Office of Public Sector Information
92.Section 27 also inserts a new subsection (3B) into that section which gives a sheriff the option of continuing a creditor petition for sequestration if the sheriff is satisfied that a debt payment programme (DPP) is pending under the debt arrangement scheme (set up under the 2002 Act).
93.If a debtor attends court to show cause why sequestration should not be awarded, and can provide sufficient evidence that a DPP application is ongoing or is about to be made, the sheriff has the power under subsection (3C) to delay awarding sequestration for as long as the sheriff thinks is necessary. Under section 4(3) of the 2002 Act a creditor is barred from petitioning for sequestration in respect of a debt which is covered by a DPP. So if the DPP is approved during the period of continuation granted by the sheriff under new subsection (3C) it would then be incompetent to sequestrate the debtor on that petition.
94.This section repeals various provisions of the 1985 Act with the effect that the Certificate of Summary Administration (COSA) procedure is abolished.
95.This section inserts new section 31(5A) into the 1985 Act. Section 31(5) of that Act gives the trustee the right to non-vested contingent interests (potential assets) as if an assignation (transferring rights to those assets) of the interest had been executed by the debtor and intimation of the assignation made at the date of sequestration. This meant that the trustee continued to hold the right to these interests even after the debtor was discharged. The most common example would be where the debtor was the beneficiary under a will at sequestration, and the testator was still alive when the debtor was discharged. In such a case, if the debtor subsequently inherited an asset under the will, it would vest in the trustee.
96.This was not the case prior to section 97(4) of the Bankruptcy (Scotland) Act 1913. New section 31(5A) returns the law to the position as it was prior to the 1913 Act; non-vested contingent interests will no longer remain vested in the trustee after the debtor is discharged.
97.This section inserts new section 43A into the 1985 Act which impose a duty on the trustee to require any debtor who is not discharged or who is subject to an IPO or IPA to give the trustee an account in writing providing details of income and expenditure every 6 months.
98.Section 49(6) of the 1985 Act allows the debtor or any creditor to appeal against an adjudication by the trustee in sequestration on claims. Section 53(6) of that Act allows the same parties to appeal against the trustee’s remuneration and outlays.
99.This section inserts a new subsection (6A) into both sections introducing a restriction on the right of appeal by the debtor. The debtor can now appeal only if the debtor has a financial interest in the outcome of the appeal, such as a right to a reversion of funds after dividend.
100.This section inserts a new subsection (2A) into section 59C of the 1985 Act. It applies to the situation where a sheriff grants an application by a person in charge of proceedings akin to sequestration commenced in another EU country which requests the conversion of a protected trust deed granted by the debtor into sequestration of the debtor’s estate. The sheriff’s order granting that conversion is to be treated as if it is an award of sequestration granted by the AiB following a debtor application.
101.Section 33 inserts a new paragraph (m) into section 32(1) of the Sheriff Courts (Scotland) Act 1971 (which deals with the regulation of civil procedure in the sheriff courts). This new paragraph gives power to the Court of Session by Act of Sederunt (that is to say court rules) to permit a debtor to be represented by a person who is not a qualified advocate or solicitor at the hearing where the sheriff decides whether or not to award sequestration following a petition by the creditor (see section 12 of the 1985 Act). The Act of Sederunt may specify particular circumstances where a debtor can be represented by a non-lawyer at such hearings (for example, the debtor may have to satisfy particular criteria).
102.Debtors who are sequestrated in Scotland are currently discharged from their liabilities in respect of student loans. This section amends the enabling power in the Education (Scotland) Act 1980 to allow regulations made under that Act to exclude from discharge loans under that Act. It also directly excludes from discharge loans which have been made under the Education (Student Loans) Act 1990.
103.This section provides that any regulations made by the Scottish Ministers under sections 5(2B)(a) or (4), 5A or 39A(4) of the Bankruptcy (Scotland) Act 1985 shall be subject to affirmative parliamentary procedure. In addition, the first regulations under paragraph 5 of Schedule 5 to the 1985, made after the amendments of that schedule by this Act are brought into force, are also subject to affirmative procedure.
104.This schedule contains a number of minor amendments of the 1985 Act and amendments of that Act consequential on the provisions in Part 1 of this Act.
