In the reclaiming motion case of Kirkwood v Thelem Assurances ([2023] CSIH 30), the Scottish Court of Session addressed the contentious issue of whether a litigant could recover fees charged by solicitors from another jurisdiction. Margaret Janis Kirkwood, the pursuer residing in Scotland, engaged English solicitors for a court action arising from a road traffic accident in France. The litigation concluded in her favor, entailing an award of expenses against Thelem Assurances, the defendant. However, the crux of the dispute revolved around the reasonableness of incurring fees from English solicitors in a Scottish legal context.

The court upheld the Auditor's decision to disallow the fees charged by Irwin Mitchell, the English solicitors, on the grounds that their involvement was not reasonable for the proper conduct of the litigation in Scotland. The Auditor found that employing foreign solicitors led to unnecessarily higher expenses, which burdened the defendants unjustly. The pursuer contested this reasoning, arguing for the necessity and reasonableness of the English solicitors' engagement. However, the court maintained that the Auditor acted within his discretion, emphasizing that litigation in Scotland should be conducted by solicitors authorized within the jurisdiction to ensure both efficiency and reasonable cost management.

Precedents Cited

The judgment references several key precedents that shape the legal framework around the taxation of judicial expenses and the engagement of foreign solicitors:

• Shanley v Stewart (2019 SLT 1090): Affirmed the wide discretion of the Auditor in determining the reasonableness of expenses.
• Scottish Lion Insurance Co (2006 SLT 606): Established the test for assessing the reasonableness of engaging foreign solicitors based on jurisdictional scales of charges.
• Wimpey v Martin Black & Co (1988 SC 264): Highlighted the necessity of assessing whether the engagement of foreign solicitors was reasonable for the specific charges incurred.
• School and Nursery Milk Alliance, Partners [2023] CSOH 32: Dealt with the Auditor's discretion in similar contexts, reinforcing the principles applied in Kirkwood's case.

These precedents collectively underscore the importance of jurisdictional appropriateness and cost reasonableness in legal expenses taxation.

Legal Reasoning

The court's legal reasoning centered on the application of the Rules of the Court of Session, specifically RCS 42.10(1), which mandates that only reasonable expenses are allowable for conducting a cause properly. The Auditor assessed that instructing English solicitors was not reasonable in this context due to:

• Higher fee rates compared to Scottish solicitors.
• Additional administrative burdens resulting from cross-jurisdictional coordination.
• Lack of demonstrable benefits that could not have been achieved by engaging local Scottish agents.

The court emphasized that the primary duty is to ensure that litigation is conducted efficiently and cost-effectively within the Scottish legal system. The Auditor's decision was deemed to appropriately apply these principles, ensuring that expense awards remain fair and justifiable.

Impact

The judgment sets a significant precedent for future cases involving the engagement of solicitors from jurisdictions outside Scotland. It emphasizes the necessity for litigants to use local legal resources unless there is a compelling and demonstrable reason to engage foreign solicitors. This decision reinforces the Auditor's authority in evaluating the reasonableness of legal expenses and promotes cost-efficiency within the Scottish legal system. Lawyers and litigants must be mindful of these constraints to avoid unfavorable expense taxation in future litigation.

Reclaiming Motion

A reclaiming motion is a legal procedure where the winning party seeks to recover legal expenses from the losing party. In this case, Margaret Kirkwood sought to reclaim the fees she paid to her solicitors from Thelem Assurances.

Party and Party Basis

This refers to a standard level of legal costs awarded to the prevailing party, covering only the necessary expenses incurred during litigation. It is less comprehensive than an indemnity basis, which may cover a broader range of costs.

Act of Sederunt

An Act of Sederunt is a form of subordinate legislation in Scotland used to regulate court procedures, including rules about legal fees and the conduct of litigation.

Auditor's Discretion

The Auditor has the authority to assess and determine the reasonableness of legal expenses claimed. Their discretion is guided by established legal principles and precedents.

Authorized Solicitors

These are solicitors who are duly recognized and permitted by the Scottish courts to conduct litigation. They must be qualified in Scotland and adhere to local professional standards.

The Kirkwood v Thelem Assurances judgment underscores the Scottish legal system's commitment to ensuring that legal expenses are reasonable and justifiable. By affirming the Auditor's decision to disallow fees from English solicitors, the court reinforces the principle that litigation should primarily involve solicitors authorized within Scotland. This is crucial for maintaining cost efficiency, procedural integrity, and equitable access to justice. Legal practitioners and clients alike must heed this precedent, ensuring that the engagement of foreign solicitors is both necessary and proportionate to the demands of the case at hand.