Welcome direction from Sheriff Appeal Court on Qualified One-Way Costs Shifting

The case of Natalie Manley v Thomas McLeese concerned a road traffic accident. As is often the case, the pursuer and defender had different recollections of the circumstances of the accident. Following a hearing of the evidence, a sheriff determined that the accident was the fault of the pursuer, Natalie Manley. The expenses of the action were awarded against her. This was on the basis that the sheriff took the view that she had lied in her evidence about the accident circumstances.

An appeal against the sheriff’s decision was advanced by Ms Manley in relation to both the issue of fault for the accident and the issue of expenses. The Appeal Court did not interfere with the sheriff’s finding that the accident was her fault. The decision, however, provides welcome discussion and clarification on the issue of expenses in such a situation.

The relevant law is Section 8 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 which states that the pursuer in a personal injury action shall be protected from a liability in expenses. Known as ‘Qualified One Way Costs Shifting’, this marked a material change in the law. The worthy aim of the legislation is to promote access to justice for injured individuals and to remove the fear of having to meet defenders’ legal costs if the claim fails. However, that protection is lost if a pursuer (a) acts fraudulently (b) behaves in a way which is manifestly unreasonable or (c) conducts the action in a way that amounts to an abuse of process.

The sheriff had concluded that Ms Manley made a fraudulent representation by lying about the circumstances of the accident. The Appeal Court held that the sheriff had erred in failing to consider all the facts and circumstances before coming to that view. The sheriff had ignored evidence on vehicle damage and independent expert witness opinion which supported Ms Manley’s account of the accident. The sheriff had been critical of Ms Manley’s behaviour directly after the collision. (She swore at the defender and took photos of the vehicle damage.) But the Appeal Court concluded that such conduct was not so unusual after an accident. In summary, the Appeal Court held that the sheriff had no basis to decide that she had acted fraudulently.

In having decided that Ms Manley had lied, the sheriff had held that it naturally followed that she had also ‘behaved in a manner which was manifestly unreasonable’ and ‘conducted the proceedings in a way that amounted to an abuse of process.’ The sheriff had, however, provided no reasons in respect of either of these two grounds and therefore they were now held not to be established.

Accordingly, the Appeal Court overturned the decision of the sheriff insofar as it related to Ms Manley’s liability to pay the defender’s costs.

Case law has been evolving since the coming into force of The 2018 Act. This Appeal Court decision assists lawyers representing both pursuers and defenders in more easily identifying the circumstances where the protection of QOCS is likely to be lost. The guidance in so far as it relates to the extremely common scenario of road accidents with disputed circumstances is most welcome.

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