CONSULTATION QUESTIONS

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1 CONSULTATION QUESTIONS CHAPTER 1: PROPOSALS ARISING FROM SHERIFF PRINCIPAL TAYLOR S REVIEW A. SPECULATIVE FEE AGREEMENTS 1. Do you think that a lack of cap on speculative fee agreements prevents potential pursuers of actions from obtaining access to justice? Yes No Caps can be effective in ensuring that fees charged are fair and proportionate. Lack of a cap on speculative fee agreements may prevent pursuers with legitimate clinical negligence claims from pursuing those claims. This is a point made, based on interviews carried out with a group of medical negligence pursuers, in the Scottish Government publication: A Study of Medical Negligence Claiming in Scotland. 2. What impact would the introduction of a cap on speculative fee agreements have on: (i) Pursuers of actions (ii) Defenders of actions (iii) You or your organisation (iii) Other organisations: 3. Which group of individuals/organisations are likely to benefit most from a cap on speculative fee agreements? Please explain how these benefits will accrue, and their likely extent if possible 4. Which group of individuals are likely to be most disadvantaged from a cap on speculative fee agreements? Please explain how these disadvantages will accrue, and their likely extent if possible 1

2 5. What measures could be considered to both identify and mitigate against disadvantages from a cap on speculative fee agreements? B. DAMAGES BASED AGREEMENTS 6. Do you think that the inability of solicitors in Scotland to enter into damages based agreements with their client prevents potential pursuers of actions from obtaining access to justice? Yes No There is no evidence presented within the consultation document, or in the Taylor report, to support that assertion. Other means of funding are available, including SFAs, BTE insurance and Legal Aid. 7. What is the likely impact on you or your business of allowing damages based agreements to be enforceable by solicitors in Scotland? Please quantify, if possible. 8. Do you think that a lack of cap on damages based agreements prevents potential pursuers of actions from obtaining access to justice? Yes No Caps can be effective in ensuring fees are fair and proportionate. Lack of a cap on speculative fee agreements may prevent pursuers with legitimate clinical negligence claims from pursuing those claims. This is a point made, based on interviews carried out with a group of medical negligence pursuers, in the Scottish Government publication: A Study of Medical Negligence Claiming in Scotland. Pursuers interviewed in that study stated that they wanted to avoid a no win no fee solicitor, as they felt that they and claims companies lacked medical negligence expertise and were primarily interested in obtaining high legal fees. The MDU believes there should be a legal means of limiting damages that may be charged as a success fee, in order to ensure the successful pursuer receives compensation as close as possible to that which he or she has been awarded by the court. We also believe that damages for future loss should be excluded (see below). 9. What impact would the introduction of a cap on damages based agreements have on: (i) Pursuers of actions (ii) Defenders of actions 2

3 (iii) You or your organisation (iii) Other organisations: 10. Which group of individuals/organisations are likely to benefit most from a cap on damages based agreements? Please explain how these benefits will accrue, and their likely extent if possible 11. Which group of individuals are likely to be most disadvantaged from a a cap on damages based agreements? Please explain how these disadvantages will accrue, and their likely extent if possible 12. What measures could be considered to both identify and mitigate against disadvantages from a a cap on damages based agreements? 13. What impact would these proposals have on excessive charging under damages based agreements? Claims Management Companies 14. Do you agree that the proposed statutory controls should apply to anyone offering a damages based agreement? Yes No In the interests of fairness, pursuers should have the same protection regardless of the nature of the organisation offering a DBA. 15. What should the sanction be for non-compliance with the statutory controls? 16. If any of the provisions of the rules are breached then should the agreement become voidable? Yes No Future Loss 3

4 17. Do you agree that the future loss from the success fee should not be ring-fenced? Yes No We believe that future loss should be ring-fenced (see above) in order to ensure the pursuer receives the full compensation awarded by the court. In a claim against the NHS, the consequences of not ring-fencing future loss (in the context of the proposed changes) may be as follows. A pursuer is successful in a claim against a hospital. In keeping with S2(4) of the Law Reform (Personal Injuries) Act 1948 (which requires the availability of NHS care to be disregarded) the pursuer receives a sum of money which having considered extensive expert evidence on both sides the court determines is the amount necessary to meet the pursuer s future care needs in the private sector. The pursuer s solicitor obtains costs, plus a percentage of the pursuer s damages (up to 60,000 in a 500,000 claim). The pursuer has inadequate funds for the care he or she needs. The NHS would in effect be penalised financially as it would have to fund the shortfall in care, having already paid damages which were intended to fund that care to be provided by the private sector. 18. What impact would not ring-fencing future loss have on: (i) Pursuers of actions (ii) Defenders of actions (iii) You or your organisation (iii) Other organisations: Information and Good Guidance 19. Do you agree that a new code of good practice, applying to all persons and businesses offering damages based agreements, should be developed? Yes No 20. Should a new code of good practice be statutory or non-statutory (please check box as appropriate)? 4