105.Paragraph 4(3)(b) clarifies that where the debtor meets the criteria in paragraphs (a) and (b) of section 5(2B) of the 1985 Act (which sets out the criteria which must apply before a living debtor can be sequestrated) and is liable to sequestration on the criterion that the debtor has granted a trust deed which has not become a protected trust deed, that the trust deed in question must have failed to become protected in accordance with the regulations under schedule 5, paragraph 5 of the 1985 Act (as inserted into that Act by section 20 of this Act).
106.Paragraph 8 inserts new sections 10 and 10A into the 1985 Act.
107.Section 10 deals with the duty to notify the existence of concurrent proceedings for sequestration or proceedings which are similar to sequestration.
108.Where a debtor or a concurring or petitioning creditor is aware of the existence of another sequestration, of proceedings that may lead to sequestration, or of proceedings that are similar to sequestration in relation to the same debtor, that person must notify the sheriff (or the AiB in the case of a debtor application) of the existence of the other proceedings. Subsections (4) to (6) set out the consequences of failure to notify on the part of any of those persons. A petitioner may be liable for the expenses of presenting the petition, a concurring creditor may be liable for the expenses of a debtor application, and a debtor shall be guilty of an offence and liable on summary conviction to a fine up to the limit at level 5 on the standard scale.
109.New section 10A of the 1985 Act sets out what may be done when any of the other proceedings listed in section 10(2) are in progress or have been completed.
110.Paragraph 20 changes the time limit for a trustee to give notice of intention to call a statutory meeting in section 21A(2) of the 1985 Act to 60 days from the date on which sequestration is awarded. It was previously 60 days from the date of sequestration which, in the case of a creditor petition, would be the date on which the sheriff grants warrant to cite the debtor – i.e. before the hearing where sequestration is awarded. Because of the provisions introduced by section 27 of this Act allowing hearings to be continued, it is possible for 60 days to pass from the date of the warrant to cite to the award of sequestration. Hence the change to the start point for the time limit for deciding whether to call the statutory meeting.
111.Paragraph 35(4)(a) clarifies that, under section 39 of the 1985 Act, a trustee can shut down a debtor’s business instead of carrying on the business (which section 39 already permitted the trustee to do).
112.Paragraph 42(a) has the effect that any creditor’s claim submitted to the trustee in sequestration shall not prescribe after 5 years, unless the trustee has rejected the claim in whole. This covers cases where the trustee makes no final decision on the claim within 5 years after the date of the sequestration or has, by that point, only partially rejected the claim (say, because there are insufficient assets from which the expense of such a decision can be recovered). In such cases, the creditor will not have to resubmit the claim during the period of the sequestration in order to bar the effect of prescription, and will therefore be entitled to a dividend (or further dividend) if any estate is realised after 5 or more years has elapsed.
113.Paragraph 45 provides that it is not necessary for a trustee to submit any legal account to the Auditor of Court for taxation if the commissioners, or if there are no commissioners, the AiB has determined that the account can be settled without taxation.
114.Paragraph 46 inserts new section 53A into the 1985 Act which modifies the procedure under section 53 of that Act where the AiB is trustee. These relate to the determination of fees, accounts of intromissions, appeals against such determinations, and the payment of dividends.
115.This section provides for the setting up of the new Register of Floating Charges under the management of the Keeper of the Registers of Scotland. The form and manner in which the Register is to be organised and maintained, and the form of documents and notices, the particulars they are to contain and the manner in which they are to be delivered to the Keeper, will be the subject of regulations made by statutory instrument. Those regulations are subject to the negative resolution procedure.
116.The date of registration of the relevant document or notice is to be the date of receipt of it by the Keeper. The intention is that (as with the Sasine Register) the Register should record the text of the document rather than, as at present, only particulars. Subject to the stipulation of appropriate regulations by the Scottish Ministers, it is intended that registration can in due course be effected electronically
117.Subsections (1) and (2) of section 38 derive from section 462(1) of the Companies Act 1985 and restate the statutory rule that, in Scotland, a company may grant a floating charge. In view of the generality of the phrases “debt or other obligation” and “all or any part of the property” the reference in parentheses in the existing provision to the former including a “cautionary obligation” and the latter “uncalled capital” is unnecessary. The term “company” is defined in section 47.
