Litigation and enforcement in UK (Scotland): overview

A Q&A guide to dispute resolution law in Scotland.

The country-specific Q&A gives a structured overview of the key practical issues concerning dispute resolution in this jurisdiction, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals.

To compare answers across multiple jurisdictions visit the Litigation and enforcement Country Q&A tool.

The Q&A is part of the global guide to dispute resolution. For a full list of jurisdictional Q&As visit www.practicallaw.com/dispute-guide.

Joanna Fulton, Burness Paull LLP
Contents

Main dispute resolution methods

1. What are the main dispute resolution methods used in your jurisdiction to settle large commercial disputes?

The main method of dispute resolution is court litigation. However, various methods of alternative dispute resolution are also used (see Question 30).

The court system is mainly adversarial. The role of the judge is to decide which party has the strongest case based on an assessment of the reliability and credibility of evidence as applied to the law. It is not part of a judge's role to take an active part in presenting the case.

A claimant (pursuer) in a civil case must prove their case on the balance of probabilities. Certain interim remedies can be obtained on the balance of convenience (assuming there is a prima facie case).

 

Court litigation

Limitation periods

2. What limitation periods apply to bringing a claim and what triggers a limitation period?

Contract and tort

A five-year prescription period applies to claims in contract and tort (delict), as well as certain tenancy matters. In contrast, the prescription or limitation period under English law is six years.

The prescriptive period runs from the date when the loss or damage occurred. In cases of latent damage, the prescriptive period is postponed until the claimant (pursuer) becomes aware of the damage, or could with reasonable diligence, have been aware. The claimant does not need to be aware that the loss or damage was caused by the defendant's (defender's) wrongful act (David T Morrison & Co Ltd (t/a Gael Home Interiors) v ICL Plastics Ltd and Ors (Scotland) [2014] UKSC 48).

Limitation and prescription periods for other types of claim

A ten-year prescription period applies to claims under the Consumer Protection Act 1987.

A three-year limitation period applies to:

  • Personal injury claims.

  • Defamation claims.

  • Harassment claims.

The court has an equitable discretionary power under statute to override the limitation period for these types of claims.

Failure to do one of the following within the prescriptive period extinguishes the relevant obligation of the other party entirely:

  • Serve foreign court proceedings.

  • Serve Scottish court proceedings.

  • Begin arbitration.

  • Make a claim in insolvency proceedings.

  • Take action to enforce the claim (diligence).

The effect of overrunning the prescriptive period is to extinguish the relevant obligation altogether. Missing the deadline for the relevant limitation period is a bar to bringing an action.

Court structure

3. What is the structure of the court where large commercial disputes are usually brought? Are certain types of dispute allocated to particular divisions of this court?

Commercial disputes with a total value of over GB£100,000 can be heard in the Court of Session. If a dispute has a value of up to GB£100,000 it may only be heard in a sheriff court (the local sheriff court having jurisdiction or the all Scotland Personal Injury court). This overview focuses primarily on procedures in the Court of Session.

The Court of Session is made up of the Outer House and the Inner House. Generally, the Outer House hears cases at first instance and the Inner House hears appeals. A single judge sitting alone usually hears cases in the Outer House. A panel of three judges usually hears Inner House appeals.

In the Outer House, certain specialist matters are assigned to particular judges, for example insolvency or patent issues. There is a special procedure for commercial claims where the court takes a more pro-active case management role. There is also a special procedure for personal injury actions that involves a pre-set and accelerated timetable working back from a date for trial (proof) fixed at the outset.

Subject to the financial limits above, commercial disputes can also be litigated in the sheriff court, which has a special commercial procedure.

The answers to the following questions relate to procedures that apply in the Court of Session.

Rights of audience

4. Which types of lawyers have rights of audience to conduct cases in courts where large commercial disputes are usually brought? What requirements must they meet? Can foreign lawyers conduct cases in these courts?

