Significant litigation success for our client defending a commercial claim

John Bett, Partner in our Commercial Disputes and Litigation team explains how our litigation experts successfully secured a six-figure sum for our client in a rare motion for an interim payment to account of an award of expenses.

There is no denying that litigation can, at times, be a costly and time-consuming exercise. In raising proceedings, the pursuers (claimants) at least have the opportunity to consider whether they wish to commit the required time and money to pursue their claim. Defenders (respondents) have no such luxury when faced with claims, even when they consider the claims to be without merit. That was the position one of our clients found themselves in when served with a multi-million pound commercial action brought against them by their landlords at one of their sites.

The dispute

The claim brought against our clients was largely in respect of an alleged dilapidations liability, but extended to cover a declaration of irritancy, alleged arrears of rent and service charge and various other sums. Our clients rejected the claim, which ran into excess of £2.5m, in its entirety. We were instructed to defend the proceedings brought in the Commercial Court of the Court of Session. 

The outcome

Following some initial procedure, a preliminary proof (restricted trial) went ahead in respect of the major elements of the claim, with eleven witnesses giving evidence over the course of four days. Our clients were successful at the proof, with the Court finding that their approach to assessing their dilapidations liability, if any, was the correct one. 

The decision of Lady Wolffe in the action, Dem-Master Demolition Limited –v- Healthcare Environmental Services Limited, can be found here. 

Following further procedure, our clients sought to have the remaining elements of the claim dismissed. That motion (opposed by the pursuers) was subsequently granted by the court. 

The award of expenses

Once what had remained of the claim was dismissed, the focus of parties’ attention quickly moved to expenses, particularly given the considerable sums committed in the action. An award in favour of our clients, partly on an agent/client, client paying basis (the highest form of recovery available) and with a ‘multi headed’ uplift (an allowable increase to the allowable solicitor fees on account of the specialised skill of the solicitor involved, the importance and value of the action, etc.) was made by the Court. 

Application for an interim payment to account of an award of expenses

While the expenses award was a very welcome one for our clients, the preparation of such a substantial account of expenses and likely fixing of Taxation (a hearing for the account to be assessed by the Auditor of Court) would take many months. On that basis, our clients sought an interim payment to account of their substantial award. 

In support of the motion for an interim payment, a letter was provided to the court from our law accountant. The letter set out our law accountant’s estimate of the likely value of the expenses award, together with a detailed breakdown of how it was calculated. A detailed note on the legal basis for the application was also lodged in support of the motion.

The interim payment to account

The six-figure, interim sum sought by our clients - which was only a percentage of the estimated final award - was subsequently awarded by the Court. The sum was to be paid within 14 days – as opposed to the likely four to six months or more which could reasonably be anticipated for the full award to be realised.    

Comment

Unlike in most other international jurisdictions, interim payments to account of awards of expenses are rarely sought in Scotland. The award in this action, similar to a small number of other awards in recent times, serve as a reminder to litigation solicitors in Scotland that such awards are perfectly competent and, indeed, should be sought when the circumstances permit.

“Lindsays’ pro-active approach to defending the action secured tactical advantages for us throughout. Their commitment to achieving the best possible outcome for us didn’t stop with the dismissal of the action, but went on to secure an early payment to account of our expenses.”

Garry Pettigrew, Managing Director, Healthcare Environmental Services Limited

Our Commercial Disputes and Litigation experts would be happy to provide advice relevant to your particular situation.

Notes

Jonathan Brown, Advocate, Axiom Advocates, was instructed by Lindsays for Healthcare Environmental Services Limited.

Joseph Madden of PMP (dilapidations) and Douglas Smith of DHS Consulting (utilities) were instructed by Lindsays  in the action and were certified as expert witnesses.