The Justice Committee commented on the implementation of the Bill in late 2017. Somewhat unsurprisingly, the Government has responded positively to some of the recommendations made by the Committee, but have declined to change current policy expressed in the Bill for the most part.
The response makes clear that the decrease in civil litigation by 41% since 2008-09 is evidence enough for the introduction of QOCS in personal injury cases to allow increased access to justice.
This was supported by the Law Society of Scotland who stated that "overall, this Bill will…create a more accessible, affordable and equitable civil justice system."
There still remain issues in the context of the wider application of some elements of the Bill, such as the regulation of CMCs, which cannot take effect until the passing of the Financial Guidance and Claims Bill by the UK Parliament. However, the Scottish Government has expressed its intention to press on with the Civil Liability Bill in 2018.
We have set out the key points of the response in the same sequence as our previous article on the Justice Committee's response to assist the reader:
- The efforts of the Law Society of Scotland (LSS) to establish safeguards to protect against conflicts of interest in damage based agreements were welcomed.However, the Government stated it would be inappropriate for it to interfere in development of professional guidelines.
- Capping success fees - in light of the concerns from the Committee about the prospect of two success fees being paid (i.e to solicitors and CMCs), the Government is considering whether additional legislation is required to prevent this from occurring.
- Clarity was also sought as to whether or not damage for future losses should be ring-fenced when considering when calculating the success fee. The Scottish Government stated that they were not inclined to change current policy based on the recommendation of Sheriff Principal James Taylor as follows:
- Where a Periodical Payment Order is ordered to deal with future losses, the "success fee should be calculated by reference to the award of damages excluding the periodical payment."
- Where the future element is paid by lump sum, "future loss should not be excluded from the ambit of a damages based agreement and the calculation of the success fee under that agreement."
- The Committee expressed that courts must have the power to make PPOs, which in theory required the Civil Liability Bill to be implemented after enactment of the Damages Bill, which would grant courts those powers. The Government response was that courts already held the powers to impose a PPO – subject to consent of the parties – and that the Damages Bill will continue to allow this when enacted.
- Proposals for the extension of other safeguards such as increasing the limit for the compulsory pre-action protocol to £100,000 and the introduction of a PAP for clinical negligence claims are acknowledged and the Scottish Civil Justice Council (SCJC) have been directed to consider those recommendations.
- QOCS suitability – The agreement that QOCS should be introduced was welcomed by the Government, and safeguards to prevent a rise in fraudulent and unmeritorious claims were set out within their response.
- The Committee sought clarification regarding the restriction of QOCS where the defender is uninsured. The response was that "the Scottish Government is not minded to change its policy in this regard" rejecting the proposal to remove "the certain safeguard which QOCS provides.
- The Scottish Government did confirm that amendments to section 8(4)(a) and (b) will be made to make clear the circumstances in which a pursuer will lose the protection of QOCS. Of particular interest to the Committee will be the amendment of Section 8(4)(b) to reflect equivalency with the test of Wednesbury unreasonableness.This move was also supported by the LSS.
- However, there will be no amendment to the Bill to make clear that QOCS will be lost (a) where the pursuer fails to beat the defender's tender or (b) a pursuer's claim is summarily dismissed. The Government responded it was "inappropriate for the Bill to introduce provision for tenders and QOCS in primary legislation,” as it was accepted by stakeholders that tenders were already regulated by the common law and rules of court.In respect of specific provision for QOCS and summary dismissal, the Government has proposed this be dealt with by rules of court under section 8(6) of the Bill, and have referred this to the Scottish Civil Justice Council for further review.
- There will be amendments made to Section 10 to make it clear that expenses awarded against third party funders do not apply to (i) trade unions or similar bodies which represent the interests of workers (ii) solicitors acting under success fee agreements.
- Regulation of CMCs - There was a firm recommendation by the Committee that the Bill should not be passed until the Financial Guidance and Claims Bill ("Finance Bill") is passed by the UK Government, in particular given the proposed changes in regulations of CMCs as mentioned above. The Scottish Government have dismissed this, stating that it "does not believe the benefits of the Bill should be delayed until such time as claims management companies are regulated" [by the Finance Bill]. A request to amend the Civil Litigation Bill to allow only regulated bodies to offer success fees / agreements was also rejected, as it would prevent "existing, reputable claims management companies" from offering success fee agreements, and that any additional CMCs now operating north of the border would be aware of the incoming regulatory changes.
- In respect of cold calling, regulatory authority lies with the UK Government, but the Scottish Government stated it is committed to reduce the numbers, highlighting the establishment of a Nuisance Calls Commission, and a fund to assist vulnerable individuals. The Scottish Government agreed that there was a responsibility on the Law Society of Scotland and its members to establish whether claim referrals are obtained by cold calling – referring to the Law Society working group on this issue.
- Class actions – the Scottish Government reiterated the grounds for the use of an 'opt-in' procedure as supported by the Committee. Updates on the provision of legal aid for group proceedings will be provided to the Committee in the future.
When is the bill likely to be implemented?
The Scottish Government expects that the Bill will likely be "implemented from the summer of 2018".
The Committee did express concerns about the interplay of the Civil Liability with the Finance Bill and the Damages Bill. However, it is clear that the Scottish Government are pushing for the Damages Bill to be implemented in early 2018.
The Finance Bill is subject to the legislative agenda in the UK Government, which finds itself increasingly pre-occupied with Brexit.