28 March 2024

The Taxation of Judicial Expenses Rules 2019 allow for a party to seek an additional charge, normally in the form of a percentage uplift to their Account of Expenses. This percentage is only applied to solicitor fees and not outlays. Prior to April 2019, the additional charge was known as an additional fee.

Rules 3.9 and Rule 5.2 of the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019/75 (Scottish SI) reproduced the original rules on additional fees but implemented an overriding test on applications for an additional charge. This new supplementary test states the court or auditor ‘must grant an application when satisfied that an increase is justified to reflect the responsibility undertaken by the solicitor in the conduct of the proceedings.’ 

Additional charges are commonly sought in complex cases which are heard in the Court of Session; they are less commonly pursued in Sheriff Court actions.

The party seeking payment of their account can rely on any or all of the headings listed in Rule 5.2(6) to make their case for an additional fee:

(a) the complexity of the proceedings and the number, difficulty or novelty of the questions raised;

(b) the skill, time and labour and specialised knowledge required of the solicitor;

(c) the number and importance of any documents prepared or perused;

(d) the place and circumstances of the proceedings or in which the work of the solicitor in preparation for, and conduct of, the proceedings has been carried out;

(e) the importance of the proceedings or the subject matter of the proceedings to the client;

(f) the amount or value of money or property involved in the proceedings;

(g) the steps taken with a view to settling the proceedings, limiting the matters in dispute or limiting the scope of any hearing.

The court has frequently been asked to give clarity on how these rules are applied to different scenarios. The court also has absolute discretion in determining the level of percentage increase itself, or remitting that to the auditor. A few recent examples are discussed below.

In Campbell v James Finlay (Kenya) Ltd 2023 S.L.T. 1364 the Inner House was asked for clarity on when an additional charge could be sought. The Lord Ordinary at first instance had ruled that it was premature to ask for an additional charge prior to the conclusion of the case. They had interpreted Rule 5.2 as needing to apply to the proceedings in full. However, the Inner House disagreed with this and noted that it could only apply to certain parts of proceedings - in this case a preliminary proof. The court observed that the rule refers to making an award in respect of “the proceedings” and by doing so it would therefore be competent to restrict an award to cover only part of the proceedings. They held that ‘The greater power includes the lesser.’

As the additional charge only uplifts the solicitors’ fees, the employment of counsel can have an impact on additional charges, with the argument being that cases involving counsel benefit from their expertise. This topic was discussed at the Lands Tribunal for Scotland (Burns v Keeper of the Registers [2023] 12 WLUK 497) where an applicant sought a 50% uplift in their expenses under headings (a), (b), (c) and (e). The respondent initially opposed sanction for counsel and the additional charge. The tribunal found that sanction for counsel was justified, however, this came at the cost of the applicant’s additional charge with the court stating, ‘Given that we have allowed sanction for junior counsel, we are not persuaded it would be appropriate to allow an additional fee to the solicitor in this case.’ Whilst these are separate tests and it can be appropriate for both to be allowed, the argument that the solicitors were subordinate to counsel is one often used in the opposition of additional fees.

In Livingston Football Club v Neil Hogarth [2024] CSOH 19 the Pursuer’s claim had been dismissed, with the court observing that their pleadings had been “difficult to follow.” The claim had included allegations of fraud and the sum of approximately £650,000 being sought. Considering the serious nature of the allegations and the increase in responsibility undertaken by the Defender’s solicitors as a consequence, the court determined that an additional charge may be sought by the Defender under reference to heads (a), (e) and (f). However, the level of any uplift was to be determined by the auditor.

Often an uplift of 30-40% per head has been sought. However, recently In Foster v Foster [2023] CSIH 44, the Inner House was asked to consider both whether an additional charge should be granted and the amount of uplift which should be awarded.

The Inner House allowed awards under only three of the seven heads sought and they made it clear that they were comparing the case to other litigations of the same type when determining whether an additional charge should be allowed. If the work done does not go beyond what would be the norm in a case of that type, an additional charge should not be allowed. Three heads were allowed and the total percentage for an additional charge was 30%. This may signal a shift in the level of percentage awards which additional charges might attract and is certainly a useful case to use when faced with a motion for an additional charge.

At the conclusion of any matter in which BTO Solicitors are instructed, we will offer to negotiate the Account of Expenses and any additional charge sought. In almost all cases we can abate the account and reduce any uplift in expenses via negotiation. However, when agreement cannot be reached, our specialist solicitors are prepared to make arguments before the court and auditor. Our clients also benefit from the experience of our Solicitor Advocates who can represent clients in the Court of Session.

Tim Webster, Associate: twe@bto.co.uk / 0141 221 8012