5 21. Should the development of a new code of good practice be sector-led? Yes No C. QUALIFIED ONE-WAY COST SHIFTING 22. Do you think that introducing a system of qualified one-way costs shifting will increase access to justice? Yes No There is no evidence presented in the consultation document that patients who would be entitled to damages in a clinical negligence action are being denied access to justice because of the possibility of paying other side costs. In considering whether it is necessary to introduce legal changes that will have an impact on all parties, it is equally important to look at the financial and other effects on a defender of the need to rebut claims that are without merit. Concern about the costs of losing a case can be an effective deterrent to bringing claims that are without merit. In the Scottish Government s publication: A Study of Medical Negligence Claiming in Scotland, at 3.108, CLO data on clinical negligence claims against the NHS in Scotland from 1998 to 2010 is analysed. Only 34.3% of claims were settled. This relates to a period (according to the publication) where most cases were legally aided i.e. required to pass the test of probabilis causa litigandi. At 3.125, the paper notes that the CLO costs for unsuccessful claims increased from 300,000 in 1998 to over 1.2m in It is possible that removing some of the costs burden for one party, the pursuer, would increase the number of clinical negligence claims brought (following the logic of the consultation document quoted above). However, based on the CLO data above, the majority of these claims will not be successful, resulting in increased costs for defenders in investigating and rebutting additional claims, with no apparent advantages for unsuccessful defenders. The result for a public body such as the NHS in Scotland would be an increase in defence costs. The same would apply to other defender organisations. For the NHS, this will be money diverted away from care of NHS patients. For doctors and dentists indemnified by the MDU, the increased costs will raise subscription costs and will indirectly be borne by the Government (through increased GP expenses) or will be borne by patients, if it necessitates increased fees in private dentistry and private medical care. If the Scottish government, nevertheless, decides to introduce QOCS, this should not include cases funded by BTE insurance or self funded by individuals (ie cases not pursued under a SFA or DBA). 23. What impact would the introduction of a system of qualified one-way costs shifting have on: (i) Pursuers of actions (ii) Defenders of actions 5

6 (iii) You or your organisation (iii) Other organisations: 24. Which group of individuals/organisations are likely to benefit most from the introduction of a system of qualified one-way costs shifting? Please explain how these benefits will accrue, and their likely extent if possible 25. Which group of individuals are likely to be most disadvantaged from the introduction of a system of qualified one-way costs shifting? Please explain how these disadvantages will accrue, and their likely extent if possible 26. What measures could be considered to both identify and mitigate against disadvantages from the introduction of a system of qualified one-way costs shifting? 27. Do you agree that the test for losing the benefit of qualified one-way costs shifting should be fraud, abuse of process and in cases of Wednesbury unreasonable behaviour? Yes No We do not agree that QOCS should still apply where a pursuer has acted unreasonably: the threshold of Wednesbury unreasonableness is difficult for non-lawyers (and therefore pursuers) to understand and so far as it requires something greater than simple unreasonableness too high. In addition, we do not agree with the proposal that where a pursuer fails to beat a tender the pursuer s liability to meet the defender s post-tender judicial expenses should be limited to 75% of the damages awarded. Under the proposals put forward, a pursuer may have a SFA or DBA and no potential liability for other side costs. To limit exposure to costs even where a reasonable tender has been made but is not accepted (and the pursuer has acted unreasonably, but not Wednesbury unreasonably ) is unfair. DAMAGES BASED AGREEMENTS, SPECULATIVE FEE AGREEMENTS AND QUALIFIED ONE- WAY COSTS SHIFTING OVERALL IMPACT OF PACKAGE 28. What is your view on the argument that the reform package removes all risk to pursuers of actions? In our view the reform package because of the addition of QOCS (and the limit on expenses where a tender is not beaten) removes almost all risk from pursuers and will encourage an increase in the number of claims pursued and the CLO experience in the Scottish Government publication referred to above indicates that a high percentage of those claims will be without merit. We believe there is also the added potential for 6