Rights of audience/requirements

Only advocates and solicitor advocates have rights of audience in the Court of Session. Advocates are lawyers who are members of the Faculty of Advocates, which regulates their profession. They are similar to English barristers and have rights of audience in every court. Advocates are subject to a code of conduct, which sets out the principles of professional conduct and advocates' professional duties. Solicitor advocates are solicitors with extended rights of audience. An individual can represent himself but cannot represent another entity.

Solicitors have rights of audience in sheriff courts.

Foreign lawyers

Lawyers from other European member states may, in principle, appear in the courts. If they do so, they are bound by the relevant Scottish rules of professional ethics. If a European lawyer wishes to appear in the Court of Session, he must produce proof of his professional status to the Faculty of Advocates. A Scottish advocate should also sign any court documents that are signed by the foreign lawyer.

 

Fees and funding

5. What legal fee structures can be used? Are fees fixed by law?

Fees are not fixed by law. Solicitors can use a variety of traditional fee structures, such as time incurred, fixed fees or fees within a pre-agreed range.

Solicitors can also enter into speculative (or conditional) fee arrangements. Under these arrangements, the solicitor is paid a success fee, calculated as a percentage of the client's legal fees if the case is successful.

Contingency fees are damages-based agreements, under which the lawyer's fee is calculated as a percentage of the monies recovered in successful litigation. Contingency fee arrangements are currently unenforceable in Scotland (but see Question 35 below).

Where an advocate is instructed, the fees are open for negotiation. In practice, fees are normally charged by item or by day for court appearances. However, an advocate may also agree fees on another basis, for example, an hourly rate, or a block fee or speculative basis.

 
6. How is litigation usually funded? Can third parties fund it? Is insurance available for litigation costs?

Funding

Litigation is usually funded by the parties to the action on the basis of a private arrangement with their solicitor.

While third party funding of litigation is not prohibited and does occur, litigation funders are not very active, although this is slowly changing.

Legal Aid is available to individual litigants to fund a civil claim if they meet the criteria for Legal Aid to be granted.

Insurance

Insurance is available to cover litigation costs. Before The Event (BTE) insurance, sometimes known as legal expenses insurance, is often offered to individuals as part of a household insurance policy. Public or employer's liability insurance may cover legal expenses for companies.

After The Event (ATE) insurance is applied for once a party has become involved in litigation. It covers liability for a costs award and some of the outlays in relation to the action. The ATE premium is not recoverable from the opposing party. The insured remains liable for the premium if they win.

 

Court proceedings

Confidentiality

7. Are court proceedings confidential or public? If public, are the proceedings or any information kept confidential in certain circumstances?

Court hearings are normally held in public. However, photography and video recordings of court proceedings are generally prohibited but changes have been recommended (see Question 35). In September 2015 the first ever live broadcast of a trial in the Scottish Courts took place. An agreement was reached between the Scottish Courts and Tribunals Service and broadcasters to permit the live broadcast from the Court of Session. Journalists were also given permission to send live tweets and texts from the court.

Pleadings and evidence lodged (filed) in a case are only available to the parties.

Pre-action conduct

8. Does the court impose any rules on the parties in relation to pre-action conduct? If yes, are there penalties for failing to comply?

Currently, pre-action protocols play a limited role in proceedings. There is no statutory basis for a pre-action protocol.

Actions that are proceeding as designated commercial actions in the Court of Session must adhere to a special practice note that includes a pre-action communication requirement. The parties are expected to provide evidence at a preliminary hearing that they have complied with this requirement.

Voluntary pre-action protocols are contained in the Law Society of Scotland's practice guidance, but only apply to certain types of lower value claims.

Main stages

9. What are the main stages of typical court proceedings?

Starting proceedings

The originating document for proceedings in the Court of Session is called a summons, and in the sheriff court it is called an "initial writ". The stages outlined below apply to actions raised in the Court of Session.

The claimant (pursuer) presents the summons at court for signetting (stamping or sealing by the court). The pursuer then serves the summons on the defendant (defender).

The summons must be served on the defender not later than a year and a day after the date of signetting. The time period for personal injury actions is three months and a day.

Notice to the defendant and defence

There are various permitted methods of service, including by hand or by post. Usually, in a large commercial dispute, a court-approved official (messenger-at-arms) will effect service.

