It is well understood that expenses generally follow success in court cases. It is also understood that expenses usually correspond to the type of court action. In other words, a Small Claims action will result in expenses being awarded on the Small Claims Scale and so on.
However, it is open to Sheriffs and Judges to make awards of expenses on a Scale that does not correspond to the action in question, if it is felt one party’s conduct has been unreasonable. This happened in the case of Teviotdale v Norwich Union Insurance Limited. Although a Small Claims action, the Sheriff awarded expenses against the defender on the Summary Cause Scale, as he considered the defenders’ conduct had been unreasonable throughout the course of the litigation. The defenders appealed but were unsuccessful.
The case involved an accident in a car park. The defenders’ insured was reversing his car into a space. He collided with the pursuer. The Sheriff’s view was that the information available to the defenders, a commercial organisation, should have been sufficient to allow them to assess the risk appropriately and make an offer to settle. It should have been clear to the defenders that the insured was at fault. The Sheriff Principal agreed.
One determining factor in this case seemed to be that the pursuer resides in Liverpool and the case was heard in Dumfries. By not making an offer to settle, the defenders’ conduct resulted in the pursuer, according to the Sheriff Principal, incurring “substantially greater expense in the prosecution of her case than should reasonably have been necessary”.
This case certainly provides insurers with more incentive to settle!