Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018

PART 1 — SUCCESS FEE AGREEMENTS

Success fee agreements

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• (1) In this Part, a “success fee agreement” is an agreement between a person providing relevant services (the “provider”) and the recipient of those services (the “recipient”) under which the recipient—

• (a) is to make a payment (the “success fee”) to the provider in respect of the services if the recipient obtains a financial benefit in connection with a matter in relation to which the services are provided, but

• (b) is not to make any payment, or is to make a payment of a lower amount than the success fee, in respect of the services if no such benefit is obtained.

• (2) In this section—

• “claims management services” means services consisting of the provision of advice or services, other than legal services, in connection with the making of a claim for damages or other financial benefit, including—advice or services in relation to—legal representation,the payment or funding of costs associated with making the claim,referring or introducing one person to another,making inquiries,

• “legal services” means services consisting of the provision of legal advice, assistance or representation,

• “payment” includes a transfer of assets and any other transfer of money's worth,

• “relevant services” means legal services or claims management services provided in connection with a matter—which is the subject of civil proceedings to which the recipient is a party before a Scottish court or tribunal, orin relation to which such proceedings are in contemplation,

• “Scottish court or tribunal” means a court or tribunal established under the law of Scotland.

• (3) In this Part, the following terms, in relation to a success fee agreement, are to be construed in accordance with this section—

• “payment”,

• “provider”,

• “recipient”,

• “relevant services”,

• “success fee”.

Enforceability

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• (1) A success fee agreement is not unenforceable by reason only that it is a pactum de quota litis (that is, an agreement for a share of the litigation).

• (2) Subsection (1) does not affect any other ground on which a success fee agreement may be unenforceable.

Expenses in the event of success

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• (1) This section applies where the recipient of relevant services under a success fee agreement—

• (a) is awarded expenses in civil proceedings concerned with a matter to which the agreement relates, or

• (b) agrees with another person that the recipient is entitled to recover expenses from that person in relation to such a matter.

• (2) Unless the success fee agreement provides otherwise—

• (a) the provider is entitled to recover and retain the expenses so far as those expenses relate to the relevant services provided by the provider in relation to the matter, and

• (b) the amount of the success fee to be paid under the agreement is not affected by the amount of expenses recovered and retained by the provider.

• (3) Subsection (2) is subject to section 17(2A) of the Legal Aid (Scotland) Act 1986 (which makes provision for circumstances in which expenses recovered are to be paid to the Scottish Legal Aid Board).

Power to cap success fees

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• (1) The Scottish Ministers may by regulations make provision for or about the maximum amounts of success fees that may be provided for under success fee agreements.

• (2) Regulations under subsection (1) may specify maximum amounts or provide for them to be determined in accordance with the regulations.

• (3) Subsection (4) applies where the maximum amount of the success fee that may be provided for under a success fee agreement is restricted—

• (a) by provision made in regulations under subsection (1), and

• (b) by, or in accordance with, another enactment.

• (4) The maximum amount of the success fee that may be paid under the agreement is the lower of the amounts allowed for by, or in accordance with, the enactments mentioned in subsection (3)(a) and (b).

• (5) A success fee agreement is unenforceable to the extent that it provides for a success fee of an amount that is higher than the maximum amount allowed for by virtue of this section.

Exclusion for certain matters

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• (1) A success fee agreement must not be entered into in connection with a matter which may be the subject of civil proceedings of a description specified by the Scottish Ministers in regulations.

• (2) Regulations under subsection (1) may relate to all success fee agreements or to success fee agreements of a description specified by the Scottish Ministers in the regulations.

Personal injury claims

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• (1) This section applies to a success fee agreement entered into in connection with a claim for damages for—

• (a) personal injuries, or

• (b) the death of a person from personal injuries.

• (2) The agreement must provide that the recipient of the relevant services is not liable to make any payment (including outlays incurred in providing the services) to the provider in respect of the services, apart from the success fee, regardless of whether any damages are obtained.

• (3) In subsection (2), “outlays” do not include any sums paid in respect of insurance premiums in connection with the claim to which the agreement relates.

• (4) The agreement—

• (a) may provide that any damages for future loss obtained in connection with the claim (the “future element”) will be included in the amount of damages by reference to which the success fee is to, or may, be calculated (the “relevant amount of damages”) if the future element is within subsection (5), but

• (b) otherwise, must provide that any future element will not be included in the relevant amount of damages.

• (5) The future element is within this subsection if it is to be paid in a lump sum and—

• (a) does not exceed £1,000,000, or

• (b) exceeds £1,000,000 and—

• (i) the provider had not advised the recipient to accept that the future element be paid in periodical instalments, and

• (ii) the condition in subsection (6) is met.