118.Subsection (3) lays down the new rule that, after the new legislation enters into force, the creation of a floating charge occurs only when the document granting the floating charge is registered in the Register of Floating Charges (which is instituted in terms of section 37).
119.Subsection (4) clarifies the meaning of “document granting a floating charge” to reflect the fact that it is a company which grants a floating charge albeit by means of a document.
120.Section 462(5) of the Companies Act 1985 provides that a floating charge has effect in relation to heritable property without the need for the document granting the charge to be registered in the Land Register or recorded in the Register of Sasines. It is evident from section 28 of the Land Registration (Scotland) Act 1979 that a floating charge constitutes an “overriding interest” and is not a registrable interest. The provision that floating charges are created by registration in the Register of Floating Charges implies no further act of registration is required and the terms of section 462(5) are not re-enacted.
121.This section makes provision for the registering of an advance notice of a floating charge. The purpose of an advance notice is to assist the mechanics of settling secured transactions by allowing parties to obtain priority of ranking from the date of the advance notice provided that settlement is completed to the extent that the floating charge is registered within 21 days of the advance notice. An advance notice cannot be registered unilaterally. The form of an advance notice, the particulars it is to contain and the manner in which it is to be delivered to the Keeper may be prescribed by statutory instrument in terms of section 37(8)(b) above. It is envisaged that the regulations will provide that the advance notice may be subscribed either by the parties or by their solicitors.
122.This section is concerned with the ranking of a floating charge both with other floating charges and with fixed securities affecting all or part of the same property as that covered by the floating charge. Subsections (1), (2) and (3) set out the leading principle that ranking proceeds on the basis of date of creation which, in the case of fixed securities is the date upon which the security was constituted as a real right. Where the floating charge is created on the same day as another floating charge or fixed security, the rule is that the respective securities rank equally.
123.Subsection (4) is concerned with a competition between a floating charge and a fixed security arising by operation of law – such as lien or a landlord's hypothec. It continues the existing rule that such fixed securities arising by operation of law have priority over any floating charge.
124.Subsections (5) and (6) continue an existing provision whereby the holder of the second, later floating charge may protect the value of the security by giving notice to the holder of the earlier floating charge. In that event, the priority of ranking of the earlier floating charge is restricted to the amount of the debt then outstanding plus any further advances which the holder of that earlier floating charge is contractually obliged to make. In view of the change in the ranking rule, the same facility is extended to the holder of a subsequent fixed security. The priority of debts is preserved by subsection (7).
125.The ranking of securities may be the subject of agreement among the secured creditors. Section 41(1) allows for secured creditors to enter into ranking agreements regulating the order in which floating charges are to rank in the event of insolvency.
126.Subsections (2) and (3) clarify that the rule contained in sections 40(1) and (2), that floating charges rank by date of creation, can be displaced by a ranking agreement. These subsections also clarify that the capping provisions contained in sections 40(5) and (6) can be altered by a ranking agreement. Subsection (2)(b) makes it clear that a ranking agreement cannot displace the rule contained in section 40(4) that a fixed security arising by operation of law (such as a lien or landlord’s hypothec) has priority over a floating charge.
127.Subsection (4) makes provision for requiring the consent of a floating charge (or fixed security) holder, where the holder’s position would be adversely affected by the provisions of a ranking agreement. It does not require such a holder to subscribe the document granting the floating charge. In practice, it may often be impractical to require the lender to grant consent by becoming a party to the floating charge document itself. Subsection (5) therefore provides that the lender may give consent in a separate document which may be (but need not be) registered in the Register of Floating Charges. As the registration of consent will be in the interests of the borrower (it makes clear to third parties that consent was duly obtained), there is no need to impose a requirement to register.
128.The existing legislation contains no provision on assignation of floating charges but in one first instance judicial decision (Libertas–Kommerz v Johnson, 1977 SC 191) it was held that a floating charge was assignable on general principles of law. Section 42(1) gives statutory affirmation of the assignability of a floating charge and further provides for vesting in the assignee on registration in the Register of Floating Charges. Subsection (2) makes clear that partial assignation is possible. Subsection (3) is necessary since a floating charge may transfer not only by voluntary assignation but also by operation of law (e.g. on sequestration of the holder, the floating charge transfers to the trustee).
