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Cite as: [2004] ScotCS 215

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Benson v. City of Edinburgh District Council [2004] ScotCS 215 (14 September 2004)

OUTER HOUSE, COURT OF SESSION

PD108/04

OPINION OF J. GORDON REID Q.C., F.C.I.Arb.

Sitting as a Temporary Judge

in the cause

MAUREEN BENSON

Pursuer;

against

CITY OF EDINBURGH DISTRICT COUNCIL

Defender:

________________

Pursuer: Blessing; Thompsons,

Defender: Dunlop; Solicitor for City of Edinburgh Council

14 September 2004

[1] In this action, the pursuer seeks decree in terms of a Minute of Tender and Acceptance thereof and certification of two expert witnesses. The defender asserts that expenses should be modified to the Sheriff Court Scale without the sanction of counsel. Certification of the expert witnesses is not opposed.

Nature of the Action
[2] The action was raised in January 2004 under the new Court of Session Rules relating to personal injuries (Chapter 43) which came into force in 2003. The pursuer sued for £25,000 and settled at £3,400 on 2^nd July 2004 when the Tender was accepted. The pursuer averred that when alighting from a bus in the dark, she stepped into a hole or depression in the road surface, fell and was injured. She twisted her ankle, suffering a Weber A fracture, required physiotherapy and was absent from work for about three months.

[3] The defect in the road surface was said to be a reportable defect in terms of certain Codes of Practice. Her case, in summary, was that the defect was present for at least twelve months before the accident and ought to have been discovered and remedied by an adequate and properly executed system of inspection and maintenance. The defence was that the system in operation accorded with the practice of other local authorities. There was no plea of contributory negligence.

[4] In the course of procedure under the new rules, the pursuer valued her claim at £5,200 of which £4,500 was attributed to solatium. The defender's valuation was £3400.

Submissions
[5] In support of his motion to modify expenses, Mr Dunlop submitted that the action was straightforward; when raised the pursuer's solicitors must have been aware, having regard to the medical report in their possession that the value of the claim would never exceed £5,000. The fact that there were new rules in the Court of Session was irrelevant. New rules were introduced in the Sheriff Court in 1993 and this did not affect the position. He sought to compare the legal expenses generally awarded in the Sheriff Court and the Court of Session at various stages between raising the action and proof or settlement. He referred to McIntosh v British Railways Board 1990 SC 338 at 343 and 345, Coyle v William Fairey Installations Ltd 1991 SC 16 at 19, Wilson v Glasgow City Council, and Gould v Glasgow City Council 11/3/04 (unreported), Lady Smith, DTZ Debenham Thorpe v I Henderson Transport Services 1995 SC 282 at 285H, and Gillespie v Fitzpatrick 2003 SLT 999.
[6] Mr Blessing for the pursuer submitted that there was a complication in relation to the expert evidence on the merits; documents had to be recovered by commission and diligence. Under the new Court of Session rules, parties are forced to address the issues at an earlier stage. Experience thus far suggests that cases settle at an earlier stage than under the old regime. This was a factor which the pursuer's solicitors were entitled to take into account when considering where to raise the action. The current Sheriff Court rules were more akin to ordinary action procedure in the Court of Session and the procedure does not run as smoothly as the Sheriff Court rules might suggest. It was difficult to compare like with like when contrasting Court of Session fees and expenses with those in the Sheriff Court. Mr Blessing relied on Wilson and Gould which he said were less complex cases.

Discussion
[7] The Court is entitled to modify expenses as it "thinks fit" (RC 42.5). The discretion is thus very broad. Modification is frequently granted to mark the court's disapproval of some aspect of the conduct of the successful party.

[8] Litigation is an expensive exercise. It is notorious that small value claims sometimes cost more to pursue or defend than the value of the claim. That is why most small value claims are settled. Small value claims may be complex; they may be straightforward but may take several days to prove if evidence cannot be agreed. In the present case, the pursuer lodged an eight page technical report by an engineer relating to the defect in the road; it included photographs; the elaborate pleadings referred to Codes of Practice; the defenders referred to the practice of other local authorities. Had this case proceeded to proof on all issues it could easily have lasted several days in the Court of Session. It is doubtful whether this case can be described as simple and straightforward in the sense discussed in the cases referred to below, even although the basic facts of the accident can be simply stated. It would not be suitable for the summary cause court and the "ordinary" sheriff court procedure does not appear to have any particular advantages which would enable a claim such as this to be speedily and economically resolved. It is therefore not immediately obvious why expenses should be modified on the basis that it would have been appropriate to litigate this action in the sheriff court.

