A Summary of Important Changes to Dispute Resolution Procedure: Coronavirus (Scotland) (No. 2) Act 2020

The above act (the “Act”) came in to force on 27 May 2020. The Act updates the provisions of the previous Coronavirus (Scotland) Act, as well as making some important additions.

For most of our clients, the most significant changes brought about by the Act from the point of view of disputes are:

1. Schedule 1, Part 3, Section 5: To make an individual bankrupt, you must now be due £10,000 as a creditor, an increase of £7,000 on the previous debt that was required. It will still be difficult to process any action seeking to bankrupt an individual where the courts are not yet fully open and continue to deal with urgent business only for the most part. This is an unwelcome development for creditors, but debtors will be relieved to see the threshold for bankruptcy increased, particularly at a time when cashflow may be difficult;
    
2. Schedule 2, Part 3, Section 9: Where documents were previously to be physically exhibited on the walls of court, they may now be published electronically on the Scottish Courts and Tribunals Service website. This is an improvement on the old system, in that electronic displaying of documents in this way is far more likely to effect the proper service of documents on the individuals that they are intended for rather than physically displaying them in a court building that’s not often visited by the public. This is one development which we would like to see remain in place after the current restrictions are lifted; and
    
3. Schedule 4 Part 3, Section 3: Inhibitions (a preventative measure, registered against a property’s title and used to stop the transfer of heritable property by a debtor to avoid paying a debt) may now be signed electronically. Again, this is an improvement that we would like to see remain in place, as there is no real need for a document of this nature to require anything more than an electronic signature.

It is likely that the Scottish Parliament will continue to update and tweak provisions as the current pandemic continues and we will keep you up to date with developments as they arise. Please do not hesitate to contact our Dispute Resolution team should you have any matters which you would like to discuss.

Disclaimer 
The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.