PERSONAL INJURY: MAINLY CLAIMANT: An Introduction to Scotland

Claim Volume and Forum Choice in Scottish Personal Injury Cases

The latest civil justice statistics published by the Scottish government in April this year and covering the year 2022–23 suggest that the general downward trend in cases raised is continuing. While the latest figures show a gradual recovery following the drop in litigation caused by the pandemic, the figures for the last two years are still nowhere near pre-pandemic level.

The latest figures also show a drop in some areas of personal injury litigation, particularly in relation to claims following accidents at work, asbestos-related claims and clinical negligence cases. It is too early to say if this is a trend that is likely to continue.

The All-Scotland Specialist Personal Injury Court, which is based in Edinburgh and has jurisdiction over the whole of Scotland, continues to be a popular forum, with just under half of all personal injury actions raised in 2022–23 initiated there. This underlines the benefits of having a specialist court with sheriffs who are familiar with the particular challenges and issues in personal injury actions.

It is worth noting that only 6% of all personal injury actions raised in 2022–23 were raised in the Court of Session, Scotland’s highest civil court, demonstrating the significant change brought about by the reforms of 2016 when, among other changes, the threshold for claims that could be raised in the Court of Session was increased from GBP5,000 to GBP100,000. This, plus the introduction of the specialist court, has seen the number of personal injury cases in the Court of Session diminish significantly.

Procedural Innovation in Scottish Courts

The Scottish courts continue to introduce welcome innovations in the processing of civil actions. The pandemic saw the introduction of provisions allowing documents to be signed and submitted to court electronically (previously hard copies and “wet” signatures were required in most cases) and online hearings, which were previously not an option.

Virtual court hearings have now become an everyday part of practice, and the courts continue to move towards a more comprehensive system for submitting documents online with the extension of their platform, Civil Online. This was originally used only for Simple Procedure cases (and personal injury claims cannot yet be made through that procedure) but is now being extended to other types of action.

Assessing Solatium: New Guidelines and an Updated Personal Injury Discount Rate

A significant development in personal injury claims has been the publication of the 17^th Edition of the Judicial College Guidelines in April 2024. The Guidelines are based on awards of damages (compensation) in English cases, but they are used by practitioners in Scotland and by the Scottish courts to assess the amount of solatium (broadly, the compensation for pain and suffering) to be awarded. The Guidelines provide brackets of awards, depending on various factors such as the duration of the injury and its long-term effects on the pursuer. The previous edition was only issued two years ago, but the latest edition recognises the significant effect of inflation over the period between the drafting of each set of Guidelines and incorporates an increase of 22% in the value of injury claims. The introduction specifically confirms that further increases on the figures should be applied by practitioners to ensure that these remain up to date, which is helpful from the perspective of pursuers’ solicitors.

Another development that will affect the value of damages recovered is the review of the way in which the Personal Injury Discount Rate (PIDR) is calculated in Scotland. The outcome of the review is due to be announced in the autumn of 2024 and practitioners are keen to find out whether the rate will be altered from the current -0.75% rate.

The Government Actuary’s Department (GAD) recommended in March 2024 that some changes be made to the current methodology for setting the PIDR. These included a recommendation that the inflation index used be changed from the Retail Prices Index to the Average Weekly Earnings Index. This recommendation was made on the basis that the AWE better reflects inflation related to earnings and care costs, which are often relevant to personal injury claims.

The current adjustment for tax and investment costs is -0.75% and the GAD recommended an updated figure of -1.25% on the basis that changes in investment yields and tax rates have increased the financial burden on pursuers.

Finally, the GAD recommended increasing the investment period from 30 years to 43 years to align with other jurisdictions in the UK.

The concern for those acting for pursuers is that assessment of the various factors could result in a less advantageous PIDR, leading to lower awards for future costs and the prospect of pursuers being under-compensated.

Qualified One-Way Costs Shifting

Qualified one-way costs shifting (QOCS) has now been in place in personal injury actions for three years and a requirement of the legislation introducing this measure was that the operation of QOCS should be reviewed by the Scottish Ministers, as soon as practicable after June 2023. The Scottish ministers are then to produce a report for the Scottish Parliament, addressing the effect of QOCS on access to justice and the administration of the Scottish courts. It is understood that the Scottish government is preparing for this review, which is likely to involve consultation with interested parties. Our experience is that QOCS is working effectively in the Scottish courts and providing the intended protection for unsuccessful pursuers in personal injury actions against awards of expenses (costs). However, where a pursuer’s behaviour has been unreasonable and meets the criteria set out in the relevant provisions, the courts are prepared to remove the protection of QOCS, leaving the pursuer to meet their opponent’s expenses.

Periodical Payment Orders

An area where progress is yet to be made is the introduction of the rules necessary to give effect to a new regime for periodical payment orders (PPOs). In most cases, compensation is paid to the pursuer in a lump sum, but this can lead to a risk that the pursuer is either under or over-compensated given the challenges in predicting life expectancy and future needs accurately.

A periodical payment order allows the pursuer to receive compensation in regular payments for as long as required. However, currently, both sides must agree to this arrangement. Under the new regime, the court will be required to consider regular payments in every case and must have “special regard to the pursuer's needs and preferences", although, where appropriate, lump sum payments could still be made. It is a matter of regret that, five years after the relevant legislation was passed, the provisions relating to PPOs have still not been brought into force.

The Scottish Law Commission’s Much Anticipated Report on Damages

Finally, it is anticipated that the Scottish Law Commission (SLC)’s report on aspects of the law of damages will be issued by the end of 2024. The original discussion paper sought views on several areas, includingthe law relating to damages for services, provisional damages and asbestos-related disease claims, and management of children’s awards of damages. The idea was to explore whether reform is needed to reflect socio-legal changes. For example, one of the issues raised is whether claims for services should continue to be restricted to “relatives”. It remains to be seen what changes the SLC might recommend and how these may impact on personal injury practice.