The case law on QOCS in Scotland is gradually developing – helping parties to better understand how the rules will be applied by the court. The first opinion from the Sheriff Appeal Court in the case of Natalie Manley v Thomas McLeese 2024 SAC (Civ) 16 has helped further that understanding. In this case, the Appeal Court confirmed that a finding the pursuer has lied may not be enough to disapply QOCS.
This action was brought following a road traffic accident in 2021. Liability was in dispute and an evidential hearing ultimately took place. Following the hearing, the Sheriff found that the accident had been the fault of the pursuer. She concluded that the pursuer was lacking in credibility, unreliable and that parts of the pursuer's evidence were inconsistent. In contrast, she found the defender to be a credible and reliable witness, and she accepted his evidence in its entirety. Having done so, she considered that she did not require to assess the evidence of the expert witnesses who had also given evidence.
The defender asked the court to disapply QOCS in terms of Section 8(4) of the Civil Litigation (Expenses and Group Proceedings)(Scotland) Act 2018 on the basis that the pursuer had either (a) made a fraudulent representation or had acted fraudulently in connection with the claim or proceedings; (b) behaved in a manner which was manifestly unreasonable; and/or (c) conducted the proceedings in a manner which amounted to an abuse of process. The sheriff found that all 3 exceptions had been satisfied and disapplied QOCS, awarding the defender his expenses. The pursuer appealed the Sheriff's decision on liability and the disapplication of QOCS.
While the Sheriff Appeal Court upheld the Sheriff's decision on liability, the decision to disapply QOCS was overturned.
The Sheriff Appeal Court found that there was nothing in the nature of the dispute or within the evidence led to infer that the pursuer had made a fraudulent representation. In their view, the Sheriff:
- Required to make a finding in fact of fraudulent representation before QOCS could be disapplied on this basis. She did not do so.
- Failed to take account of all of the relevant facts when considering whether there was fraudulent representation (such as the independent physical damage to both vehicles).
- Took account of irrelevant facts (such as the pursuer's behaviour after the accident).
Insofar as the other two exceptions (manifest unreasonableness and abuse of process) were concerned, the Sheriff Appeal Court found that the Sheriff had erred by determining that they were automatically established because fraudulent representation was established. She ought to have given separate reasoning for upholding each. The Appeal Court did not make any comment on whether they considered either of these exceptions could have been competently made out.
The decision in this case is another reminder that a defender has a very high threshold to meet before QOCS will be disapplied. The case is also a reminder to defenders that allegations of fraud should be pled as a finding in fact of fraud will be necessary before QOCS can be disapplied on this basis.
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