Taxation and Note of Objections procedure

Where matters cannot be resolved through the normal process of negotiation, counsel (or SLAB) has a right to refer the matter to the Auditor, subject to the guidance below.

Given the comprehensive nature of the Table of Fees and notes on the operation the auditor’s role can be limited even where a case proceeds to taxation.

Paragraph 1 of the notes on the operation states:

“Subject to the following provisions of this Schedule, the fees of counsel shall be calculated by the Board, or in the event of dispute by the auditor, in accordance with the fees prescribed in the Tables of Fees set out after paragraph 17 to this Schedule…”

All work must be calculated in accordance with the Table of Fees, where appropriate, including those cases which are subject to taxation.

The purpose of this paragraph is to make clear that there is limited scope for the exercise of discretion in the calculation of prescribed fees and they are subject to the constraints contained in the Tables of Fees.

Paragraph 17 of the notes on the operation states:

“In any taxation of counsel’s fees in terms of regulation 12, the auditor shall have regard to information not previously made available to the Board only if the information was not available to be provided to the Board at the time it made the offer to counsel which is the subject of taxation, or on cause shown”.

In the event that the case is referred to the Auditor, you must provide us with any information that you intend to provide in support of the claim before it can be considered.

Scope of taxation – charges not subject to the taxation process

While there is a statutory right to taxation, it is not a universal remedy for a range of issues that may arise at the assessment stage.

It is limited in a number of ways.

For example, it is primarily our decision whether an account submitted to us is competent and falls to be assessed. It is not a decision of an auditor.

This may arise, for example, in situations where:

• you have undertaken work which requires our prior approval without the necessary approval
• you have undertaken work which is specifically precluded from payment in terms of the notes on the operation of the table of fees
• your account has been submitted out of time without a special reason being provided that would allow us to exercise our discretion.

We may make this decision, subject always to judicial review, at any time whether an account is identified and rejected immediately on its receipt, or is identified thereafter in the course of being processed for assessment.

It is inherent in our regulations that the account must have been assessed before it is lodged for taxation.

Taxation is premature in circumstances where we are unable to finalise the assessment of an account.

This may arise in circumstances where we have paid on offer but you have made no meaningful attempt to negotiate or agree the account, or where we have requested information, documentation or perhaps even the file and such information has been withheld.

Our position is that it is an abuse of the taxation process to lodge an account for taxation in these circumstances, and any reference to the auditor will be challenged.

Provision for Taxation of Fees and Outlays

Where we are unable to reach an accommodation on the fees and outlays payable from the Fund provision is made which allows you to exercise your right to taxation.

Taxation is the process where an independent determination of fees is carried out by the Auditor.

At the conclusion of the taxation having considered all the documentation and where appropriate heard submissions, the Auditor issues a report.

In terms of regulation 12(1) of the Civil Fees Regulations, if any question or dispute arises between us and a solicitor or counsel as to the amount of fees or outlays, the matter shall be referred for taxation by the auditor.

For taxations under legal aid the auditor is:

• in relation to proceedings in a sheriff court the auditor of that sheriff court
• in relation to proceedings in the Sheriff Appeal Court, the auditor of the Sheriff Appeal Court
• in relation to proceedings in the Court of Session, the Auditor of the Court of Session.

The regulatory provision for an account being lodged with the auditor is simply a link into the wider system of taxation in Scotland.

The normal policies and practices surrounding the taxation of accounts apply, and the auditor has a wide discretion in the way in which a taxation is conducted.

The role of the auditor in a legal aid case remains the same as in any other taxation. In this regard, the respective roles of the auditor and the court were defined by Lord Woolman in the case of Marilyn Stewart and others v Mrs. Amanda Reid and another [2015] CSOH 175 at paragraphs [24] and [25]:

“[25] From those authorities I derive the following propositions regarding the respective roles of the Auditor and the court: 

1. The Auditor acts essentially as a valuer. 
2. He is expected to apply his knowledge and experience in carrying out his task of assessing a fair and reasonable fee.
3. The court will be slow to disturb his decision if he has properly exercised his discretion.
4. It will not substitute its own views for those of the Auditor.
5. It will not attempt to tax an account itself.
6. The court will, however, intervene if the Auditor did not have sufficient materials on which to proceed, or his decision is unreasonable.”

It is not the function of the auditor, as identified at bullets a. and b. to interpret the legal aid legislation or to attempt to attach a value to work that is not chargeable due to a more fundamental cause, for example that the work was undertaken or an outlay incurred:

• before the client was properly admitted to legal aid
• the work was outwith the scope of legal aid.

When a case has been lodged for taxation you will require to comply with the procedures that are set down by the relevant auditor which will ordinarily follow the procedures laid out in:

• Rules 48-53 of the Supreme Court Rules 2009
• Chapter 42 of the Rules of the Court of Session
• Chapter 20 of the Sheriff Appeal Court Rules; or
• Chapter 32 of the Sheriff Court Ordinary Cause Rules.

Note of Objections to the Auditor’s report

In certain circumstances a Note of Objections to the Auditor’s report can be taken if it is considered the Auditor has gone wrong.

In terms of regulation 12(2) or 12A of the Civil Fees Regulations, SLAB and any other party to a reference to the Auditor have the right to state written objections to the court in relation to the Auditor’s report within 14 days of the issue of that report.

For the purposes of this regulation the “the court” means:

• in relation to any report of the Auditor of the Court of Session, the Court of Session
• in relation to any report of the Auditor of a sheriff court in relation to proceedings in the Sheriff Appeal Court, the Sheriff Appeal Court
• in relation to any report of the Auditor of a sheriff court, (other than a report in relation to proceedings in the Sheriff Appeal Court), the sheriff.

It should be borne in mind, before taking a note of objections to the Auditor’s report, that the Auditor has a wide discretion.

The court’s role in challenges to the exercise of that discretion is a limited one and analogous with those available in a judicial review.

The leading modern authority is Shanley v Stewart [2019] CSIH 15, Lord President (Carloway) delivering the opinion of the court, at [25], states “The court can interfere only if the Auditor has misdirected himself in law, taken irrelevant circumstances into account, failed to take into account relevant circumstances or misunderstood the factual material before him. Where his decision depended on the exercise of discretion, it will be susceptible to being overturned only where it is such that no reasonable auditor could have reached it.”

Taxation decisions: the practical effect

Auditor’s decisions are not binding on any other auditor although they may well be persuasive.

In terms of part 3, paragraph 18 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018, the Auditor of the Court of Session must issue guidance to the auditors of court about the exercise of their functions.

The guidance may, in particular, include guidance relating to the types and levels of expenses that may be allowed in an account of expenses.

Taxation decisions, sometimes only in the form of a taxed account, may do no more than value the work or outlays incurred in the circumstances of the account.

This together with the lack of any requirement for an auditor to issue detailed reasons, the role of the auditor being a “practical jurisdiction” – see Marilyn Stewart and others v Mrs. Amanda Reid and another [2015] CSOH 175 at paragraphs [26] to [29] – means that most decisions have limited practical effect beyond the circumstances of the particular account that is the subject of taxation.

Other decisions, however, often in the form of a Note or Report, may set out certain general observations or broad principles and where this is so they will have guided our decisions and approach to taxation.

There are some decisions which have been instrumental in forming our approach and the content of this Guidance.