A long-awaited review of civil litigation funding in Scotland has recommended the introduction of damages-based agreements and qualified one-way costs shifting.

The Taylor Review, carried out by Sheriff Principal James Taylor, today sets out 85 recommendations for changes to costs and funding in Scotland.

Analysts have already drawn similarities with the Jackson report for England and Wales, completed in 2011, which formed the basis for the civil litigation section of the Legal Aid, Sentencing and Punishment of Offenders Act.

Under the changes recommended by Taylor, solicitors will be able to offer their clients agreements in which fees are calculated as a percentage of the damages recovered. The maximum percentage that can be deducted from damages in personal injury cases would be set on a sliding scale in which the percentage reduces as the award increases.

In the foreword to his report, Taylor says he sought to address what he called the ‘David and Goliath relationship’ of pursuer and defender of claims by proposing qualified one-way costs shifting.

This would mean an unsuccessful claimant will not be liable for the expenses of the defendant apart from in exceptional circumstances.

‘The key issue for me was how to improve access to justice in a meaningful way; in many cases, “meaningful” means being affordable for the private individual,’ said Taylor.

‘However, access to justice is a wider concept. It embraces the ability for any legal persona, be they individuals or commercial enterprises, to have access to the courts in order to attempt to vindicate their legal rights. Obstacles to access to justice can extend beyond the issue of affordability. Recoverability and predictability of expenses can be just as important.’

Taylor pointed to claims figures showing the number of claims made in Scotland is significantly lower than in England and Wales. For example, the total number of claims for motor liability made in Scotland was one twenty-fourth of those south of the border, from a country with one tenth the population. In Scotland, public liability claims were one fifteenth lower than in England and Wales.

‘Even if a “compensation culture” had taken hold in England and Wales, the data for Scotland did not disclose evidence of its appearance in Scotland,’ said Taylor. But he conceded that his recommendations did not differ significantly from those of Lord Justice Jackson in his review of civil litigation costs for England and Wales.

Responding to the Taylor review, Kim Leslie, convener of the Law Society of Scotland’s Civil Justice Committee, said the proposals would assist PI claimants.

’Qualified one way costs shifting – where injured people no longer face the possibility of significant adverse costs if their case is unsuccessful – will significantly improve access to justice in personal injury cases. The recommendation does acknowledge the need to build in safeguards to protect the system from abuse.

‘Some of the recommendations made in the Taylor review mirror changes which were recently made south of the border, such as damage based or contingency fee agreements. These are agreements under which a solicitor’s fee is calculated as a percentage of their client’s damages if their case is won, but no fee is payable if it is lost. We will actively investigate whether these recommendations have resulted in significant improvements, and what lessons can be learned in relation to Scotland.’

John Barrie and Jenny Dickson, Scottish representatives on the executive committee of the Forum of Insurance Lawyers, said the report is likely to have considerable impact on the cost of claims in Scotland. ‘A number of the proposals in the review appear to echo what has been introduced by the Jackson reforms in England and Wales, despite the expenses landscape in Scotland being very different to that south of the border.

‘The proposal to introduce no win, no fee as a percentage of damages, linked with one-way cost shifting may well lead increased levels of settlement.’