16 November 2023

Every personal injury solicitor in Scotland will no doubt be all-too-familiar with Qualified One-Way Cost Shifting (or “QOCS” as we’ve all taken to referring to it by way of shorthand, because “Qualified One-Way Cost Shifting” is a bit of a tongue-twister). Brought in by way of the Civil Litigation (Expenses and Group Proceedings (Scotland) Act 2018 (“the Act”), QOCS came into force in Scotland on 30 June 2021, and has enormously altered the landscape of expenses in personal injuries actions. Under section 8(4) of the Act, courts are not permitted to make an award of expenses against a Pursuer except where they failed to conduct the proceedings appropriately.

This is by way of 3 exceptions to so-called “appropriate conduct”:

1. fraudulent representation;
2. manifestly unreasonable conduct; and/or
3. abuse of process.

In most litigation in Scotland, the general rule of thumb is that expenses follow success.  That is, the party who “loses” at court is usually responsible for footing the bill.  QOCS was brought in ostensibly so that Pursuers would be able to raise actions for personal injury matters without fear of being landed with a huge legal expenses bill should they not be successful.  However, it has resulted in Defenders having little recourse for recovery of their own expenses where they successfully defend an action, or have the case dismissed or abandoned at an earlier juncture.

While appreciating that there have only been a small number of reported cases considering QOCS since its inception, it has only been in very recent judgments that the court have appeared more amenable to disapplying QOCS in certain circumstances.  Several hearings on the matter have been taking place recently and starting some chatter in legal circles about the likelihood of QOCS being disapplied becoming more reality than fantasy.

On 6 November 2023, I appeared at one such hearing.  The key challenge for QOCS in this case was that it never went to Proof, with the Pursuer’s agents withdrawing from acting a few months before it was due to call for Proof.  In this case, the Pursuer had failed to appear at both the peremptory diet hearing and the hearing on expenses (aka the QOCS disapplication hearing). 

We were successful in a motion for disapplication of QOCS under section 8(4)(b) – manifestly unreasonable conduct.  The court held that raising an action and thereafter failing to engage with the court process – in this case the failing to appear at the peremptory diet hearing following the agents’ withdrawal and the hearing on expenses – was tantamount to manifestly unreasonable conduct under the Act.  Sheriff Fife noted: 

“The failure by the pursuer to appear or be represented at the peremptory diet and at the hearing to disapply QOCS, in the absence of any explanation from the pursuer, provided a basis for disapplying QOCS under section 8(4)(b) of the 2018 Act.  In all the circumstances of this case, the pursuer behaved in a manner which was manifestly unreasonable in connection with the claim and the proceedings and QOCS is disapplied.”

Historically, it has been difficult to define what constitutes manifestly unreasonable conduct and recent case law, such as Lennox v Iceland Foods Ltd 2023 SLT (Sh Ct) 73 and Gilchrist v Chief Constable Police Scotland 2023 SLT (Sh Ct) 119, has demonstrated that the test for this can be difficult to meet.  However, it seems the court is willing to meet the test for manifest unreasonableness when it comes to failure to engage.  An award of expenses has been made in our case against the Pursuer. 

While this case was not reported and not binding on future decisions on the matter, it does demonstrate that the courts are becoming less tolerant of non-engaging parties and may well sanction such behaviour with an award of expenses.  A Pursuer who decides to no longer proceed with a case would be well-advised to communicate this to the court and any other parties involved, as simply hitting the proverbial “snooze” button when a letter is received and ignoring the case can become a very costly mistake.

Sian Keddie (Author of article), Trainee Solicitor: ske@bto.co.uk / 0131 222 2939

Stephen Bryceland, Partner: sbr@bto.co.uk / 0141 221 8012