129.This section deals with alterations to the terms of a floating charge.
130.Section 43(2) sets out the alterations to the terms of a floating charge which must be registered, namely alterations concerning the ranking of the charge with any other floating charge or any fixed security and alterations concerning the specification of the property that is subject to the charge or the obligations that are secured by the charge.
131.An unregistered agreement to alter the terms of a floating charge would remain as a contractual agreement between the parties to it but could not affect any third party.
132.A ranking agreement is essentially an agreement between secured creditors and may be of no interest to the debtor. Accordingly, subsection (4) enables an agreement between the secured creditors, in which the debtor is not a participant, to be registered, provided that the debtor is not thereby adversely affected.
133.Subsection (5) addresses the case – exemplified in Scottish & Newcastle plc v Ascot Inns Ltd, 1994 SLT 1140 - in which the holder of a floating charge gives consent to specific assets, or a specific class of assets of the company, being released from the scope of the floating charge while yet remaining in the ownership of the company. If, as is currently the case, the fact of such a release is not published, an acquirer from a liquidator, an administrator or a receiver appointed by the holder of the floating charge cannot be confident of their title.
134.The subsection is not directed towards the escape of individual assets from the scope of the charge on the onerous or gratuitous transfer of the asset by the company to a third party prior to attachment of the floating charge. Unless or until the company goes into liquidation or a receiver is appointed, the company should be able to deal with its secured assets as normal by (say) selling them. It is not intended that normal business events of this kind should be registered as alterations. Accordingly, subsection (6) clarifies that, for the purposes of subsection (5), property is not to be regarded as released from the scope of a floating charge by reason only of its ceasing to be the property of the company which granted the charge.
135.This section is essentially permissive. Payment of the debt, or performance of the obligation, secured by the floating charge will normally discharge or extinguish the security and this is recognised in subsection (3). But it is useful to have a means whereby the Register of Floating Charges may be cleared of floating charges which have been so discharged or extinguished. There may also be instances in which, as part of a re-financing arrangement, it is desired to discharge an existing floating charge in favour of some other form of security and this section provides a ready, public means of achieving that.
136.The essence of a floating charge is that until some event, such as the company going into liquidation or the appointment of a receiver, the security right is inchoate and the company may dispose (even gratuitously) of assets within the scope of the charge and the acquirer will obtain ownership unencumbered by any security right.
137.This section does a number of things. It repeats the existing law dealing with attachment, or crystallisation, of the floating charge on a winding up, when the floating charge is converted into a fixed security over the assets then within its scope.
138.It also provides in subsection (2) that if there is an insolvency in another EU state which is the company’s centre of main interests that will trigger the crystallisation of a Scottish floating charge only if a notice is registered in the Register of Floating Charges.
139.It also clarifies that liquidation for the purposes of section 45 covers both the meaning within the Insolvency Act 1986 and, in the situation outlined in subsection (7)(a), the opening of “insolvency proceedings” within the meaning of Article 2(a) of the EC Regulation on insolvency proceedings (EC No 1346/2000).
140.A floating charge similarly attaches or crystallises on the appointment of a receiver or the delivery of a notice by an administrator. The relevant statutory provisions on receivership and administration are in the Insolvency Act 1986. They are not affected by these reforms. The priority of debts as provided for in section 176A of the Insolvency Act 1986 is also preserved. Going into liquidation within the meaning of section 247(2) of the Insolvency Act 1986 encompasses the insolvent liquidation of assets of an oversea company – see sections 220 and 221 of that Act.
141.Section 46(1) repeals Part XVIII of the Companies Act 1985 which is replaced by the new provisions on floating charges as set out in this Part. However, so that the new rules do not have retrospective effect, it is necessary to regard Part XVIII as still having effect in respect of all floating charges subsisting before the coming into force of these new rules (see subsections (2) and (3)). This will enable all matters relating to pre-commencement floating charges, such as the alteration of them, to be dealt with under the relevant pre-commencement provisions.
142.The new rules on creation of floating charges and ranking by date of creation will not disturb the priority of ranking of existing securities, whether fixed or floating, since they have all been created prior to the coming into force of the new rules. Holders of such securities will not be adversely affected by the creation of any new floating charge. In the interest of clarity, subsection (4) is intended to make plain that, for existing security rights, the pre-commencement rules of ranking continue in force.
