OUTER HOUSE, COURT OF SESSION
OPINION OF J. GORDON REID Q.C., F.C.I.Arb.
Sitting as a Temporary Judge
in the cause
SUSAN McNEISH (A. P.)
THE ADVOCATE GENERAL
Pursuer: Gardiner; Allan McDougall & Co., S.S.C.
Defender: Hood; Morton Fraser
30 July 2004
 On 25 June 2004, I heard a motion on behalf of the pursuer to modify her liability for expenses as an assisted person to nil. An identical motion was on, 25 February 2004, refused as premature. Since then, parties' accounts of expenses have been prepared and agreed.
 The pursuer raised an action in November 2001 under the Optional Procedure for £150,000 against the Advocate General as representing the Ministry of Defence in Scotland. On 18 May 1999, a vehicle, driven by an employee of the Ministry drove into the rear of the vehicle in which the pursuer was a back seat passenger. Liability was admitted on record. In the pleadings there are lengthy and over-elaborate averments of the loss injury and damage for which she sought damages. Essentially, the pursuer, who was two months pregnant at the time, suffered whiplash injuries and a central prolapsed lumbar intervertebral disc. Averments of continuing pain, flashbacks, PTSD, the need for physiotherapy and possible cognitive behavioural therapy, loss of amenity and a claim under section 9 of the Administration of Justice Act 1982 are made. Averments of loss of earnings past and future and disadvantage on the labour market are also made. The defender's initial response in the pleadings was formal. A tender in the sum of £12,500 was lodged on 22 April 2002, which was in addition to a sum of £2000 of interim damages which the defender had paid voluntarily at an earlier stage before the action was raised. A diet of proof, fixed in December 2001, for 5 November 2002 was discharged on 25 October 2002, the pursuer being found liable as an Assisted Person in the expenses of the discharge. The pursuer had, a week earlier, lodged a Minute of Amendment, elaborating on the injuries suffered and adding a claim for future wage loss. A fresh diet was fixed on 14 March 2003 for 24 February 2004.
 By Minute of Amendment, dated 26 March 2003, the defender alluded to the pursuer's medical history and averred inter alia that the prolapse suffered by the pursuer was likely to have occurred "even without the accident within months of the accident" either spontaneously or following a minor strain to her back. Shortly thereafter, the defender lodged two expert medical reports dated November 2002 and 27 February 2003 supporting her averments on causation and quantum. The later report, I was informed, indicated that the prolapse would have occurred within a period of three months rather than twelve months stated in the earlier report
 In response, the pursuer sought her own medical expert's view on these reports. The advice apparently given, in April 2003, was that if the accident had not occurred there would have been no prolapse, thus contradicting the opinion of the defender's medical expert. In these circumstances, the pursuer prepared for the proof fixed for 24 February 2004. However, a pre-proof consultation with her medical expert did not take place until 9 February 2004, less than two weeks before the start of the proof. I was informed that at the consultation, which the pursuer did not attend, the pursuer's medical expert, when pressed, "moved closer" to the opinion expressed by the defender's medical expert. The pursuer's instructions were taken, and some discussions took place with the defender's advisers, but they would not move from their Tender. Accordingly, on Friday 20 February 2004, "informal" acceptance of the Tender was intimated to the defender. A Minute of Acceptance of Tender was lodged on Monday 23 February 2004 and the case settled.
 In these circumstances, the pursuer has, by interlocutor dated 25 February 2004, been found entitled to the expenses of the action up to the date of Tender, but the defender is entitled to the expenses of the action thereafter. The pursuer's judicial account of expenses up to the date of Tender has been agreed at the sum of £4,300, and the defender's judicial account from that date until settlement has been agreed at the sum of £6,250.
Pursuer's Financial Circumstances.
 The pursuer is employed as a checkout operator in a supermarket. She works 19 hours each week and earns £400 net per month or £4,800 net per annum. Her social partner, earns £850 net per month or £10,200 per annum. They thus have a combined earned annual income of about £15,000. They have two children, aged four and a half years and one year and receive Child Benefit of £26 per month or just over £300 per annum. They pay rent of £116 per fortnight or about £3,000 per annum; they pay Council Tax of £1872; they have a Bank loan which they are repaying at the rate of £168 per month or about £2000 per annum. Their annual outgoings thus amount to about £7,000.
 The pursuer's Legal Aid Certificate discloses a Disposable Income of £2,767, Disposable Capital -"Nil" and a "Nil" Contribution.
 Counsel for the pursuer referred me to section 18(2) of the Legal Aid (Scotland) Act 1986, to Stoddart, The Law and Practice of Legal Aid in Scotland (1994) 4th Edition, paras. 14.11-14, 14.17, 14.21, & 14.26, and to Burns v James M'Haffie & Son Ltd 1953 S.L.T. 238. He pointed out that when the Tender was lodged there was no defence in relation to the prolapsed disc. It was surprising that a young woman should have advanced degenerative changes without an accident. She had acted reasonably by declining to accept the Tender in 2002. Moreover, it was reasonable to rely on her own medical expert in 2003. She had therefore acted reasonably and her liability in expenses should be modified to nil or to 50% or such other appropriate amount.
 Counsel narrated the pursuer's financial circumstances which I have set out above. He submitted that if the defender's judicial account from the date of tender is £6250, then the pursuer's solicitor's account for that period is likely to be just as much; the pursuer will have to pay that account through the settlement sum. He informed me that the defender's judicial account from Tender to March 2003 was about £2175. As there was no defence on record relating to the prolapsed disc during that period, the defender should not be entitled to recover that sum.
