Man who accepted pre-litigation settlement offer five days before proof ordered to pay defender’s expenses

About this case:

• Citation:
  [2023] SC EDIN 31
• Judgment:
  External link
• Court:
  Sheriff Court
• Judge:
  Sheriff K J Campbell

Pursuer John Carty, who was involved in an accident in May 2021, had raised a claim against Churchill Insurance Co Ltd, whose insured admitted liability for the accident. The defender argued that it was manifestly unreasonable for the pursuer to raise an action and subsequently accept the pre-litigation offer.

The case was heard by Sheriff Kenneth Campbell in the All-Scotland Sheriff Personal Injury Court. Petre, solicitor, appeared for the pursuer and Brotherhood, solicitor, for the defender.

Abuse of process

The pursuer issued a letter of claim on 21 June 2021. The defender agreed to deal with the case under the compulsory pre-action protocol and made an offer of £3,700 on 8 April 2022. This was rejected on 20 April 2022 and a counter-offer of £10,000 was made. A warrant to serve was issued in May 2022, and a court timetabled followed.

A tender, for the pre-litigation offer amount of £3,700, was lodged and intimated on 10 August 2022. Following lengthy correspondence between the parties and repeated occasions on which the pursuer’s agents missed dates on the court timetable, the tender was accepted on 4 May 2023.

For the defender it was submitted that the pursuer’s conduct of the case was manifestly unreasonable and an abuse of process. In esto positions in which the pursuer was found entitled to expenses, they should be modified by 75 per cent or without a qualified one-way cost shifting qualification 50 per cent due to the conduct of the case.

The solicitor for the pursuer explained the failures as due to a period of ill health on her part and due to her firm dissolving, leaving her to deal with all of her partner’s cases. None of the criteria for manifestly unreasonable conduct was made out, there being no issues of bad faith, fraud, or ulterior motive. The pre-litigation offer of £3700 had been rejected because case-law suggested a valuation of £8,000, but when the offer was accepted the proceedings had become so protracted that the pursuer chose to accept it to be done with the action.

Unsatisfactory management

In his decision, Sheriff Campbell said of the test for unreasonableness: “The pursuer’s agent took issue with some elements of the chronology, but not with most of it, nor with the overall picture. On any view, that overall picture is of unsatisfactory management of the action by the pursuer’s agents. There was an apparent failure to respond to correspondence from the defender’s agents, either in a timely fashion or at all, and a persistent failure to adhere to dates in the court timetable once the action was raised.”

He continued: “No doubt the dissolution of the firm and the re-allocation of business was a busy and a stressful time. However, practitioners’ obligations to their clients and to the court are not in any way diluted by such pressures. The onus is on the practitioner to make appropriate mitigations, and how they do so will depend on the nature of the circumstance faced at the time.”

Addressing whether to disapply QOCS, the sheriff said: “I am not satisfied that the explanation offered entitles the court to overlook the persistent failures to comply with the timetable or to engage in a timely fashion with the defender’s agents. The operation of all court process depends on the due observance of the procedural framework and that is especially so in a case-flow managed court such as ASSPIC, which relies in part on appropriate engagement with the process by agents.”

He concluded: “The integrity of the process and the effective management of the cases before it depends on that. I am accordingly satisfied that the conduct of the pursuer’s agents in the management of the action was manifestly unreasonable. I will therefore grant the part of the defender’s motion which invites the court to disapply QOCS and seeks an award of expenses.”

The defender was therefore found entitled to the expenses of the action.