Expenses of unassisted party out of the Legal Aid Fund

Statutory provisions: circumstances where an unassisted person’s expenses may be paid from the Fund

Section 19 of the Act makes provision for the circumstances in which an unassisted party may obtain a court order for payment of their expenses out of the Legal Aid Fund.  Such an order will normally only be sought where the court has modified an assisted person’s liability in terms of section 18(2).  However, an order may be sought in the absence of modification where the decree for expenses cannot be enforced for some reason, perhaps because the assisted person has been sequestrated.

The main features of the statutory provisions are:

  • an order for payment of expenses out of the Fund is competent only where the proceedings are finally decided (as defined in section 20(1)) in favour of the unassisted party;
  • the whole or part only of the unassisted party’s expenses may be awarded out of the Fund;
  • the order may only relate to expenses attributable to any part of the proceedings for which the assisted person was receiving legal aid;
  • the court must consider making an award of expenses against the assisted person before awarding expenses out of the Fund;
  • the proceedings must be such that an order for expenses might be made, apart from the Act;
  • in proceedings at first instance, an order may be made only if the assisted person instituted the proceedings and the court is satisfied the unassisted party will suffer financial hardship if the award is not made;
  • in all cases the court must be satisfied that it is just and equitable in all the circumstances that the award should be paid out of public funds.

Section 20 contains provisions to clarify the stage at which proceedings may be regarded as having been finally decided in favour of an unassisted party.  These provisions largely relate to the possibility of an appeal being taken against the decision concerned.  The court may refuse to make an order under section 19 if an appeal may be taken against the decision.  If an appeal is allowed to be made late, the court may order the unassisted party to repay any expenses paid to them to the Fund.

The question of the point in time when proceedings are finally decided was considered by the Inner House in the case of Moss -v- Penman, 1994 SCLR 15.  The pursuer had raised an action of payment in the sheriff court and the defender had legal aid.  After a debate, the sheriff allowed a proof before answer, and the defender appealed against this decision to the Court of Session.  His appeal was unsuccessful and the Inner House remitted the case back to the sheriff to hear the proof.  The pursuer, an unassisted party, applied to the Inner House for an award of the expenses of the appeal out of the Legal Aid Fund, and we opposed the motion.

It was submitted that the word “proceedings” in section 19 included the proceedings both at first instance in the sheriff court and in the Court of Session on appeal.  Until a final interlocutor had been pronounced in the sheriff court and not taken to appeal, or until any appeal had been disposed of, the proceedings could not be said to have been finally decided in the pursuer’s favour.  It was argued for the pursuer that, because the House of Lords, the Court of Session and the sheriff court are listed separately in schedule 2 to the 1986 Act as courts in which civil legal aid is available, the proceedings in the sheriff court and the proceedings in the Court of Session should be seen as separate proceedings for the purposes of section 19.

In the court’s opinion, our argument was well founded.  It was held that, since the case must be returned for further proceedings in the sheriff court, it was premature for an order to be made under section 19 at this stage.  Giving the opinion of the court, the Lord President said it was clear that the effect of the statutory provisions, when read together, is that the court which is empowered to make the order under section 19 is the court before which the proceedings are being conducted when they are finally decided in favour of the unassisted party.  It is empowered to do so in respect of the whole or any part of any expenses incurred by the unassisted party, whether or not they have been incurred in the court which makes the order.  Thus, if the Court of Session is the empowered court, it may make an order under section 19 which includes the expenses incurred at first instance in the sheriff court.  If the sheriff court is the empowered court, the sheriff may make an order which includes the expenses incurred in the Court of Session in an appeal following upon which the case was remitted back for further proceedings in the sheriff court.

The case of Moss -v- Penman was considered by the House of Lords in the case of Herd -v- Clyde Helicopters Ltd, 1997 SCLR 308.  The Lord Ordinary upheld the defenders’ argument that common law negligence was excluded by statute and on a reclaiming motion the Inner House adhered to his judgement.  The pursuers appealed to the House of Lords, which refused the appeal.  The defenders sought an order for payment out of the Fund of the expenses of the appeal, although the case had to be remitted to the Court of Session for further procedure in relation to other matters.

