As anyone who has ever been involved in a court action will tell you – litigation is expensive. No matter how confident parties and their legal advisers are as to the merits of a case, there is no guarantee of success. Parties may be encouraged by the thought that if they are successful in a court action, they will always recover their legal costs. But will they?
While the award of any expenses is strictly a matter within the discretion of the Court, expenses are normally awarded in favour of the successful party. However, a recent case has highlighted several issues relating to expenses.
Background
Penelope Uprichard sought to challenge the approval of a proposed housing development, a business park and a science park in the west of St. Andrews. Following two unsuccessful challenges in the Court of Session she was ordered to pay her own expenses, as well as those of the Scottish Minsters and Fife Council. A total legal bill of £173,000.
Miss Uprichard had sought to resist the award of expenses in favour of Fife Council. However, in ordering her to meet the £173,000 bill, Lord Gill, the Lord Justice-Clerk, said:
"Those who challenge decisions of this nature enter into litigation with their eyes open. They have to expect that if they should fail, the normal consequence will be that they will be liable in expenses. It would be reckless for a litigant to embark on a case of this kind in the hope that if he should fail, the court would relieve him of his liability for the expenses that he caused thereby. It is significant that the applicant [Miss Uprichard] was not deterred from raising this application by the possible extent of her liability should she fail."
Protective Costs Order
Penelope Uprichard has now taken her fight to the Supreme Court - her appeal is due to be heard in March 2013. In the meantime, the Supreme Court has granted Miss Uprichard a Protective Costs Order (PCO) of £6,000. A PCO can be applied for by parties raising a legal challenge in connection with a planning matter. In this case, it means that should her appeal to the Supreme Court be unsuccessful, the Scottish Ministers and Fife Council will be limited to recovering a maximum of £3,000 each.
Despite the PCO, Miss Pritchard is of the view that the appeal to the Supreme Court will cost her somewhere in the region of £50,000.
Taylor Review
The issue of expenses is contentious in any litigation. An award of expenses is currently measured on a judicial scale which is normally lower than the commercial rates charged by many legal firms. As such, it is not unusual for a successful party to recover approximately 50% of the legal fees and outlays actually incurred.
In his report of the Review of the Scottish Civil Courts, Lord Gill recommended that a review of the costs and funding of litigation in Scotland be undertaken. Former Sheriff Principal James Taylor began this Review in May 2011. The deadline for consultation has now closed and all responses are now being considered. It is hoped that Sheriff Principal Taylor's Review will be complete by the end of the year.
The results could have a considerable effect on expenses and the cost of litigation in Scotland. We look forward to his Report with interest.
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.
