Tara Davison: New sanction for employment of counsel rules expose lacuna in the law

Tara Davison
Tara Davison

Edinburgh solicitor Tara Davison writes on recent Sheriff Court proceedings exposing a lacuna in the law.

At a recent case in Edinburgh Sheriff Court the pursuer’s agent was called in to address the Sheriff at a pre-issue hearing regarding a motion for sanction of the employment of counsel made at the stage of warranting the Initial Writ where counsel was instructed to prepare a commercial action to enforce an adjudication award.

This action allowed the Court and agents to ventilate their concerns about the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019 that came into force on 29 April 2019 and its subsequent effect on sanction for employment of counsel during the early stages of a claim.

The test for sanction for employment of counsel in the Sheriff Court is well established and the new rules are not ambiguous. The issue relates to there being a lack of clear guidance on the procedure.

There is a clear disconnect in relation to the procedure and specifically the interplay between rules 4.3 and 5.4:

  • Rule 4.3(2) makes clear that no work is to be sanctioned as suitable for the employment of counsel unless in accordance with rule 5.4;
  • Rule 5.4(5) states that any interlocutor for sanctioning proceedings has no effect as regards work carried out by counsel before the date of the interlocutor. At 5.4(6) the court may only sanction particular work already carried out as suitable for the employment of counsel when satisfied that the party applying has shown cause for not having applied for sanction before the work was carried out.

Plainly in the circumstances you cannot apply for sanction for counsel retrospectively without cause shown. The earliest time to motion for sanction of counsel is therefore at the time of the initial writ being warranted; i.e. the first opportunity on cause shown. This is not an attractive prospects for the Court who would be required to dedicate resources towards handling a significant volume of motions.

What does this mean for employment of counsel to give a view as to prospects of success and for drafting proceedings in complex actions?

The new rules appear to give the bizarre outcome of requiring agents to apply for sanction in the circumstances before the action has begun, and in this instance sanction was requested at the stage of warranting the initial writ, as it being the earliest opportunity but also where there is not yet a compelling party to oppose the motion.

Sheriff Holligan considered that Section 108 of the Court Reform (Scotland) Act 2014 offered no assistance in any determination and in examination of the matter came to no concluded view, instead reserving consideration of the pursuer’s motion to be revived at a later date.

In practice there are two unfavourable results of the new legislation:

  1. Granting sanction for counsel at a point which the defending party has not yet been served and the potential unfairness to that party; or
  2. If sanction is not granted at the earliest possible opportunity it appears you are unable to seek sanction for counsel at a later stage which is also an unfavourable outcome.

As the law stands there is no concluded view on the matter and there should either be a determination to clarify the position or an amendment to the rules prescribing the correct procedure.