Narrow the gap

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The Woolf reforms in the UK have promoted exchange of information, while Scottish legislation has lowered costs. Cameron McNaught and Ben Marshall ask whether the two jurisdictions should learn from each other

The litigation landscapes in Scotland and England remain very different, and only rarely do litigators in each jurisdiction lift their heads above the parapet to consider what they might learn from one another. Indeed, it is difficult for lawyers to absorb lessons from other jurisdictions unless they have experience in working in those jurisdictions to draw upon. The exception tends to be those who are dual-qualified with experience of working both north and south of the border. Such experience enables lawyers to comment on how best practice in terms of procedure in each jurisdiction might transfer to the other.

Knowledge of, and participation in, both jurisdictions reveals that Scotland does borrow from England, but only covertly. England, however, almost never borrows from Scotland. A recent exception to this rule would be the welcome alteration to Part 36 of the Civil Procedure Rules, which sees the abolition of the requirement to make a physical payment into court. This cuts down on bureaucracy and streamlines the process. In Scotland, actual payments into court have never been required.

However, there are two further areas in which each jurisdiction could benefit from the other. The first relates to costs.

Recovering costs

As a rule, in England and Wales, the successful party can expect to recover their costs, and what they can recover is governed by the CPR. The overriding test is that such costs are 'reasonable' and, ultimately, the level of costs is determined by the Costs Judge, who has considerable discretion.

This rather flexible approach carries with it several problems, particularly in lower-value personal injury actions. It is difficult for an insurer to determine their potential liability for costs prior to an action commencing, or, indeed, as it progresses. This militates against informed, commercial decision-making. Furthermore, because of very different views on what is reasonable - and many regional variations - there can be considerable post-settlement litigation in relation to costs. The English experience also adds to the widely held view that costs are too high, and often wholly disproportionate.

Scotland takes a different approach to costs and satellite cost litigation is virtually unknown. There are no conditional fee arrangements and, where solicitors act on a speculative basis, there is only a court-determined uplift as a reward for success in complex cases. Pursuers, that is to say claimants, regularly try to push the boundaries on what is a complex case; and there has been some considerable success in defeating those attempts. Scotland also has an effective pre-litigation scale, which operates by agreement. In litigation itself, recoverable costs are assessed by reference to a Table of (fixed) Fees. This table breaks down a court action into its constituent parts and applies a fixed cost in relation to each of those parts. Successful litigants recover the fixed fee for each part, regardless of the length of time it has taken to perform that work. A different Table of Fees operates depending on the value of the claim and the level of court.

This approach to costs helps insurers to estimate their exposure at any given time. Expensive post-settlement disputes are minimised because the Costs Auditor - equivalent to the Costs Judge - has limited discretion. This regime also ensures that costs are usually kept proportionate to the value of the claim in multi-track equivalent cases. Indeed, costs are often considerably less than they would be in England in similar cases.

There are, therefore, clear benefits that could be obtained by England adopting a more predictive regime, for both pre and post-litigation, particularly in multi-track equivalent cases. The scheme for predictable costs in motor cases is a welcome development but even those costs are higher than the comparable Scottish scheme. This is hard to understand, given that Edinburgh is the most expensive place to do business in the UK outside London.

Exchange of Evidence

The second area worthy of consideration is that of evidence exchange. The Woolf reforms in England and Wales introduced rules in relation to disclosure, witness evidence and expert evidence. These reforms also introduced pre-action protocols with an overall emphasis on openness and sharing information. The overriding spirit of litigation in Scotland still remains 'cards close to your chest'. There is no automatic disclosure; no exchange of witness statements; and expert reports are exchanged very close to trial. An expert can give evidence far and wide beyond the terms of his report in court. Experience reveals that cases in Scotland which, due to a lack of early exchange of evidence, settle at the doors of court, would have settled earlier in England.

In January 2006, the Law Society of Scotland and Forum of Scottish Claims Managers agreed a voluntary pre-action protocol for personal injury claims of up to £10,000 in value. This seeks to encourage early exchange of information and expedite settlement discussions but only goes so far. Being a voluntary protocol, it relies on individual solicitors adopting the protocol on an individual claim basis. Furthermore, it only covers claims of up to £10,000. It does not cover claims for property damage or those in relation to industrial diseases, although more protocols are on their way. Addressing late exchange of evidence, both factual and opinion, is the best thing that could be done to reduce costs and delays for insurers.

Lord Gill, Scotland's most senior judge, is embarking on a 'Woolf-esque' review in Scotland. In England, the Civil Justice Council is understood to be preparing to embark on a review on the CPR and protocols. Therefore, now is the perfect opportunity for each jurisdiction to learn from the other and for insurers and their lawyers to contribute to any change.

Cameron McNaught is a partner, and Ben Marshall a senior solicitor, at DLA Piper Scotland.

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