[9] In McIntosh, the pursuer raised an action of damages under the optional procedure in the Court of Session. He sued for £3,000; the claim was straightforward; the injuries minor, and it was not obvious that he would recover more than £1500 (the limit of privative jurisdiction in the sheriff court). The defender sought a remit to the local sheriff court under section 14 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985; the test under section 14 is, where the action could have been competently raised in the sheriff court, whether "the nature of the action makes it appropriate to do so". McIntosh raised a point of general importance in relation to the proper interpretation of section 14. It was not directly concerned with the modification of expenses. However, four observations of the Court are of relevance. The first is that the Court accepted that there was force in the point that actions should not be raised in the Court of Session where the costs of litigation are likely to be out of proportion to the sum likely to be awarded (at 343). The second is that as a general rule, it is cheaper to litigate in the sheriff court (at 344). The third is that practical or procedural advantages in adopting one forum rather than another are matters which a litigant may properly take into account in choosing the court in which to raise his action (at 344). The fourth is that the Court's opinion on section 14 was not intended to restrict the power of the court to modify an award of expenses to a pursuer at the end of the case; a pursuer taking advantage of the practices and procedure of the Court of Session must take account of the risk that if the sum recovered is small he will be confined to sheriff court expenses; this was said to be a valuable safeguard against a defender being exposed to claims in the Court of Session where the awards are "trivial" in relation to the expenses (at 345). By the use of the word "trivial" I take the Court to be applying the ordinary meaning of that word namely, of small value, trifling or of no significance.

[10] In Coyle, the Division emphasised that the amount of a settlement was a relevant factor in determining the question of modification but noted that it was not the only criterion (page 18) and that it was necessary to consider all the circumstances known to the pursuer's advisers when the action was raised having regard to the high level of costs likely to be incurred by bringing an action in the Court of Session (page 20). In Coyle the Court considered that the estimated value of the claim on full liability at about £5000 was too high; the Court also disagreed with the submission that the case was of some complexity (page 19-20). The Court's reasoning appears to proceed on the basis that it was for the pursuer to justify an entitlement to Court of Session expenses (see pages 19-20). This was perhaps because the sum at which the case settled was within the privative jurisdiction of the sheriff court albeit at the very limit of its jurisdiction. The present case was settled at a sum which is more than double the present limit. In these circumstances, particularly if the various factors for and against pursuing an action in the Court of Session are finely balanced, it seems to me that it is for a defender to show why raising the action in the Court of Session was inappropriate.

[11] DTZ Debenham Thorpe was cited to show the operation of the Ordinary Cause Rules 1993 in the sheriff court. The appeal concerned the sheriff's dismissal of an action because the record had been lodged late. The Court refused the appeal, observing that the purpose of the 1993 Rules was to introduce a new procedure for securing the expeditious progress of defended causes in the sheriff court (at 285H-286C). However, there are a number of significant differences between these sheriff court rules and the new rules for personal injury actions in the Court of Session. The Court of Session rules provide, for example, for early disclosure of each side's valuation of the claim. The philosophy of "cards on the table" at an early stage rather than "trial by ambush", which is often what happens in ordinary procedure, is carried into effect at least in part by rule 43.6(1) which, in combination with Practice Note No 2 of 2003, requires the pursuer and defender each to lodge a statement of valuation of claim 8 and 16 weeks respectively from the date of lodging defences. There are no equivalent provisions in the sheriff court. This is a significant provision which experience has shown has encouraged the early settlement of claims, particularly small claims of which this case, Wilson and Gould are examples.

[12] In Gillespie an action of damages was raised under the optional procedure in the Court of Session arising out of a road accident. There had been a pre-litigation admission of liability and pre-action correspondence showed that the claim was valued by the pursuer's solicitors at about £3,500. The case was straightforward on the merits and on quantum. The first issue before the Court was whether a tender in the sum of £3,000 had been accepted. The Lord Ordinary held that it had. The second issue was the appropriate level of expenses. The Lord Ordinary noted that it was not the intention behind the optional procedure that cases of low value, straightforward in their nature and wholly suited to the sheriff court should be brought in the Court of Session and thereby expose the defender to liability for Court of Session expenses; it was also noted in particular that there were no suggested procedural advantages in the Court of Session optional procedure (1001J-K. The result was that expenses were awarded on the sheriff court scale without sanction of counsel. The reclaiming motion referred to in the report does not appear to have proceeded. While I agree with the decision and reasoning in Gillespie, it seems to me that there are now considerable noteworthy procedural advantages in the new rules for actions relating to personal injuries when compared with procedure in the sheriff court.