• (6) The condition is—

• (a) in the case where the damages are awarded by a court or tribunal, that the court or tribunal in awarding the future element has stated that it is satisfied that it is in the recipient's best interests that the future element be paid as a lump sum rather than in periodical instalments,

• (b) in the case where the damages are obtained by agreement, that an independent actuary has, after having consulted the recipient personally in the absence of the provider, certified that in the actuary's view it is in the recipient's best interests that the future element be paid as a lump sum rather than in periodical instalments.

• (7) The agreement is unenforceable to the extent that it makes provision contrary to subsection (2) or (4).

• (8) The Scottish Ministers may by regulations substitute another sum for the sum for the time being specified in subsection (5)(a) and (b).

• (9) In subsection (1), “personal injuries” include any disease and any impairment of a person's physical or mental condition.

• (10) In subsection (6)(b), “actuary” means an Associate or Fellow of the Institute and Faculty of Actuaries.

Form, content etc.

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• (1) A success fee agreement must be in writing.

• (2) A success fee agreement must specify the basis on which the amount of the success fee is to be determined.

• (3) The Scottish Ministers may by regulations make further provision about success fee agreements including in particular provision about—

• (a) their form and content (including their terms),

• (b) the manner in which they may be entered into,

• (c) their modification and termination,

• (d) the resolution of disputes in relation to such agreements,

• (e) the consequences of failure to comply with the requirements of subsection (1) or (2) or the regulations,

• (f) the application of this Part, or any provision made under it, where a recipient receives relevant services from more than one provider in connection with the same matter.

• (4) Regulations under subsection (3) may modify this section so as to—

• (a) add text to it,

• (b) modify any text added under paragraph (a).

PART 2 — EXPENSES IN CIVIL LITIGATION

Restriction on pursuer’s liability for expenses in personal injury claims

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• (1) This section applies in civil proceedings where—

• (a) the person bringing the proceedings makes a claim for damages for—

• (i) personal injuries, or

• (ii) the death of a person from personal injuries, and

• (b) the person conducts the proceedings in an appropriate manner.

• (2) The court must not make an award of expenses against the person in respect of any expenses which relate to—

• (a) the claim, or

• (b) any appeal in respect of the claim.

• (3) Subsection (2) does not prevent the court from making an award in respect of expenses which relate to any other type of claim in the proceedings.

• (4) For the purposes of subsection (1)(b), a person conducts civil proceedings in an appropriate manner unless the person or the person's legal representative—

• (a) makes a fraudulent representation or otherwise acts fraudulently in connection with the claim or proceedings,

• (b) behaves in a manner which is manifestly unreasonable in connection with the claim or proceedings, or

• (c) otherwise, conducts the proceedings in a manner that the court considers amounts to an abuse of process.

• (5) For the purpose of subsection (4)(a), the standard of proof is the balance of probabilities.

• (6) Subsection (2) is subject to any exceptions that may be specified in an act of sederunt under section 103(1) or 104(1) of the Courts Reform (Scotland) Act 2014.

• (7) In subsection (1)(a), “personal injuries” include any disease and any impairment of a person's physical or mental condition.

Representation free of charge

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• (1) This section applies in civil proceedings where—

• (a) a party to the proceedings is represented by a legal representative, and

• (b) some (or all) of that representation is provided free of charge.

• (2) The party must disclose to the court the fact that some (or all) of the representation is provided free of charge.

• (3) The court may order a person to make a payment to the charity designated under subsection (5) in respect of the representation which was provided free of charge.

• (4) In considering whether to make an order under subsection (3) and the terms of such an order, the court must have regard to—

• (a) whether, had the representation not been provided free of charge, the court would have awarded expenses in respect of the representation, and

• (b) if so, what the terms of the award would have been.

• (5) For the purposes of subsection (3), the Lord President of the Court of Session must designate a charity which—

• (a) is registered in the Scottish Charity Register, and

• (b) has a charitable purpose (however described) of improving access to justice in respect of civil proceedings in Scotland.

• (6) Subsection (3) does not apply in relation to representation provided under section 28 of the Equality Act 2006 (legal assistance).

• (7) In this section, “free of charge” means otherwise than for or in expectation of a fee, gain or reward.

Third party funding of civil litigation

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• (1) This section applies where a party to civil proceedings receives financial assistance in respect of the proceedings from another person (whether directly or through an intermediary) who is not a party to the proceedings (“the funder”).

• (2) The party receiving financial assistance must disclose to the court—

• (a) if known to the party, the identity of the funder and any intermediary, and

• (b) the nature of the assistance being provided.

