Proposals for Reform of the Scottish Civil Justice System 8/10/09
The Lord Justice Clerk for Scotland, Lord Gill, published his report on review of the Scottish Civil Justice System following a two year consideration of structure, jurisdiction, procedures and working methods.
A brief summary of the most significant recommendations which are likely to affect banks and bankers are as follows:-
Structure of civil court system
A national Sheriff Appeal Court to hear civil appeals from district judges and sheriffs.
Only claims worth above £150,000 should be litigated in the Court of Session.
Accordingly all claims for less than £150,000 would require to be pursued in the existing Sheriff Courts across Scotland.
Where a claimant sues in the Court of Session but is awarded a sum less than £150,000, costs should be awarded on the Sheriff Court scale unless the claimant can show reasons why it was necessary to raise an action in the Court of Session.
A number of sheriffs should be designated as specialists in commercial practice, and deal with that type of case only.
A new judicial office of district judge should be created. A district judge would sit in the Sheriff Court and hear civil claims with a value of £5,000 or less. This will be based on an interventionist approach and will replace the current Summary Cause and Small Claim procedure.
A rule should be introduced enabling a tender (i.e. part 36 offer) of a value below £150,000 to be accompanied by an offer of Sheriff Court costs in full and final settlement of the claim.
A new case management model
An overriding principle of the court should be that it would have power to control the conduct and pace of all cases before it.
On entering a defence, a case should be allocated to a particular judge or sheriff who wherever practicable, will deal with all hearings for that case. In the Sheriff Court, if the case is within a specialist area, it should be designated to a specialist sheriff.
Mediation and other forms of dispute resolution
The report recognises the value of Alternative Dispute Resolution and makes proposals such as a free mediation service for claims under the new simplified procedure.
Courts should not compel a party to enter into Alternative Dispute Resolution.
Facilitating settlement
Judicial tenders (i.e. Part 36 offers) should be replaced by a rule regulating the making of formal offers. Any party would be entitled to make a monetary or non-monetary offer in full or partial settlement before or after the commencement of an action. Such an offer, if not accepted, would have implications regarding cost.
A party making a judicial offer should be able to specify a time limit for acceptance.
Enhanced case management
The report makes recommendations for enhancing the court’s case management powers, including early disclosure of documents, greater use of witness statements in place of oral testimony, abbreviated written pleadings and the appropriate use of expert evidence.
Either party should be able to ask the court to dispose of a case summarily (i.e. without proceeding to a full hearing) if the other party has no real prospect of success and there is no other compelling reason why the case should proceed.
The court should have a general power to impose sanctions for failure to comply with rules or court orders. An extensive list of sanctions is proposed, including granting decree against the defaulting party, dismissing the case or making order in relation to costs.
Multi-party actions (i.e. “class actions”)
There should be a special procedure for dealing with multiple claims in the Court of Session.
The court should be satisfied that: the applicant of one group of persons claim gives rise to common or similar issues of fact or law; the adoption of group procedure is preferable; and that the applicant is an appropriate person to be appointed as a representative party.
The court should be satisfied that the claimants have demonstrated a prima facie cause of action.
The court will also need powers to make a global award of damages.
The cost and funding of litigation
There should be a significant increase in the recoverable fee for pre-litigation work to reflect work properly and reasonably carried out in connection with investigation and intimation of a claim, discussion on settlement and compliance with pre-action protocol.
There should be a judicial table of fees for counsel in Court of Session and Sheriff Court (where sanction for counsel is given).
Legal aid should be available, subject to usual tests, for all types and values of proceedings under simplified procedure.
Summary
It will be for the Scottish Ministers to decide how to take forward the recommendations made by Lord Gill. If the recommendations are implemented, in part or in full, they will radically overhaul the way in which civil cases are dealt with in Scotland. Parties to actions will have to be proactive to facilitate early resolution of disputes, make best use of resources and technology so as to ensure that cases are dealt with in proportion to their value, importance and complexity of the issues raised.
Importantly for Banks:
The courts will have regard to pre-action offers when making awards of costs.
Claims worth less than £150,000 will be litigated in a more cost-effective forum
A new fast track for claims worth up to £5,000 will be created.
We will update you again as soon as there are further developments. To access a full copy of the report please click here.
Further information
For further information on the issues raised in this legal update or any banking issue, please contact Ruari MacNeill, Claire Martin, Andrew Foyle, Lesley Paterson or your usual contact at Anderson Strathern LLP.
This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.
