PERSONAL INJURY: MAINLY CLAIMANT: An Introduction to Scotland

Chambers UK 2023: Practice Area Overview - Scotland: Personal Injury: Mainly Claimant

Access to justice to ensure that clients receive the compensation that they are entitled to is a key consideration for those who pursue claims for damages for personal injury on behalf of claimants.

A number of reforms recommended almost a decade ago in the Taylor Review were intended to increase access to justice and the much-anticipated provisions giving effect to Qualified One Way Cost Shifting (QOCS) came into effect in June last year. The provisions only apply to personal injury actions and allow the pursuer (claimant) to benefit from QOCS, provided they conduct civil proceedings in “an appropriate manner”. This means that, if their claim is unsuccessful, they are protected from meeting the expenses (costs) of the other side. That protection can only be removed in limited circumstances, for example if the pursuer or their legal representative makes a fraudulent representation or acts in a way that is “manifestly unreasonable” in connection with the claim or proceedings.

Although personal injury practitioners in Scotland have been watching the development of the case law south of the border on the dis-application of QOCS with interest, it remains to be seen to what extent guidance can be drawn from the decisions of the English courts. This is because the relevant English provision states that QOCS will not apply where the claimant has demonstrated “fundamental dishonesty”. Much of the case law has focused on what this means, but the Scottish provisions make no mention of that concept. So, it will be interesting to see how the Scottish courts deal with the exceptions to QOCS and, in particular, the types of behaviour that will be considered “manifestly unreasonable”. As yet, there has been no reported judicial consideration of the QOCS provisions in Scotland, but we are bound to see some discussion of the provisions and exceptions as actions progress through the courts over the next 12 months.

Before the introduction of QOCS in Scotland, there was much discussion among insurers and their legal advisers about the likelihood of QOCS leading to a significant increase in personal injury litigation, but there has yet to be any evidence of this. In general, there has been a long-term downward trend in cases raised in the Scottish civil courts over the past decade, and according to the latest civil justice statistics in Scotland for the year to April 2021 published earlier this year, the total number of civil cases initiated decreased by just over 40% on the previous year. The number of personal injury cases initiated was down by 21%, which was not as significant as the reduction in other types of action. That said, these figures clearly will not reflect any change in behaviour resulting from the introduction of QOCS given that they cover the period before that, and there is no doubt that restrictions during the pandemic will have had an effect on personal injury claims, as they did on litigation generally, which is reflected in the figures for the year to April 2021.

Another measure designed to increase access to justice was the introduction of the first and, so far the only, specialist court in Scotland, the All-Scotland Personal Injury Court (ASPIC) in Edinburgh. That court has jurisdiction to hear cases from across the country and has been dealing with business since September 2015. Perhaps one measure of the success of having a specialist court is the fact that in the year to April 2021, the court dealt with 43% of all personal injury cases raised in Scotland. Of course, this is in part down to the change in the privative jurisdiction of the sheriff courts, also introduced in 2015, which resulted in claims for up to £100,000 being dealt at sheriff court level, whereas previously any claim over £5,000 could be raised in the Court of Session or the sheriff court, and the Court of Session was often the court of choice for personal injury actions.

We litigate regularly in ASPIC and, overall, our experience has been reasonably positive. In the main, cases are dealt with by sheriffs who have built up specialist knowledge of personal injury claims and we are beginning to see a degree of consistency in approach emerging, which is helpful in assessing prospects of success and advising clients.

Claims arising from road traffic accidents remain the main basis for personal injury actions, with just under 50% of those actions raised in the year to April 2021 arising from such accidents. Many result in complex claims for damages with multiple heads of claim, including those for future losses, which are usually calculated by reference to the discount rate. For over a decade, the discount rate in England and Wales and in Scotland was 2.5%. Traditionally, the rate was calculated on the assumption that investment would be made in index-linked gilts. However, more recently, when savings and investments, particularly those like index-linked gilts, have failed to give a reasonable rate of return, the discount rate of 2.5% led to unfairness as claimants were often under-compensated.

Following a review, the discount rate in England and Wales was fixed at −0.25% from October 2019, whereas it is −0.75% in Scotland. The difference in rates, which is down to several factors, provoked speculation, much of it from insurers and those representing them, about the prospect that compensators would face paying higher levels of compensation in Scotland. It was also suggested that this would lead claimants who had sustained serious injuries to “forum shop” and choose to bring proceedings in Scotland rather than in England to take advantage of the lower discount rate. This has certainly not been reflected in our experience and the suggestion seems to have been largely based on a lack of understanding of the basic rules of jurisdiction governing the courts’ ability to deal with cases.

The discount rate provisions on both sides of the border include a requirement that the rate is reviewed no later than 5 years after being fixed and the Scottish Ministers also have the power to prompt an earlier review. With the current economic climate, we would not be surprised if a further review of the discount rate is called for and, from a claimants’ perspective, this is important if the current recession is not to lead to under-compensation.

A development that could arguably be seen to have increased access to justice was the introduction of the Scottish Government’s statutory Redress Scheme in December 2021. The Scheme allows those who suffered abuse (whether sexual, physical, emotional or through neglect) as a child under 18 in a relevant care setting to claim a redress payment without having to establish negligence, which would be necessary for a successful civil claim for damages.

The scheme is intended as an alternative to claiming damages through the civil courts. However, the interaction between the right to claim a redress payment and the right to pursue a civil claim is often not straightforward, so it is particularly important that claimants are fully advised of their rights. That is because the redress scheme includes a waiver provision, which was controversial when the legislation introducing the scheme made its way through the Scottish parliament. Claimants accepting a redress payment must waive their right to make a civil claim for damages against any of the organisations that have contributed to the scheme. Deciding which route to pursue can be challenging, particularly as the law on historic abuse claims is still developing following the introduction of the Limitation (Childhood Abuse) (Scotland) Act 2017, which removed the 3-year limitation period for claims made by those who suffered historic childhood abuse. Questions around who had responsibility for the institution where the abuse took place; the employment status of the abuser(s); and whether the survivor suffered abuse in more than one institution all require to be carefully considered and investigated.

A legacy of the pandemic is the use of remote online hearings. Until 2020, these were not a common feature of civil proceedings in Scotland, but online hearings were essential to ensure access to justice continued over the following 18 months. However, there was concern among practitioners at the suggestion that remote hearings were to become the default in many civil actions. Fortunately, the courts have recently announced that, although remote hearings will continue for procedural matters, hearings requiring evidence will be held in person. This is definitely a better way forward as hearing a witness’s evidence in person is almost always more effective than the online alternative.