In Scotland, if you have raised a court action against another person for recovery of a sum of money then you are known as the “Pursuer” and the person you have taken to court becomes known as the “Defender”.
Defenders in court actions have been able to take advantage of formal offers of settlement for some time, offers known as “tenders”. However, as of 3rd April 2017, Pursuers are able to make formal offers of settlement in Sheriff Court actions seeking payment of £5000 or more or in Court of Session actions.
How is an offer made?
The Pursuers’ offer can be made in an action which seeks an order for a payment of a sum, or sums of money, unless the court may not make that order without evidence.
The offer must
- State the chapter the offer is being made under the appropriate court rules
- Offer a sum of money inclusive of interest to the date of offer and offer that the Defender accepts the taxed expenses
The offer may –
- Be made at any time before the court retires to consider judgement or gives judgement (or before the jury retires to consider the verdict in a jury trial)
- Be withdrawn at any time before it is accepted.
What happens after an offer is made?
Following an offer being made by a Pursuer, the Defender can then choose whether to accept or reject the offer.
If the Defender chooses to reject the offer, or fails to accept the offer within a reasonable time, then additional expense may be awarded against them, if the Pursuer is awarded a sum equal to or greater than the offer formally made. The rules do not specify what is considered a reasonable time and this will likely vary from case to case depending on the circumstances, however, acceptance within a 21 day period is likely to be deemed as acceptable.
The additional expense that would be applied would be a 50% uplift on the Pursuer’s account of expenses from the period when the offer could have reasonably been accepted until it was accepted, or until a judgment was passed. It is for the Pursuer to make the motion to the court for this additional uplift to be applied.
What are the advantages of these changes?
The introduction of Pursuers’ Offers are likely intended to encourage early settlement of cases. They will undoubtedly be a valuable tool for Pursuers seeking to put pressure on a Defender, who risks additional expenses by rejecting or delaying in accepting an offer. A potential benefit for Defenders will be receiving an insight into a Pursuer’s more realistic view of the valuation of their claim.
If you have any questions relating to raising court action in Scotland, please do not hesitate to contact a member of our experienced court team here.