Motion to cap expenses in action seeking to establish possibility of indyref2 without UK consent refused

Martin Keatings argued that it was appropriate and necessary to grant a PEO restricting his liability in expenses to the defenders, the Advocate General for Scotland, the Lord Advocate, and the Scottish Ministers, to the sum of £5,000 and capping the defenders’ liability to £30,000 each.

The motion was heard by Lady Poole.

Five criteria

The pursuer, the convener of the Forward as One campaign group, brought the motion at common law to seek declarator that the Scottish Parliament has power to legislate for the holding of a referendum on whether Scotland should be an independent country, without requiring the consent of the UK government or any further amendment of the Scotland Act 1998. Legal costs for the pursuer’s motion were raised via crowdfunding.

The motion required the pursuer to establish five criteria in order to be successful: that the issues raised were of general public importance; the public interest required that those issues should be resolved; the applicant had no private interest in the outcome of the case; it was fair and just to make the order having regard to the financial resources of the parties; and that the applicant would probably discontinue the proceedings if the order was not made and would be acting reasonably in doing so.

An additional condition, that the application had a real prospect of success, was found to be present by Lady Poole, who found it “unnecessary and undesirable” to explain further why this was the case, given that the threshold of a “real” prospect of success was not especially high.

The first defender argued that if the court was minded to grant a PEO, the first defender’s maximum liability in expenses to the pursuer should also be restricted to£5,000, so both parties were on an equal footing. The second and third defenders submitted that, if an order was granted, there should be a cumulative cap of £30,000 covering both the second and third defenders, since they were not being separately represented.

Significant funding

In her opinion, Lady Poole addressed each of the five criteria in turn. Of the first criteria she said: “Although disputed by the first defender, I am satisfied the issue of whether or not the Scottish Parliament has power to legislate for the holding of a referendum on whether Scotland should be an independent country, without requiring the consent of the UK government or any further amendment of the Scotland Act 1998, raises an issue of general public importance.”

Of the second criterion, she said: “I am not satisfied that the second criterion is met, because the public interest does not require the issue of general public importance to be resolved in these proceedings. There are other ways to resolve the issues raised. Separately, having regard to the legal tests which must be applied to determine issues of legislative competence, these proceedings are not the appropriate forum to determine the issue of general public importance.”

Regarding the third criterion, she said, noting the pursuer’s previous efforts to campaign for Scottish independence: “Previous PEO cases tend to focus on private interest in the form of financial interest, rather than private interest in a wider sense, and that is the approach I also take in this case.” 

She continued: “I consider that the pursuer has an indirect financial interest in the outcome of this case were I to grant the PEO in the form sought. This arises because of the crowdfunding currently being utilised to fund legal expenses of the action. The pursuer sought a cap on the expenses that could be paid to him by the defenders in the event of success, of £30,000 each or £90,000 in total. If an order was granted in those terms, the pursuer was successful, he received an award of expenses in his favour, and his judicial expenses amounted to that sum, he would stand to receive £90,000”

On the fourth criterion, she said: “The practical reality appears to be that the pursuer has access to significant funding to support this action. Turning to the defenders, representing the UK and Scottish governments, it was not disputed that the resources available to them are extensive. Those resources are significantly in excess of those available to the pursuer.”

She continued: “The pursuer tweeted on 22 May 2020 that the action is in his name only primarily to protect everyone from the financial repercussions of the action. The likely availability of further funding through crowdfunding means that the ability to pay reasonable legal expenses of this action is not as disparate between the parties as the pursuer sought to present it. The overall test is what is fair and just, and in that context the pursuer is to be expected to access what funds he reasonably can. It is objectively reasonable in all the circumstances to expect the pursuer to meet his own expenses and a significant part of the defenders’ judicial expenses occasioned in the action if not successful.”

Of the fifth criterion, she concluded: “I am not satisfied that if the application for a PEO is refused the pursuer would as a matter of fact discontinue the action. I note that the pursuer does not say that in his affidavit in terms. What appears likely to happen is that there would be further phases of crowdfunding, through which funds would be raised. This further crowdfunding would enable the action to go ahead. The pursuer would continue in that knowledge, because the crowdfunding would prevent him from exposure to liability for expenses he could not afford from his personal resources.”

For these reasons, Lady Poole refused to grant a PEO to the pursuer