FULL COURT

(Sheriff MacLeod, D Houston, A Macdonald)

BARRACHANDER FARM v THE SCOTTISH MINISTERS

(Application RN SLC/121/05 - Order of 10 June 2008)

EXPENSES – WHETHER CAUSE SHOULD BE CERTIFIED AS SUITABLE FOR THE EMPLOYMENT OF SENIOR COUNSEL – SCOTTISH LAND COURT RULE 96

The applicants appealed to the Court against a decision of the respondents to withhold payment of Single Farm Payment. The Court refused the appeal (its decision on that matter is reported at 2006 SLCR (2) 109) and, after an unsuccessful appeal to the Court of Session had been disposed of, a hearing on expenses was fixed at which the applicants moved the Court to certify the cause as suitable for the employment of senior counsel. In support of their motion the applicants relied on the difficulty of the case, as one involving consideration of European law outwith the normal range of complexity, and the importance of the matter both to themselves but also to the respondents in terms of how Article 44 of European Commission Regulation (EC) No. 2419/2001 was to be applied. The respondents relied on Rule 96 of the Rules of the Scottish Land Court and argued that if, as was stated in that Rule, sanction for the employment of counsel required the application to be one of difficulty and importance, logically the sanctioning of senior counsel required a greater degree of difficulty and importance and that such a level of difficulty and importance was not to be found in the present application.

In refusing the motion, the Court held that the higher degree of complexity and importance which certification of the cause as suitable for the employment of senior, as opposed to junior, counsel required was lacking. Although the application involved questions of European law, that did not of itself make it a more difficult case or take it out of the range of cases with which junior counsel could appropriately be trusted. The level of complexity and importance here were sufficient to sanction the employment of junior counsel but not senior and the Court so certified. On an incidental point, the Court noted that although the motion related to the cause as a whole, it would not have been incompetent or inappropriate for certification to have been sought in respect of only the debate, as a distinct and severable part of the process.

The Note appended to the Court’s Order is in the following terms:-

[1] When this hearing on expenses called before us on 25 April the appellants were again represented by Sir Crispin Agnew of Lochnaw Q.C. and the respondents by Mr Flinn, solicitor.

[2] Prior to the hearing we had been alerted to the fact that the critical point at issue would be the employment of senior counsel at the diet of debate held on 16 December 2005. Since the Court which heard that debate had been presided over by the Chairman we began the hearing by ascertaining whether parties wished him to conduct it. Both sides indicated that not only were they happy that the Court as constituted should continue with the hearing but that they would likewise be happy for us to consult the Chairman for his view if we felt that appropriate. We say more of that below.

[3] At the outset Sir Crispin informed the Court that parties had agreed as follows:-

  1. that the appellants should be found liable to the respondents in the expenses of the cause save for the diet of debate heard on 16 December 2005;
  2. that the respondents should be found liable to the appellants in the expenses of that debate with all associated preparatory work;
  3. that agents on both sides should be entitled to a 30 per cent uplift on the fees payable under the Act of Sederunt (Fees of Solicitors in the Sheriff Court) 1993 (as amended); and
  4. that the case merited the employment of counsel on both sides, the appellants contending that it merited the employment of senior counsel while the respondents would be arguing that it merited junior counsel only.

[4] The only matter in dispute was, therefore, the appellants’ employment of senior counsel and the only area of the case which resolution of that issue would affect in practical terms – given the overall agreement on expenses – was the diet of debate.

Submissions for Appellants

[5] Sir Crispin moved us to certify the cause – and not just the debate – as suitable for the employment of senior counsel. He founded on the importance of the cause and the complexity of the issues of law which it raised.

[6] The case was of considerable importance to the appellants in that it involved loss of Sheep Annual Premium amounting to £19,668.27 for the year in question. (That is the precise figure supplied by the respondents since the hearing and accords with Sir Crispin’s estimate of the loss at the hearing. A suggestion that this loss had in turn impacted on the appellants’ Single Farm Payment was not, we understand, well-founded, 2003 not having been a base year for the calculation of SFP).

[7] But more important for our purposes was the complexity of the legal issues which had arisen not only at debate but at the proof before answer. The debate had involved exploration of European Union law and particularly the interplay of paragraphs 1 and 2 of Article 44 of European Commission Regulation (EC) No. 2419/2001. That had involved reference to a number of European Court of Justice judgements in relation to other subsidy cases. Consideration of novel and complex questions of European law was not within the “mainstream norm” for practitioners in this or any other domestic court. There had been substantial differences of approach between himself and counsel for the respondents. The complexity of the matter could be seen reflected in the Court’s consideration of a reference to the European Court at page 19 of its judgement following the debate albeit the Court had ultimately found it possible to resolve the question in issue “without difficulty”.

