Summary of Court Opinion

Factual and Procedural Background

This opinion, delivered by Judge [Braid], concerns an action by the Pursuers against the Defender alleging negligence in the provision of Professional Consultant's Certificates (PCCs). In October 2020 the Pursuers purchased a property in The City from a seller. The Defender had previously issued two PCCs (dated 27 September 2019 and 10 January 2020) in the standard form issued by Entity A, certifying that the property had been constructed to a satisfactory standard and in general compliance with approved drawings. The Pursuers allege numerous defects in the property.

The Pursuers initially sued the seller for breach of contract and, on 12 April 2024, obtained a decree against the seller for £500,000 plus expenses. The seller is said to be insolvent, and the Pursuers have raised the present negligence action against the Defender seeking damages of £1 million. That action is being defended and proceeds through the court.

The present interlocutor concerns the Pursuers' motion for certification under the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019 of seven skilled persons whom the Pursuers intend to call as expert witnesses. The motion seeks both prospective certification and retrospective sanction (covering work already done). All but one of the experts were previously instructed by the Pursuers in the earlier action against the seller and prepared reports originally intended for that earlier action. The Defender opposed certification in respect of most of the witnesses and opposed retrospective certification for one of them.

Legal Issues Presented

1. Whether the court should certify each proposed expert as a "skilled person" under rule 5.3 of the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019 (i.e., whether each person is a skilled person and whether it was, or is, reasonable and proportionate that they be employed).
2. Whether, under rule 5.3(5), the court should determine that certification has retrospective effect so as to cover work already done (i.e., whether the Pursuers have shown cause for not having applied for certification before the work was done).
3. Whether charges for expert work initially incurred in a different, earlier action can be recovered from the Defender in this action, subject to the court's certification and the auditor's subsequent assessment under rule 4.5.

Arguments of the Parties

Pursuers' Arguments

• The court should aim to achieve substantial justice; certification (including retrospective certification) is needed so that the Pursuers can prove existence and extent of defects and the cost of rectification by leading expert evidence.
• If retrospective certification is refused, the Pursuers would be precluded from recovering charges for work already done even if that work is necessary for the present action, producing an unjustified windfall for the Defender.
• Certification does not guarantee recovery of the experts' charges — the auditor retains a fact-based assessment and the court can apportion expenses appropriately; thus granting certification preserves procedural fairness and economy.
• The litigation realistically depended on the earlier action; instructing an entirely new set of experts would be inefficient and contrary to the object of the 2019 Rules.

Defender's Arguments

• The Pursuers seek to pass onto the Defender costs incurred in a different action, which is unjustified.
• With the exception of the architect expert (Witness [Drummond]) and the quantum expert for future work (Witness [McLeish]), it was not shown that it was reasonable and proportionate to instruct the other witnesses for the purposes of this action, particularly where some reports were expressly prepared for the earlier action.
• Some reports (for example the septic tank report) go beyond what could be expected of an architect exercising ordinary skill and care in issuing a PCC, and thus are not properly recoverable from the Defender.
• Retrospective certification for Witness [McLeish] was not justified because the Pursuers had not shown cause for failing to apply earlier.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by setting out the statutory control over recovery of expert fees in the Act of Sederunt (Taxation of Judicial Expenses Rules) 2019, explaining the interaction of rule 4.5 (which restricts recoverable charges to certified skilled persons and generally to work done after certification) and rule 5.3 (which governs certification and allows retrospective effect only where cause is shown under paragraph (5)). The court emphasised that even where certification is granted, the auditor retains the factual role under rule 4.5(2) to determine whether particular work was reasonably required "for a purpose in connection with the proceedings, or in contemplation of the proceedings."

Applying the objective test (as described in the cited precedent), the court assessed whether the Pursuers, looking forward, reasonably and proportionately required expert evidence to prove the existence of defects and the cost of rectification. The court accepted the Pursuers' position that proving the alleged defects and the quantum of loss would require expert evidence and that a range of experts was reasonably required to cover the asserted defects. The court rejected the argument that prior instruction of the same experts in the earlier action was a bar to certification in the present action, noting that such a requirement would be contrary to economy in litigation.

However, the court performed a report-by-report correlation with the pleadings and identified one exception: the report by Witness [Vinter] (the structural engineer) did not, on the available pleadings, demonstrate a sufficient link to specific structural averments in the Pursuers' pleadings. For that reason the court refused certification for Witness [Vinter] in hoc statu, while leaving open the possibility of reconsideration if the Pursuers provided additional material.

On retrospective certification, the court applied rule 5.3(5) and asked whether the Pursuers had shown cause for not applying for certification earlier. The court accepted that instructing expert evidence before raising proceedings can be justified because the action did not yet exist and therefore certification could not be sought at that time; that fact constituted sufficient cause. The court also considered, but did not treat as determinative at that stage, whether the Defender might suffer prejudice; it viewed prejudice as relevant to the exercise of discretion after cause has been shown rather than as the threshold test for cause. The court therefore exercised its discretion to grant retrospective certification for the relevant witnesses.

Finally, the court reiterated that certification and retrospective sanction do not themselves establish recoverability of the fees; the auditor must still determine, on the facts, whether the reports were prepared for the purposes of, or in contemplation of, the present action and whether the charges were reasonably incurred. That residual auditor function provides a safeguard against potential unfairness to the Defender.

Holding and Implications

Holding: The court granted the Pursuers' motion to certify the proposed skilled persons as skilled witnesses for the purposes of rule 4.5/5.3, except that certification was refused in hoc statu for Witness [Vinter]. The court further determined under rule 5.3(5) that certification has retrospective effect for work already done in all certified cases (including Witness [McLeish]).

Implications:

• Direct effect on the parties: The Pursuers have achieved court certification for the experts they proposed (except Witness [Vinter]) and retrospective sanction has been granted; this enables the Pursuers to seek recovery of those experts' charges from the Defender if they later obtain an award of expenses, subject to the auditor's factual assessment under rule 4.5.
• Residual safeguards: The auditor will determine whether particular reports and charges were incurred for the purposes of, or in contemplation of, the present proceedings and whether the charges are fair and reasonable; the court's certification does not guarantee recoverability.
• Broader precedent: The opinion applies established principles (including the objective "reasonable and proportionate" test) and exercises the court's discretion under rule 5.3(5); it does not purport to create a new legal rule beyond those statutory provisions and the application of established principles to the facts of this case.

Disposition

The motion for certification was granted as to all witnesses specified in the motion except Witness [Vinter], for whom certification was refused in hoc statu. A determination was made under rule 5.3(5) that certification has effect for work done or expenses incurred before the date of certification in the certified cases.