QOCS – the high but not insurmountable bar

Qualified One-Way Costs Shifting was introduced in Scotland on 30 June 2021 with the traditional 'winner takes all' approach disapplied to personal injury cases. The crux of the changes was that no award of expenses would be made against a 'reasonable' pursuer, but where the litigation was not conducted in an appropriate manner – as was encapsulated in four listed 'exceptions' – the protection would be lost.

At the point of introduction, it was not clear how the exceptions would operate in practice. The founder of QOCS, Sheriff Principal Taylor, had forewarned that the courts would require 'to apply a high test' and defence agents have since looked to assess where the boundaries of each exception will lie. Brodies had initial unreported success but several failed attempts by others to disapply QOCS then arose. Helpfully, that tide has now started to turn. During Autumn 2023 a number of more positive decisions have emerged, some officially reported, and others shared.

We have summarised the key decisions to be aware of and which confirm when a pursuer may be found liable to pay the expenses of a defender:

•  McRae v Screwfix and Royal Mail [2023] SC EDIN 28: The pursuer claimed damages following an accident at his home, raising against two defenders but later accepting an offer of settlement from one and abandoning his claim against the other. Sheriff Fife did not hesitate, holding that abandonment by a pursuer was a clear and recognised scenario where QOCS should be disapplied.
• Carty v Churchill Insurance Company Ltd [2023] SC EDIN 31: The pursuer was injured in a road traffic accident and having raised proceedings, and their agent having failed to initially comply with all applicable timetable dates and to engage timeously with the defender's agents, then later accepted the pre-action offer (made one year before) at five days before proof. Sheriff Campbell held the conduct of the pursuer's agent in their management of the action to be manifestly unreasonable and disapplied QOCS.
• Musialowska v Zurich Insurance plc [2023] SC EDIN 36: The pursuer was involved in a minor road traffic collision in which the other vehicle was not damaged and litigated her claim for injury. The pursuer and her partner gave evidence before the court as to what happened, but both were found to be incredible and unreliable witnesses. The court identified significant issues with the evidence given which could not be excused as simply a different recollection, they were false allegations. QOCS was disapplied because the pursuer had made a fraudulent representation and had acted in a manner which was manifestly unreasonable.
• Case name not disclosed, Unreported: The pursuer having been involved in a road traffic accident initially confronted the defender to extract a cash payment from him. When that was refused, the pursuer litigated, and the case proceeded to an evidential hearing. Sheriff Stirling found the pursuer to be an incredible and unreliable witness holding that she had lied about what happened. QOCS was disapplied in respect that she had made a false representation and in so doing had acted in a way which was manifestly unreasonable and an abuse of process. 
• Ali & Hussain v Royal & Sun Alliance Insurance Ltd [2023] SC EDI 35: Each pursuer was inside a parked vehicle struck by a van. Liability was admitted but insurers denied that either pursuer had been injured and the cases proceeded together to an evidential hearing. Sheriff Fife found neither pursuer to be credible or reliable in relation to the core issues of their claims, their evidence having been peppered with significant inconsistencies and contradictions and which had, in parts, been disproved by CCTV evidence and negated by available documents. They had acted intentionally to mislead the court. QOCS was disapplied in respect that the pursuers had made a fraudulent representation and had acted in a way which was manifestly unreasonable.

These decisions confirm not that the high bar has shifted, it remains but can be overcome. The court preferring the defender's witnesses over the pursuer's account will not be enough of itself to disapply QOCS; whether it does will depend on the court's reasons.

If the court makes a positive finding that the pursuer was neither credible or reliable in relation to the core issues (of what happened and/or what they lost in response) a defender will be well placed to seek disapplication. Initial nervousness arose as to whether Scottish courts would go this far, the decisions above confirm that in the right cases they will. There is also an appetite to make sure that due process and procedure is followed.