Pursuer’s premature litigation finds them liable for expenses

05.10.17

Lindsay Crawford v Zurich Insurance PLC 


Brodies represented the defender in this case where the pursuer was ordered to pay the defender’s expenses because his solicitors failed to engage in any settlement attempts and litigated prematurely. It was a straightforward claim following a road traffic accident. The pursuer sought repair costs, car hire charges and miscellaneous expenses. The claim was intimated to the defender’s insurer on 19 August 2016. The insurer responded on 23 September 2016 admitting liability and requesting supporting financial evidence, with a view to settling the claim. 


The letter was ignored and no vouching was provided. No further warning letter was issued. No vouching was provided to the insurer. A court action was raised without any further correspondence, against a background where there was no time bar issue.


The defender’s insurer instructed solicitors. On instruction, it immediately sent a letter to the pursuer’s agents requesting vouching. This letter highlighted the previous request and noted that the litigation was considered to be “premature and unnecessary”. 


Nonetheless, that request was also ignored. Further requests were made, and ultimately it was only when the defender intimated a motion asking that the pursuer lodge the vouching, which had been incorporated in pleadings ‘brevitatis causa' (for the sake of brevity), that it was it produced. Settlement was concluded thereafter on the basis of a Minute of Tender. The pursuer sought expenses and the defender opposed that motion. 


Sheriff Fife heard the motion. Reference was made to the case of Gibson v Menzies Aviation (UK) Ltd., where expenses were modified by two thirds, albeit still in favour of the pursuer. However, Sheriff Fife did not accept that the circumstances of the current case were comparable to those in Gibson, and found that  the behaviour of the pursuer’s agents both pre-litigation and post litigation warranted greater sanction. He stated that, “this action should not have been raised by the pursuer when there had been an admission of liability at the earliest opportunity and a request for vouching of losses which was ignored.”


The pursuer’s agent tried to argue that her large case load had been a factor in the failure to consider the letter admitting liability. The Sheriff held that: “[The] pressure of business is not a reasonable excuse. The pursuer chose to raise an action when it was premature to do so. The pursuer must face the consequences of so doing.” 


Due to the relative simplicity of the case, he did not accept that court proceedings were inevitable or even likely. He went so far as to say that there was every prospect of the claim being settled once vouching and full details had been disclosed.


On that basis he refused the pursuer’s motion for expenses and rather found that the defender was entitled to the expenses of the action on the Ordinary Cause Scale. As a reflection of the possibility of an extra judicial settlement, he used his discretion to restrict those to 75%.


The circumstances of this claim will no doubt resonate with those handling claims on behalf of defenders. Sheriff Fife’s robust and sensible approach is a helpful statement of the obligation on a pursuer to avoid litigation unless it is necessary. He has gone beyond the sanction on expenses previously set down in Gibson v Menzies Aviation (UK) Ltd. His written decision should be a useful tool to encourage disclosure and cooperation both before and after litigation. It will also be a powerful authority in future expenses arguments about premature litigation.