Legislation introducing the new pursuers’ offers chapters was brought forward on 2 March 2017, meaning that defending parties will now be told what level of offer the pursuer will accept, rather than simply receiving a best case scenario formal statement of valuation.
The introduction of pursuer’s offers by The Scottish Civil Justice Council is something that has been kept under the radar in recent times but appeared in the Courts Reform (Scotland) Act 2014 – the same legislation that introduced the All Scotland Personal Injury Sheriff Court.
The new legislation amends both the Court of Session and Sheriff Court rules by inserting rules that provide for a formal system of pursuers’ offers. The closest equivalent is a defender’s tendered offer (or a part 36 offer to refer to English procedure).
After 3 April 2017, a pursuer’s offer can be made in any case in which the summons or initial writ includes a crave seeking damages, other than a conclusion or crave that cannot be granted without evidence. The offer, which has to be lodged into Court, must offer the defender the opportunity to settle the case by accepting the pursuer’s offer of a sum or sums of money, inclusive of interest to the date of the offer, along with the Pursuer’s expenses.
The system will work in much the same way as tenders presently do. As with tenders, a pursuer’s offer has to be accepted by the defender by their lodging a minute of acceptance in process. The acceptance must be unqualified other than as regards any question of contribution, indemnity or relief. Where the offer relates to more than one defender, it is only effective when accepted by all defenders. If one defender does wish to accept, the pursuer may seek decree against the accepting defender, with the consent of that defender.
Where the court is satisfied that the pursuer’s offer was accepted later than it could reasonably have been, the defender is to be found liable for interest on the principal sum from the date of the offer, and for payment of an additional sum of expenses to the pursuer. That additional payment will be a 50% uplift on the pursuer’s account of expenses as agreed or as taxed, for the period attributable to the period following the making of the offer.
The rules also provide for the defender to be found liable for payment of the same additional uplift in expenses to the pursuer where an offer is not accepted and where any Court award is the same or better than the level of the pursuer’s offer.
On one view it seems an inequitable position not to afford a defender the same uplift in their expenses in the event the pursuer fails to beat the tender at proof/trial, or the pursuer accepts the tendered offer late in the day. However with the introduction of qualified one way costs shifting anticipated further down the track, perhaps this inequity will soon become academic.
It is important to note that there is no prerequisite for the pursuer to exhibit vouching before they lodge an offer. However the rules are drafted in such a way as to allow a defender to argue that the additional uplift in the pursuer’s expenses should not apply on cause shown. Arguably the lack of vouching would be argued as cause shown. However, at least for personal injury actions under the value of £25,000 which are now captured by the compulsory pre-action protocol rules, all vouching to support a pursuer’s offer ought to have been provided before the litigation is raised.
The advantage to pursuer’s offers is that the defending party will now at least be told what level of offer the pursuer will accept, rather than simply receiving a best case scenario formal statement of valuation. However it is anticipated that the lodging of an early offer will inevitably “up the ante” in a liability denied case that proceeds to proof/trial.