The defender is given a minimum period of notice before the case can proceed. The time period is 21 days within Europe and 42 days outside of Europe.

After the required period of notice to the defender has lapsed, the pursuer, if they wish to proceed with the case, must lodge the summons at court for "calling". The calling of the case means that the case appears on the rolls of court and formally brings the case into court. The defender then has:

  • Three days from the date of calling to enter an appearance, that is to confirm its intention to defend the claim.

  • Seven days from the date of calling within which to lodge its written defences.

Defences lodged at this initial stage can be basic and can consist of complete denials of matters raised in the summons.

Subsequent stages

In a commercial action, there is a preliminary hearing 14 days after initial defences are lodged. At the preliminary hearing, the court identifies the issues in dispute and considers procedural matters.

The next stage is the adjustment period during which each party has an opportunity to adjust their pleadings in any way they wish. The adjustment period typically lasts for eight to twelve weeks, but the court may extend or reduce the period.

At the end of the adjustment period, the pleadings are closed and there is a hearing to determine further procedure. At this point the case could proceed to:

  • A proof, which is a trial with a full hearing on the facts of the case.

  • A debate, which is a hearing on a point of law before consideration of the facts.

  • A proof before answer, which is a hearing where evidence is heard on the facts before any questions of law are determined.

 

Interim remedies

10. What actions can a party bring for a case to be dismissed before a full trial? On what grounds must such a claim be brought? What is the applicable procedure?

The most common types of decree that result in an action being dismissed without proceeding to a full trial are:

  • Summary decree, which is available where the defendant (defender) has lodged no stateable defence.

  • Decree in absence, which is available where the defender has failed to enter appearance, that is they:

    • failed to note their intention to defend the claim when the case calls; or

    • failed to lodge any defences.

  • Decree by default, which is available for non-attendance at hearings or other failure to comply with the procedural requirements of the court.

These decrees must be sought through an application to the court (motion). A hearing may not always be necessary.

 
11. Can a defendant apply for an order for the claimant to provide security for its costs? If yes, on what grounds?

A defendant (defender) can apply for an order for the claimant (pursuer) to provide security for costs (caution for expenses); if granted, the pursuer is given a specific period of time to provide security. If the pursuer fails to provide security, the defender can enrol a motion for decree of dismissal to be granted.

Caution or security can, in principle, be sought from a defender but this request is only granted in exceptional cases.

Caution for expenses may be granted where there are reasonable grounds to believe the pursuer could not, if required to, meet the expenses of the claim. Where the pursuer is a limited company, there must be credible testimony that the company would not be able to pay the defender's expenses. Money, or lack of money, is not the only factor that the court considers, but it is an important one.

Caution or security usually takes the form of money or a bond deposited with the court. The amount of security required is a matter for the court. The amount is usually a reasonable estimate of the expenses that the defender is likely to incur from the date of the motion for caution until the proceedings end. Caution does not cover past expenses.

 
12. What are the rules concerning interim injunctions granted before a full trial?

Availability and grounds

An interim injunction (interim interdict) is available at any point before the action is finally resolved. It can be sought on its own, or as part of the remedies sought in a wider action.

The party seeking an interim interdict must show both:

  • A prima facie case.

  • The balance of convenience lies in their favour. More specifically, the applicant must show there would be less harm caused by granting the interdict than refusing it.

The party seeking the interdict does not have to provide security in exchange. However, there is an implied undertaking as to damages so that if they fail to obtain a permanent interdict at the end of the case then the opponent can claim damages for any losses suffered while the interim interdict was in place.

Prior notice/same-day

An interim interdict can be sought on an urgent basis by making a motion to the court and can be heard on the same day (subject to the availability of the court). It can be granted without notice and ex parte.

The defendant (defender) may have lodged a caveat at court. A caveat is a legal document lodged in court on behalf of a party so that certain interim orders cannot be granted without prior notice being given. It acts as a warning device. If a caveat has been lodged, the court will require that the defender be made aware of the application and be given a right to be heard by the court before the order is granted.

