Pursuer: McConnell; Thompsons

Defenders: Cleland; G. Lindsay, Edinburgh City Council

13 May 2008

[1] On 8 May 2006 the pursuer, who was employed by the defenders as a clerical assistant, was injured at work when a partition fell and struck her on the back. On 5 March 2007 her agents intimated a claim against the defenders. The claim was intimated again on 6 December, and on 23 November the defenders repudiated liability. On 4 December 2007 the pursuer's agents asked the defenders to reconsider their position, but on 7 January 2008 the defenders reiterated their repudiation of liability. On 10 January 2008 a summons was signeted. The sum concluded for was £10,000. The summons was served on the defenders on 23 January. On 7 March defences and a tender were lodged; the tender was for payment of £2,500 with expenses to date in full satisfaction of the conclusions of the summons. That tender was accepted. On 18 April the defenders enrolled a motion under Rule 42.5 of the Rules of Court for modification of the pursuer's expenses to the summary cause scale in the sheriff court, without certification for counsel. That motion called before me on 22 April. I heard detailed submissions on the motion, and it appeared to me that a significant issue of principle arose which merited a written opinion.

[2] The basis for the motion was that the sum accepted by the pursuer in terms of the tender and acceptance was less than the limit of the privative jurisdiction of the sheriff court. The privative jurisdiction of the sheriff court, fixed by section 7 of the Sheriff Courts (Scotland) Act 1907 and section 31 of the Sheriff Courts (Scotland) Act 1971, was set at £1,500 prior to 14 January 2008. On the latter date the Sheriff Courts (Scotland) Act 1971 (Privative Jurisdiction and Summary Cause) Order 2007 (SI 2007 No. 507) came into force. Article 2 of that Order raised the limit of the privative jurisdiction to £5,000. Article 4 of the Order provided that the amendment made by Article 2 should not apply "in relation to any proceedings commenced before 14 January 2008".

[3] The significance of the privative jurisdiction of the Sheriff Court was explained in two cases, McIntosh v British Railways Board, 1990 SC 339, and Coyle v William Fairey Installations Ltd, 1991 SC 16. In the first of these cases the First Division considered a motion that an action should be remitted to the sheriff court. Lord President Hope stated (at 343):

"The privative jurisdiction of the sheriff court is defined by reference to a particular sum of money, so that everyone knows that all causes not exceeding that sum in value must be brought in the sheriff court. All causes exceeding that sum in value may be brought either in the Court of Session or in the sheriff court at the option of the pursuer ....

In this situation the proper approach to [the section permitting a remit] seems to us to be that, except in extreme cases, the fact that the claim is small and straightforward is not enough to justify a remit to the sheriff court. By extreme cases we mean cases where it is obvious from the pleadings, whatever may be the sum sued for, that on no possible view could the pursuer recover more than the upper limit to the privative jurisdiction of the sheriff court. If this is the case, then the action is plainly appropriate for the sheriff court, because it ought not to have been raised in the Court of Session at all. But if the pleadings show that the pursuer could possibly recover more than the upper limit then the action should be regarded as appropriate for the Court of Session unless some other factor is present which shows that the nature of the particular case is such that it is appropriate for it to be dealt with in the sheriff court".

The Lord President then referred to the availability in the Court of Session of jury trial and the optional procedure for reparation actions; these were not available in the sheriff court. He continued (at 344):

"It is not right that litigants should be deprived of these advantages just because their claims are small and simple, so long as they are claims which can competently be made in this court. The smaller and simpler the claim that more force that is in the point, in the general public interest, that they should be dealt with as quickly as possible in the court which is best able to achieve this result. Procedure by way of summary cause in the sheriff court is cheap and simple, but a pursuer under that procedure cannot recover more than the upper limit in value for actions for payment of money, currently £1500 exclusive of interest and expenses. This makes it unsatisfactory for actions of reparation where a pursuer might possibly recover more than that amount, which is no doubt why actions of reparation are not often brought under that procedure".

