CHAPTER IX. PARTICULAR FACTORS OF THE COST OF LITIGATION. General Dimensions of Costs-The Chief Factors of Cost and their Distribution-The Regulation of Agents' Fees and Counsel's Remuneration "Lump," "Brief," and "Wholetime" Fees--Application of principle of "Supply and Demand"-Advocates' Clerks, their Remuneration and the decrease in their numbers-Agency Terms (sharing of fees)— Printing and Boxing-Shorthand Writers-Payment for copies of Notes of Evidence should be made to Shorthand Writer-Payment for Copies of Judges' Opinions should be made by Fee-fund Stamps— Fee-fund Dues-Time Fee for Debates. In the preceding Chapters of this Report we have reviewed and made recommendations with regard to a large variety of matters which have a direct bearing on the expense of litigation. In the present Chapter we purpose dealing with some particular factors of that expense which either do not bear any necessary relation to our other proposals, or (if they do) are more conveniently dealt with by themselves. General Dimensions of Costs.-There are no means of arriving at precise figures relative to the cost of litigation in the Court of Session, and the character and circumstances of different cases vary so widely that it is impossible to form any but the most general idea of its dimensions. But a fair general impression can be obtained from the figures supplied to us by the Auditor of Court relative to the whole of the Accounts of Expenses in Actions in the Court of Session which passed through his office for taxation during the five years 1920-21 to 1924-25. The total number of such accounts was 5509; and, taking the average figures for the whole period, 76 per cent. of these were taxed under £100, 22 per cent. between £100 and £500, and 2 per cent. above £500. Over and above these, there were of course, during those years, a very large number of accounts which were settled without going through the Auditor's Office; but there is no reason to doubt that the amounts and proportions shewn by the Auditor's experience fairly reflect those of the whole. It must be kept in mind, however, that the Accounts referred to are the accounts of the successful parties only, and that, particularly as regards the larger accounts, there would be among them many in which extra-judicial costs (i.e. costs of a kind not recoverable from the defeated party) would swell (more or less) the total cost of the litigation. But, keeping these considerations in view, the amounts cannot be said to indicate any extravagantly high level of cost. The Chief Factors of Cost and their Distribution. The main heads of expense are the fees of Counsel, the fees of Agents, allowances and fees of Witnesses, and Printing. These departments of cost bear no constant relation to each other. On the contrary, the figures in certain groups of typical cases (selected for our consideration by the Auditor) show the widest variation from group to group in the proportions which these various heads of expense bear to each other. In almost all cases the minimum of Agents' fees is substantial, and these fees in the aggregate vary less with the nature of the case than do those of Counsel. The latter may, in some cases, be negligible in amount; but they absorb an increasing share of the Account in proportion as the services of Counsel in the actual conduct of lengthy proofs and heavy debates are more in demand. As a result, in comparatively inexpensive actions the fees of Counsel and their Clerks represent a much smaller proportion of the total account than the fees of Agents, while in comparatively costly actions the proportions are reversed. In the groups considered by us, Agents' fees varied from 13 per cent. in one case (which required a long enquiry into the facts and the discussion of a mass of detail) to an average of 61 per cent. in five comparatively small actions and petitions in which only a Junior Counsel was employed. Senior Counsel's fees ranged from 11 per cent. to 23 per cent.; Junior Counsel's fees, from 15 per cent. to 18 per cent. Again, if a case is one in which scientific or other expert witnesses are employed, the fees and expenses of such witnesses may constitute by themselves as much as half of the total account. So also printing, with a view to presenting the case to the Inner House or the House of Lords, may absorb a large share. In four of the typical cases referred to, the fees of the ordinary witnesses only amounted on the average to 3 per cent of the taxed account; but in another (in which a number of witnesses were brought from abroad) they amounted to 42 per cent. These figures cannot be relied on as an index to the probabilities in any particular case, for every case has its own incidents and peculiarities. Indeed, no general conclusions can be drawn from figures of this kind, however carefully the typical cases or groups of cases on which they are based may be selected. In themselves, however, the variations disclosed provide no ground for suggesting that excessive charges are made in respect of any of the departments of the Accounts. They seem to correspond roughly with the varying extent of the respective contributions made by Counsel, Agents, Witnesses, and Printer to the service of the litigation. But while all this is so far satisfactory, it in no way diminishes the importance of cheapening costs, so far as that can be done without impairing efficiency. The Regulation of Agents' Fees and Counsel's Remuneration.The Table of Fees, which limits the remuneration of agents and restricts the items that can be made the subject of charge, is already somewhat out of date, and will require to be completely overhauled if effect is given to any material part of the recommendations made throughout this Report. Since the War, these fees have been subject to an increase of 33 per cent, made to meet the rise of costs of every kind-office-salaries and expenses particularly-which has marked the post-war years. Counsel's fees have always been in a different position, being merely honorary. Counsel cannot refuse his services to any client if his time is available; and, as both in principle and in fact his membership of the Faculty of Advocates imposes upon him the duties of a Public Office-owed to the public and the Court alike,— he has no legal right to any remuneration. The fees paid to him are accordingly fixed, within certain limits of variation, according to the honourable traditions which have long subsisted between the two branches of the legal profession, and any excess is restrained by the Auditor in taxing the Agent's account, subject (if necessary) to revision by the Court (see, e.g., Caledonian Railway Company v. Greenock Corporation, 1922, S.C. 299, especially at pp. 310 et seq.). In the case of Junior Counsel particularly, many of these fees are and have for long been practically stereotyped; but the fees paid to both Senior and Junior Counsel in respect of proofs and Inner House debates where the whole responsibility devolves on their shoulders are, and always have been, subject to considerable variation according to the time occupied and the difficulty of the case. There has, we think, been a tendency towards increase in these latter fees since the