Frances Lombardi

This case serves as a reminder of how the court evaluates the actions of both parties when awarding expenses.

What are judicial expenses?

Judicial expenses, often referred to simply as “expenses,” are the costs incurred by a party proceeding with court action. Expenses typically include solicitor’s fees, court fees, Counsel’s fees, and other related costs (for example, expert reports) incurred while pursuing or defending a litigation.

The court’s role in judicial expenses

The court has an inherent discretion when it comes to awarding expenses. If the court decides to make an award, it can determine the following:

1. Who is responsible for the expenses (i.e., which party should pay);
2. On what basis the expenses will be calculated; and
3. What level of expenses should be awarded.

Unless the expenses are agreed by parties or are summarily assessed, the court may fix a diet of taxation to determine the appropriate level of expenses. This process involves an Auditor of the Court reviewing an account prepared by each party and applying a prescribed table of fees to determine the recoverability. The Auditor can also restrict or write off time included in the account. It is unusual for a party to recover all their legal costs. 

General rule of awarding expenses

Generally, expenses are typically awarded to the successful party in litigation. In theory, the unsuccessful party should bear the costs incurred by the successful party. However, judicial expenses are not automatically awarded, and the court has discretion in deciding whether and how to award them. The court will also consider whether the conduct of the successful party has contributed to court action or caused unnecessary delays or costs.

Case background

In the appeal by Smaira Bilal Saleem in the cause Euro Parks Limited v Smaira Bilal Saleem, the respondent, Euro Parks Limited, a car park operator, brought an action against Smaira Bilal Saleem, the owner of a car that had been repeatedly left in a Euro Parks car park. A total of 49 fixed penalty charge tickets had been issued for the vehicle. Euro Parks raised an action against Ms Saleem for £6,370 in unpaid parking charges.

The case was defended and proceeded to a diet of Proof. At the hearing, it was revealed that the car was actually being parked by Ms Saleem’s son, not Ms Saleem herself. This crucial detail had not been disclosed in any of the pre-action correspondence. Upon learning this, Euro Parks no longer sought decree against Ms Saleem for unpaid charges. Despite this, the sheriff awarded expenses in favour of Euro Parks on account of Ms Saleem’s conduct of the case.

Ms Saleem appealed the decision, arguing that the sheriff had erred by failing to award expenses to the successful party (Ms Saleem).

Court’s decision

Sheriff Principal Murphy allowed the appeal, but only to the extent that the original decision was modified. The sheriff did not award expenses in favour of Ms Saleem but made an award of no expenses to either party. Whilst acknowledging that Ms Saleem’s failure to identify the actual driver of the car had caused unnecessary expense and wasted court time, the sheriff also noted that Euro Parks could have acted before the debt had accumulated to the extent that it did.

Lessons learnt

This case emphasises several key points:

1. The general rule is “Expenses follow success”;
2. Even if you are the successful party in litigation, the court has judicial discretion to depart from the status quo;
3. The court may deny an award pf expenses to the successful party if their behaviour before the action, or the procedure followed, was irregular or unnecessary.
4. A party who unreasonably initiates or prolongs a case may be required to pay the unsuccessful party’s expenses.
5. It is unusual for a decision which relates purely to expenses to be appealed.

Frances Lombardi is a senior solicitor at Harper Macleod