Stefanie Johnston Dual qualified commercial disputes Partner
Thélem’s the breaks: recovering English solicitors’ fees in the Scottish Courts
Kirkwood v. Thélem Assurances  CSOH 53
A recent Outer House Opinion has provided welcome clarity on the recovery of English solicitors’ fees in the Scottish Courts.
While there is no general principle against allowing the expenses of English and other foreign agents in Scottish court proceedings, in this case the Court decided that it was not reasonable for the conduct of the case to have incurred these expenses and they should not be for the defenders to pay.
The pursuer sustained injuries as a result of an accident in France. Proceedings were raised in the Court of Session. The action was settled by the defenders and expenses were awarded to the pursuer.
The pursuer had instructed solicitors situated in England to conduct the claim while Edinburgh agents were instructed to attend to the procedural aspects. When the pursuer’s account of expenses was lodged with the Court, it was in the total sum of approximately £260,000. Of that sum, approximately £250,000 related to the English solicitors’ fees and outlays.
The Court decisions
The Auditor of the Court of Session refused to consider the fees incurred by the English solicitors as, in terms of rule of court 42.10, it was “not reasonable for conducting the cause in a proper manner to instruct foreign solicitors”. He determined that the account was worth around £136,000, made up of the Scottish solicitors’ fees, VAT and outlays incurred by the English solicitors such as counsels’ fees.
Lord Menzies concluded that the Auditor’s decision should stand. The relevant test (based on when the action was raised) was that “Only such expenses as are reasonable for conducting the case in a proper manner shall be allowed”. The Auditor had applied his mind to that test and concluded that the English solicitors’ charges did not meet it. The pursuer lived in Scotland, the accident was in France and Scottish solicitors had initially been instructed. The action was raised in the Court of Session and remained there. It was not, therefore, apparent why the pursuer needed to instruct English solicitors in order to conduct the case in a proper manner. While the pursuer was entitled to do so, it was not reasonable to expect the defenders to pay for it. Indeed, it seems to have formed part of the reasoning of both the Auditor and the Lord Ordinary that the English solicitors involved have a Scottish office.
Lord Menzies did, however, indicate that it may be appropriate in some circumstances to instruct English agents. The example he gave was where the primary issue in a case is the interpretation of a contract subject to English law.
Those litigating in the Scottish courts (from whatever jurisdiction) should think carefully about whether the facts of the case justify instructing solicitors from outside Scotland to do the bulk of the work. It is unlikely that this expense will be considered reasonable where the underlying facts of the case do not have a strong connection to the jurisdiction in which those solicitors are based.
However, it may not always be obvious in which jurisdiction proceedings will be raised. For example, if a pursuer could elect to raise proceedings in England or Scotland, it seems unlikely that a litigant would be penalised for selecting the “wrong” jurisdiction for the initial instruction. In that scenario, it would be advisable swiftly to instruct Scottish agents.
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