In relation to expenses, the court's view was as follows (at 345),

"Nothing in what we have said so far is intended to restrict in any way the power of the court to modify an award of expenses to a pursuer at the end of the case. A pursuer who raises his action in the Court of Session and seeks to take advantage of the practices and procedures of this court must take account of the risk that if the sum which he recovers is small he will be confined to expenses on the sheriff court summary cause scale or on the sheriff court ordinary court scale with or without sanction for counsel according to the circumstances ... At this stage, when all the facts are known and all imponderables are out of the way, the court can reflect its view as to whether in the event the sheriff court was the appropriate court for the determination of the case. It does so with the advantage of then knowing the result, which is an advantage not usually enjoyed by the pursuer's advisers at the start of the case. This is a valuable safeguard in the defenders' interest against their being exposed to claims in this court where the awards are trivial in relation to the expenses".

[4] In Coyle v William Fairey Installations Ltd, the question that arose was whether expenses should be modified. The approach taken in McIntosh was followed; the court stated (at 1991 SC 19):

"The proper approach ... is that in respect of actions brought in the Court of Session the court should determine whether the initial choice of that forum was justified in all the circumstances of the case 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 there. The court's judgment on that matter may be assisted by a consideration of events which have occurred subsequent to the date on which the choice was made, including the very important consideration of the result of the case; but the result, particularly if it is one which is achieved by settlement, does not necessarily resolve the issue whether the initial choice of forum was inappropriate on the grounds that the value of the claim was not commensurate with Court of Session expenses. For example, a pursuer might well agree to a settlement at a figure substantially less than that at which a claim had been properly valued, in order to avoid a prolonged period of delay and uncertainty, or because further information had come to light of which the pursuer's advisers were justifiably unaware when the action was commenced".

[5] The result of McIntosh and Coyle is accordingly that, if the sum recovered by the pursuer is small, that is a factor that the court may take into account in determining whether expenses should be awarded on the Court of Session scale or one of the sheriff court scales. The argument for restricting expenses to a sheriff court scale is obviously particularly strong when the sum recovered is below the level of the privative jurisdiction of the sheriff court, because in such a case the action should not normally have been raised in the Court of Session at all. Nevertheless, the level of recovery is not conclusive; if it appears that the sum ultimately recovered was the result of a settlement designed to resolve delay or uncertainty, or because further information had come to light as the action proceeded, it might be appropriate to award expenses at the Court of Session level. Likewise, as pointed out in McIntosh, the court may have regard to specific advantages of Court of Session procedure, notably the existence of jury trial and special procedures available under the Rules of Court for the expeditious disposal of reparation actions. In view of those advantages, it will usually only be in cases where the pursuer falls short of the privative jurisdiction of the sheriff court by a substantial margin that expenses will be modified.

[6] Since McIntosh and Coyle were decided, Chapter 43 of the Rules of Court has come into operation. This has provided significant advantages for litigants in personal injury actions, and it is clear that such cases are now disposed of more quickly and more cheaply and was formerly the case. In view of the advantages of the Chapter 43 procedure, Outer House judges have in recent years been more reluctant than formerly to modify expenses because the pursuer has recovered a small amount. Thus in Wilson v Glasgow City Council, 2004 SLT 1189, Lady Smith refused to modify expenses in two cases where the pursuers accepted tenders of £2,250 and £2,000 respectively. She referred to the advantages of the new procedure and expressed the view that, in view of very clear liability on the part of the defenders, the cases were likely to settle in early course under that procedure. In addition, jury trial might have been appropriate if the cases had not settled. In Benson v City of Edinburgh District Council, 2004 SLT 1227, Judge JG Reid refused to modify expenses in a case where action raised for £25,000 was settled, following acceptance of a tender, for £3,400. He pointed out the advantages of Chapter 43, in particular the requirements of early disclosure, early evaluation of prospects and early valuation of the claim; it was obvious that these considerations were "likely to lead to settlement at a much earlier stage than hitherto was the norm" (paragraph [14]). That in turn meant that the level of expenses was not likely to be particularly high by comparison with the rates of sheriff court expenses (paragraph [16]). Judge Reid further indicated (paragraph [17)) that it was not necessarily inappropriate for a straightforward claim known to have a maximum value of £5,000 to be raised in the Court of Session; such claims were ideally suited to the Chapter 43 procedure, and if it were thought appropriate to keep such cases out of the Court of Session that could be done by raising the privative jurisdiction of the sheriff court.

