One of the tools frequently used to protect clients' interests
in relation to expenses (or costs) is the Minute of Tender.
Recently we have encountered a number of cases in which the level
of protection afforded by the use of a Tender has come under the
spotlight. Principally, this has been connected with a reluctance
on the part of pursuers' solicitors either to concede our
entitlement to expenses for the period after the date of a Tender,
or their belated attempts to extend the period for consideration of
a Tender beyond reasonable limits.
In an action where the pursuer seeks a sum of money from the
defender, the defender can make a judicial offer known as a Minute
of Tender to their adversary offering to pay damages without any
admission of liability. Those of you familiar with English
procedure will be aware of the equivalent Part 36 offer.
In order to be effective a Tender must contain an offer to pay
the pursuer's expenses. The Tender will normally offer payment of
the pursuer's legitimate and proper expenses up to the date when
the Tender is lodged. In Scotland there is a distinction between
solicitor/client expenses, which are the fees and outlays (profit
costs and disbursements) which a solicitor can properly charge to
his client, governed by their fee arrangement, and party/party
expenses which are the expenses which one party can recover from
the other in terms of a judicial award.
Where a Tender is accepted, the court will usually find the
pursuer entitled to expenses down to 'the date of the Tender'. A
defender may be entitled to the expenses thereafter, and if they
wish to seek these they must specifically ask the court to make an
award of expenses from the date of the Tender. Where a Tender is
rejected the action will proceed normally. If the pursuer is
awarded a principal sum lower than that offered in the Tender then
again as a general rule the defender will be entitled to expenses
from the date of the Tender.
The date on which the Tender 'bites' for expenses purposes
becomes an issue where the defender wishes to limit the pursuers
entitlement to expenses and separately claim contra expenses back
from the pursuer where either - the pursuer has delayed in
accepting the Tender for some time, or alternatively has run the
action to proof/trial and failed to 'beat' the Tender.
Based upon the actual wording of the Tender, one might assume
that the pursuer would be entitled to the expenses to the actual
date on which the Tender was intimated, and the defender the
expenses thereafter, but this is not the case.
Upon receipt of the Tender, the other party is allowed a
reasonable period to decide whether to accept it. However, what
constitutes a reasonable time is a flexible concept which can take
into account a number of factors. It requires to be judged case by
case.
In general, defenders tend to argue the proposition that the
Tender should bite for expenses purposes after roughly two weeks,
which allows adequate time for the pursuer's solicitor to receive
it, consider it, take advice and respond. This approach has mostly
been accepted by pursuer's agents, but is by no means a definite
rule. We are now seeing many attempts by pursuer's solicitors to
delay the date on which the Tender bites for expenses purposes and
therefore maximize the expenses to which they are entitled.
In these cases the court must determine the 'true date' of the
Tender and the determination is by no means straightforward. The
decision in relation to the actual or true date of a Tender is one
that can be taken either by the Auditor of the Court, who taxes
accounts or the court.
The indication given by the authorities is that the decision
ought to be taken by the Auditor. The rationale for this seems to
be based on the assumption that the Auditor will have access to
more information than the court. In lower value cases it tends to
be more cost effective to avoid going before the Auditor for
taxation and therefore defenders tend to prefer not to do so. In
those cases therefore it would be preferable to have the sheriff
make the decision and to do so it is necessary to persuade the
sheriff that they have access to all the relevant information.
Whether a sheriff will decide the issue will depend on the
particular nature of that sheriff, and there may be situations
where you would prefer a particular sheriff NOT to make the
decision!
The factors which tend to influence the fixing of the 'true
date' are:
1. The close timing of a proof. If a proof is imminent then the
court will expect the pursuer to consider the Tender and respond
quickly.
2. The position of the pursuer. This relates to the ability of
the pursuer's solicitors to take his/her instructions. If the court
can be persuaded that there was some legitimate delay then this can
influence the determination of the 'true date'. This was more of a
factor in days gone by when methods of communication were more
limited.
3. The requirement for further medical evidence. This is the
factor most commonly relied upon by pursuer's agents in trying to
delay the date. It is accepted that if the pursuer has a material
change of circumstances which necessitates the instruction of
further medical reports, then the 'true date' would not fall until
after such reports were ingathered and considered. In this scenario
it may not be sufficient to argue that the pursuer had an ongoing
condition which required to be monitored or reassessed as most
medical experts will at the outset give a prognosis which details
whether and when the pursuer's condition is likely to resolve and
can detail the likely implications of that condition in order to
allow the pursuer's solicitor to accurately value the claim at the
outset.
The determination of the 'true date' will largely depend on the
facts of the individual case. For instance, in one recent case
argued before the Auditor it was determined that the 'true date' of
the Tender fell 3 months after it was actually intimated.
Interestingly the Auditor relied on an indication given by the
sheriff at an earlier calling that the pursuer ought to have
concluded their investigations and be ready to proceed to proof at
a point 3 months after the litigation commenced. In that case the
pursuer had ongoing physical and psychological conditions. The
defenders had from the outset contested that these were not
causally connected to the accident which formed the basis of the
case and lodged a Tender on that basis. The pursuer's solicitors
had however delayed for over a year instructing experts to comment
on the causation issue. The implication was that on receipt of the
Tender, the pursuers ought to have proceeded to instruct those
reports, especially as they had notice of the issue in the
written
pleadings.
The moral of the story remains that an early Tender is still to
be preferred.
Contributed by Caroline Gordon