Act of Sederunt (Sheriff Court Rules) (Miscellaneous Amendments 2009) 5/10/09

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The Act of Sederunt (Sheriff Court Rules) (Miscellaneous Amendments) 2009 was introduced by the Lord President’s Office and passed on 18 August 2009.  Unlike a normal SSI, it was not subject to usual Parliamentary procedures. As a result Parliament had very limited powers to object, amend or halt its progression.

The Instrument introduces new procedures for raising actions relating to the Consumer Credit Act 1974 in the Sheriff Courts. A number of the amendments came into force on 1st October 2009, primarily relating to alterations to certain forms.  The most far-reaching amendments do not come into force until 1st December 2009.

What the Instrument does:

  • Amendments are made to various forms required in proceedings in the Sheriff Court under the Debtor (Scotland) Act 1987 ("the 1987 Act"), the Ordinary Cause Rules, Summary Applications, and the Summary Cause/Small Claims Rules.  New Forms are also introduced in relation to Time to Pay Directions and Time Orders
  • Imposes new obligations upon Pursuers to provide copy regulated agreements under the Consumer Credit Act 1974 ("the CCA") when lodging payment actions for recovery of sums due under a regulated agreement in the Sheriff Court
  • Introduces new requirements for Pursuers to state detailed reasons when objecting to Time to Pay Directions Introduces a procedure to allow a party to an action to apply to dismiss the action due to unwarranted delay
     
     

Provisions which came into effect on 1st October 2009
In brief, the new provisions are as follows:

Time to Pay Orders
Forms of Application for Time to Pay Directions and Time Orders under the CCA are amended to include more details of Debtor’s income and outgoings than were previously required. For example, details must now be provided regarding income and the source of that income together with a breakdown of outgoings and a note of the defender’s dependants.  The result is that with immediate effect the amended form of Application will require to be served on Defenders in all actions raised.

Conjoined Arrestment Orders
Where a Conjoined Arrestment Order is required the form of application has been amended to include some further detail to mirroring the requirements of the amended 1987 Act.

Dismissal of Action due to Delay
The Instrument introduces a process in Ordinary Cause and Summary Cause actions whereby a party to an action can apply for dismissal due to delay in progressing the action. In determining whether to dismiss the action the Court will have regard to whether:

  • There has been an inordinate and inexcusable delay on the part of any party or agent in progressing the action; and
  • Such delay results in unfairness specific to the factual circumstances, including the procedural circumstances of that action.
     

Provisions which will come into force on 1st December 2009
For banking clients, we consider that the changes coming into force on 1st December 2009 will have a major effect on debt recovery practice and procedures.  In brief, the effect of these new provisions are as follows:

Raising Payment Actions
When raising an action for payment based on an agreement regulated by the CCA, a copy of that agreement will require to be produced at the outset. The initial writ or summons must also include statements that the agreement exists together with details of the agreement. The details that require to be included are not specified, but we would suggest as a minimum that these include the date that the agreement was entered into, the amount borrowed, the contractual payments required and the term of the agreement.

Prior to raising actions we will require to be provided with a copy of the credit agreement and, whilst there is some room for doubt, in our view this should be a true copy of the agreement in terms of the Section 77 and 78 of the CCA.

Time to Pay Directions and Time Orders
When raising a payment action for an amount which does not exceed £25,000, the pursuer must provide the defender with a form allowing the debtor to apply for a time to pay direction or Time Order under the 1974 Act. The Act introduces new style Forms which require the Defender to include more detailed information regarding their income and outgoings and their proposals for repayment.

It will now be for the Sheriff Clerk rather than for the defender to intimate Time to Pay Applications upon pursuers in Ordinary and Summary Cause/Small Claim actions.  In the past it was common for defenders to fail to intimate their application, meaning the pursuer was often unaware of it, resulting in delays.

In the event that an application for a Time to Pay direction is opposed we must provide detailed reasons in a new form prescribed by the Instrument. The information required mirrors the considerations which a Sheriff must take into account in making or refusing a direction in terms of the 1987 Act.  That form requires to be intimated upon the defender at the time of opposition, which is a new requirement.  Previously the Court and the defender did not require prior notice of the reasons for the objection as these would be advanced at the hearing on the application.  As a result of this amendment we will require detailed information from our client’s at an early stage in order to satisfy the requirements.

The Instrument applies to Ordinary Cause, Summary Applications, Summary Cause and Small Claim actions. In Ordinary Cause actions a hearing will take place within 28 days of the opposition to the Application being received by the Court. In Summary Cause and Small Claim actions the Court must receive opposition to the Application 9 days prior to the Hearing or Calling Date.  In Summary/Small Claim actions the period between the Return date and Calling/Hearing dates has been extended from 7 to 14 days.

The Rules as they applied prior to 1st December 2009 will continue to have effect for the purpose of any initial writ or summons, Time to Pay Direction or Time Orders lodged prior to 1st December 2009.

Summary
Under the new provisions Pursuers will require to have much more detailed information to hand prior to raising proceedings in the Sheriff Court, particularly where the CCA applies.

If Pursuers do not retain detailed information upon which true copy CCA agreements can be constructed they will be rendered unable to pursue recovery proceedings. Furthermore, the onus placed on Pursuers to provide information relating to all previous payments and dates of payments when opposing Time to Pay Directions and Time Orders may prove onerous where large volumes of cases are being instructed. 

Further information
Click here to read the Act which also contains the new style forms.

For further information on this or any banking-related issue, please contact Ruari MacNeill, Claire Martin, Andrew Foyle, Lesley Paterson or your usual contact at Anderson Strathern. 


This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.