Scottish Land Court and the Lands Tribunal for Scotland: consultation analysis

Question 6

Do you consider that the Lands Tribunal power to award expenses under section 103 of the Title Condition (Scotland) Act 2003 should be amended so that expenses are not as tied to the success of an application as they are at present?

Yes	No	Not answered
24	8	26
41.3%	13.8%	44.8%

A considerable majority (75%) of those who answered this question considered that expenses should not be as tied to success as they are at the moment.

Those who consider that section 103 of the Title Condition (Scotland) Act 2003 should be amended so that expenses are not as tied to the success of an application as they are at present

A number of the respondents including, the Scottish Land Commission, the Scottish Land & Estates, and the Scottish Tenant Farmers Association and another respondent considered that the principle of expenses following success raised access to justice issues.

The Scottish Tenant Farmers Association were very direct:

"Winner takes all has always been a dangerous principle and frequently acts as a disincentive to individuals seeking justice where the opposing party has deeper pockets."

The Scottish Land Commission gave an example of the problem:

"I am aware of cases, particularly in respect of rent negotiations, where the threat of the Land Court and the costs involved, is used by one party, normally the landlord, to persuade the other party to agree to a rent that they would otherwise consider to be unduly high. When faced with agreeing to a rent rise that seems unduly high or facing the costs of challenging the rent, many tenants will chose the former."

However, they and several others including Lord McGhie, did note that the issue was perhaps a little more complicated. For example, one respondent wrote that "[c]osts should not be allowed to be a barrier to justice and public bodies will be open to criticism if this is perceived to be the case". He then went on to caveat this though by stating that "neither is it reasonable for the taxpayer to fund costs which arise from an unsuccessful party pursuing a spurious case which had no merit. There is a balance. The Tribunal is well placed to exercise discretion to achieve that balance". He also stated that costs become more of an issue when they become disproportionate to the value in dispute and suggested a lower cost simplified procedure to resolve this sort of dispute.

Malcolm Combe also tried to present a balanced view:

"On an access to justice basis, I can see the argument for this not to be 'as tied', but I am not strongly of the view that section 103 is horribly skewed against an unsuccessful applicant. There is a place for the principle that 'expenses follow success', although problems can arise from its blanket application or prioritisation over other considerations. Perhaps the ', in particular,' wording in the section could be deleted to mitigate the position slightly.

Kieran Buxton agreed with this position.

Although he indicated that he was in favour of the Lands Tribunal power to award expenses under section 103 of the Title Condition (Scotland) Act 2003 being amended, Lord McGhie stated that he did not have a clear view stating:

"It should be noted that reference to 'expenses following success' is shorthand for the more complex requirement to find against the party whose conduct 'really caused the expense'. … This plainly can discourage people, both applicants and objectors. … It is particularly hard for a party litigant who thinks that title conditions issues can easily be explained without lawyers - as is very often the case – to find themselves liable in the expenses of solicitors and expert witnesses. A 'no expenses' rule would let people decide for themselves what level of firepower to engage."

The CAAV and SAAVA, Stirling Council, the Senators of the College of Justice indicated that they were in favour of amending the Lands Tribunal's power without offering any argument in support of the view.

The Sheriffs' Association raised possibilities that might apply if the Land Court and Lands Tribunal were to merge and be brought within the Scottish Tribunals Structure. It considered that if that happened, there may be merit in bringing the rules about expenses broadly into line with the current rules that apply within the tribunal world. It noted that the power to award expenses in the First-tier Tribunal (FtT) is somewhat restricted and in the Housing and Property Chamber the FtT may award expenses as taxed by the Auditor of the Court of Session against a party but only where that party through unreasonable behaviour in the conduct of a case has put the other party to unnecessary or unreasonable expense. It continued:

"Further where expenses are awarded the amount of the expenses awarded must be the amount of expenses required to cover any unnecessary or unreasonable expense incurred by the party in whose favour the order for expenses is made. Any such change is likely to increase the amount of business coming to the new merged Scottish Land Court and the Lands Tribunal for Scotland tribunal because the threat of an adverse award of expenses is much reduced."

On the other hand, the Scottish Crofting Association took the view that if there was a merger, the resultant body would be a court. It argued that "costs awarded should be proportional to the case and that protected expenses orders are made available. Appellants will incur expenses getting the case to court which can deter frivolous applications".

Professor Colin Reid and the ERCS tried to widen the argument of costs to environmental matters and the UK's international obligations under the Aarhus Convention.

Those who do not consider that section 103 of the Title Condition (Scotland) Act 2003 should be amended so that expenses are not as tied to the success of an application as they are at present

The Law Society was firmly against any emendation of the principle of "expenses following success". It noted that it is a generally recognised norm across a range of legal situations. It considered that any change has "the potential to open the floodgates for objections which may be ill-founded". It further argued that it may also "weaken the Tribunal's power to discharge real burdens 'as of right' and without the need for a hearing if an application is unopposed (section 97 of the Title Conditions (Scotland) Act 2003)". It did, however, suggest an alternative:

"Although we favour a status quo in relation to the power to award expenses under section 103 of the Title Condition (Scotland) Act 2003, we note that an alternative would be for parties to bear their own costs. While this approach is consistent with other tribunals, we recognise that Tribunal cases commonly involve an action between a party and the state, whereas applications under part 9 of the Title Condition (Scotland) Act 2003 concerns property owners. In light of our comments above, if parties were to bear their own costs, the court could order expenses in favour of a party where the court considers that a party or their representatives has acted unreasonably in bringing, defending or conducting the proceedings."

Two respondents whilst indicating that they did not favour any change, noted that there was always the option for the no expenses to be awarded by the Lands Tribunal and perhaps this is the way forward.

Other

Some respondents did not indicate whether they favoured an emendation to section 103 Title Condition (Scotland) Act 2003 but made comments that are worthy of note.

The Faculty stated that it supported the general principle that expenses should follow success and that it would be "unfair for parties in the sheriff court to be liable for expenses in an action for interdict to prevent breach of a title condition, but for the same parties not to be liable for expenses in a dispute over removal or variation of a title condition". It was, however, divided in its view as to whether the general principle ought to be "subject to modification, for example by expenses-capping, such as happens in environmental law cases".

The Crofting Commission stated that it had no view, but did note that the possibility of an adverse award of expenses in crofting disputes can be a deterrent to litigation and also prevents frivolous appeals.

Working Group for the Centre for Scots Law, indicated that it broadly supported a default approach that expenses follow success but that it could be modified or limited in certain ways. The suggested modifications included an expenses cap, similar to the simple procedure or the introduction of "an appropriate and limited fees scale".

The Scottish Assessors Association noted that in respect of the Lands Tribunal's power to award expenses, the current normal practice with regard to non-domestic rating appeals is that each party bears its own costs. The Association understood that the Tribunal does have powers to award costs, but normally does not so do "unless the behaviour of one of the parties in their conduct of the appeal is considered to be unreasonable". The Association consider that this procedure struck the right balance between preserving access to justice whilst protecting parties from inappropriate behaviour that results in unnecessary costs.