23 March 2016

On the 18th and 21st of March 2016 Sheriffs of the All Scotland Personal Injury Court issued the first judgments under the Court Reform (Scotland) Act 2014 on sanction for Counsel.

One of the main objectives of the Courts Reform (Scotland) Act 2014 was to reduce the cost of personal injury litigation in Scotland. This was primarily achieved by increasing the privative jurisdiction of the Sheriff Court to £100,000 which restricts the fees recoverable by solicitors and the use of counsel when compared to the Court of Session. In the Sheriff Court, sanction for the use of counsel must be obtained for their fees to be recoverable outlays in a judicial account of expenses. One of the key issues raised by the reforms for practitioners on both sides has therefore been under what circumstances the Court will grant sanction for the employment of Counsel.

Lewis Richardson, Associate

The first written judgements on this subject have now been issued by Sheriff Reith QC and Sheriff Braid who are among the 6 specialist Personal injury Sheriffs of the All-Scotland Personal Injury Court (SPIC). The judgments were issued in Dow v M & D Crolla Ltd and V on behalf of J v M & D (leisure) Ltd.
 

Dow v M & D Crolla Ltd - Summary

The case related to a slip and trip in a fish & chip shop. Liability was admitted.

The consequences of the accident were relatively serious for the pursuer. She had suffered an injury to her right elbow and because of an underlying blood disorder was unable to have this surgically repaired. This resulted in her being unable to carry out heavier work with her right arm. It was argued this caused her a disadvantage in the labour market. Her injury limited her ability to carry out her current job as a community support assistant with Fife Council. The council was going through a restructuring and it was expected that there would be redundancies. It was argued by the pursuer that counsel had been instructed because of the particular issues raised by the disadvantage claim. Counsel’s involvement was restricted to a single consultation. The action was settled on the basis that the defenders would pay the pursuer £30,000 with a separate payment of £7,324.80 to the pursuer’s employers, Fife Council, in relation to recoverable sick pay.

V on behalf of J v M & D (leisure) Ltd - Summary

The pursuer, V, is the father of J and sues on his behalf as his guardian. At the time of the accident J was 10. He had been walking down a set of wooden steps at a crazy golf course holding a putter. The steps were slippery and as a result it was claimed that J fell hitting his chin off the end of his putter. Unfortunately for J, the rubber grip had deteriorated exposing the metal edge of the club. This metal edge hitting J’s chin caused a laceration and permanent scarring.

Liability was disputed by the defender. The matter was raised by the pursuer’s agents without counsel being instructed in October 2015. Counsel was instructed in December to adjust the pleadings and value the claim. As a result, a consultation was held and counsel produced substantial adjustments. Negotiations were entered into shortly thereafter which resulted in the claim settling for £12,500.

In both cases, the pursuers moved the court for sanction for the employment of counsel.

The test for sanction

The test for sanction is governed by S. 108(3)(a) of the 2014 Act which puts into statutory form, with some modification, the common law test previously applied in the Sheriff Court. When being asked to grant Sanction the Court must have regard to the difficulty or complexity, or likely difficulty or complexity, of the proceedings, the importance or value of any claim in the proceedings, and the desirability of ensuring that no party gains an unfair advantage by virtue of the employment of counsel. S.108(4) allows the Sheriff to have regard to such other matters as they consider appropriate. Where the Sheriff considers that it was reasonable to instruct counsel, sanction must be granted.

Dow v M & D Crolla Ltd - The arguments and decision

Counsel for the pursuer argued that the figure tendered was some three times the pursuer’s annual salary and it was therefore a significant sum to her. The pursuer’s employer was undergoing a restructuring process and the pursuer could therefore lose her job. The pursuer herself was anxious that she could be made redundant. The loss of employability claim was not straightforward. Counsel had produced valuations on various scenarios from nil to £116,000. The decision to instruct counsel was therefore proportionate.

