Scotland's New Litigation Procedures

Introduction

Scotland's litigation procedure for smaller value actions (those between £1,500 & £5,000) 1 has been updated by the introduction of new court rules2. In addition the judicial expenses (solicitor's costs) have also been revised.3 This article takes a brief look at undefended and defended litigation and costs in the event of the case being defended.

With the new rule book extending to some 156 pages many will expect radical changes to current procedure. However, only 55 pages relate to the actual rules with the rest of the pages being devoted to the various forms along with a very useful glossary.

The rules and forms prescribe the means by which litigation is conducted for all types of court action, both undisputed and defended, including payment actions; actions for damages for personal injury and actions for delivery. However, credit controllers will be more focussed on payment actions - being the style required for debt recovery. Although many of the new rules are virtually identical to the old ones - important changes have been introduced.

Whether the rules will represent a "sea change" in Scottish litigation remains to be seen although a real attempt has been made to respond to litigators' greatest concerns.

Greatest Impact

From a debt collecting perspective the greatest impact will be on defended litigation and the increased fees which can be levied should a case be defended.

If clients suspect the case will be defended they should tell this to their lawyer at the outset. This is because usually with the vast majority of cases being undefended the summons, by necessity, is not usually drafted with any great precision. Many creditors take the view once a case becomes defended "it's really too much bother" and what they want is an early exit at little or no cost. There may be good commercial reasons for this. The court's rules do allow for early abandonment although pursuers (claimants) will have to appreciate there will be a financial consequence. Unless the creditor's lawyer can agree with the defender's counterpart the case can be abandoned on the basis of no expenses being due to or by either party there could be quite a hefty sum due to the defender for these expenses. Perhaps the moral is creditors should iron out any dispute they are aware of prior to embarking on litigation.

A Brief Mention About Small Claims

Contemporaneously the Small Claims Rules were also amended. A Small Claim is very similar in form and substance to a Summary Cause action with the proposed financial limit being £1,500. As for the proposed expenses, in the event of a Small Claim being defended should the value of the action be between £200 and £1,000 the maximum amount of expense, which may be awarded will be £100. In the event of the claim exceeding £1,000 the maximum expenses will be no more than 10% of the value of the claim; i.e. £150.

Undefended actions

The court action is commenced by the pursuer preparing a summons which requires to conform to the rules. There is little difference between the style of the old and new forms. Payment actions will have to contain a monetary claim (the sum sued for) with a supporting "statement of claim".

The rules stipulate the statement of claim has to give the defender fair notice of the claim and its basis. So, for example, if the claim relates to the provision of goods or services their description, their date of supply, value and possibly their order date should be stated.

For reasons to become apparent, when discussing defended litigation it may be prudent for supporting invoices or a statement of account to be produced to the court along with the summons when first submitted to the court for warranting. The writer is conscious how difficult this can be, particularly for institutional creditors such as banks and building societies. However, only the sands of time will determine whether this requirement will be, for practical purposes, accepted practice.

A copy of the summons will require to be served on the defender. This is done by the pursuer's lawyer - usually by recorded delivery post - and thereafter by sheriff officer if postal service is unsuccessful. Different types of service copy will be used depending upon whether the defender is entitled to apply for time to pay the debt, whether this be by Time to Pay Direction or Time to Pay Order.

With any summons there will be two critical dates, being the return date and calling date.4 Generally the return date is the day when the defender must return any document to the court whilst the calling date (always 7 days after the return date) is the date the case will call in court for a hearing. The calling date will be critical in defended cases.

What happens if the claim is undisputed?

If in response to the summons the...