143.Subsection (5) is consequential on the repeal of Part XVIII. Although it repeals section 140 of the Companies Act 1989, that section is to be treated as having effect for the purposes of subsections (3) and (4).
144.It should be noted that section 893 of the Companies Act 2006 provides the Secretary of State with a power to make provision for the effect of registration in the Register of Floating Charges and other similar registers.
145.This section defines “company” in a way which includes an oversea company. It also defines “fixed security” in terms based on and to the same effect as the definition in section 486 of the Companies Act 1985.
146.The Requirements of Writing (Scotland) Act 1995 provides for a form of subscription of documents whereby the document has an evidential presumption of having been validly subscribed by the signatory. The 1995 Act provides that only documents having such “presumed authenticity” may be registered in inter alia the Register of Sasines. In practice, the same requirement is asked of documents presented to the Land Register. Section 48(1) applies the equivalent rule in the case of the Register of Floating Charges, which will facilitate a uniform treatment of applications to the Registers of Scotland when electronic conveyancing is introduced. Although not dealt with in this Act, section 222 (registration and execution of electronic standard securities) represents part of that electronic conveyancing system (see paragraph 842842 below.)
147.Subsections (2) and (3) are necessary to deal with the following situations: (a) where a document registered in the Register of Floating Charges has been annulled as a result of an application to the court for a decree of reduction; and (b) where something has been inaccurately expressed in a document registered in the Register of Floating Charges and, on application, the court has granted an order rectifying the defect. Although both may happen rarely, it is important that, as is already the law in relation to standard securities, a third party such as a person to whom a floating charge is being assigned should be able to rely on the Register. Accordingly, the effect of these provisions is that the decree of reduction or order of rectification will not affect the rights of the third party unless it has been duly registered in the Register of Floating Charges.
148.The purpose of this section is to apply the recommended registration regime for floating charges by companies to floating charges in Scottish form granted by industrial and provident societies registered in Great Britain. Such charges are currently registered with the Financial Services Authority by virtue of section 4 of the Industrial and Provident Societies Act 1967, which is repealed.
149.Section 50(1) establishes a new corporate body to be known as the Scottish Civil Enforcement Commission. The Commission has to exercise its functions in accordance with any directions given to it by the Scottish Ministers. It also has to carry out its functions in a way which encourages equal opportunities and, in particular, compliance with the equal opportunity requirements.
150.Subsection (4) gives the Scottish Ministers power, by regulations, to confer functions on the Commission, take functions away from the Commission or to otherwise modify the functions of the Commission. Such regulations are subject to affirmative resolution procedure in the Scottish Parliament by virtue of section 224(4)(b)(i) of this Act. “Functions” in this context includes powers and duties (by virtue of section 127 of the Scotland Act 1998 and paragraph 6(3) of the Scotland Act 1998 (Transitory and Transitional Provisions) (Publication and Interpretation etc. of Acts of the Scottish Parliament) Order 1999 (S.I. 1999/1379). Hence the ability of the Scottish Ministers to confer functions on the Commission allows them to impose duties on the Commission.
151.Subsection (5) provides that the regulations under subsection (4) may transfer a function conferred on another person (including the Scottish Ministers) by another enactment (such as a regulation or Act) to the Commission. Those regulations may also amend regulations or Acts as a consequence of transferring the function where this is considered necessary or expedient.
152.Subsection (6) abolishes the Advisory Council on Messengers-at-Arms and Sheriff Officers. The Advisory Council was established by Part V of the Debtors (Scotland) Act 1987 (the “1987 Act”), section 76, to advise the Court of Session on the making of Acts of Sederunt (that is to say court rules) to regulate the officer of court profession and generally to keep under review all matters relating to officers of court. Schedule 6 to this Act repeals Part V of the 1987 Act in its entirety since this Part, which deals with matters relating to the professions of sheriff officers and messengers-at-arms, such as their regulation, is replaced by Part 3 of this Act.
153.Subsection (7) introduces schedule 2 which makes general provision about the Commission.
