Faculty warns of hidden danger in civil litigation bill

In written evidence to the Scottish Parliament’s Justice Committee, which is examining the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill, the Faculty said it supported the intention of the bill to improve access to justice by creating a more accessible, affordable and equitable civil justice system.

However, the Faculty had some concerns in relation to particular sections of the bill, including a clause on family law proceedings, and speculative fee agreements (no win, no fee) and damages based agreements or DBAs (the fee calculated as a percentage of any damages won).

“The Faculty notes from the Policy Memorandum and Explanatory Notes to the Bill that Part 1 applies to both speculative fee agreements and DBAs. For the most part, this appears sensible, although it does have one unintended consequence,” stated the Faculty.

“Clause 5 prohibits success fee arrangements, ie both speculative fee agreements and DBAs, in family proceedings. Speculative fee arrangements are currently permitted in family proceedings. They are only used in a small number of cases with very particular circumstances, but where they are used, they are used to good effect, and enable access to specialist representation (and therefore justice), where it might otherwise not be readily available.”

The Faculty agreed that DBAs should not be allowed in family law proceedings, but suggested a rewording of Clause 5 to maintain the status quo that speculative fee agreements were permitted.

Also in relation to DBAs, which are common in the US and which the bill would introduce in Scotland, the Faculty said there was a public interest in the proper regulation of such agreements. Previously, it had raised concerns that the Scottish government was not proposing to regulate claims management companies which DBAs could attract to the Scottish market.

“The Faculty again expresses concern that the draft Bill does not include provision for the regulation of claims management companies,” it said.

The written evidence is here and earlier responses by the Faculty can be seen here and here.