In Focus Consumer Credit
Left-right: Daniel Sheppard; Raj Gill; Donald McNaught; Gerry Kaye; Jamie Mathewson
What are the biggest challenges and opportunities facing the credit, collections, and enforcement sector at the moment, from a Scottish perspective? AF: For me, the biggest challenge is the Simple Procedure. It has not bedded in as much as I, and most people around the table, I suspect, would have hoped. It seems to be interpreted in as many different ways as there are sheriffs, and it makes it impossible for us to use the technology in the way that we would want to, because we cannot build a case-management system around several different interpretations of the rules. I see that there is now a consultation ongoing from the Civil Justice Council, which, hopefully, the industry will input into because it is looking at how the rules have worked over the past year and a bit, and, hopefully, that will lead to some improvements.
SN: I agree that the Simple Procedure has caused difficulties for practitioners, party litigants, and courts. A lot of sheriffs are going back to old Summary Cause or Small Claims ways of interpreting things, which is very good for consistency. But, as there are a number of grey areas within the Simple Procedure rules, it does seem that many sheriffs are interpreting them in very different ways. We have a few appeals going on at the moment, where we have carried out extensive work to try to persuade the Appeal Court that this should be cut down, and there has been the recent announcement of the consultation. However, I would have preferred for the consultation to have happened before now, because a lot of practitioners, party litigants, and courts seem to have become very frustrated with the Simple Procedure rules.
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SC:My biggest challenge, when litigating, is to establish the debtor’s ability to pay the debt. It is, in many instances, very difficult to get an answer to that.
MH: It is our job to try to get the recoveries and often we do feel a bit unsupported. It concerns me that suspected offences can be reported, unfit-conduct reports can be made, and bankruptcy-restriction orders are lodged, and then we wonder why nothing is happening. Perhaps the answer is that there is not much resource going behind the policing of that. The result is that the recoveries we make are inevitably impaired, because people are getting away with it. You have alienations of estate, transfers of assets, and other unfit conduct making it difficult for trustees to pursue, and the courts can sometimes not be well equipped to look at the commercial aspects of what is going on. Sometimes there are clear scams that are not being captured, and people being dealt with.
SC: Once Brexit happens and, with the degree that powers will be repatriated, there is going to be a huge amount of work that the civil service are going to have to do. It
will really stretch them – speaking to people involved, it is clear that the amount of work is going to be huge. Where a statutory instrument to do with debt collecting will come in, amidst all of that, I am just not sure, but let us hope so.
AF: I do think that we can take a positive approach to collecting and enforcing debt through the Scottish courts. I act for clients based on both sides of the border and, whilst the Scottish litigation process itself can sometimes seem a little clunky to English ears – we do not have a bulk centre and we cannot easily put large volumes through the system – when it gets to enforcement, my clients down south are really impressed with how slick it is in Scotland, how easy it is to move things through, once you have your decree. It may take slightly longer to get to that stage, but you then have no more court involvement, or at least not often. That is a real positive, and we probably do not talk it up enough, as Scottish lawyers.
It concerns me that suspected offences can be reported, unfit-conduct reports can be made, and bankruptcy-restriction orders are lodged, and then we wonder why nothing is happening
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DM: The role of sheriffs officers has certainly evolved. Clearly, technology is important, but you still need people on the ground, and I regularly rely on what they see when they are eyeballing potential assets. We are quite often consulted by solicitors who are considering action against an individual, and we would do our own enquiries to supplement those of the solicitor or their client. We have spoken to software providers to explore how we can expand upon what the credit reference agencies can provide, for example looking at the Property Register, but there are challenges there, with it not being an exact science. If you do not know exactly where the property is, it is difficult to trace property ownership, and there is
April 2018
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