which require further consideration in order to take this matter forward. First of all, the Scottish Government wishes to explore the likely impact of the Gill proposals in respect of those involved in taxations in both the public and private sector. Secondly, work will be required to assess appropriate pay and grading arrangements for the new salaried position of Auditor of the Court of Session and the posts of auditors in the Sheriff Court.

Questions

47. What impact will the proposal to make the post of the Auditor of the Court of Session a salaried public appointment have on:

a) The Auditor of the Court of Session?

b) Staff of the Auditor of the Court of Session?

c) Pursuers of actions?

d) Defenders of actions?

e) Solicitors?

f) Counsel?

g) Scottish Legal Aid Board?

h) Other?

Please give reasons for your answers

48. What impact would the proposal to make the post of auditor in the sheriff court a salaried public appointment have on:

a) Sheriff court auditors?

b) Independent practitioners who currently hold commissions as auditors?

c) Pursuers of actions?

d) Defenders of actions?

e) Solicitors?

f) Counsel?

g) Scottish Legal Aid Board?

h) Other?

Please give reasons for your answers

C. COURT'S POWER IN RESPECT OF CONDUCT OF LEGAL REPRESENTATIVES

What Lord Gill recommended

185. Lord Gill's Scottish Civil Courts Review ("SCCR") proposed (recommendation 129) that, as far as the conduct of legal representatives is concerned, the court's power to make solicitors personally liable for expenses occasioned by their own fault, or where they are guilty of an abuse of process, ought to be incorporated in statute; and that it should be extended to cover all those with rights of audience.

186. The SCCR also proposed (recommendation 130) that the courts should have the power to order that agents or counsel may not charge their clients or SLAB for any work that is occasioned by any improper, unreasonable or negligent act or omission on their part. The court should have the power to order that a copy of the court's interlocutor be notified by the clerk of court to the client personally or to SLAB. Lord Gill hoped to meet an objection made to the review team that in current practice mistakes make money.

What are we proposing to do and why?

187. Recommendations 129 and 130, in essence, seek to achieve the position that a solicitor or advocate who has caused needless cost, bears that cost. Having consulted further, we intend that the Bill will make provision to allow the Courts to take forward the SCCR proposals as set out in recommendations 129 and 130.

Questions

49. Do you support the proposal to make legal representatives personally liable for expenses occasioned by their own conduct? Yes or no

Please give reasons for your answer.

50. What impacts do you think that the proposal to make legal representatives personally liable for expenses occasioned by their own conduct will have on you or your organisation?