New rules could be a game changer for personal injury claims - Gavin Deeprose
New court rules which provide for qualified-one way cost shifting (“QOCS” for short) are due to come into force in Scotland on 30 June 2021.
The rules will alter the traditional principle in personal injury cases that the loser pays the winner’s legal costs. With QOCS, the pursuer (the claimant) will not be responsible for the defender’s costs, if unsuccessful. Instead, unless the pursuer has behaved inappropriately in some way in conducting the dispute, the defender will have to pay their own legal costs. The new rules apply to all personal injury proceedings started after 30 June 2021.
The new rules represent a significant change in legal procedure in Scotland. In practical terms, QOCS will make bringing an injury claim in future less financially risky for a claimant.
It will also impact those who frequently defend such claims, including the insurance sector and large corporations who self-insure. In particular it is anticipated that there will be:
an initial spike in personal injury claims as cases held back to take advantage of the new rules are commenced. more speculative injury claims made generally. There is evidence from England, where the rule change has already been introduced, that claimant law firms are more willing to pursue litigation in the hope of achieving a compromise on a claim they previously would not have pursued. a lot of satellite litigation around the circumstances in which the costs protection for claimants within QOCS will be lost. In terms of “inappropriate behaviour” the rules say this includes situations where the pursuer has acted “fraudulently” or in a “manifestly unreasonable” manner or where there has been an “abuse of process”, although these phrases aren’t defined. Judges will therefore be required to establish the parameters of these concepts in actual cases, which will take time and have potential cost implications for parties.
One important aspect of the new rules for defenders is that costs protection is maintained where a reasonable offer is made and refused by the claimant or accepted late. In these situations the pursuer will have to pay the defender’s costs from the date the offer was made, although they will be capped at a percentage of any damages awarded. It will therefore remain important for parties defending personal injury to make realistic offers early in proceedings to put pressure on their opponents to accept.
QOCS is one of a package of recent reforms to Scottish civil procedure which include the introduction of group proceedings, third party funding and damages based agreements. The overarching aim of these reforms is to widen access to justice in Scotland and QOCS, along with the other reforms, should make it easier for those sustaining injury to do that. On the flip side, the changes are likely to increase the commoditisation of litigation services and contribute to the development of the litigation funding market where disputes are treated as an investment vehicle. These advances may themselves pose risks and entail conflicts of interest.
One thing is clear, however. As QOCS and the other reforms are implemented it has never been more important for businesses operating in Scotland to assess, and keep under constant review, their risk management policies and procedures
Gavin Deeprose is a lawyer in DLA Piper’s Litigation and Regulatory practice
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