154.Schedule 2 makes detailed provision concerning the status, governance, remuneration and other terms of appointment of Commissioners, and the general and disciplinary powers of the Commission. It also makes detailed provision in relation to various matters of an administrative nature.
155.Paragraph 1 makes it clear that the Commission is not to be regarded as a servant or agent of the Crown and that the Commission’s property is not to be regarded as property of the Crown. This has legal implications in relation to immunities which are applied to servants or agents of the Crown and also in relation to particular statutory provisions which relate to Crown property.
156.Paragraph 2 deals with the membership of the Commission. It must be made up of a judge, a sheriff principal or sheriff, a lawyer, a judicial officer, 3 lay persons and 2 ex-officio members (the Lord Lyon King of Arms and the Keeper of the Registers of Scotland).
157.Paragraphs 3 to 14 deal with the tenure of each member and the procedure for filling vacancies in membership. By virtue of paragraph 3, serving MPs, MSPs and MEPs are ineligible for being appointed as members of the Commission. This rule also applies to those who have acted as such in the preceding 12 months. Paragraph 8 clarifies that a member of the Commission ceases to be a member if he or she becomes an MP, MSP or MEP.
158.Paragraph 10 gives the Scottish Ministers power to remove a member of the Commission from office where that member is unable or unfit to discharge the functions of a member or has not complied with the terms and conditions of office as set down by Ministers. This power could be used where, for example, a member of the Commission falls seriously ill and needs to be replaced.
159.Paragraphs 13 and 14 set out the procedure to be followed to fill vacancies in the Commission and paragraph 15 provides for a Commission chairperson to be selected from one of its members.
160.Paragraph 16 places a duty on the Commission to appoint a disciplinary committee. That committee will perform the disciplinary functions set out in section 71 and will make decisions under sections 68 and 72. Paragraph 17 provides for the determination by the Scottish Ministers of the remuneration and allowances for expenses which must be paid to Commission members by the Commission.
161.Paragraphs 18 to 20 set out the general powers of the Commission. The Commission has a wide power to do anything which it considers necessary or expedient for the purpose of carrying out its functions or in relation to its functions. In paragraph 19, several powers which are included in this general power are set out.
162.Paragraph 21 provides for the Commission to determine its quorum and that of the disciplinary committee and any other committee or sub-committee. By virtue of paragraph 22, the Scottish Ministers may make regulations (subject to negative procedure under section 224(3)) about the structure and procedures of the Commission.
163.Paragraphs 23 to 28 give the Commission the necessary powers to appoint and pay a chief executive officer and such other employees as it sees fit. These powers can be exercised only with the approval of the Scottish Ministers because the Commission, as a non-departmental public body, will be funded by the Scottish Executive as provided for by paragraphs 30 to 32. Those provide for the payment of grants and loans by the Scottish Ministers to the Commission. Any grant paid or loan made will be subject to terms and conditions that may be varied by the Scottish Ministers.
164.Paragraph 29 provides that the location of the Commission’s offices must be approved by the Scottish Ministers. The Commission must also comply with any direction of the Scottish Ministers in this matter. This means that the Scottish Ministers can opt to relocate the Commission should they so wish.
165.Paragraph 30 provides for the Scottish Ministers to provide finance to the Commission by means of grants and loans.
166.Paragraphs 33 to 35 set out the duties incumbent on the Commission in respect of accounts and audit and provide for the Commission’s financial year to run from 31 March of each year. Under paragraph 34, the Scottish Ministers can direct the Commission in relation to certain aspects of the statement of accounts which is required under paragraph 33(b).
167.This section obliges the Commission to provide information relating to the carrying out of its functions to the Scottish Ministers and to prepare an annual report on its activities. The report should be prepared as soon as practicable after the end of the financial year to which the report relates.
168.Subsection (3) states that the report has to include a statement of accounts prepared according to the audit and account requirements specified in paragraphs 33 and 34 of schedule 2. The report may also contain a statistical analysis of the performance of judicial officers during the reporting period or any other period. The statistical information can be on both official functions, such as enforcement of court decrees and documents of debt by diligence, and on any other activities, such as informal debt collection, which officers undertake.
169.In preparing the report, the Commission has the power to require a judicial officer to provide information it thinks necessary for the preparation of the report (subsection (4)). Failure to provide information is considered to be “misconduct” under section 67(9) and can be dealt with under the powers given to the disciplinary committee in section 72.