• (3) If the funder has a financial interest in respect of the outcome of the proceedings—

• (a) the party receiving the assistance must disclose that interest to the court once the substantive issues in dispute in the proceedings have been decided or otherwise resolved, and

• (b) the court may make an award of expenses against the funder and any intermediary.

• (4) Subsection (3) does not apply where the assistance is provided—

• (a) under a success fee agreement (within the meaning of section 1),

• (b) by a trade union or similar body which represents the interests of workers.

• (5) This section does not apply where the assistance is provided in respect of family proceedings by—

• (a) the spouse or civil partner of the party receiving the assistance,

• (b) a person living with the party as if they were married to each other,

• (c) a parent of the party,

• (d) a child of the party,

• (e) a sibling of the party (whether of the full-blood or of the half-blood).

• (6) For the purposes of this section—

• “family proceedings” has the same meaning as in section 135 of the Courts Reform (Scotland) Act 2014,

• “financial assistance” does not include a payment from the Scottish Legal Aid Fund.

• (7) This section is subject to an act of sederunt under section 103(1) or 104(1) of the Courts Reform (Scotland) Act 2014.

Awards of expenses against legal representatives

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• (1) This section applies in civil proceedings where the court considers that a legal representative of a party to the proceedings has committed a serious breach of that representative's duties to the court.

• (2) The court may make an award of expenses against the legal representative.

• (3) This section is subject to any limitations that may be specified in an act of sederunt under section 103(1) or 104(1) of the Courts Reform (Scotland) Act 2014.

Minor and consequential modifications of the Courts Reform (Scotland) Act 2014

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• (1) The Courts Reform (Scotland) Act 2014 is amended as follows.

• (2) In section 81(5)(b) (expenses in simple procedure cases), for “unreasonably” substitute “ in a manner which is manifestly unreasonable ”.

• (3) In section 103(2) (examples of how the power to regulate procedure and practice in the Court of Session may be exercised)—

• (a) in paragraph (j), for “to parties to” substitute “ in ”,

• (b) in paragraph (k), after “parties” insert “ or persons representing such parties ”.

• (4) In section 104(2) (examples of how the power to regulate procedure and practice in the sheriff court and Sheriff Appeal Court may be exercised)—

• (a) in paragraph (j), for “to parties to” substitute “ in ”,

• (b) in paragraph (k), after “parties” insert “ or persons representing such parties ”.

Meaning of “legal representative”

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In this Part, “legal representative” means—

• (a) a solicitor enrolled in the roll of solicitors kept under section 7 of the Solicitors (Scotland) Act 1980,

• (b) a member of the Faculty of Advocates,

• (c) any other person who may exercise a right of audience or conduct litigation in civil proceedings on behalf of a party to the proceedings.

PART 3 — AUDITORS OF COURT

Auditors of court

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• (1) There is to continue to be—

• (a) an office of the Court of Session called the Auditor of the Court of Session,

• (b) an office of the Sheriff Appeal Court called the auditor of the Sheriff Appeal Court,

• (c) an office called the auditor of the sheriff court.

• (2) In this Part, the holders of those offices are referred to as the “auditors of court”.

• (3) The Scottish Courts and Tribunals Service (“the SCTS”) has the function of appointing individuals to hold those offices.

• (4) A person's appointment as an auditor of court—

• (a) lasts for such period, and

• (b) is on such other terms and conditions,

as the SCTS may determine.

• (5) The auditors of court are also members of the staff of the SCTS and, accordingly, a reference in any enactment to the staff of the SCTS includes, except where the context requires otherwise, a reference to the auditors of court.

• (6) The Auditor of the Court of Session is to continue to be a member of the College of Justice.

• (7) The schedule modifies enactments in relation to the auditors of court.

Temporary Auditor of the Court of Session

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• (1) Subsection (2) applies during any period when—

• (a) the office of the Auditor of the Court of Session is vacant, or

• (b) the holder of that office is for any reason unable to carry out the functions of the office.

• (2) The Lord President of the Court of Session may appoint a person to act as the Auditor of the Court of Session during that period.

• (3) A person appointed under subsection (2)—

• (a) is to be appointed on such terms and conditions as the Lord President determines,

• (b) while acting as the Auditor of the Court of Session, is to be treated for all purposes, other than those of sections 14(4), (5) and (6) and 18(1) and (6), as the Auditor of the Court of Session.

Auditors’ functions

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• (1) An auditor of court—

• (a) is to tax such accounts of expenses as are remitted to the auditor for taxation by a court or tribunal,

• (b) has such other functions as are conferred on that office by an enactment (including this Act).

• (2) An auditor of court may tax such accounts as are submitted to the auditor for taxation otherwise than on remission from a court or tribunal or where required by an enactment.

• (3) An auditor of the sheriff court may—