[7] In Hunt v British Bakeries Ltd, 2005 SCLR 178, the pursuer accepted a tender of £1,450, slightly below the limit of the privative jurisdiction of the sheriff court that was then in force. Lady Smith refused a motion to modify expenses. She pointed out (at paragraph [9]) that, when a case was likely to fall not far outwith the privative jurisdiction, it did not require to be raised in the sheriff court, and did not require to be raised as a summary cause. In addition, it appeared that the action was likely to settle, which meant that the Chapter 43 procedure was important; no cogent argument was advanced to the effect that a similar efficiency and expedition would have been achieved in an ordinary cause in the sheriff court, or that an ordinary cause would have cost less. Lady Smith concluded (at paragraph [12]) by pointing out that the wider issue of whether straightforward, small value personal damages claims should as a matter of principle be litigated in the Court of Session was not addressed. Finally, in Galbraith v First Glasgow (No 1) Ltd, 2006 SLT 317, the pursuer accepted a tender for £2,875. Lord Kinclaven refused a motion to modify expenses. He expressed the view that practice had changed since the era of McIntosh and Coyle; the Chapter 43 procedures were important in achieving the aim of earlier settlements, with the result that there was often a good reason for raising proceedings in the Court of Session. As in Benson and Hunt, it was pointed out that the wider issue of principle as how best to deal with straightforward low value personal injuries cases was not addressed.

[8] Thus the introduction of the Chapter 43 procedure appears to have brought about a change in the practice of the Court; it has become relatively unusual for expenses to be modified even where the damages accepted by a pursuer are relatively modest. That practice has proceeded, however, on the basis that the privative jurisdiction of the sheriff court is £1,500. In Benson Judge Reid expressly referred to the possibility that the privative jurisdiction might be raised if it were thought desirable to keep claims of low value out of the Court of Session. The limit of the privative jurisdiction has now been raised by a substantial margin, to £5,000, under the Sheriff Courts (Scotland) Act 1971 (Privative Jurisdiction and Summary Cause) Order 2007. That Order has also by Article 3 raised the financial limit for summary causes in the sheriff court by a like amount, from £1,500 to £5,000. That means that any claim for an amount less than £5,000 can now be raised as a summary cause.

[9] The latter change is significant. If an action proceeds as a summary cause in the sheriff court, the procedure is informal and expeditious. Rules 8.2 and 8.3 of the Summary Cause Rules 2002 provide that in every defended action a hearing is to be heard on the calling date, at which the sheriff is to ascertain the factual basis for the action and any defence and the legal basis on which the action and defence are to proceed. The sheriff is also directed, by Rule 8.3(2)(b), to seek to negotiate and secure settlement of the action between the parties. If he is unable to do so he must identify and note the issues of fact and law which are in dispute and note any agreed facts. He may further proceed to an immediate hearing on issues of law. On that basis it seems that the Summary Cause Rules are well directed towards securing an agreed settlement at a very early stage of proceedings. Moreover, Chapter 34 of the Summary Cause Rules makes specific provision for actions of damages for personal injury; this part of the Rules has no equivalent in ordinary cause procedure. Chapter 34 provides for a short and simple form of summons and the lodging along with the summons of the pursuer's medical reports and a statement of valuation of claim (Rule 34.2). If the defender wishes to defend the action he must complete and lodge a form of response giving notice of the grounds of fact and law on which he intends to resist the claim, together with a brief statement of the facts upon which he relies. Thus the procedure that is available in personal injury actions under the Summary Cause Rules is designed to identify any issues in dispute at an early stage, to provide a valuation of the claim at an early stage, and to achieve a settlement, if that is possible, at an early stage. Those are precisely the advantages of the Chapter 43 procedure in the Court of Session.

