With UK personal injury claims inflation running at over 10%, and courts across the country reporting significant backlogs, it is crucial that claims procedures are designed to mitigate cost and streamline the claims journey. Whilst England & Wales are quite far along this path, Scotland has often been considered to be slower to implement change. Here we consider some of the key differences in the jurisdictions and why this ultimately leads to Scottish claims costing more.
The Scotland and England & Wales courts use differing
terminology for key aspects of the claims process. It is
important to highlight some of these at the outset:
Pre-Action Protocols & Fixed Costs
On 28th November 2016 the compulsory pre action protocol (‘CPAP’) was introduced in Scotland, with the aim to limit the volume of claims requiring court intervention. The ‘CPAP’ outlines relevant timescales for both defenders and pursuers to adhere to, providing a transparent and fair process which both sides must follow to try and resolve the claim. Fixed costs are payable under claims which are resolved within the ‘CPAP’ in Scotland, based on a low-cost fixed amount and a sliding scale based on damages recovered. However, if the claim litigates the matter is immediately subject to judicial expenses (based on an hourly rate) which are not fixed.
The changes were mostly welcomed by defenders but given England & Wales introduced similar procedures in the 1990’s (the ‘Woolf Reforms’), Scotland does appear to fall behind when it comes to introducing protocols and legislation to drive efficiencies and costs limitation in claims processes.
In England & Wales the Pre-Action Protocol for Personal Injury Claims relates to all personal injury claims of any value. There are then further protocols which apply fixed costs regimes to both pre and post litigation claims of a value of less than £100,000. Furthermore, motor and casualty claims under £25,000 can be handled through the Claims Portal which sets short deadlines and largely ensures claims are processed efficiently. Scotland is yet to implement such a portal but discussions on the subject are ongoing within the Scottish Government.
In contrast with England & Wales there is no general
requirement in Scotland for defenders to disclose
documentation pre litigation which they intend to rely on if
a court action was issued. Should Defenders wish to obtain
evidence they must make an application to the Court.
This can lead to claims taking years before the Defender
has full sight of the Pursuer’s factual and medical evidence.
Unsurprisingly this generally means that a significant amount
of own legal expenses are incurred before the Defender is
able to properly quantify the Pursuer’s claim, thereby making early settlement unlikely.
Road Traffic Injuries
For many whiplash injuries arising from road traffic incidents in England and Wales (since 31 May 2021), fixed tariff figures apply. No legal costs are generally recoverable for such claims involving symptoms up to 24 months (some exceptions apply). Below are some comparisons showing the difference in damages awards between Scotland and England & Wales.
When expenses are added to the claim value this can lead
to motor claims resulting from Scottish collisions costing
significantly more than similar claims in England & Wales.
Certain heads of claim following fatalities in Scotland are governed by the Damages (Scotland) Act 2011 which provides that anyone with close societal ties to the deceased may claim for “loss of society” and / or “loss of support”. In effect this head of claim can be pursued by a broad class of individuals (i.e. it does not need to be a family member or financial dependent). This can lead to a vast number of claims arising from a single incident e.g. from friends and acquaintances of the deceased.
Comparatively, The Fatal Accidents Act 1976 in England & Wales caps bereavement awards at £15,120 and limits those who can make such a claim to close family members. Costly claims for financial dependency can be pursued in both jurisdictions.
The current discount rate applied to claims for future loss in England & Wales is -0.25%. However, in Scotland it is -0.75%. This leads to high value matters involving future care or loss of earnings claims generally being more costly in Scotland.
Both rates are expected to be reviewed in 2024 and consideration is being paid to implementing a dual rate system.
Qualified One Way Costs Shifting (QOCS)
QOCS was introduced in Scotland on 30th June 2021, over eight years after it was introduced in England & Wales. QOCS largely serves to remove the risk of a pursuer having an expenses order made against them if their personal injury claim fails, therefore providing better access to justice.
Looking at it this from a defender’s perspective however, this means that it is difficult to secure an award of expenses against a pursuer even if the defence to the claim is successful. Given that Scotland does not require the early disclosure of evidence this can lead to defenders spending significant sums dealing with the claim before they are able to accurately quantify it.
There are a number of ways in which a pursuer can lose protection under QOCS e.g. fraudulent representation, failure to beat a defender’s offer, abuse of process. However the experience of QOCS in England & Wales is that it is rare for claimants to lose protection and generally defendants are responsible for meeting their own legal costs in most scenarios, even where successful at trial. Whether Scottish courts are likely to take the same approach is yet to be seen. Recently reported decisions from legal commentators such as Clyde & Co note that the Scottish Courts have thus far been relatively accepting of defender’s arguments that a pursuer should lose protection where suitable evidence is available.
It is too early to say whether QOCS has increased the number of injury claims entering the court system, although this would appear likely. The Scottish Government has thus far published civil litigation statistics up to March 2022 (nine months after the introduction of QOCS) with the only trend noted as being an increased number of claims involving multiple defenders.
What can defenders do to support insurers and solicitors?
Ensuring the early instruction of robust legal representation in Scottish claims is key to limiting claims cost. Where possible claims should be kept within the CPAP with suitable settlement offers made, taking into account the escalation in expenses that will occur should the claim move on to litigation. These offers can later be lodged as formal tenders, providing some expenses protection, should proceedings be issued.
Clearly, given the lack of formal pre-litigation disclosure requirements in Scotland it is critically important for defenders to retain as much evidence as possible and provide this to legal representatives to understand the liability and quantum position at the outset.
Scotland is slowly moving in the right direction to streamline the personal injury claims process and address the balance between defender and pursuer. However, there is still a lot more to be done. Awards and resulting legal costs in Scotland are still generally much higher than in England & Wales, which combined by a lack of disclosure requirements and QOCS protection allows for the protocols and litigation processes to be manipulated thereby generally achieving more favourable outcomes for pursuers.
Over the coming years there will be no doubt further
developments. The extension of fixed costs to litigated claims
and a requirement for earlier disclosure of medical evidence
would have a very significant impact, however it does not currently appear to be a priority for the Scottish Government. For the time being personal injury claims arising in Scotland will continue to be more complex and costly than those resulting from incidents south of the border.
For further information on these issues please contact:
Paul O’Donnell DIP CII
Retail Claims Team
M: +44 (0)7990 075 640