Mandatory injunctions

Interim orders for specific performance (specific implement) are available. Since specific performance (specific implement) is a primary remedy in Scotland, an interim order would also in principle be easier to obtain than in, say, England.

Rights of appeal

If the interim interdict is granted ex parte, the opponent can apply at any time during the case to have it withdrawn (recalled). If the opponent was present at the original hearing, they would need to show a material change in circumstances in order to persuade the court to recall it.

Separately, the opponent can appeal the granting of the interim interdict either on the facts or the law. This can be done without leave within 14 days of the decision, or with leave after that period.

 
13. What are the rules relating to interim attachment orders to preserve assets pending judgment or a final order (or equivalent)?

Availability and grounds

Interim attachment is a statutory remedy used to freeze an opponent's physical assets outside his home. Certain categories of assets are excluded, such as tools of the trade, a vehicle reasonably required by the opponent, money, cargo onboard ships, perishable goods, and material for a manufacturing process or goods to be sold as a normal part of the opponent's stock in trade.

Interim attachment orders are available at any time before the final disposal of the action. The creditor or claimant (pursuer) needs to demonstrate, on the balance of probabilities, all of the following:

  • A prima facie case on the merits.

  • There is a real and substantial risk that any decree in favour of the creditor would be defeated or prejudiced by the debtor's insolvency, or the debtor disposing of the assets in some manner.

  • The order is reasonable in the circumstances.

Prior notice/same-day

A request for an interim attachment order need not be notified to the other party where the creditor is seeking the order in advance of a hearing on the application. In this case, a subsequent hearing would be fixed for the defendant (defender) to be heard.

Main proceedings

The Scottish courts can make an order for an interim attachment in support of foreign proceedings.

Preferential right or lien

Depending on the timing of the attachment, there may be a preference in subsequent insolvency proceedings.

A lien is a right in security, which may be exercised when in possession of moveable property. A lien entitles a creditor to retain moveable property belonging to the debtor in certain situations until payment is made.

Damages as a result

If wrongful action including an attachment order, is taken to enforce a debt, it could amount to a tort (delict) entitling the debtor to damages from the creditor. However, the debtor would generally need to show malice, rather than mere negligence, on the part of the creditor.

Security

The claimant or applicant does not have to provide security (caution) in order to obtain an order for interim attachment.

 
14. Are any other interim remedies commonly available and obtained?

Arrestment is available to a claimant (pursuer) who has raised an action for the payment of money. Its effect is to freeze goods or money owed to the defendant (defender) by a third party. Arrestment prevents the third party from transferring the goods or money back to the defender. If the third party breaches the order then he may find himself liable for the full amount of the arrestment.

An inhibition relates to heritable or real property that is owned by the defender. In effect, an inhibition prevents the defender from burdening, selling or otherwise affecting the property subject to the inhibition. This is because transactions carried out in breach of an inhibition are challengeable.

 

Final remedies

15. What remedies are available at the full trial stage? Are damages just compensatory or can they also be punitive?

The most commonly sought remedies in civil cases are:

  • Decree for payment, or damages, or both. Damages in relation to both contractual and tortious (delictual) actions are purely compensatory. Exemplary or punitive damages are not available in Scotland.

There is no special standard of proof relating specifically to the losses for which damages are sought in civil cases. Causation must be shown. Allegations of remoteness of loss must be defended on the balance of probabilities.

  • Decree of declarator or reduction. A decree of declarator simply declares that a particular right or factual situation exists. This remedy is invariably paired with other remedies. A decree of reduction is the converse of a declarator; it may be viewed as a judicial annulment.

  • A permanent injunction (interdict). Permanent interdicts are not available as of right. The same grounds apply as for an interim interdict.

  • A decree for ad factum praestandum (specific implement or specific performance). Specific implement can be sought as a primary remedy in Scotland (in contrast to the position in England where specific performance is granted at the court's discretion).

 

Evidence

Disclosure

16. What documents must the parties disclose to the other parties and/or the court? Are there any detailed rules governing this procedure?

There is no discovery procedure. Instead there is a more restricted recovery process.

