Act of Sederunt (Taxation of Judicial Expenses Rules) 2019

EXPLANATORY NOTE

(This note is not part of the Act of Sederunt)

Introduction

This Act of Sederunt makes provision regarding—

• the taxation of accounts of expenses as between party and party in civil proceedings;

• the reimbursement of losses and expenses incurred by witnesses cited to attend court in such proceedings;

• the fees payable to shorthand writers and transcribers in relation to such proceedings; and

• the sums chargeable against a debtor in respect of the work of a solicitor in instructing steps in diligence.

With the exception of rule 8.1, the Act of Sederunt applies in relation to civil proceedings in the Court of Session, Sheriff Appeal Court and sheriff court where the proceedings are commenced on or after 29th April 2019. For this purpose appeal proceedings are considered to be distinct proceedings from the proceedings in the lower court from which the appeal is taken. Taxation of accounts in proceedings commenced before 29th April 2019, and in summary causes commenced on or after that date, continue to be subject to the pre-existing rules and tables of fees.

Rule 8.1 (diligence) applies when the work involved in instructing a step in diligence is carried out on or after 29th April 2019.

General principles

Rule 2.1 prescribes the form of an account of expenses, which must include a statement as to whether the entitled party (as defined in rule 1.2(1)(c)) will bear the ultimate burden of value added tax charged on solicitors’ fees or on outlays that are sought to be recovered.

Rule 2.2 sets out the general principle governing the taxation of expenses and instances of circumstances in which the Auditor may refuse to allow expenses that have been incurred.

Charges for work by entitled party’s solicitor

Chapter 3, and the tables of charges in schedules 1 to 5, apply for the purpose of calculating the charges to be allowed at taxation in respect of the work carried out by the entitled party’s solicitor in the conduct of the proceedings. Where applicable, the provisions of Chapter 3 and the tables apply with equal effect where the entitled party has been represented by a member of the Association of Commercial Attorneys.

The charges prescribed in the tables of charges are expressed as multiples of a unit of monetary charge. Rule 3.2 sets the value of the unit at £16.40.

Subject to direction by the court, the provisions of rule 3.3 determine which of the tables of charges is to be applied at taxation. The entitled party may elect to have an account taxed on the basis of the table of detailed charges in schedule 1 in relation to any proceedings other than a simple procedure case, and that table must be used when there is no applicable table of inclusive charges. When there is a table of inclusive charges applicable to the proceedings in schedule 2 (Court of Session), schedule 3 (Sheriff Appeal Court), or schedule 4 (sheriff court ordinary cause), the entitled party may elect to have the account taxed either on the basis of that table, or on the basis of the table of detailed charges in schedule 1. Accounts of expenses relating to simple procedure cases in the sheriff court must be taxed on the basis of the tables of inclusive charges in schedule 5.

Rule 3.4 makes provision regarding charges for copying and scanning documents. A charge is only to be allowed where the Auditor is satisfied that it was reasonable for more than 2000 pages to be scanned or copied. In that event the applicable charge is 1 unit per 100 pages copied or scanned in excess of that number.

Rule 3.5 provides that a charge of 0.9 units per 6 minutes of travelling time may be allowed at the Auditor’s discretion.

Where an account of expenses is being taxed on the basis of a table of inclusive charges, rule 3.6 allows the Auditor to increase or reduce a charge, or to apportion a charge between parties represented by different solicitors.

Where an account of expenses is being taxed by reference to the tables of charges for simple procedure cases in schedule 5, rule 3.7 provides that all charges allowed by the Auditor are to be reduced by 10%, and are to be reduced by a further 25% or 50% where the total value of the claim is less than £2500, or less than £1000, as the case may be.

Rule 3.8 makes provision regarding charges for instructing counsel (as defined in rule 1.3) in the sheriff court or Sheriff Appeal Court. Such charges may be allowed only where (1) counsel’s fees have been allowed as an outlay under rule 4.3, and (2) in the case of a solicitor advocate, where he or she was instructed by another solicitor.

Rule 3.8 also provides that the Auditor may allow an attendance charge where a solicitor advocate is assisted by another solicitor. In the sheriff court or Sheriff Appeal Court the allowance of such a charge would be dependent on the solicitor advocate’s fees having been allowed as an outlay under rule 4.3.

Rule 3.9 applies where, on an application under rule 5.2, the court has granted an application for an additional charge, or the Auditor of the Court of Session has determined that an increase should be allowed. The rule provides for the charges allowed under Chapter 3 to be increased by the percentage specified by the court, or in accordance with the Auditor’s determination.

Where the entitled party was not represented by a solicitor rule 3.10 provides that the Auditor may allow a reasonable sum in respect of work done by the entitled party not exceeding two thirds of the charges that would be allowed under Chapter 3 if the same work had been done by a solicitor.

