Plain Guide to Litigation: Expenses
When intimating the decision, the Clerk will, if directed by the Court, invite parties to make submissions about expenses. That is the normal practice and the normal rule is that expenses follow success. It is very important to understand this and its implications for party litigants. We look further at these implications below. The losing party will be found liable to pay the expenses properly incurred by the winning party in fighting the case. This is not a punishment for losing but simply that expenses are an important part of any litigation and it would not be much of a victory if the side which won on the merits did not also win expenses. There are various ways of expressing the rule. The idea is that the person who caused the litigation should pay for it. This may allow scope for argument that time was wasted on some parts of the case. If so, and if that was really the fault of the winning party, there might be some modification of expenses.
The question of expenses is dealt with in two stages. First of all, the court decides who should be liable to pay for expenses. The next stage is to decide what is allowable as a charge for all the pieces of work done. That is a separate matter which is not dealt with by the court but by a separate official known as the Auditor of Court. Under the Rules of the Land Court, our Principal Clerk is also the Auditor.
Any argument about who should pay must be made at the first stage. Where parties are in dispute over different issues and one side wins on some points and loses on others, it may not be easy to say that any one party has been successful overall. The Court may have to take a close look at who won what, what time was spent on that, and then decide what bearing that should have on the overall award. A very broad approach is taken to expenses. But the basic rule – that the successful party is entitled to recover expenses from the other – governs most circumstances. There are situations where a winning party’s entitlement may be modified because of the way they have conducted the case. But a broad approach is always taken, partly to avoid the risk of disputes over expenses themselves giving rise to additional expense.
At the second stage, the Auditor can be asked to scrutinise the accounts to check that only proper claims are made and proper amounts charged. In the Land Court the usual rule is that the rates to be charged by solicitors are those covered by the Table of Fees for the Sheriff Court.
A successful party litigant is entitled to be paid something for his time. There is no set scale. The Rules of Court provide for the Auditor to assess the appropriate rate of remuneration in each case. The Auditor will consider the level of any earnings lost by the DIY litigant in taking time to present or prepare the case. Usually the Auditor will wish to fix remuneration by having regard to the time an experienced practitioner would take. So you could not expect to be paid for all the hours you have had to spend getting to grips with the law. You will not be paid at lawyers’ rates. Part of the reason for that is that lawyers’ rates have to cover their training and their administrative backup. Where you are represented by someone other than a solicitor, the Court will control what such person can charge you, if anything, and what can be charged against the other side if you are successful.
It is not always easy for a layman to know whether particular items of work are properly to be included in an account. However, you can include all things you did in connection with the litigation. If the paying side disputes any items, the Auditor will be able to decide what is to be allowed and how much is to be allowed.
A particular problem for DIY litigants is that although they may decide to save expense by acting on their own behalf, the other side may quite properly think that the issues in the case are difficult enough to justify employment not only of solicitors but of counsel or even senior counsel. As we have said, liability to pay expenses depends mainly on success. The court has no power to exercise a sympathetic discretion to limit the amount you have to pay if you lose. Liability to pay expenses will be a debt like any other. The amount charged will not depend on your ability to pay.
You may think it particularly hard that the opponent is entitled to charge the cost of employing lawyers when you have managed without. The Land Court does have some limited scope for control of this. If your opponent has employed a solicitor the cost will usually be seen as a proper charge. But where counsel have been employed the losing side will only have to pay for counsel if the court gives specific authority certifying that their fees are a proper charge. Where senior counsel has been employed the court has to certify that the case is suitable for employment of senior counsel before their fees can be recovered. But many cases which seem straightforward to the parties can turn out to give rise to complicated legal questions. Often DIY pleadings do not make it at all clear what the legal contentions are. Put shortly, it is not uncommon for the court to feel obliged to certify a case as suitable for counsel or even senior counsel despite the fact that the other side is acting on a DIY basis. In that event, losing litigants can find themselves liable to pay the full lawyers expenses of the other side even when they have been very careful in minimising their own expenses.
The Court cannot reduce the liability just because one side has no money – unless that person has the benefit of Legal Aid. It may be worth noting that if you qualify financially for Legal Aid it will almost certainly be worth getting it and employing a lawyer, even if you think you could do the case just as well yourself. That is because, if you lose, you will be entitled, if you are on Legal Aid, to have your liability to the other side reduced. Otherwise the Court has no power to cut down a bill just because you cannot afford it.
The risk of liability in expenses is a major worry for both sides. It may worth trying to persuade your opponent, at the outset of the litigation, that each party will pay their own expenses – win or lose. That would allow each side to keep a good control of how much the case was going to cost them, win or lose. Such agreements are not uncommon where the dispute is between employer and employee and that relationship is to continue, and they might make good sense, particularly in relation to certain types of dispute between landlord and tenant.
In some cases it may be possible to get some protection against expenses by making a formal offer in settlement at the outset. You might be prepared to offer more than you think the other side is really entitled to, just to avoid litigation. You can make your offer to the other side and send a copy to the Principal Clerk in a sealed envelope. The court will not know what your offer was until the stage of deciding who should pay expenses. So, you will not be prejudiced by making your opponent a generous offer and then fighting for less if they do not take it. If you have offered more than the court has awarded, it will be clear that the litigation has been caused by your opponent’s failure to take the offer when it was made. So, you will have been successful as far as expense was concerned.
It is worth taking professional advice on such offers, whether you are the party making the offer or the recipient of an offer. In courts where the dispute is about money such offers are described as “tenders” and various formal rules apply to them. These can be a trap for the unwary. Although the Land Court does not have formal rules for tenders, the principles applied in other courts will be borne in mind. Where the dispute is not over something as simple as a claim for payment, offers in settlement may be a bit complicated. Legal advice will probably be worthwhile.
© 2011, Scottish Land Court