War, but whether to the extent of 33 per cent. (as in the case of Agents) it is impossible to say. A number of suggestions were made in the course of the evidence for the adoption of lump fees for the preparation of proofs by Agents, and of brief fees for Counsel, and for restricting the costs recoverable in respect of the employment of Counsel in certain cases to the fees of one Junior Counsel. We think these are matters of domestic regulation which might properly engage the attention of the Rules Council, who, if our recommendation in favour of the creation of that body is accepted, will have to revise the Table of Fees, and will include among its members representatives of the Faculty of Advocates. The same remarks apply to the points connected with Witnesses' fees which the Auditor brought to our attention. Both in the case of Counsel and in that of expert Witnesses, it is impossible to prevent individual clients from trying, regardless of expense, to ensure the exclusive attendance in their interests of the best (or the most fashionable) men at the hearing of their cases. With this object in view they offer exceptionally high fees, and some of the witnesses we examined seemed to think that this practice is on the increase. There is no doubt that the practice of paying "Whole-time Fees " to eminent Counsel for proofs and debates has considerably extended since its first introduction in Scotland (about twenty-five years ago) by Companies and Corporations, the specialties of whose legal business made it expedient to have specially retained Counsel. Such Counsel acquired familiarity with the details of particular classes of commercial or industrial affairs, and the command of their exclusive attention thus became of high value. The mischief of its extension is that it tends to raise the general standard of remuneration where there is no such special justification for it. For the reasons indicated above, we should deprecate any attempt to supersede the restraints of honour, and of professional Advocates' Clerks.-There is nothing in connection with the Court of Session comparable with the Inns of Court which constitute so characteristic a feature of the establishment of the High Court of Justice in England. A Scottish Advocate has no chambers apart from his own house. The provision of someone who shall go between him and the law agents who employ him thus becomes a practical necessity. The Clerks are remunerated under present practice by the Advocates' clients on a scale which varies according to the fee paid to the Advocate. Their fees constitute a very small proportion of the total costs of litigation. The plan of remunerating the Clerks by a charge on the client dates from a time when the Clerks at least the "First Clerks," as they were then calledcould practise as law agents. The "First Clerks" became incorporated with the body of the Solicitors practising before the Supreme Courts of Scotland; and the modern Advocates' Clerk is no more than the "Second Clerk" of former times, whose services to his client are restricted to the function of acting as a go-between. The position of these Clerks and the mode and scale of their remuneration is another domestic matter about which we do not feel called upon to make any recommendation. It is primarily one for the Faculty of Advocates to control, in view of its position as part of the College of Justice. It appears from the evidence that, largely (if not entirely) as the result of the devastation caused by the War, the work of the Clerks has recently fallen into comparatively few hands. It would be most detrimental to the interest of the Faculty if the concentration of the clerical work in a small number of hands gave rise to the apprehension that it was controlled by anything in the nature of a ring. We are not in a position to affirm positively that this stage has been reached; and we are sensible of the difficulties caused by the interruption of the regular recruitment both of the Bar and of the body of Advocates' Clerks which was a consequence of the War. But we think the views expressed on this topic by a number of the witnesses who appeared before us call for the serious consideration of the Faculty. Agency Terms. In connection with the subject of expenses our attention was drawn to the practice by which the fees of agents for conducting litigation in the Court of Session are shared between the Edinburgh and the local Solicitor acting in the same case for the same client. This sharing of fees is known as doing business on "Agency Terms." In litigation both Agents ordinarily contribute to the work, and the Agent giving instructions to another receives payment from his client of the accounts incurred to both. He retains all fees applying to the portion of the work performed by himself, and in addition he usually receives from the Agent instructed by him a portion, ordinarily one-third, of the fees applicable to the work done by such Agent. This one-third is not an absolute rule and sometimes includes and sometimes excludes Clerk's copyings, as may be agreed upon. Some agents neither charge nor give Agency Terms, but the practice is very general. In the case of litigious work coming to an Edinburgh Agent through a local Solicitor, while the fees are divided as mentioned above, it is usual that both attend on special occasions such as consultations, proofs and hearings. A successful litigant usually obtains a finding for expenses against his opponent. These expenses are termed the "judicial expenses," and are limited as against the unsuccessful litigant to such items as the Auditor allows on taxation as being necessary for conducting the litigation in a proper manner with due regard to economy Litigants usually leave to their Solicitors to decide what are suitable fees to Counsel and Witnesses and these are often larger than the Auditor will pass against the unsuccessful litigant. In other matters also, Solicitors avoid omitting anything that they think will conduce to success even though its cost may not be recoverable from the opponent. The consequence is that the amount recovered by the successful litigant is usually less than the total amount that he is liable to pay to his Solicitor or Solicitors, as between Agent and Client. On recovery by the successful litigant of the taxed amount of the "judicial account," the Edinburgh Agent makes out his "extra-judicial account" (per Table of Fees) against the client. This latter account includes in it all the work actually done by the Edinburgh Agent and all the outlays (e.g. fees paid to Counsel) actually disbursed by him. In almost all cases, therefore, it contains some items of work and some outlay in excess of the items of work and outlay that the Auditor passed in the "judicial account" as proper charges to be recovered from the unsuccessful party. The " extra-judicial account" does not and should not include any work done by the local Agent; and we have no reason to think that this, the proper, method of stating the Edinburgh Agent's account is not followed in practice. From this "extrajudicial account " is deducted the amount of the " judicial account recovered from the unsuccessful litigant, and the remainder is the H |