As a young advocate in the Court of Session the words “Don’t forget the expenses” were often whispered in my ear by the instructing solicitor from the bench behind. Any success was greatly devalued if the client had to meet his or her own legal fees.
Most of those who take a passing interest in the civil court system will know the general rule is that the expenses follow success. That is, the losing party pays the legal expenses of the successful party.
Often in personal injury litigation the pursuer’s solicitors will take the case on a no win-no fee agreement under which, in the event of success, they will accept as payment whatever expenses are awarded against the loser.
In any case where there is a financial claim the defender can move the goalposts and redefine success by making a formal offer, called a tender, of an amount at which he or she is willing to settle the action. The tender is intimated to the pursuer and a note of the offer is placed in a sealed envelope in the court process. The judge does not see it.
If the offer is not accepted and the case continues to proof, and the judge then awards the pursuer more than the tender, he or she is “successful” and gets awarded all of his or her expenses. If the judge awards a lower amount the pursuer has to pay the defender’s expenses from the date of the tender to the date of the award.
This puts legitimate pressure on the pursuer to consider the tender very carefully.
Especially in relatively low-value claims, falling short of the tender can mean expenses swallow up most or all of the amount awarded by the judge.
Falling short of the tender in a multimillion-pound claim should still leave the disappointed pursuer with something.
In December 2012, Dr Helen McGlone was awarded damages of £2,034,500 against Greater Glasgow Health Board as a result of medical negligence. Smear tests had been misread on three occasions and as a result Dr McGlone, at the age of 27, developed a serious cancer, that required radical surgery and six weeks of radiotherapy.
The board’s staff had misread a smear test. The board conceded negligence but argued that even if the abnormalities had been picked up earlier the outcome for Ms McGlone would have been the same. After hearing expert evidence, Lord Tyre rejected that argument on 6 April, 2011.
The case was then sent to Lord Bannatyne to hear evidence about Ms McGlone’s losses. In the event he awarded her a little more than £2m. More than £1.7m of that was for past and future loss of earnings. He accepted that Ms McGlone, who held a PhD in maths and physics, had been denied the chance of a well-paid job in the City of London.
Even before Lord Tyre had made his decision the board had tendered £150,000.
Once he decided the negligence had caused Ms McGlone’s loss, the board submitted three more tenders, the last of which was an offer to settle of £1.8 million, made on 26 April, 2012.
Ms McGlone had beaten the tender and therefore expected to recover all of her expenses from the board.
Unusually, the board decided to oppose her motion for expenses on the basis that although she beat the tender she had not been successful on all the issues that were the subject of evidence and argument before Lord Bannatyne. In particular, her award had fallen a long way short of her claim for £20m.
The board said that by making an award that was only 10 per cent of the claim it was the board, not Ms McGlone, that had effectively succeeded.
Ms McGlone’s counsel argued that a win is a win; and any change to the customary practice would bring unacceptable uncertainty into litigation.
It was an important challenge and Lord Bannatyne was not moved by it.
There have been far tighter cases than this with just a few pounds of a difference between award and tender deciding who picked up the legal bills.
Those advising clients, both pursuers and defenders, will generally be happy with the decision. It is more efficient to have a certain and predictable rule that does justice in most cases rather than to have uncertainty caused by having flexible but uncertain rules that strive, probably in vain, to do justice in every case.
• Bryan Heaney is an advocate and a founder member of the Westwater Advocates Medical Law Group.