If the applicant wishes to recover documents from the other side, and the party in possession (haver) of the documents will not disclose them voluntarily, the applicant must seek an order from the court sanctioning their recovery request. It must demonstrate that the documents are relevant to the claim and support its pleaded case. The court will not authorise a recovery request simply for the party to see or explore what information the other party has.

A haver can be any third party, not just the parties involved in the case.

If the person in possession of the documents claims that they are confidential, they can lodge the documents in court in a sealed envelope. The court then decides whether they should be disclosed.

An applicant can also seek a pre-action order for recovery of evidence, if they are concerned that the haver may try to destroy it.

Any documents that are recovered can only be used for the purposes of the action in which they were obtained.

Privileged documents

17. Are any documents privileged? If privilege is not recognised, are there any other rules allowing a party not to disclose a document?

Privileged documents

Privilege is a recognised concept. Privilege gives an absolute right for a party to withhold evidence from a third party or the court. The most commonly-claimed types of privilege are legal professional privilege and without prejudice privilege.

Legal professional privilege

Legal professional privilege encompasses legal advice privilege and litigation privilege:

  • Legal advice privilege covers confidential communications between a legal advisor (in his capacity as a legal advisor) and his client for the purpose of obtaining legal advice.

  • Litigation privilege covers communications between lawyers or their clients and third parties made for the dominant purpose of litigation that is pending, reasonably contemplated or existing.

A legal advisor is a solicitor or advocate (or their foreign equivalent). In-house lawyers are included in this definition, except in relation to EU competition cases. The communication is only privileged if it involves seeking or providing legal advice.

It is assumed that the courts would follow English authority in determining who is a client. On this basis, where the client is a company, privilege would only apply to communications with a restricted group of employees charged with instructing the company's lawyers.

Without prejudice privilege

Without prejudice privilege is also recognised, although it has no formal legal meaning. It covers communications made with a view to settling an existing dispute. It is common practice to make a statement noting that a communication is "without prejudice", but it is the content of the communication rather than the use of this phrase that determines if it attracts privilege. An unambiguous statement of fact, even if contained in a without prejudice document, may be disclosable.

Other non-disclosure situations

A party is not required to disclose a document where either:

  • It is not relevant to the case before the court.

  • To disclose the document would not be in the public interest.

A confidential document may still need to be disclosed. Only privileged documents are protected from disclosure.

Examination of witnesses

18. Do witnesses of fact give oral evidence or do they just submit written evidence? Is there a right to cross-examine witnesses of fact?

Oral evidence

As a general rule, evidence given by witnesses of fact is given orally and in full at a trial (proof).

There is no standard procedure for the exchange of witness statements. Ordinarily the parties would exchange only lists of witnesses in advance of a proof.

In certain situations the court will order the exchange of written witness statements, particularly in designated commercial actions. That evidence may also be ordered to stand as evidence in chief, but this is not the general rule.

The party calling a witness will nevertheless usually take an informal statement (precognition) of each witness's evidence prior to the hearing. Precognitions are private documents so they are inadmissible as evidence and are not disclosed to the other parties. Parties can also approach witnesses for their opponent and request to take a precognition, although the witnesses are not obliged to agree to give a statement.

Right to cross-examine

There is no provision for witnesses to be cross-examined prior to a proof (see Question 9, Subsequent stages). At a proof, the witnesses give their evidence (examination in chief) and then the other parties have the opportunity to question the witnesses (cross-examination).

The only time that cross examination of a witness might take place before the proof is if a specific request for documents is made to a witness who then refuses to comply. The witness can be ordered to come to court to explain certain matters. In that context, the other party could cross-examine the witness. However, this is within the document recovery process.

Third party experts

19. What are the rules in relation to third party experts?

Appointment procedure

There are few rules regarding the appointment and evidence of an expert witness. A party to the case appoints an expert. There is no specific stage for disclosure of expert reports, but a report would have to be disclosed if it is relied upon.

Role of experts

The expert's duty is to provide independent advice to the court and the information necessary for the court to reach its own judgment of the issues before it, as supported by the facts.

