Keoghs Scotland along with Screwfix, a client of its corporate sector risks retail team, has been successful in the first reported decision on abandonment in the era of Qualified One Way Cost Shifting (QOCS) in Scotland in the case Alan McRae v Screwfix and Royal Mail. In addition, this is the first reported decision where costs protection now afforded to a pursuer in a personal injury action has been qualified, and QOCS dis-applied. Historically, expenses follow success. In Scottish personal injury actions, QOCS now applies, and the new default position is that even when the defence is successful, the defender cannot recover its legal expenses subject to limited exceptions.
However, working to defend its client and first defender, Screwfix, Keoghs Scotland pursued the first reported successful exception to this this under Ordinary Cause Rule 31A.2(2)(d) – that is that a defender can make an application for an award of expenses against the pursuer following the abandonment of the claim.
Commenting on the judgment, which was announced on 14 September 2023 Eoin Quinn, Associate, Keoghs Scotland, said: “This decision should provide a measure of comfort to defenders in personal injury litigation and restores and reaffirms the court’s discretion on expenses in an important area of everyday practice.”
The circumstances of the underlying claim were straightforward. The pursuer was injured following a home delivery. He alleged the item delivered was too heavy, and, when he assisted the delivery driver to carry the item into his home, he sustained injury. The pursuer issued proceedings against both the company he had ordered the product from, Screwfix, and the delivery company as second defender. Working together, Keoghs and Screwfix defended the action on the basis that Screwfix took care to use competent contractors and was not responsible for carrying out the delivery. Ultimately the claim was compromised between the pursuer and Royal Mail, with the pursuer choosing to abandon his claim against Screwfix.
Keoghs made a written application for its client to be awarded expenses of process against the pursuer on the basis the claim was abandoned. The pursuer argued against this motion, using QOCS and Section 8 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 to argue that expenses awards can only be made against the pursuer where there was evidence of fraud, where the pursuer was deemed to be acting manifestly unreasonably or abuse of process. The pursuer submitted that abandonment alone was not enough and suggested that the primary legislation makes it impossible for a court to find a pursuer liable in the expenses of a personal injury action, unless he had not conducted the proceedings in an appropriate manner. Ultimately, however the Sheriff disagreed, and the pursuer was found liable to Screwfix for the expenses of the action. The Sheriff determined that if it was intended that abandonment required to be in circumstances analogous to the other QOCS exceptions, that would have been expressly stated, and that such an interpretation was inconsistent with the Court Rules.
Eoin Quinn explained: “Screwfix’s position was straightforward and relied on the Ordinary Cause Rule (OCR) which provides specific exceptions to One-Way Cost Shifting. We argued that the language of the OCR and QOCS legislation is clear and unambiguous. This meant that the abandonment qualification did not need to be viewed through the prism of a new default position that expenses awards can only be made against the pursuer where these exceptions of the 2018 Act were met. The Court accepted our submission that the various grounds upon which the court could qualify costs shifting, were not mutually exclusive and neither the rules nor the primary legislation provide for a hierarchy of grounds and there was no basis to assert that the grounds specified in the 2018 Act possess a higher status than those in the court rules. As the first reported case of this type, we believe it sets a useful precedent in cases of abandonment and QOCS going forward, and we are very pleased with the successful result we have achieved for our client.”
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