[10] I was also provided with information about the level of fees likely to be incurred in a personal injuries action in the Court of Session and a personal injury claim that proceeds as a summary cause in the sheriff court. It is not necessary to go into the figures in detail; I was satisfied that the level of expenses in a summary cause is substantially less than that found in the Court of Session.

[11] The clear intention underlying the legislation increasing the privative jurisdiction and the financial limit for summary causes is that claims of small value should proceed as summary causes in the sheriff court and not in the Court of Session. In my opinion those changes have important implications for the level of expenses that may be recovered in the Court of Session. It seems to me that the approach to the modification of expenses laid down in McIntosh and Coyle must once again receive full effect. While a judge dealing with a motion for modification of expenses has a discretion, it is a major factor in the exercise of that discretion that the level of damages ultimately awarded or accepted fell significantly below the level of the privative jurisdiction of the sheriff court. That factor is not conclusive for the reasons set out in paragraph [5] above; nevertheless, it seems to me that it is important. Moreover, the financial limit for summary causes has been increased, and in such cases a simple and expeditious procedure is now available under the Summary Cause Rules. In these circumstances I am of opinion that the advantages of the Chapter 43 procedure are unlikely to be material in a case where the award is significantly below the level of the privative jurisdiction. Finally, the increase in the privative jurisdiction is a clear indication that claims for relatively small amounts are not appropriate for jury trial. That is no doubt justified on the basis that a jury trial is a relatively costly and time-consuming procedure, the costs in question comprising not only legal expenses but also the services of members of the public.

[12] For the reasons stated, I am of opinion that since the increase in the privative jurisdiction of the sheriff court the expenses awarded to a pursuer who recovers a sum significantly below the limit of the privative jurisdiction should normally be modified to the summary cause scale without certification for counsel. Exceptions may exist, such as where the pursuer's claim raises an issue of fact or law of some difficulty, or where some unforeseen factor has arisen as the action proceeded, or where it appears that the pursuer has accepted a compromise figure to avoid the delays and uncertainties of litigation. Likewise, if the pursuer does not fall below the level of privative jurisdiction by a significant margin, it can normally be inferred that it was reasonable to raise proceedings in the Court of Session. Because in a summary cause the damages awarded may not exceed £5,000, if there is a realistic possibility that a greater sum might be awarded the choice is between the Court of Session and ordinary cause procedure, and in those circumstances the advantages of the Chapter 43 procedure and the possibility of jury trial may be significant, as accepted in, Wilson, Benson, Hunt and Galbraith.

[13] In the present case, the pursuer has accepted a tender of £2,500. In my opinion that is significantly below the level of the privative jurisdiction, and in the absence of special circumstances I would consider it appropriate to grant the defenders' motion to modify expenses to the summary cause scale without certification for counsel. It was not suggested that the present case was one of particular difficulty, or that the settlement was the result of unforeseen circumstances, or that the pursuer accepted a figure well below what the claim was truly thought to be worth; nor was it suggested that there were any other exceptional circumstances apart from the specialty discussed in the next paragraph. Consequently, were it not for that specialty, I would have granted the defenders' motion.