Right of reply

During the hearing, each party has the right to cross-examine any experts called by other parties. There is no right for a party to cross-examine another party's expert before the hearing.

Fees

The expert's fees are payable by the party who instructs that expert.

 

Appeals

20. What are the rules concerning appeals of first instance judgments in large commercial disputes?

Which courts

Decisions in disputes heard in the Outer House (first instance court) of the Court of Session can be appealed to the Inner House (appeal court) of the Court of Session (reclaiming motion). From the Inner House of the Court of Session, there is a right of appeal to the Supreme Court in London. Appeals from the Sheriff Court take a different path. This section focuses on appeals from a decision of the Court of Session.

Appeals from the Inner House of the Court of Session may only be taken to the Supreme Court if leave is granted by the Inner House, or the Supreme Court if the Inner House has refused.

Grounds for appeal

A party who is dissatisfied with any decision of the Outer House may appeal that decision to the Inner House. Evidence will not be heard again, but the decision may be reconsidered on evidence that was previously led, or on a point of law. If the proof (see Question 9, Subsequent stages) was originally heard in the sheriff court, an appeal to the Supreme Court may only be on a point of law.

Leave to appeal to the Supreme Court may be granted only if the appeal raises an arguable point of law of general public importance.

Time limit

If a party wishes to appeal a decision of the Outer House of the Court of Session at first instance, they must lodge their appeal within 21 days of the decision being made or 14 days for an interim order. If a party wishes to appeal a final judgment of the Inner House, an application for leave to appeal must be made within 28 days.

 

Class actions

21. Are there any mechanisms available for collective redress or class actions?

There are currently no formal mechanisms for class actions, although there is discussion on possible reforms.

However, there have been cases where a designated judge has case managed claims by multiple claimants (pursuers) arising from the same or similar causes of action resulting in their claims being dealt with and heard together.

 

Costs

22. Does the unsuccessful party have to pay the successful party's costs and how does the court usually calculate any costs award? What factors does the court consider when awarding costs?

Costs (expenses) are at the court's discretion, but the unsuccessful party will generally have to pay a proportion of the successful party's costs (judicial expenses). The court decides which party should be liable to pay judicial expenses based on:

  • The facts of the particular case.

  • The length and expense of the litigation.

  • The conduct of the parties before and during litigation.

Considering the same factors, the court then decides what proportion of the expenses incurred that party should pay. A court auditor determines the exact amount of judicial expenses during a procedural hearing. Court rules prescribe the recoverable fees for each block of time or piece of work undertaken.

Counsels' fees are recoverable in Court of Session cases. Counsels' fees can only be recovered in sheriff court cases where the court sanctions the use of counsel. Other outlays, such as the cost of obtaining expert reports, witness expenses and court dues, may also be included in judicial expenses.

Draft legislation is under consultation to introduce qualified one way costs shifting, which would alter the normal "loser pays" principle above (see Question 35).

 
23. Is interest awarded on costs? If yes, how is it calculated?

Interest is usually awarded on costs. It is calculated from the date the costs award is determined (unless there are exceptional circumstances). It is calculated using the judicial interest rate (currently 8%), although there may be scope to ask for a different rate or a different period to apply.

 

Enforcement of a local judgment

24. What are the procedures to enforce a local judgment in the local courts?

The possible methods of enforcement are wide-ranging and depend on the nature of the case. The methods include:

  • An arrestment. This freezes funds held by a third party for the debtor company, for example in a bank account. Bailiffs (sheriff officers) serve arrestments. The third party must confirm the amount caught by the arrestment. If the debtor company's banking arrangements are unknown, a speculative arrestment can be served on any bank. If there is no challenge to the arrestment, funds are released within fourteen weeks.

  • A money attachment. This applies to business cash and enables sheriff officers to seize cash held at a place of business.

  • An inhibition. This seeks to prevent the debtor company from selling or mortgaging their property. Disposals of inhibited property are challengeable.

