In a recent decision, Kirkwood v Thelem, the Inner House of the Court of Session has held that a Pursuer who instructed English solicitors to pursue a claim in the Scottish courts was not able to recover their costs. The Court has also provided comment on the wider issue of solicitors from other jurisdictions conducting litigation in Scotland.

The Pursuer, Margaret Kirkwood, was resident in Scotland and involved in a road traffic accident, while on holiday in France. She instructed a firm of solicitors, Irwin Mitchell, based in Birmingham, to advance a personal injury claim on her behalf. Whilst Irwin Mitchell solicitors have a Scottish Office, the office was not instructed on behalf of Mrs Kirkwood. Instead, Irwin Mitchell in Birmingham used the services of a Scottish firm, Blacklocks, as local agents in a litigation which was raised in the Court of Session in Edinburgh.

Mrs Kirkwood’s personal injury claim was settled and the Defenders were found liable to her for the expenses of the litigation.

In personal injury litigation, where a party has been found liable to another party for expenses, the Auditor of Court will consider that party’s account of expenses and tax off any elements which they consider are not recoverable. The applicable rule for taxation of the account in this case was that “Only such expenses as are reasonable for conducting the cause in a proper manner shall be allowed.”

Val Pitt is a Partner in the Glasgow Office of Horwich Farrelly

An account of expenses was produced totalling £260,629.11, of which £92,936.50 (plus VAT) was Irwin Mitchell’s fees.

The Auditor taxed off all of Irwin Mitchell’s fees on the basis that it was not reasonable for the proper conduct of the cause for the Pursuer to have instructed English solicitors, those solicitors having no specialism which was not readily available from a number of Scottish agents. It was considered that the decision to use English solicitors would have resulted in expenses being charged at a higher rate and in additional procedures that would not have been required, had Scottish solicitors been instructed.

The Pursuer appealed the decision but it was upheld by both the Outer and Inner House of the Court of Session.

The Inner House noted that the Auditor has a wide discretion and held;

“It is important that litigation in Scotland is: (a) conducted by those whom the court has authorised to do so; and (b) subject to the expenses regime which the court has devised.”

The court stressed that this was not only for the efficiency of the system but also to ensure that those conducting litigation in Scotland are subject to the disciplinary rules of the Scottish legal profession.

The Inner House considered that the Auditor was bound to tax off the fees relating to Irwin Mitchell’s general conduct of the litigation and highlighted that it had a duty to ensure access to justice, including the maintenance of an expenses’ regime which is designed to keep the costs of litigation at a reasonable level.

It was noted that there is no general principle prohibiting the allowance of charges for discrete pieces of work completed by foreign solicitors, on the instructions of Scottish solicitors conducting a litigation, in circumstances where it is reasonable to do so. For example, where a party requires to seek the advice of matters of foreign law or procedure. However, those seeking to conduct litigation in Scotland should be careful that they instruct Scottish solicitors, as they will not be permitted to recover the costs of foreign solicitors, unless there is a particular reason as to why their expertise is required.

Val Pitt is a Partner in the Glasgow Office of Horwich Farrelly

Instruct Scottish solicitors to conduct litigation in Scotland - Val Pitt