On 1 May 2018 the Scottish Parliament passed the Civil Litigation Bill. It was passed unanimously by those in the chamber.
This marks the end of a long process which began as long ago as Lord Gill's review on the Civil Courts in Scotland which was published on 30 September 2009. Sheriff Principal Taylor's review of expenses and funding of civil litigation followed in October 2013 and the Bill itself was first laid before Parliament on 2 June 2017.
Despite civil litigation being described as "dry and technical" by the MSPs tasked with scrutinising the Bill it has promoted impassioned debate and there is no doubt that those involved as drafters, MSPs and stakeholders have put much time and effort into the Bill which will now pass into Scottish Law.
The legislation marks a significant change to the funding of civil litigation in Scotland. For the first time damages based agreements (DBAs) or no win no fees agreements can be enforced by solicitors. The Act will also introduce qualified one way cost shifting (QOCS) which means that, save for in certain specified circumstances, even an unsuccessful claimant will not be obliged to pay the defender's costs. Those headline provisions were never under threat during the progress of the Bill. However some of the surrounding detail was the subject of energetic argument.
Future losses
One of those areas of controversy was the ring-fencing, or not, of future losses from DBAs. Sheriff Principal Taylor had recommended that claimants' solicitors should be allowed to take a percentage of the sum awarded for future losses; such losses can include future care costs.
The Bill initially reflected that recommendation but the provision troubled many in the Justice Committee and the Bill was amended to remove future losses from solicitors' deductions. However, that was not the end of the matter as an amendment at stage 3 removed the ring-fencing and also rejected the proposed amendment made by the Convenor of the Justice Committee which would have meant that only 1% of damages over £500,000 could be deducted.
The motivation for allowing this deduction appears to have been to provide proper incentive to claimants' solicitors to act in higher value cases. There is however to be a five year scrutiny of the Act and no doubt this particular provision will be looked at closely when that happens.
Fraudulent claims
Another area of significant controversy was the definition to be given to fraudulent claims. This is important because a fraudulent claim will not attract the protection of QOCS.
It was ultimately agreed that a claim will be exempt from QOCS where the claimant makes a "fraudulent misrepresentation or otherwise acts fraudulently in relation to the claim or proceedings." It had been proposed that a claim should only be exempt from QOCS where the claim was held to be "fraudulent". There was concern about this definition, particularly so because the Inner House of the Court of Session (Scottish civil appeal court) has recently rejected the argument that a claim can be termed fraudulent where there is a genuine claim at the core of, even gross, exaggeration. Against that background the final definition appears to strike a sensible balance.
What next?
Much of the detail required for the practical operation of the Act's provisions will come from civil court rules. The body responsible for drafting such rules, the Scottish Civil Justice Council, has confirmed that it will prioritise implementation of the Act. One particular area of interest is what will happen when a case is summarily dismissed, abandoned or the claimant fails to beat a tender (part 36 offer). All of those were circumstances which were raised during the consultation and in relation to which the Bill had no answers.
This Act represents a change for everyone involved in civil litigation and there is no doubt that the repercussions will be felt by all. At review in five years' time there will be an opportunity to consider those repercussions and whether the Act has fulfilled the fundamental aspiration of the Bill, "That people who contemplate litigation in the civil courts should have more certainty about what it will cost them and that it will, indeed, be possible for them to access justice".
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