Debt Collection in Scotland

The debt collection process in Scotland.

Out-of-court debt collection in Scotland.

Our debt collection company starts the debt collection process in Scotland by contacting and pressuring the debtor to pay without the need for legal action. This involves demand letters, telephone calls, etc. With extensive experience of debt collection in Scotland and the rest of the UK, our UK debt collection agency has great success in getting debtors to pay at this stage.

For those situations where, despite pressure at the ‘friendly’ stage of debt collection process in Scotland, a Scottish debtor continues not to pay, it may sometimes be appropriate to proceed with legal debt recovery in Scotland.

Below is a brief review of how this works.

“Judicial” debt collection in Scotland.

In Scottish civil cases (between two civil parties), the Sheriff courts and the Court of Session are the courts of first instance.

Most commonly, in debt collection cases in Scotland, it is the Sheriff Court that has jurisdiction to hear the case. Actions where the value, excluding interest and costs, does not exceed £100,000 must be brought in the Sheriff Court.

The general rule is that a debtor is sued in the court where the debtor is domiciled. For a natural person, this is where they live and for a company, where it has its registered office. (There are some exceptions to this general rule)

To start a case, you must first contact the administrative staff of the court. Either in writing, by telephone or in person. The application must be in English and hearings are also conducted in English, with an interpreter to assist if necessary. (In this case, the parties to the case will pay for the interpreter).

Court fees need to be paid when proceedings are started. The amount of the fees varies, depending, among other things, on the type of action brought and the court in which it is brought. The updated fees are available on the Scottish Courts and Tribunals Service website. http://www.scotcourts.gov.uk/ .

The losing party in court proceedings is usually liable to pay the costs and expenses of the proceedings. In some cases, the judge has some discretion as to how much the losing party must pay.

Simplified legal procedures for uncontested claims.

In all legal debt collection cases in Scotland that are heard in court, the debtor has the opportunity to file a defense to the disputed claim that the creditor has. However, should the debtor choose not to respond to a summons, there is an option for the court to rule in the case in favor of the creditor. In practice, this is a simplified legal procedure for uncontested claims which is ideal for judicial debt collection in Scotland.

These simplified procedures have different titles depending on the court dealing with the case and the size of the claim.

These procedures are:

• “Summary Cause” – limit £5000.
• “Simple Procedure” – limit £5000.
• “Ordinary Cause in the Sheriff Court “ – no limit.
• “Ordinary Cause in the Court of Session” – no limit.

Course of the case in the various simplified legal procedures:

 “Summary cause”: (In the “Sheriff court”).

The debtor has 21 days in which to file a statement of defense.

What happens if the debtor disputes the claim? Both the creditor and the debtor are summoned to a meeting where the court tries to get the parties to agree on a settlement.

What happens if the debtor does not contest the claim? The creditor can lodge a motion for decree, which can then be used in an enforcement procedure.

There are specific forms for each stage of the “simple procedure” and the “summary cause” procedure. The use of the forms is compulsory for the creditor and the debtor. The forms are available on the website of the Scottish Courts and Tribunals Service. These include forms for applications, defences and requests for decisions. 

“Simple Procedure”: (In the “Sheriff court”). 

The debtor must submit a reply form whether he intends to contest the claim. This must be done no later than the reply date specified in the summons served on the debtor. 

What happens if the debtor disputes the claim? The court issues a written decision within two weeks, in which the court decides what to do next in the process. This may involve referring the parties to alternative dispute resolution, summoning them to a meeting/hearing, or the court may make a decision on the merits of the case.

What happens if the debtor does not contest the claim? In this case, the creditor may apply to the court for a decision. 

“Ordinary Cause”: (In the “Sheriff court”).

The debtor has 21 days after being served with the summons to lodge a statement of defence contesting the claim.

What happens if the debtor disputes the claim?  The litigation continues as an ordinary court case that is contested.

What happens if the debtor does not contest the claim? The creditor can lodge a motion for decree, which can then be used in an enforcement procedure. Just like in the “summary cause” procedure.

“Ordinary Cause in the Court of Session”:

What happens if the debtor disputes the claim?

The litigation continues as an ordinary court case that is contested.

What happens if the debtor does not contest the claim? The creditor can lodge a motion for decree, which can then be used in an enforcement procedure. Just like in the “summary cause” and “ordinary cause” in the “Sheriff court” procedure.

Enforcement proceedings in Scotland:

Enforcement proceedings can be said to be the final step in the process of debt collection in Scotland. Enforcement proceedings in Scotland arise where a creditor has obtained a judgment through the civil procedures, but the debtor continues to default on payment. The term “diligence” is used for these enforcement measures available to transfer a debtor’s assets to a creditor.

The responsible authorities for enforcement measures in Scotland are the “Sheriff Officers” and the “Messengers-at-Arms”.

These officers are not directly employed by the State but are independent contractors acting on behalf of the public. However, their work and suitability is checked by the courts.

Insolvency proceedings in Scotland.

Finally, it should also be mentioned that insolvency proceedings may be relevant in the context of debt collection in Scotland. These are situations where the debtor is simply not in a financial position to pay his claims to his creditors.

In bankruptcy, the debtor’s assets are put into a bankruptcy estate so that all creditors are treated equally and fairly.