7 prolongation of claims and further increase in costs because there would be a decreased incentive for pursuers to settle early. In relation to clinical negligence, where the majority of compensation is funded from the public purse, this will result in money being diverted from the front line care of patients in the NHS to pursuer solicitors. 29. What is likely to be the overall impact of the package on you or your business? Please quantify, if possible. 30. What do you think the impact of the overall package will be on: a) The general level of claims? b) The general level of litigation? c) The trajectory of claims, and settlement rates? d) Pursuers of actions? e) Defenders of actions? f) Pursuers solicitors? g) Defenders solicitors? h) Insurance companies? i) Case management companies? j) The courts? k) Scottish Legal Aid Board? l) The general public? m) Others? D. COUNSEL S FEES 31. Do you agree that there should be a table of fees introduced for counsel in the Court of Session? Yes No For the reasons set out in the consultation document. 32. Do you agree that there should be a table of fees introduced for counsel in the sheriff court for those cases where sanction for counsel has been granted? Yes No 7

8 For the reasons set out in the consultation document. 33. Do you agree that solicitor advocates should be included in this table of fees? Yes No 34. Do you agree that the Scottish Civil Justice Council is best placed to develop and maintain the table of fees? Yes No For the reasons set out in the consultation document. 35. What do you think the impact of introducing a table of fees will be on: a) Pursuers of actions? b) Defenders of actions? c) Solicitors? d) Solicitor advocates? e) Counsel? f) Scottish Legal Aid Board? g) Others? CHAPTER 2: PROPOSALS ARISING FROM LORD GILL S SCOTTISH CIVIL COURTS REVIEW A. MULTI-PARTY ACTIONS Option What would the impact be on access to justice of introducing a procedure along the lines of option 1? 37. Who would be most affected by option 1 and what would that impact look like? 8

9 Option What would the impact be on access to justice of introducing a procedure along the lines of option 2? 39. Who would be most affected by option 2 and what would that impact look like? 40. Do you have any observations on the technical and funding issues raised in relation to option 2? Option Is there a need for 3 rd party bodies without a direct legal interest to have the right to bring class actions on behalf of the group they represent or are existing regulatory mechanisms sufficient? Yes No 42. Should 3 rd party bodies without a direct legal interest have access to public funding for litigation through the proposed multi-party action fund? Yes No 43. What would the impact be on access to justice of introducing a procedure along the lines of option 3? 44. Who would be most affected by option 3 and what would that impact look like? 45. Do you have any observations on the technical and funding issues raised in relation to option Do you support multi-party action option 1 option 2 or option 3 (please check box as appropriate)? We do not believe that QOCS should apply to multi party actions considering this unfair where a firm of solicitors may represent a very large number of clients and may amass enormous costs, even at a very early stage in the litigation (and in circumstances where there would be no realistic prospect of early settlement). We would have considerable concerns about any opt-out system with an unascertainable number of claims, but would need further details of the system proposed in order to expand upon those concerns in a meaningful way. We note that detailed assessment and modelling of funding arrangements would be carried out before this option is considered further and would welcome the opportunity to be involved in any further consultation process on this issue. 9

10 B. AUDITOR OF COURT 47. What impact will the proposal to make the post of the Auditor of the Court of Session a salaried public appointment have on: a) The Auditor of the Court of Session? b) Staff of the Auditor of the Court of Session? c) Pursuers of actions? d) Defenders of actions? e) Solicitors? f) Counsel? g) Scottish Legal Aid Board? h) Other? s 48. What impact would the proposal to make the post of auditor in the sheriff court a salaried public appointment have on: a) Sheriff court auditors? b) Independent practitioners who currently hold commissions as auditors? c) Pursuers of actions? d) Defenders of actions? e) Solicitors? f) Counsel? g) Scottish Legal Aid Board? h) Other? s 10

11 C. CONDUCT OF LEGAL REPRESENTATIVES 49. Do you support the proposal to make legal representatives personally liable for expenses occasioned by their own conduct? Yes No For the reasons set out in the consultation document. 50. What impacts do you think that the proposal to make legal representatives personally liable for expenses occasioned by their own conduct will have on you or your organisation? CHAPTER 3: LEGAL AID PROVISIONS A. LEGAL AID FOR LEGAL PERSONS 51. Do you agree that these legal aid for legal persons provisions should be taken forward? Yes No There is insufficient information in the consultation document for us to comment on this issue. 52. Do you agree that the Scottish Legal Aid Board should be required to apply the financial eligibility tests set out in paragraph 187 above? Yes No B. Funder of Last Resort 53. Do you agree that the Legal Aid Fund should only be used as a funder of last resort in respect of civil litigation? Yes No CHAPTER 4: ASSESSING THE IMPACT EQUALITY Please tell us about any potential impacts, either positive or negative, you feel any of the proposals for the Bill may have on particular groups of people, with reference to the "protected characteristics" listed above. BUSINESS AND REGULATION 11

12 Please tell us about any potential costs or savings that may occur as a result of the proposals for the Bill, and any increase or reduction in the burden of regulation for any sector. Please be as specific as possible. 12

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