  • Liquidation. This is a more indirect method of payment. It involves service of a charge for payment that, if not paid, entitles the creditor to petition for the company to be wound up. The creditor would then have a claim on any assets of the liquidated company.

 

Cross-border litigation

25. Do local courts respect the choice of governing law in a contract? If yes, are there any areas of law in your jurisdiction that apply to the contract despite the choice of law?

The courts respect a governing law clause in a contract. The applicable law is:

  • The Rome Convention on the law applicable to contractual obligations (1980/934/EEC) (Rome Convention) for contracts dated before 17 December 2009.

  • Article 3(1) of Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I) for contracts dating on or after 17 December 2009.

There are certain exceptions to this rule, including the following:

  • Mandatory rules of Scots law may override the choice of law.

  • If all elements relevant to the contract relate to a country other than that of the chosen law, then the law of that other country may be applied.

  • There are special rules for employment, consumer and insurance contracts.

  • A choice of law may not be respected if it is manifestly incompatible with public policy.

 
26. Do local courts respect the choice of jurisdiction in a contract? Do local courts claim jurisdiction over a dispute in some circumstances, despite the choice of jurisdiction?

The courts respect a choice of jurisdiction in a contract.

The applicable law is:

  • For the EU, for proceedings commenced before 10 January 2015, Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation) and, for proceedings commenced on or after 10 January 2015, Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation recast).

  • For Switzerland, Norway and Iceland, the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 2007 (New Lugano Convention).

  • Within the UK, Schedule 4, Civil Jurisdiction and Judgments Act 1982.

Otherwise Scots common law applies.

There are certain exceptions to this rule, as follows:

  • There are areas of exclusive jurisdiction in the EU regime that prevail over any choice of jurisdiction.

  • Under the EU regime there are particular rules relating to contracts of insurance, consumer law and employment.

  • If the defendant (defender) appears in the court of a particular jurisdiction without contesting jurisdiction then they are deemed to have accepted the jurisdiction irrespective of any choice.

  • In relation to matters falling outside the EU regime, the defender could make a plea of forum non conveniens, arguing that there is a competent and more suitable jurisdiction.

 
27. If a foreign party obtains permission from its local courts to serve proceedings on a party in your jurisdiction, what is the procedure to effect service in your jurisdiction? Is your jurisdiction party to any international agreements affecting this process?

Service from EU jurisdictions

For service of proceedings from other EU jurisdictions, Regulation (EC) 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters (Service of Documents Regulation) applies.

Service can be made through a designated transmitting agency in the jurisdiction of the foreign party and the receiving agency in Scotland. Once in Scotland, proceedings are served on the defendant (defender) using a permitted method of service, which includes by:

  • Post. Certain conditions apply to service by post.

  • Private firms of court appointed service agents (messengers-at-arms).

Service under the Service of Documents Regulation is also permitted by post direct from the foreign jurisdiction (by the member state itself) or through diplomatic or consular agents.

Service from non-EU jurisdictions

For service of proceedings from outside the EU, different procedures apply. Scotland (as part of the UK) is a party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters 1965 (Hague Service Convention) and other bilateral service conventions.

Service of proceedings from jurisdictions that are not a party to the Hague Service Convention or any bilateral service convention with the UK can be carried out by a method permitted under the court rules, subject to the requirements of the foreign court.

 
28. What is the procedure to take evidence from a witness in your jurisdiction for use in proceedings in another jurisdiction? Is your jurisdiction party to an international convention on this issue?

Where a court in another EU member state makes the request, the requesting court transmits a form of request to the Scottish court. The prescribed form requires information such as the details of the parties, the nature of the case, and the questions to be put to a witness (Regulation (EC) 1206/2001 on co-operation between the courts of the member states in the taking of evidence in civil or commercial matters).

When evidence is required by a court in another part of the UK, or in a country outside of the EU, a request can be made by petition and accompanying letter of request to the Court of Session in Scotland (Evidence (Proceedings in Other Jurisdictions) Act 1975, implementing the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970).