[8] In addition to the relationship between paragraphs 1 and 2 of Article 44 the case had involved consideration of the meaning of “fault” for the purposes of that Article and that in itself had been a matter of some difficulty.

[9] The correct approach was to look at the whole case, not just the diet of debate. The question was whether the cause, and not just some stage of the procedure, justified the employment of senior counsel. Approaching the matter in that way, and reverting to the importance of the cause, it had also been of importance from the respondents’ point of view because it affected how they dealt with other cases involving Article 44. There had also been the complexity, at the proof stage, of evidence having to be led from an expert as to what would have been understood by an agister as to his obligations under a contract of agistment.

Submissions for Respondents

[10] In Mr Flinn’s submission the correct starting point was Rule 96 of the Rules of the Scottish Land Court. It allowed us to sanction the employment of counsel in applications of “difficulty and general importance”. That was akin to the approach taken in the Sheriff Court. He referred to Leny v Milne 1899 Sh. Ct. Reports 76 in which the Sheriff Principal had said (at page 77):- “I find on inquiry that in many Sheriff Courts the expense of counsel, although employed on one side only, is, as a general rule, allowed. I think, however, this should not be done unless the case is one of serious difficulty, or one of very large value, or one which relates to personal character. In these cases – and there may be others, though probably these are the chief – I think the cost of counsel may generally be sanctioned, and that the onus is thrown on the other side to show why it should not be.” The Land Court should take a similar approach and look for significant difficulty and general importance before sanctioning counsel. And if one required difficulty and importance in order to sanction the employment of counsel it logically followed that one required greater difficulty and importance in order to sanction the employment of senior counsel.

[11] As to the complexity of the present case, Mr Flinn too founded on what the Court had said at page 19 of its debate judgement but putting the emphasis on the fact that the Court had been able to decide the issue before it without difficulty. That showed that the matter was not one of great difficulty. Ninety per cent of the judgement following on the debate had been to do with whether paragraphs 1 and 2 of Article 44 were severable. That was the point which the Court had been able to decide without difficulty. The debate had, therefore, been a single-issue debate on a point which the Court had not found difficult.

[12] In Salvesen v Graham (Scottish Land Court unreported 25 July 2006) this Court, in considering the employment of senior counsel in that case, had (at page 68 of its judgement) referred to “the number and complexity of issues arising”. Likewise in The Firm of A C Stoddart v The Colston Trust 2006 SLCR 114 the Court had (at page 129), again in considering the employment of senior counsel, described the case as one involving “some difficult and complicated issues of importance to both parties”. There was a distinction between these cases and the present case as to both the number of issues involved and their complexity. As to the importance of this case as a test case, that was doubtful since the class of aid scheme involved had been almost wholly abolished. The case, therefore, had no ongoing significance. It was not a test case for the future and the appellants’ motion should be refused.

[13] We clarified with Mr Flinn his understanding of the correct approach to be taken. He confirmed that one had to look at the cause as a whole rather than at a particular stage. If the cause justified the employment of senior counsel the question then became whether there was something about a particular stage of the case which meant that such sanction should not cover that stage.

Rejoinder from Sir Crispin

[14] On the matter of separating out a particular stage of a case for which the employment of counsel was otherwise thought reasonable, Sir Crispin submitted that the correct approach was to ask whether it would have been reasonable to expect a party not to instruct, for that stage, counsel who had been involved in the earlier stages of the case. It may be different if senior and junior counsel had been involved previously; they may be severable in such a way that certain stages of the case could appropriately be dealt with by junior counsel only. But where only senior counsel had been involved that option was not available and the question became whether it was so unreasonable to employ senior counsel for that part of the process that certification of senior should not be granted.

[15] Although largely concerned with one issue, the debate had not been a single-issue debate; there had also been some consideration of fault and exceptional circumstances. In terms of deciding whether to employ senior counsel one had to bear in mind that although a debate may have been fixed with a particular issue in view one did not know what highways and byways the debate might in fact follow.

[16] As to the importance of the case, the relationship between paragraphs 1 and 2 of Article 44 had been important to the respondents at the time, before the advent of Single Farm Payment. But for this case the respondents would have continued to apply their former approach as to whether the two paragraphs of Article 44 were severable. The correct interpretation of “fault” and the question of vicarious liability for the acts of an agister were also important questions.

Discussion and decision

[17] Although our decision will affect only the expenses of the diet of debate, Sir Crispin’s motion was for certification of the cause as suitable for the employment of senior counsel. Although we would not ourselves have regarded a motion seeking certification for only the debate as in any way inappropriate, far less incompetent, we see the logic of that position. A solicitor in deciding whether to employ counsel, and if so whether it should be junior or senior counsel or both, will have regard to the complexity and importance of the case as a whole. In this case a decision to employ senior counsel alone was taken at the outset of the case. We have to decide whether that was justified in terms of Rule 96 and whether it continued to be justified at the debate stage of the case and thereafter.