The House of Lords decided that as the pursuers had been given legal aid for the appeal, which had been finally determined, there being no right of further appeal, that was the appropriate stage for an order under section 19 being made.  In his speech, Lord Hope of Craighead relied on the case of Megarity -v- D J Ryan & Sons Ltd (No. 2), [1982] A.C.81, where it was held that on the true construction of the equivalent provisions for England and Wales in the Legal Aid Act 1974 all proceedings on appeal to an appellate court in any action, cause or matter were to be treated as separate proceedings from the proceedings in the same action in the court of first instance from which the appeal was brought.  As Lord Diplock had pointed out in that case, where there was an appeal to an appellate court, the only court that could make an order for payment out of the Fund was the appellate court, as the statutory provision plainly contemplated that, in the event of an appeal, an order relating to the unassisted party’s costs at first instance might be made by the appellate court by which the proceedings were finally decided.  Lord Hope of Craighead stated that, without wishing to cast doubt on the soundness of the decision in Moss -v- Penman [in which he himself had presided and delivered the opinion of the court] except to point out that the Inner House had not been referred to the Megarity case, he considered that the matter was resolved, so far as the House of Lords was concerned, by what was decided in the Megarity case.

NOTE

Paragraph (f) in this section was amended in May 2009 to remove the word “severe” – this was repealed by the Legal Profession and Legal Aid (Scotland) Act 2007, schedule 5 (in force from 1 October 2008)..

Procedural rules: for all section 19 motions lodged on or after 11 December 2017

Where application is to be made for an order under section 19, you must follow the court procedure set down in Rule 6 the Act of Sederunt (Civil Legal Aid Rules) 1987, as amended by way of The Act of Sederunt (Civil Legal Aid Rules Amendment) 2017.

The main procedural rules are:

  1. Application is made to the court by motion
  2. At least 28 days prior to the motion being enrolled or lodged
    1. a mandatory pre-motion notice in prescribed form has to be completed;
    2. where this form indicates a requirement for vouching, such documents as are required should be obtained and collated; and
    3. the completed form and vouching must be intimated to SLAB
  3. Intimate the motion to SLAB
  4. Lodge the motion along with copies of the notice form and documents sent to SLAB.

The pre-motion procedure is to help ensure that the application can be determined at the court’s first consideration of the motion, with all relevant information having been collated for the court and intimated to us.  To facilitate this, although not required to do so under the Rules, we will provide a response to the applicant, normally within 7 days of receipt of the notice.  This response will detail our initial position in relation to competency of the application, and identify what further information or vouching could be provided to assist the application and, in due course, the court.

For all applications the notice will require the applicant to:

  • provide an estimate of the expenses
  • detail if there has been modification of the assisted person’s liability
  • address the basis on which it is considered to be just and equitable that an award be made, with reference to the circumstances of the case
  • for applications where the court is called upon to apply the financial hardship test (see 3.13 above), relevant information about the applicant’s financial circumstances should be provided and be accompanied by proper vouching (including, where the applicant is self-employed, copies of recent business accounts).
  • in addition, all payments the applicant has made on account of your fees and outlays must be disclosed, as this is a relevant factor in assessing their ability to meet the legal expenses incurred.

Where issues are raised or identified as a result of the intimation of the notice, the 28 day period allows time for further investigation, discussion and correspondence between us and the applicant to help resolve these, with the intention that by the expiry of this period, both the applicant and us will be sighted on whether any issues remain with the application, or if it can simply be left to the discretion of the court upon consideration of the motion, without any representations from us.

After the 28 day period has elapsed, the motion, a copy of the notice form as intimated to us with any vouching and related documents will require to be lodged at the relevant court.  This motion must be intimated to us.  We are entitled to make representations at the motions hearing, although we will usually have advised the solicitor acting for applicant, prior to the motion being lodged, whether it intends to make representations.

The form and supportive vouching can be intimated by email to us at section19apps@slab.org.uk  or sent by post to Thistle House, 91 Haymarket Terrace, Edinburgh EH12 5HE.

If the provisions of Rule 6 are not adhered to, so that an award of expenses out of the Fund is made without our having the opportunity to be heard in relation to the application, we may, if necessary, take steps to have the order judicially reduced, and will reserve the right to seek expenses.

Our assessment: expenses to be assessed on party and party basis at non-legal aid rates

If an order is made in accordance with the provisions of section 19 and rule 6 for payment to an unassisted party of their expenses out of the Fund, under section 19(6) we will assess these expenses on the party and party basis, and include the expenses of applying for the order for payment out of the Fund.  We will calculate the expenses in accordance with the ordinary judicial tables of fees, not the legal aid tables.

In this section