As we acclimatise to the continuing Coronavirus/Covid-19 restrictions in place and with no hint of a move to phase 4 on the horizon, the Courts continue to issue updated guidance from time to time on how certain business can proceed and on what basis you can seek to do so. Each Sheriff Court across the county now publishes its own guidance on how the restrictions in place will be navigated. We have put together a general summary of the position.
Please note, due to the pace at which the impact of the present Coronavirus / COVID-19 pandemic is evolving, this article can only seek to offer insights as at the date of publication (30 September 2020). It is acknowledged that the position may change over the coming days, weeks and months.
The Coronavirus pandemic has impacted on every individual, organisation and business in the UK and the world over. The Scottish Courts and Tribunals Service (SCTS) is no exception. Whilst a return to business as usual is not yet possible, parties can now take steps to progress certain business. With regard to civil business (including, actions for payment of money), the following changes will take effect.
Court of Session
The Court of Session will now progress certain business as follows:
- The Inner House (primarily dealing with civil appeals from the Outer House) will allow substantive hearings to proceed by way of WebEx video conference or by written submissions. The Court will now hear appeals and procedural hearings will proceed as scheduled (preferably by way of written submissions or if required, by way of WebEx video conference).
- The Outer House (primarily dealing with high value and complex civil cases) will now allow most procedural hearings to proceed as scheduled in the Commercial, Ordinary and Family Courts, as well as those relating to Petition business (including for example Petitions by creditors seeking to wind up a company). The procedural hearings will be conducted preferably by teleconference or by written submissions, with the agreement of the Court. Any parties who had business which was scheduled to call before 21 April 2020 and was cancelled can now apply to have that business rescheduled.
The Courts are now dealing with administrative business electronically.
Urgent matters will be prioritised.
Non-urgent matters are likely to take longer than usual to be progressed due to a backlog of correspondence/limited staff resources.
Substantive hearings in some cases can be conducted by electronic means.
Sheriff Court
In addition to urgent Sheriff Court civil business (including applications for interim interdicts, caveats, urgent corporate insolvency and sequestration applications, urgent applications in relation to Adults with Incapacity and various child protection and support related applications), all local Sheriff Courts have resumed dealing with the following business :
- Any new simple procedure, summary cause, ordinary cause, family and commercial actions; adults with incapacity applications; and corporate insolvency proceedings or those types of actions which were sisted by the Court or administratively adjourned can be now progressed where the Court is satisfied that there is good reason to do so and where the matter can proceed remotely (with the exception of hearings which require the leading of evidence).
- All Commissary applications (i.e. business related to dealing with the estate of a deceased person) including applications for confirmation and petitions for appointment of executor dative. There will be a delay in the processing of such applications due to reduced staff resources, and presumably, a backlog of business.
In the Sheriff Court, in cases previously suspended, where parties consider that an action can be progressed remotely and that there is good reason to do so, they may apply to restart the case at the original local Sheriff Court.
All local Sheriff Courts are now processing the backlog of business submitted during the lockdown. Priority will be given to undefended actions seeking decree, cases which have resolved by joint/unopposed motion and those cases awaiting the issue of extract decrees/simplified divorces.
The remaining backlog of business including the lodging of initial writs, notices of intention to defend and returned citations will then be processed.
Civil hearings will be conducted by electronic means unless physical attendance at Court is ordered. In circumstances where physical attendance is required, government guidance and regulations on physical distancing, gathering and hygiene must be complied with.
From 15 June 2020, all Sheriff Court civil business should be submitted to the local Sheriff Courts having jurisdiction.
What the changes mean in practice
In practice, the above noted changes are anticipated to have the following effects:
1. New actions for payment of money can be submitted from 15 June 2020.
Owing to the backlog of business, unless there is a good reason - such as where interim order are deemed necessary (ie. interim interdict, arrestment or inhibition on the dependence, etc.) - such actions are not likely to be progressed expediently.
2. All debt related court hearings in respect of current ‘live’ actions will either be continued for a period of weeks (unless there is good reason to progress or restart the action – see above) or formally put on hold for a period.
It is anticipated that procedural timetables will be adjusted in accordance with the above.
3. Where actions have concluded or interim orders have been granted, an increased provision of services by Sheriff Officers means that enforcement of certain business will now resume.
As well as undertaking urgent and necessary instructions, they are now in a position to arrange service of initial writs, summonses and simple procedure claims together with enforcement of decrees by arrestments, inhibitions and earnings arrestments. Charges for payment at business/commercial premises and on individuals will resume.
We anticipate some delays in the processing of such matters by Sheriff Officers, who are likely to be inundated with a backlog of business. Separately, third party arrestments (‘freezing’ orders) or earning arrestments (deductions taken directly from salaries) could be affected by the closure of offices where such orders would usually be served.
How to minimise the reliance on the court system
In light of the above, where possible we would advise parties to consider putting measures in place to avoid the need to rely on the court system at this time.
Such measures may include:
Maintaining lines of communication with creditors/ debtors
Creditors/ debtors are encouraged to seek to identify the most appropriate, currently available contacts within organisations/ businesses (or their legal advisors) and open lines of communication via email, telephone or other digital means of communication.
Where invoices, remittance advice or other financial documents require to be issued, this should be done (where possible) by email or other digital means of communication.
Delays in communication are to be expected. Parties are encouraged to adjust their expectations accordingly.
Negotiating payment terms
Cashflow is a major issue for many businesses at this time. Parties are encouraged, where possible, to seek to agree sustainable payment terms, including: deferred payments, payment holidays or instalment payment schedules. Of course, where possible, parties should endeavour to pay invoices timeously and/ or to meet pre-set payment schedules, but where revised terms are sought an early approach is advised.
Recently published government procurement guidelines indicate that businesses supplying goods/ services to the public sector may benefit from new measures to designed to boost cash flow and support businesses until 30 June 2020. We would advise such business to make enquiries with their public sector client contacts. Further details are available here.
Alternative Dispute Resolution
Whilst the above noted advice is provided with a view to avoiding disputes, where that is not possible we would advise parties to consider Alternative Dispute Resolution (ADR) before reverting to the court system. This will be particularly relevant where contracts are ambiguous when it comes to issues attributable to Covid-19, such as payments for contracts only partly completed or where modifications to contracts are sought.
ADR is wide ranging. It could take the form of negotiating terms of settlement either directly or via legal representatives; or mediation – which could be done remotely via telephone or video conferencing. Indeed, many mediators have long provided this type of service.
Above all else, parties should focus on good, early communication. They should also consider what reasonable changes they may make to their debt recovery and payment procedures in light of the unprecedented circumstances affecting us all just now.
We remain ready to guide and support you through any payment disputes affecting you or your business at this time.
Visit our COVID-19 support hub.
