Factual and Procedural Background
The Plaintiff initiated a claim against the Defendant seeking £60 million in damages for malicious prosecution. The Defendant admitted liability early in the proceedings. A proof before answer was conducted, limited to the issue of quantum, during which the court found the Plaintiff had been dishonest in presenting his claim. An initial damages award was limited accordingly, and the court invited the parties to calculate taxation and interest effects while reserving questions of expenses. The court highlighted potential consequences for the Plaintiff's dishonesty, including possible expenses awards against him on an agent and client basis and contempt of court proceedings.
At a subsequent hearing, the parties agreed on a damages award of £368,061 plus interest, a small fraction of the sum claimed. The Defendant had not made any offer to settle. The court awarded expenses to the Plaintiff but restricted them by 50% due to the Plaintiff’s improper conduct. The court considered but declined to initiate contempt proceedings against the Plaintiff. The expenses of the hearing to address these matters were reserved.
Nearly four months later, the Plaintiff moved to recover the expenses of that hearing on an unrestricted basis and sought an additional fee under rule 42.14 of the Act of Sederunt (Rules of the Court of Session 1994), citing all heads under the rule. The delay in bringing this motion and the failure to seek the additional fee alongside the expenses motion were noted but not challenged as incompetent. The Defendant adopted a pragmatic stance and did not oppose the motion to recover expenses on an unrestricted basis but opposed the additional fee application on the basis that it would undermine the penalties imposed on the Plaintiff for dishonesty.
Legal Issues Presented
- Whether the Plaintiff is entitled to recover the expenses of the by order hearing on an unrestricted basis.
- Whether the Plaintiff is entitled to an additional fee under rule 42.14 of the Act of Sederunt, and if so, at what level.
- How to apply the court’s discretion in awarding expenses and additional fees in light of the Plaintiff’s dishonesty and the limited success on quantum.
Arguments of the Parties
Plaintiff's Arguments
- The Plaintiff sought recovery of the by order hearing expenses on an unrestricted basis.
- An additional fee was sought under all heads of rule 42.14(3)(a) to (g), with submissions emphasizing the complexity and novelty of the case, the skill and labour of solicitors, the volume and importance of documents, the global nature of the witnesses, the importance of the cause to the Plaintiff, the large sum claimed, and the absence of settlement offers by the Defendant.
- The Plaintiff argued the case involved novel legal questions relating to malicious prosecution and regulatory activity under the Financial Services and Markets Act 2000, requiring specialist advice and expert evidence.
- The Plaintiff contended that the damages claimed reflected significant reputational damage and lost business opportunities.
Defendant's Arguments
- The Defendant accepted the by order hearing expenses should be recoverable on an unrestricted basis but opposed the award of any additional fee.
- It was submitted that allowing an additional fee would undermine the court’s earlier decision to restrict expenses by 50% as a penalty for the Plaintiff’s dishonesty and would dilute the rationale behind declining to initiate contempt proceedings.
- The Defendant emphasized that the Plaintiff’s claim was grossly inflated and that the case was not novel or complex.
- The Defendant contended that many documents and witness statements were included unnecessarily and that the Plaintiff’s account was fundamentally dishonest, affecting the weight of the evidence and the appropriateness of additional fees.
