Spare no expense!

This case review was co-authored by Katie Mckinnon, Trainee Solicitor, Glasgow.

The case of David Motherwell v Covea Insurance PLC concerns an appeal regarding which scale of expenses should be applicable when a low value settlement is reached. 

Background

On 4 September 2020, the pursuer was a front seat passenger in a vehicle which was stationary at a roundabout. The defender’s insured was travelling behind the vehicle the pursuer was in and failed to stop, colliding with the rear of the vehicle. The claim was intimated shortly after the accident, with the pursuer’s claim being valued at £5,651.09. Liability was not disputed.

The defender offered £2,800 in full and final settlement, which was rejected. The pursuer’s agent indicated that they would be willing to compromise and accept £4,000. A counter-proposal of £3,000 was subsequently made by the defender and rejected. Accordingly, an action was raised in the All-Scotland Personal Injury Court for £6,000 in August 2021.

An initial response was lodged together with a minute of tender (Part 36 Offer equivalent) for £3,500 on 24 August 2021. The offer was accepted shortly thereafter. However, the pursuer’s application to conclude the case was opposed in respect of expenses; with the pursuer seeking expenses on the ordinary cause level and the defender arguing that the expenses should be restricted to the lower summary cause level. The summary cause procedure is used for claims of up to £5,000, whereas the ordinary cause procedure can be used in the sheriff court where the value of the claim is over £5,000.

The parties submitted written submissions and the sheriff found in favour of the defender, restricting the expenses to the summary cause scale.

Appeal

The pursuer appealed the sheriff’s decision, submitting that he had erred in principle, misdirected himself and erred in his approach to the opposed motion hearing. The parties’ positions can be briefly summarised as follows. The pursuer argued that if authorities are available to support an award in excess of £5,000, they were entitled to raise as an ordinary cause action. The defender’s position was that the entirety of the pre- and post-litigation correspondence ought to be taken into account.

Ultimately the appeal was refused on the basis that the sheriff was entitled to reach the conclusion he did, particularly having consideration to the pre-litigation correspondence in terms of the offers of settlement made. As such, the pursuer’s costs were restricted to the summary cause scale.

Comment

The case serves as a reminder of the importance of pre-litigation correspondence and conduct of the parties. The court placed reliance on the pursuer’s pre-litigation proposal in finding that the claim ought to have been raised at a lower level. In the face of a post QOCS (Qualified One Way Shifting) world, any restriction and saving on expenses is a win for defenders.