[18] Rule 96 allows us to sanction the employment of counsel in applications of “difficulty and general importance”. The reference is simply to “counsel” and we agree with Mr Flinn that if it is a requirement of the sanction of even junior counsel that the application be one of difficulty and general importance, then, logically, the sanction of senior counsel requires greater difficulty and general importance. In the present case parties are agreed that the difficulty and importance of the cause carries it over the threshold required for sanction of junior counsel. The question is whether it is one of these cases which, viewed in its entirety, has that extra degree of difficulty and importance which justifies the employment of senior.

[19] As to difficulty, the two relevant areas of difficulty were Article 44 and the proper interpretation of “fault”. The former was the predominant question at debate; the latter featured more in the proof before answer and subsequent appeal to the Court of Session.

[20] Both of these involved consideration of European law. We do not think that that in itself implies any particular level of difficulty. These days litigation practitioners at all levels require to be able to consider the European dimension of a problem. That said, however, some areas of European law are no doubt more familiar to a greater number of practitioners than others. The law on agricultural subsidies is probably not one of these. That in itself may be sufficient to make the cause one suitable for the employment of junior counsel but whether it is suitable for the employment of senior counsel really depends on the difficulty and importance of the particular questions which arise, rather than on any presumption that if the case involves a relatively rarely visited area of European law it must justify sanction for senior counsel.

[21] As to how difficult the Article 44 question was, we have to look at the judgement of the Court following upon the debate. That judgement was already familiar to us but we have re-read it since hearing the submissions on expenses. Treatment of the question involved consideration of the proper approach to the interpretation of European legislation, tracing the development of the relevant regulations with a view to seeing whether that development showed a gradual expansion of the relief provisions available to allow an applicant for aid to avoid penalty, and interpretation of Article 44 itself including consideration of the practical effects of the two competing interpretations. But at the end of the day, as has been seen, the Court reached its decision on the major issue before it without difficulty: it raised the possibility of a referral to the European Court of Justice only to dismiss it as unnecessary.

[22] So far as the interpretation of “fault” is concerned, we would say that although the matter was not without some difficulty, like the Court which heard the debate, we found the decision – subsequently described by the Lord Justice-Clerk on appeal (at paragraph [43] of his Opinion) as “plainly correct”– one at which we felt compelled to arrive. That was because of the well known need to give European legislation a purposive interpretation. Although Sir Crispin presented us with a very full and painstakingly researched submission which required careful consideration on our part, at the end of the day we were in no real doubt as to what our decision should be.

[23] As to the matter of having to lead the evidence of an expert witness at proof, we recognise that this was only a make-weight in support of the motion for certification. The fact is that junior counsel both lead and cross-examine experts at proof very frequently and there was nothing about the nature of the expert or his expertise in this case which took it out of the ordinary. That aspect of matters could certainly have been handled perfectly well by competent junior counsel.

[24] Looking at difficulty generally, then, it will be plain that we are much influenced by the fact that, challenging and interesting although submissions on both Article 44 and fault were, at the end of the day the Court did not find these issues difficult. We consider that the judgement of the Inner House endorses this Court’s conclusion to that effect so far as the interpretation of fault is concerned. In our view these matters, individually and in aggregate, could have been adequately handled by competent junior counsel. We also think that Mr Flinn was right to distinguish the present case from Salvesen and Stoddart on the grounds of the number and complexity of the issues involved.

[25] As for the importance of the case, the amount of money at stake clearly made it important from the appellants’ point of view. Looking to the “general importance” to which we are directed by Rule 96, we consider that the correct interpretation of Article 44 and of “fault” was important at the time. It affected how the respondents dealt with claims to which that Article might apply, many of them, no doubt, like the appellants’ involving significant sums of money. That gave the importance of the case its requisite “general” nature. That importance was, however, limited by the fact that the schemes to which Article 44 related have since been abolished. Again our feeling has been that, of some general importance though it was, the case was not of such importance that it could not properly have been entrusted to competent junior counsel.

[26] Taking difficulty and general importance together, therefore, as Rule 96 requires us to do, we were minded to conclude that there was insufficient in this case to take it beyond the sphere of competence and responsibility of reasonably competent junior counsel. Before finalising our decision, however, we took advantage of parties’ invitation to discuss the matter with the Chairman. He did not demur from our provisional view and we have, accordingly, refused the applicants’ motion.

[27] Sir Crispin and Mr Flinn were agreed that the expenses of the motion should follow success and we have, therefore, awarded these to the respondents.

For the applicants: Sir Crispin Agnew of Lochnaw, QC; Messrs Snell & Co, Solicitors, Edinburgh

For the respondents: Mr R Flinn, Solicitor, Edinburgh