Outlays

The provisions of Chapter 4 apply for the purpose of determining the outlays incurred by, or on behalf of, an entitled party that are to be allowed at taxation. Rule 4.2 sets out a general rule that outlays reasonably incurred in order to conduct the proceedings in a proper manner are to be allowed.

Counsel’s fees in the sheriff court and Sheriff Appeal Court

The circumstances in which fees incurred to counsel in relation to proceedings in the sheriff court and Sheriff Appeal Court may be allowed as an outlay is regulated by rule 4.3, and by rule 5.4 which makes provision regarding applications to the court to sanction the employment of counsel.

Fees incurred to counsel in relation to proceedings in the sheriff court or Sheriff Appeal Court may not be allowed as an outlay unless, and to the extent that, the court has sanctioned the employment of counsel on an application under rule 5.4. On such an application the court may sanction as suitable for the employment of counsel—

• the proceedings;

• any part of the proceedings;

• particular work involved in the proceedings; or

• any combination of the foregoing.

Where particular work has been sanctioned as suitable for the employment of counsel, the Auditor is to allow counsel’s reasonable fees for that work. Where proceedings or parts of proceedings have been sanctioned as suitable for the employment of counsel, it is for the Auditor to determine the work for which it was reasonable for counsel to be instructed, and to allow a reasonable fee for that work.

Other than in personal injury proceedings under Chapter 36 of the Ordinary Cause Rules, simple procedure cases, and proceedings in the Sheriff Appeal Court, there are restrictions on the sanctioning of work already carried out by counsel. An interlocutor sanctioning proceedings, or parts of proceedings as suitable for the employment of counsel has no effect as regards work carried out before the date of the interlocutor, and particular work carried out before the date of the interlocutor may only be sanctioned where the court is satisfied that cause has been shown for sanction not having been sought previously.

Skilled persons

The circumstances in which charges incurred to skilled persons may be allowed as an outlay is regulated by rule 4.5, and by rule 5.3 which makes provision regarding applications to the court for certification of such persons.

Charges incurred to a person who has been engaged for the application of that person’s skill may only be allowed as an outlay if that person has been certified by the court on an application under rule 5.3. The court may only grant such an application if satisfied that the person is a skilled person, and that it is, or was, reasonable and proportionate for that person to be employed. In the event of certification the Auditor is to allow such charges as the Auditor determines to be fair and reasonable for work done which was reasonably required for a purpose in connection with the proceedings, or in contemplation of the proceedings.

Other than in personal injury proceedings under Chapter 43 of the Rules of the Court of Session, personal injury proceedings under Chapter 36 of the Ordinary Cause Rules, or simple procedure cases, the Auditor may not allow charges relating to work done before the date of certification unless that court has determined in accordance with rule 5.3(4) that the certification has effect for the purposes of work already done. The court may only make such a determination if satisfied that cause has been shown for certification not having been sought previously.

Additional charge

Rule 5.2 makes provision for applications to the court for an increase in the charges to be allowed at taxation in respect of the work carried out by the entitled party’s solicitor.

The court (or Auditor) must grant an application when satisfied that an increase is justified to reflect the responsibility undertaken by the solicitor in the conduct of the proceedings. Rule 5.2(6) prescribes factors that the court (or Auditor) must have regard to in considering both whether to grant an application, and the level of any increase.

On the making of such an application in the Court of Session the court may either determine the application itself or remit the application to the Auditor to determine if an increase should be allowed (and the level of any increase). If the Court grants the application it may either specify the percentage increase to be allowed, or remit to the Auditor to determine the level of increase.

On the making of such an application in the sheriff court or Sheriff Appeal Court it is for the court to determine the application and to specify the percentage increase to be allowed.

Value Added Tax

Rule 6.1 sets out the circumstances in which a provision for value added tax may be added to the charges allowed under Chapter 3, and in which the amount allowed in respect of an outlay under Chapter 4 may include value added tax charged on the outlay by the provider of the goods or services.

Payments to witnesses and fees of shorthand writers

Rule 7.1 and schedule 6 make provision regarding payments to witnesses. Witnesses other than skilled witnesses are not entitled to payment of a fee. A party who cites or requests the attendance of a witness is liable to reimburse—

• financial loss reasonably incurred not exceeding £400 per day;

• travelling expenses reasonably incurred;

• the reasonable cost of subsistence; and

• the reasonable cost of board and lodging.

On the application of a party the court may remit to the Auditor to determine the extent to which loses and expenses were reasonably incurred. A party must apply for such a remit when requested to do so by a witness.

Rule 7.2 and schedule 7 make provision regarding the fees and expenses of shorthand writers and persons preparing transcripts of evidence.

Diligence

Rule 8.1 prescribes the sum that may be included in the expenses chargeable against a debtor in respect of the work of a solicitor in instructing a step in diligence.