170.Subsections (5) and (6) provide that the Commission must publish and send a copy of each report to the Scottish Ministers, who must lay a copy before the Scottish Parliament. The report may be published electronically by virtue of section 78(a).
171.Section 52 provides that the Commission may, for the purposes of informing and educating the public, prepare and publish information and other material on its functions, the functions and activities (subject to section 56(1) which already deals with the publication of information and materials for the activity of informal debt collection) of judicial officers and the law of and procedures relating to diligence. Publishing can be by electronic means (section 78(a)). It can also carry out other such activities as it thinks fit with regard to informing and educating the public. Examples of such activities might include publicity campaigns, market research, school and college based activities and career promotion work.
172.Section 53 provides that the information contained in an annual report under section 51(2) or published under sections 52(1) or 56(1) must not be in a form which will enable identification of individual judicial officers or any persons who have had diligence executed against them. This means that such published information must not contain personal information, for example an officer’s or other person’s name or address.
173.Section 54 provides that the Commission must keep a register of judicial officers. It may make rules as to the particulars and other information to be recorded in the register, regulate the procedure by which this will be provided by judicial officers and how changes in this information must be notified. The Commission must open the register to public inspection at reasonable times determined by the Commission.
174.Section 55 provides that the Commission must prepare and publish a code of practice relating to the exercise of the functions of judicial officers. It also enables the Commission to prepare and publish a code in relation to the undertaking of activities by judicial officers. This power is subject to section 56(2)(a) which already provides a power to publish a code of practice for the activity of informal debt collection. A code published under this section may, from time to time, be revised in whole or in part and any revised code must be published. Publishing can be effected electronically (section 78(a)). The Commission will send a copy of each code of practice to the professional association for judicial officers (see section 63) and the Scottish Ministers, who must lay a copy of it before the Scottish Parliament.
175.In section 56, “informal debt collection” (as defined in subsection (4)) is the collection of debts, including debts which have not been established by court action, by means other than by formal diligence. This type of debt collection covers activities such as debt collection by letters, phone calls or personal visits. Informal debt collection for consumer debts such as credit card debts is already regulated by the Office of Fair Trading for the UK Government’s reserved interest under the Consumer Credit Act 1974. Section 56 therefore covers informal debt collection relating to matters such as commercial debt and public debt, for example arrears of council tax. It provides that the Commission may publish information and other materials promoting good practice and informing the public about informal debt collection.
176.This information may be published as a code of practice or as guidance for persons carrying out informal debt collection (which could include judicial officers if rules under section 61(4) permit informal debt collection to be undertaken by them). A code published under this section may, from time to time, be revised and any revised code must be published and sent to the Scottish Ministers who will lay it before the Scottish Parliament. By virtue of section 78(a), the information (including any code of practice) may be published electronically.
177.Section 57(1) creates the office of judicial officer and any person holding the office will have the functions (which include powers and duties) conferred on that office by the provisions of this Act (including any subordinate legislation made under powers contained in this Act) and by any other legislation.
178.A person may be granted a commission as a judicial officer by the Lord President only on the recommendation of the Commission provided the Commission is satisfied that the requirements set out in section 58(1) are met and that the person is a member of the professional association designated by the Scottish Ministers under section 63(1). The Commission must notify the applicant and the professional association where a commission is granted.
179.A judicial officer (unlike a sheriff officer) may carry out the functions of a judicial officer throughout Scotland (subsection (4)).
180.Subsection (5) provides that any person wishing to be a judicial officer must apply to the Commission unless the person is deemed to hold a commission as a judicial officer as a result of section 60(2). Under that section, messengers-at-arms and sheriff officers who hold a commission as such immediately before the day on which that section comes into force will automatically become judicial officers.
181.Subsection (6) provides for the process by which the Lord President may deprive an officer of his or her office. This will be done after the disciplinary committee of the Commission makes such a recommendation to the Lord President and once any time limit for appeal under section 74 has expired with no appeal having been made. The Lord President’s decision is to be notified to the officer, the professional association, the Court of Session and every sheriff principal.
Bankruptcy and Diligence etc (Scotland) Act 2007