The Taylor Review – Scotland’s version of the Jackson Review – has recommended the introduction of contingency fees and one-way cost-shifting.
The Review of expenses and funding of civil litigation in Scotland, conducted by Sheriff Principal James Taylor, makes 85 recommendations in total, including costs management pilots for commercial cases where judges will be required to play a greater role in costs management.
However, the most far-reaching change for Scottish solicitors will be ‘no win, no fee’ cases where the fee is calculated as a percentage of the damages recovered. The maximum percentages will be “set on a sliding scale in which the percentage reduces as the award increases”.
Currently, litigation can be funded by “speculative fee agreements”, which are similar to conditional fee agreements apart from that success fees and after-the-event insurance premiums cannot be recovered from the losing opponent.
The Review also recommends that a pursuer (claimant) in a personal injury action should no longer have to pay the defender’s (defendant’s) costs if the action fails because “fear [of the cost of legal action] can result in good claims not being pursued”.
It does not recommend an increase in general damages – in England and Wales, a ten per cent rise has been introduced. Nor does it support a ban on referral fees, which it says are “a fact of life”.
Taylor highlighted “contextual differences” between the Jackson Review and his own, including that there was a “different culture” of litigation in Scotland, which has proportionately far fewer clinical negligence, motor and employer liability and other civil claims than in England. There are no plans to withdraw civil legal aid from any areas in Scotland, in sharp contrast to the position in England and Wales.
John Barrie and Jenny Dickson, Scottish Representatives on the executive committee of the Forum of Insurance Lawyers (FOIL), said: “A number of the proposals in the Review appear to echo what has been introduced by the Jackson Reforms in England and Wales, despite the expenses landscape in Scotland being very different to that south of the Border.
“There is likely to be a considerable impact on the cost of claims in Scotland. The proposal to introduce no win no fee as a percentage of damages, linked with one way cost shifting may well lead to increased levels of settlement.”
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