 Miss Hood, for the defender, submitted that there were two relevant factors to consider, namely the conduct of the litigation and the means of the parties. The defender had acted reasonably throughout. An interim payment had been made before the action was raised and liability was admitted at an early stage. The defender took the view, on receipt of the February 2003 medical report, that the Tender lodged in 2002 was generous but decided not to withdraw it. The pursuer had ample opportunity to consider that report; to do so only shortly before the proof in February 2004 was unreasonable; the pursuer's medical expert should have been "pressed" at an earlier stage between March 2003 and February 2004. In principle, a defender was entitled to the benefit of his Tender. Miss Hood also referred to Burns at page 240 col 1 where Lord Guthrie refused to modify an Assisted Person's liability in expenses and allowed the defender, where the pursuer had failed to beat a Tender, to set off his taxed account against the damages and expenses awarded to the pursuer. She also referred to O'Donnell v M. & G. Robertson 1965 S.L.T. 32 where Lord Hunter refused to modify the pursuer's liability and allowed the defenders to set off their taxed expenses against the damages awarded, and to MacKenzie v Lothian and Borders Police 1995 S.L.T. 1332 at 1335D-F. The pursuer's conduct should be judged objectively and therefore the rejection of the tender, the purpose of which is to prevent unnecessary litigation, must be assumed to be unreasonable. In Hanley v James Bowen & Sons Ltd 1976 S.L.T. (Notes) 32 at page 33, Lord Macdonald accepted that in certain circumstances, refusal to modify would be appropriate. The purpose of Legal Aid was to put persons with insufficient funds on the same footing (but not on a better footing) as a privately funded litigant who would be able to bear the costs of litigation. Litigation is a risky business. Defenders will be discouraged from tendering in Legal Aid cases if they are not allowed to reap the benefits of a prudent tender.
 As to the means of the parties, the defender represents the taxpayer. Refusing modification will not affect the pursuer's own resources. The court should take into account the damages recovered (Mackenzie at 1334L). If set off operates, the pursuer's liability in expenses will be £1,950 (£6,250-£4,300). The circumstances which led to limited modification in Mackenzie (the pursuer there was unemployed and in receipt of State Benefits) did not apply here.
 The starting point is section 18(2) of the 1986 Act which provides that "The liability of a legally assisted person under an award of expenses in any proceedings shall not exceed the amount (if any) which in the opinion of the court or tribunal making the award is a reasonable one for him to pay having regard to all the circumstances including the means of all the parties and their conduct in connection with the dispute". The court is given a wide discretion. The only factors bearing on that discretion upon which counsel addressed me were the pursuer's means and conduct, the defender's conduct and the history of the action. I also bear in mind the general principle, which is subject to exceptions, set forth in section 17(2B) that where there is a net liability of the Scottish Legal Aid Fund on the account of any party, the amount of that liability is to be paid to the Scottish Legal Aid Board in priority to any other debts, out of any property which is recovered for him.
 From the authorities cited to me, the following propositions appear to be the backcloth to the exercise of discretion conferred by section 18(2):-
 In my opinion, viewed objectively, the pursuer's conduct of at least part of the action is unsatisfactory. Between March 2003 and up to 9 February 2004, no effective steps were apparently taken to test, in consultation, the significant medical argument advanced in the defender's medical reports and pleadings. During that whole period, much unnecessary expense was incurred by the defender. It took the pursuer a further two weeks until the eve of the proof to decide, in light of her own medical expert's apparent shift of position, to accept the tender, and to accept it. No satisfactory explanation was given for holding a consultation so late in the day with an expert whose views were bound to have a very significant effect on the valuation of the pursuer's claim. The defender, on the other hand, acted fairly throughout by making a payment to account, admitting liability and tendering early in what seems to have been quite reasonable terms.
 As for the pursuer's means, her present financial circumstances will not be affected at all if I refuse to modify her liability in expenses. She will be able to meet that liability. She has secured a settlement of £14,500 with an award of expenses in her favour of £4,300. She has a liability to the defender in the sum of £6,250. Her own expenses over the same period between 22 April 2002 to date seem to be of the same order. If no modification is granted and set off is applied, as provided for in the court's interlocutor dated 25 February 2004, both in relation to the accounts and the sum of £14,500, the pursuer will be left with net damages of about (£14,500 + £4,300) - (£6,250 +£6,250) i.e. £18,800 - £12,500, namely £6,300. Her present circumstances will not be adversely affected if I refuse to modify. If the interim payment of £2000 does not fall to be paid into the Legal Aid Fund, the resulting figure of £6,300 becomes £4,300, and she already has the interim payment. It was not suggested that any further expenses due to the pursuer's solicitors (falling outwith the scope of judicial expenses) would eliminate the surplus of either £6,300 or £4,300.
 The facts and circumstances of this case do not justify modification of the pursuer's liability in expenses to the defender. I cannot find any basis in the material before me not to apply the general propositions set out above. Litigation is a risky business. For one reason or another, it rarely goes according to plan. Here, the defender has, possibly fortuitously, lodged an early, and apparently generous tender, which because of a late change of view by one or more of the pursuer's advisers, had to be accepted very late in the day. The revelation of new information and new arguments, the strengthening of one line of attack and the weakening of others are but some of the risks which all litigants must endure. Although a litigant with a legal aid certificate thereby has, in practice, a strong bargaining tool, such a litigant is not immune from these risks. It would be unjust if he were. In my opinion, therefore, the full amount of the defender's expenses is a reasonable amount for the pursuer to pay having regard to all the circumstances including the means of the parties and their conduct in connection with the dispute.
 In the foregoing circumstances, I refuse the pursuer's motion.