The agent for the defender submitted that the question of disadvantage was not particularly complicated. The pursuer’s agent could have conducted straightforward investigations with the pursuer’s employer to resolve the issue and it was therefore not necessary for counsel to have been instructed.

Sheriff Reith granted sanction for counsel. The Sheriff considered that the complexity raised by the issue of disadvantage merited the instruction of counsel. The Sheriff also accepted that the importance and value of the claim to the pursuer was such that sanction should be granted. Counsel for the Pursuer then invited the court to grant sanction for her employment for the purposes of the opposed motion. This was not opposed by the Defenders. The court was satisfied that it was reasonable for the Pursuer’s agents to instruct Counsel for the motion hearing. The Sheriff commented that it was particularly helpful to the court to be provided with the background information which Pursuer’s Counsel had as to the specific reasons for her having been instructed for the consultation and the reasons why the claim had been of particular importance to the pursuer.

V on behalf of J v M & D (Leisure) Ltd- The arguments and decision

Counsel for the pursuer argued that the employment of Counsel was merited on several grounds e.g. in respect that liability was disputed and there may be a question as to contributory negligence, the case was important to J, who was very young (and had suffered permanent disfigurement) and taking the evidence of and consulting with such a young pursuer was of sufficient difficulty and complexity.

The agent for the defender submitted that there were no specialities in relation to liability or causation. This case was no more or less important to the pursuer than any other case. In addition, even if the employment of counsel was justified for the taking of evidence from the child pursuer, it did not justify the instruction of counsel at such an early stage.

Sheriff Braid granted sanction for counsel. The Sheriff considered that the action was not of sufficient complexity or value to justify the instruction of counsel on their own. However, he concluded that the pursuer being a child added sufficient difficulty to the action that sanction was appropriate. The Sheriff considered that counsel had not been instructed too early as it would have been unreasonable for J to have coped with the introduction of counsel in close proximity to the proof.

Conclusion

The Sheriffs are clear to note that their ultimate decisions are based on the facts of each particular case. However, there are several points of interest which may prove to be of general application.

The level of counsel’s involvement and the reason for that involvement are likely to be key. It appears that in Dow the pursuer was assisted in her motion by the fact that counsel was only instructed for a particular reason and the pursuer was able to explain that reason for that, in some detail, to the court.

The relative value of the case also played a part in the Dow matter. At £37,000, this was not a particularly high value claim, however, the fact that this was some three times the pursuer’s salary and the pursuer’s precarious position with her employer appear to have had some bearing on the decision. Therefore, the particular circumstances of an individual pursuer ought to be considered if the issue of sanction is raised.

In the V case, Sheriff Braid was keen to emphasise that whilst issues of difficulty and complexity may not be enough on their own, they may be amplified where the particular pursuer is vulnerable. In this case, the pursuer was a child but the argument could apply to anyone who could be classified as a vulnerable pursuer. Therefore, it should be remembered that relevant factors cannot be looked at in isolation and cumulatively they may show that it was reasonable to instruct counsel.

Interestingly, Sheriff Braid was of the view that whilst future complexity may be an issue where the court is asked to grant pre-emptive sanction, it was not appropriate to consider it where the case had settled and the complexity or lack thereof of the case was clear. If this line is maintained as further judgments are issued, it may be that a greater number of pre-emptive motions for sanction are made to avoid such decisions being reviewed with the benefit of hindsight.

We expect that there will be a number of judgments on this issue issued over the coming months which will provide further guidance.

The full judgements can be read here:

Dow v M & D Crolla Ltd
http://www.scotcourts.gov.uk/search-judgments/judgment?id=62200da7-8980-69d2-b500-ff0000d74aa7

V on behalf of J v M & D (Leisure) Ltd
http://www.scotcourts.gov.uk/search-judgments/judgment?id=3f640da7-8980-69d2-b500-ff0000d74aa7

If you require further information about this update, please do not hesitate to contact:

Lewis Richardson
Associate
E: lri@bto.co.uk
T. 0141 221 8012