Chapter 3: Cases not suitable to be funded by damages based agreements
30. Sheriff Principal Taylor, when considering success fee agreements, concluded that damages based agreements in particular were not suited to all types of litigation. Section 5 of the 2018 Act gives a power to the Scottish Ministers to exclude those types of cases that are not suitable to be funded by a success fee agreements of a kind to be specified in regulations. The power can be used to exclude certain types of litigation from success fee agreements as a whole, or to exclude certain types of litigation from either damages based agreements or speculative fee agreements.
31. Sheriff Principal Taylor noted that damages based agreements were not available for family proceedings in England and Wales and recommended that they should also not be available for family actions in Scotland. He argued that it was much more difficult to define success in family proceedings since the court may require to make a range of different orders dealing with various aspects of, for example, matrimonial breakdown aside from purely financial matters and ‘success’ may therefore be divided. It does not therefore seem appropriate that damages based agreements, which are predicated on the provider of the relevant services taking a percentage of damages awarded or agreed, should be used in such cases.
32. The Faculty of Advocates submitted evidence to the Justice Committee during the Bill’s Parliamentary stages that speculative fee agreements were sometimes used in family proceedings and argued that this funding option should not become unavailable to litigants.
33. There is some uncertainty over what types of family proceedings speculative fee agreements are used in connection with, and what types of agreements are used.
34. The Scottish Government fully intends to implement Sheriff Principal Taylor’s recommendation that damages based agreements should not be used in family proceedings.
35. The 2018 Act therefore gives Scottish Ministers power to make regulations so as to specify what kinds of litigation should be capable of being dealt with by certain kinds of such agreements. This was intended to permit consultation on what should be included in regulations to ensure the correct result is reached for family proceedings. Further, this will allow for future proofing since the regulations can change as practice changes.
36. The question arises as to whether other kinds of success fee agreements should be excluded from certain other kinds of litigation.
37. The Scottish Government therefore wishes to ask three questions in relation to the use of success fee agreements including damages based agreements.
a. In connection with what types of family proceedings are speculative fee agreements used?
b. What types of agreements are used in family proceedings?
c. Are there any other kind of proceedings which do not appear to be appropriate for the use of success fee agreements and particularly damages based agreements, apart from family proceedings?
Email: Michael Green