[13] Wilson was a slipping/tripping case raised under the new Court of Session procedure. The pursuer valued the claim at about £3800 and the defender valued it at about £2,000. A tender of £2,250, lodged with the defender's statement of valuation of claim, was accepted. Gould was minor accident at work case. The pursuer's Statement of Valuation of Claim was in the sum of about £2,590 while the defender's was in the sum of about £1750. The defender tendered £2000 about a fortnight before lodging the Statement of Valuation of Claim and the pursuer accepted it about six weeks later. The issue before the Court in each case was whether expenses should be modified to the sheriff court ordinary scale. The Court proceeded on the agreed basis that both cases were straightforward in nature and of modest value. Lady Smith observed that the reason why expenses in such cases had hitherto been modified was that they were suitable for the practices and procedures of the sheriff court and that the cost of litigating there was likely to be cheaper than the Court of Session. She pointed out, correctly in my view, that practice has changed "since the era of McIntosh and Coyle". Lady Smith also pointed out that the fact that a case was straightforward did not give rise to the inference that it would be significantly cheaper to raise it in the sheriff court. The defender's counsel, unlike the present case, did not suggest otherwise. Indeed, the Court accepted the submission that the genuine assessment of the pursuer's solicitors at the outset was that the cost of litigating the claims in the Court of Session would be less than the sheriff court. Lady Smith concluded that the nature of the claims before her was such that it was highly likely that the claims would settle in early course under the new procedure. Her Ladyship also considered that the simplicity of the claims would enable the pursuers to insist in jury trials if so advised.

[14] None of the authorities cited to me requires me to modify the expenses sought by the pursuer. The most relevant decision is Wilson and Gould where the effect of the new Chapter 43 of the Rules of the Court of Session was discussed. Their effect, as Lady Smith describes, is significant. They encourage the "cards on the table" approach, early disclosure, early evaluation of prospects and early valuation of the claim. It is obvious that these considerations are likely to lead to settlement at a much earlier stage than hitherto was the norm. Sterile legal debates are discouraged; adjustment and calling before the court are kept to a minimum. The period between the lodging of the required Statements of Valuation of Claim, tenders and settlement in Wilson and Gould and indeed in this case is striking. It seems reasonable to assume that, in general, the shorter the period between the raising of a personal injury action and the settlement of the claim, the more likely it will be that expenses will ultimately be significantly less than if the case is allowed to drag on procedurally without either party properly focusing on the issues. It seems to me entirely reasonable for a pursuer in a straightforward claim of modest value to take these matters into account when choosing his forum. It seems to me to be unjust to penalise a pursuer or his solicitor for achieving an early settlement in the Court of Session where the Rules are designed to achieve speedy and economic resolution to personal injury claims.

[15] I am not satisfied that the award or settlement sum in this case is trivial in relation to the expenses. No estimate was given as to what either party's expenses were likely to be. I was provided with a sheet which tabulated some general rates for solicitor's fees in the Court of Session and the sheriff court. I am not satisfied that they are truly comparable (except perhaps in relation to court dues where it is plain that Court of Session dues on signeting etc and for time occupied in Court are significantly greater than the sheriff court). It therefore cannot be said that the award in this case is or is likely to be "trivial in relation to expenses". That might have been the case had a proof or jury trial taken place. As noted in Coyle the result of the case is a very important consideration. In my view the result of the case does not assist the defender as they have not established that the award is trivial in relation to the expenses, or putting it the other way, that the expenses are out of proportion to the damages.

[16] In choosing the Court of Session, the pursuer selected a procedure which was designed to encourage speedy and economic resolution of her claim. That seems to me to be materially different from the argument rejected by the Court in Coyle which proceeded upon the basis of the "high level of costs likely to be incurred by bringing an action" in the Court of Session (at 1991 SC 16 at 19). As I have indicated, it has not been established before me that the costs of this action are at a high level compared to what they would have been had the action been raised in the sheriff court and settled at some unspecified date after unspecified procedure had occurred. I cannot therefore accept that, on the ground of costs, the sheriff court was necessarily the appropriate court in which to raise the action. I do not consider that the pursuer and her advisers can be justifiably criticised for raising this action in the Court of Session rather than the Sheriff Court.

[17] Moreover, I do not consider that it necessarily follows that it is inappropriate for a straightforward claim which at the raising of the action is known to have a maximum value of £5,000 to be raised in the Court of Session. It could equally be argued that Chapter 43 of the Rules of Court makes such claims ideally suited to the new rules. The actions will generally be dealt with administratively and may not come before a judge sitting in Court at all. To those who argue that such a view will encourage or further encourage low value claims which are beneath the dignity of the Supreme Courts of Scotland to consider, it should be noted that the Court of Session deals with many and varied simple and low value claims. Some applications for judicial review are straightforward and objectively have a low value, yet they can only be dealt with in the Court of Session. Straightforward actions for payment under £10,000 are frequently pursued in the Court of Session. Moreover, it would be very easy to raise, by statutory instrument, the level of privative jurisdiction of the sheriff court to say £25,000 or some other figure. That has not been done.

Result
[18] I shall grant the pursuer's motion for decree in terms of the Minute of Tender and its acceptance, for certification of the witnesses specified in the motion and for expenses. I shall refuse the defender's motion for modification of those expenses.