THE civil justice system in Scotland is set for its biggest shake-up in a generation. In the coming months, the Courts Reform (Scotland) Act 2014 will be implemented and the recommendations of the Taylor Review of Expenses and Funding of Civil Litigation will be taken forward. These reforms will impact all businesses which litigate in Scotland. So what lies ahead?
Sheriff court jurisdiction to expand
In September 2015, the threshold for bringing cases in the Court of Session will rise from £5,000 to £100,000. This means that actions for £100,000 or less will have to proceed in the sheriff court. This change should bring about cost savings for commercial litigants in lower value disputes as sheriff court proceedings are much less expensive than those in the Court of Session. However, the automatic right to use counsel will be lost in these cases, as will access to the Court of Session’s specialist Commercial Court. This may disappoint companies who routinely use these services.
Reform of costs awards
The gap between what a successful company has to pay his or her solicitor and what is recovered from the unsuccessful party by way of costs should narrow. In commercial actions, where cost recovery is poor, the Taylor Review wants successful litigants to be able to recover 80-90 per cent of their legal costs – currently it is about 50 per cent. Taylor’s recommendations include revising the “table” of recoverable fees, the possibility of a successful party recovering their solicitor’s actual hourly rate and a modified system for recovering additional costs in complex or high-value cases. Trials of judge-led costs management of expenses are also suggested to make it easier for commercial litigants to predict their outgoings in court proceedings.
Specialist courts and judges
Specialisation within the judiciary is set to increase. A new specialist personal injury sheriff court with an all-Scotland jurisdiction is to be established in September 2015, a new dedicated Sheriff Appeal Court will be created to hear sheriff court appeals and from spring 2016 small claims will be determined by new specialist “summary sheriffs”. The formation of a specialist Energy and Natural Resources Court is also being considered to handle disputes arising from energy and renewables. These changes should improve the overall efficiency of the court system in Scotland and enhance judicial expertise and quality of decision-making.
New funding options
New methods of funding commercial litigation are likely to become available as an alternative to the traditional private client retainer. The Scottish Government has recently consulted on Taylor’s proposal to end the ban on damages based agreements which allow a solicitor to receive a percentage of damages by way of fees. Controversially, in personal injury cases, “qualified one-way cost shifting” has also been suggested. Under this proposal unsuccessful claimants would not require to pay defenders’ legal expenses except in special circumstances, which could see a rise in the number of reparation claims being pursued.
This may be of concern to companies operating in the insurance market.
An increase in the use of digital technology by the Scottish Court Service should reduce time and expense for commercial litigants. By the end of 2016 video-conferencing facilities will be installed in courts to enable witness evidence to be given remotely, a digital evidence vault will be created to store documents, audio, pictures and video content and by 2017 parties will be able to track their case online through a public information portal. Live TV coverage of legal debates and civil appeals is also on the cards, subject to clear guidelines as to use. Taken together these reforms should bring about substantial improvements in Scotland’s civil justice system which will be welcomed by Scotland’s business community. Access to justice should be easier and more affordable and commercial disputes should be resolved more efficiently and cost effectively. However the reforms will only succeed if they are properly resourced and managed. Training will be required for specialist judges, investment will be required in IT equipment and the sheriff courts will need considerable support to deal with the new processes and the influx of new business from the Court of Session. The Scottish Courts and Tribunal Service is confident it can deliver. I hope it can too as the prize of a more accessible, affordable and efficient civil justice system is an important one.
• Alistair Drummond is a partner in litigation & regulatory at DLA Piper Scotland