Simple procedure expenses cap includes VAT and outlays: sheriff
Capped expenses under the Sheriff Court Simple Procedure (Limits on Award of Expenses) Order 2016 include VAT and outlays, a summary sheriff has held.
Sheriff Jillian Martin-Brown at Forfar Sheriff Court gave her decision in awarding expenses of £218.45 to Natalie Gowans in her action for payment against Elizabeth Miller, being 10% of a settlement figure of £2,184.50 reached prior to a case management discussion.
The sheriff said she had been asked to provide a note outlining her reasoning on the basis that the same issue had arisen and continued to arise in other cases.
For the claimant it was argued that under the 1993 Act of Sederunt regulating fees of solicitors in the sheriff court, VAT and outlays were recoverable separately from “expenses”. Apart from the capped figures introduced with the simple procedure, there were no other amendments to that Act of Sederunt, thus VAT and outlays remained recoverable. If these were not recoverable, the principles of civil justice would not be achieved, as without the opportunity to instruct an expert and recover the expert’s fee as an outlay, claimants might not be in a position to support their claims and there would be no equality of arms between claimants and respondents.
Sheriff Martin-Brown said the principles of simple procedure included “that cases are to be resolved as quickly as possible, with the least expense to the parties and the courts; and that parties should only have to come to court when it is necessary to do so to progress or resolve their dispute”.
She continued: “Against that background, article 3 of the Sheriff Court Simple Procedure (Limits on Award of Expenses) Order 2016/338 has restricted expenses in a simple and predictable manner for the majority of cases. While exceptions apply in certain circumstances, such as unreasonable behaviour by a party or difficult issues of fact or law, in most cases a fixed sum can be easily determined at the conclusion of a case without the need to return to court.
“I am of the view that the term 'expenses' in the 2016 Order includes all the elements of a judicial account. That interpretation is in keeping with the principles of quick resolution at least expense and only coming to court when necessary. To interpret the cap as restricting the fee element of a judicial account only and allowing VAT and outlays to be recovered separately would remove predictability for parties when considering the potential costs of litigating low value claims.”