The Solution for that problem is to make a pawn and turn your mesh 90 degress up on scene turn the pawn 90 degreee back.
For that to work you have to write a custom movement component if its ai controlled or just write your pawn class so that your forward axis is Z.
Thats actually relatively easy to do. just make a custom c++ class inherented from pawn and follow the ue4 tutorial https://docs.unrealengine.com/latest/INT/Programming/Tutorials/PlayerInput/index.html
follow that and then jsut change the influenced axis from forward to up. (y to z).
or as a further twist add impuls instead of kinematic movement.
Beware you cant use the c++ class directly you have to make a Bp out of that again so you can drag this onto the scene! Its also not a bad idea to not set the camera and spring arm up in the class but later on in the BP.
I didnt try this with Bps but with cpp its no problem. The next problem which inherents from that is the camera control sceme which gets a little messed up if you intend to inherent control rotation for the springarm. That may require a custom getViewrotation method in your pawn class. Otherwiese its just a bit of mind twisting trial and error to make that look good.
But Beware a Capsule that s not always upright has problem with friction and behaving properly when controlled paritally by physics. By that i mean its likely to tople if not restrict on pitch. And roll you have to restrict anyway because you will never get the roll to behave. Pitch is a matter of taste and with less friction it isnt so likely to toplle over the front or back end. But you can make fun things with its just a little bit like the vehicle vontroller from physx which also rewquires a lot of time to get right. You will see what im talking about when yu try this out ;D
And dont try to inherent from actor because actor is not controllable because UWorld coesent know about it. Thats only doable(AFAIK) when editing the source code and would require therefore to have that on mind with every change to the engine. Using Character as base class for this is also not a viable solution AFAIK. So this is the least painful way of doing this.
Its really sad that UE is so restricted when its comes to character collision setups.