- The Defendant argued that the absence of settlement offers was already accounted for in the expenses award and did not justify an additional fee.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Ahmad v Lord Advocate (No 2) [2024] CSOH 54; 2024 SLT 747 |
Basis for awarding expenses restricted by 50% due to Plaintiff’s dishonesty and improper conduct. |
Used to justify restriction of expenses and to decline contempt proceedings. |
| Gray v Babcock Power Ltd [1990] SLT 693 |
Discretion of auditor to examine additional fee applications and relation to expenses awards. |
Referenced to explain that an additional fee application must be made by the successful party and that the auditor retains discretion, with the court able to recommend but not fix the uplift. |
| Trunature Ltd v Scotnet (1974) Ltd 2008 SLT 653 |
Right of solicitor to an additional fee as part of expenses; procedural guidance. |
Applied to confirm that the Plaintiff’s solicitors retained the right to apply for an additional fee despite prior court decisions. |
| Centenary 6 Ltd v TLT LLP [2024] CSIH 29; 2024 SLT 1106 |
Guidance on appropriate uplift percentages for additional fees. |
Used as a benchmark for recommending an uplift of no more than 10% for the additional fee under head (e). |
| Whitehouse v Lord Advocate 2020 SC 133 |
Consideration of the Lord Advocate’s immunity from suit in malicious prosecution claims. |
Referenced to show that immunity issues had been resolved prior to proof, negating novelty in this case. |
| Financial Conduct Authority v Avacade Ltd (in Liquidation) [2021] EWCA 1206; [2021] Bus LR 1810 |
Interpretation of the Financial Services and Markets Act 2000 (Regulated Activities Order). |
Applied to confirm that the activities underlying the Plaintiff’s claim were regulated activities, negating novelty. |
| Thompson v Commissioner of Police of the Metropolis [1998] QB 498 |
Guidance on quantum for solatium damages. |
Used to support the assessment of solatium damages in this case. |
| Rees v Commissioner of Police of the Metropolis [2019] EWHC 2339 |
Further guidance on solatium quantum. |
Reinforced established principles for solatium assessment. |
| Grier v Chief Constable of the Police Service of Scotland 2022 SLT 199 |
Principles for assessing injury caused by prosecution versus other factors. |
Applied to distinguish injury caused by prosecution from other causes and to justify broad brush approach to damages. |
| Grier v Lord Advocate 2023 SC 116 |
Use of broad judicial discretion ("broad axe with a blunt blade") in assessing damages. |
Supported the court’s approach to damages assessment in this case. |
| Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC) |
Principles relating to mediation as a condition precedent to litigation. |
Used to reject argument that withdrawal from mediation was improper or a factor justifying additional fees. |
Court's Reasoning and Analysis
The court undertook a detailed examination of the Plaintiff’s claim and the circumstances surrounding the litigation. It emphasized that the Plaintiff’s dishonesty had significantly distorted the presentation of the claim, inflating the damages sought to an unreasonably high figure. This inflation created a superficial layer of complexity and difficulty that was not reflective of the true nature of the case, which was relatively straightforward and involved no novel legal questions aside from the immunity issue, which had been resolved prior to proof.
The court rejected the Plaintiff’s submissions of complexity and novelty, noting established case law provided clear guidance on issues such as solatium, causation, and regulatory activity. It found the Plaintiff’s expert evidence was undermined by the Plaintiff’s false testimony, and much of the documentation and witness evidence was unnecessary or presented in a distorted context.
In assessing the application for an additional fee under rule 42.14, the court analyzed each head individually. It gave no weight to most heads, including complexity, solicitor skill and labour, volume of documents, place and circumstances of the cause, amount of money involved, and steps taken to settle. The only head warranting weight was the importance of the cause to the Plaintiff, given the Plaintiff’s need for vindication beyond the initial apology and the limited compensation ultimately awarded.
The court acknowledged that it could not fix the level of any uplift for the additional fee but could make a recommendation to the auditor. It recommended an uplift of no more than 10% under head (e) to reflect the importance of the cause to the Plaintiff. The court also clarified that the additional fee and any uplift would remain subject to the earlier 50% restriction on expenses awarded to the Plaintiff.
Finally, the court found the Defendant liable for the expenses of both the by order hearing and the opposed motion hearing, without applying the 50% restriction to these awards.
Holding and Implications
The court held that the Plaintiff is entitled to recover the expenses of the by order hearing on an unrestricted basis and is entitled to an additional fee under rule 42.14(3)(e), reflecting the importance of the cause to the Plaintiff.
DISPOSED OF: The Plaintiff’s motion for an additional fee is allowed under head (e), with a recommendation to the auditor that an uplift of no more than 10% be fixed. The Defendant is liable for the expenses of the by order hearing and the opposed motion hearing without the previously imposed 50% restriction applying to these expense awards.
The decision directly affects the parties by permitting the Plaintiff to recover additional legal costs despite prior penalties for dishonesty. No new legal precedent was established, and the ruling primarily applies the court’s discretion in managing expenses and additional fees consistent with existing principles and procedural rules.