More firms encouraged to get their day in court

Lord Gill concluded that the service provided by the Scottish civil courts was slow, inefficient and expensive. Picture: TSPL

When disputes arise in the commercial world – and they inevitably do – businesses should be able to rely on the courts to resolve matters when other forms of resolution fail. However, the number of organisations opting to pursue cases through the Scottish courts has been decreasing over the past decade.

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Statistics show that in 2011-2012 there was a 12 per cent drop in the number of new civil actions raised in Scottish courts. If you go further back, to 2008-2009, there has been a startling 43 per cent fall in cases. The reasons for this drop are not clear, but it may be that businesses are put off by the costs and delays involved in the court system.

That was certainly what Lord Gill, Scotland’s most senior judge, thought when he carried out a review of the Scottish civil justice system in 2009. He concluded that the service provided by the Scottish civil courts was “slow, inefficient and expensive”, while the range of remedies on offer was “inadequate”. His research suggested that some Scottish businesses were choosing to enter into contracts providing for the English courts to resolve their disputes.

Lord Gill proposed major reforms across the system to eliminate needless delay and unreasonable cost. The final outcome of his review is the recently passed Courts Reform (Scotland) Act 2014. The Act includes many of the recommendations made by Lord Gill, with reforms designed to revive confidence in the Scottish civil justice system.

A cornerstone of the reforms, and one that may prove beneficial for smaller businesses, is the transfer of cases to the (cheaper) sheriff courts. Previously, claims for more than £5,000 could be raised in the Court of Session in Edinburgh. Under the new Act, disputes involving sums less than £100,000 will have to be raised in the sheriff court and heard by sheriffs with specialist commercial knowledge. In a further streamlining to the system, an all-Scotland Sheriff Appeal Court will be created to hear all civil appeals from the sheriff courts.

There is also emphasis on improving the use of IT in the administration and conduct of litigation. Initial hearings in the sheriff court will be conducted by telephone and documents will be lodged and stored electronically.

To help address the concerns that inevitably come with systemic reform, the Scottish Civil Justice Council has been established to monitor and develop the new system. A separate review by Sheriff Principal Taylor emphasised the importance of making the cost of litigation more predictable – and ultimately more affordable. A number of recommendations for reform have now been put forward, including measures aimed at encouraging solicitors to share the risk of litigation with their clients.

Those overseeing and implementing reform of the Scottish civil justice system should be commended for their ambition and innovation. However, whether these major changes will ultimately satisfy court users remains to be seen. Swifter and more efficient justice will no doubt be welcomed, but the success of the broader project of reform will be determined by whether litigation is now seen as an affordable option.

For the Scottish business community the reforms certainly offer an opportunity to re-embrace the civil justice system. This could ultimately benefit the Scottish economy and can only be welcome news for businesses which need to rely on an effective court system.

• Susan Gallacher is a senior associate and Rory Thomson is an associate at CMS