[14] The specialty is that the present action was raised immediately following the increase in the privative jurisdiction. On 7 January 2008 the defenders repudiated liability for a second time, and three days later, on 10 January, the summons was signeted. The Order increasing the privative jurisdiction had no effect in relation to "any proceedings commenced before 14 January 2008". The present summons was served on 23 January 2008. For the defenders it was submitted that the proceedings in the present case had been "commenced" on that date. That was the usual meaning of the word "commenced", as indicated in Macphail on Sheriff Court Practice, 3rd edition, at paragraph 6.06. By the time when the summons was served the privative jurisdiction had been increased, and thus the pursuer had fallen significantly below the level of the privative jurisdiction that applied to the present case. For the pursuer it was submitted that the critical question was whether it was reasonable to have raised the present action in the Court of Session. That question must be decided at the time when the action was raised. On 10 January 2008, when the summons was signeted, the Order increasing the privative jurisdiction had not come into force, and the privative jurisdiction of the sheriff court was accordingly £1,500. It was clear that the claim was worth more than that; consequently it was reasonable for the pursuer to choose to raise proceedings in the Court of Session.

[15] In my opinion the pursuer is correct in submitting that the reasonableness of any particular form of proceedings must be tested at the date when those proceedings were raised. In the present case, the raising of proceedings involved two stages: the signeting of the summons and its subsequent service. The summons was signeted three days after a second rejection of the pursuer's claim by the defenders. In view of the two rejections of the claim, I am of opinion that it was reasonable to begin an action immediately. The increase in the privative jurisdiction was due to come into effect four days later, with the consequences described above, but it is unrealistic to expect that those responsible for the formal steps of court procedure would have that in mind when they had the summons signeted following the rejection of the pursuer's claim. When the summons was signeted the privative jurisdiction was £1,500. It was not disputed that the pursuer was likely to recover a sum in excess of that amount, and in fact she did so. Consequently summary cause proceedings would not have been appropriate, and the choice was between an action in the Court of Session and a sheriff court action proceeding as an ordinary cause. In those circumstances Court of Session procedure had the advantage of the Chapter 43 procedure; the ordinary cause procedure did not have any equivalent of Chapter 34 of the Sheriff Court Rules or Chapter 43 of the Rules of Court. Jury trial was also a possibility in the Court of Session. In the light of those advantages of Court of Session procedure, it had been recognized in a series of cases, Wilson, Benson, Hunt and Galbraith, that it would usually be reasonable to raise an action in the Court of Session even though the sum recovered might not be greatly in excess of the privative jurisdiction. In those circumstances I am of opinion that it was reasonable for the pursuer's agents to take steps to raise an action in the Court of Session; that was the established law, and that law was still applicable when the summons was signeted.

[16] Once the summons was signeted, the pursuer was committed to proceedings in the Court of Session. In theory the pursuer's agents, noticing that the privative jurisdiction had been increased, might have taken no further steps with the signeted summons and instead raised summary cause proceedings in the sheriff court. That would, however, involve wasting the work that had been done, and it assumes that the significance of the increase in the privative jurisdiction should have been noticed. In all the circumstances it does not seem realistic to expect that Court of Session proceedings should have been terminated after the summons had been signeted. I am accordingly of opinion that it was reasonable for the pursuer's agents to continue with the Court of Session action by serving the summons, notwithstanding the increase in the privative jurisdiction.

[17] The defenders' argument was based on the proposition that an action is "commenced" at the date of service. It seems clear that that is the normal rule; that appears from paragraph 6.06 of Lord Macphail's work on Sheriff Court Practice, and it seems correct in principle, since it is only at service that a defender is convened. It follows that it would have been incompetent to raise an action in the Court of Session concluding for less than £5,000 at the time when the present action was commenced. Nevertheless, the present action was not incompetent, because the conclusion was for more than that amount. The sanction for raising an action for an amount that truly falls below the limit of the privative jurisdiction lies in expenses, or possibly a remit to the sheriff court. In the present case any sanction would have taken the form of modified expenses. For the reasons already stated, I am of opinion that the pursuer's agents acted reasonably in the steps taken to initiate the present action. In those circumstances I decline to exercise the court's jurisdiction to modify the pursuer's expenses. I would emphasize, however, that that decision is made in the very specific circumstances of the present case, which arise out of the increase in the privative jurisdiction. If similar facts were to occur in future, I am of opinion that in the absence of special circumstances it would be appropriate to modify the pursuer's expenses.