Enforcement of a foreign judgment

29. What are the procedures to enforce a foreign judgment in the local courts?

For a judgment from another part of the UK, the procedure is set out in the Civil Jurisdiction and Judgments Act 1982. The judgment must be registered in Scotland. The procedure and required documents differ depending on whether it involves enforcement of money or non-money provisions in a judgment.

Judgments of EU member states are enforceable under Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation) and Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation (recast)), and judgments of Switzerland, Norway and Iceland under the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Lugano Convention). Enforcement of a judgment under the Brussels Regulation or the Lugano Convention (but not the Brussels Regulation (recast)) requires a petition to the Court of Session ex parte for registration of the judgment.

A European Enforcement Order (EEO) under Regulation (EC) 805/2004 creating a European Enforcement Order for uncontested claims (European Enforcement Order Regulation) can also be used to enforce uncontested judgments from EU member states. Following judgment by the foreign court, the creditor applies to that court for an EEO certificate. With this, the judgment can then be registered directly in Scotland.

Judgments of some Commonwealth countries (New Zealand, Singapore, Nigeria and Kenya among others) are enforced through the Administration of Justice Act 1920. This involves registration of the judgment, which is a discretionary matter for the court.

Judgments of certain recognised courts of non-Commonwealth countries and other Commonwealth countries (for example) Canada, Australia, India, Jersey, Guernsey and the Isle of Man) are enforced through the Foreign Judgments (Reciprocal Enforcement) Act 1933. The judgment must be registered before it can be enforced. Registration of a judgment under this Act is a right and not discretionary provided certain conditions are met.

Judgments of Mexico (and Singapore) may be recognised and enforced under the HCCH Convention on Choice of Court Agreements 2005.

Judgments of countries outside the EU not falling under one of the treaties above are enforced under the common law. This includes judgments from the US, some African countries, the Middle East and Far East, including Hong Kong. The process involves raising a fresh action in Scotland, based on the foreign judgment. Certain conditions must be met for the judgment to be enforceable and certain grounds of challenge are available.

The registration and/or enforcement of a judgment may be appealed against on various grounds depending on which regime applies.

 

Alternative dispute resolution

30. What are the main alternative dispute resolution (ADR) methods used in your jurisdiction to settle large commercial disputes? Is ADR used more in certain industries? What proportion of large commercial disputes is settled through ADR?

The main methods of ADR to settle large commercial disputes are mediation, arbitration and adjudication.

Mediation

Mediation is a wholly voluntary process. The courts may support mediation in appropriate cases, but there is no procedural basis to mandate the use of mediation. In general, while mediation is used, this is less so than in, for example, England.

Arbitration

Arbitration in Scotland is governed by the Arbitration (Scotland) Act 2010, which contains:

  • Mandatory arbitration rules, which apply to every arbitration seated in Scotland and cannot be modified or disapplied.

  • Default rules that apply unless the parties agree otherwise.

In 2013, the International Centre for Energy Arbitration was launched to promote arbitration in the energy sector.

Adjudication

Adjudication is used primarily to resolve disputes in the construction sector. A party to a construction contract has a statutory right to refer a dispute to adjudication (Housing Grants, Construction and Regeneration Act 1996).

 
31. Does ADR form part of court procedures or does it only apply if the parties agree? Can courts compel the use of ADR?

The courts cannot make a compulsory order for ADR. The parties to a dispute need to agree to ADR, either contractually or when a dispute arises.

 
32. How is evidence given in ADR? Can documents produced or admissions made during (or for the purposes of) the ADR later be protected from disclosure by privilege? Is ADR confidential?

Mediation

The parties agree both:

  • The manner of giving evidence and the requirement to do so.

  • Whether any evidence given is confidential.

The courts will uphold any such agreement.

Arbitration

The tribunal or arbitrator can decide (Arbitration (Scotland) Act 2010):

  • The admissibility, relevance, materiality or weight of any evidence.

  • The documents to be disclosed.

  • The scope and nature of any witness evidence.

Disclosure by the tribunal or any party of confidential information relating to the arbitration is actionable as a breach of confidence. However, the parties may authorise disclosure (expressly or impliedly) and disclosure may be required for various specified reasons.

Adjudication

The adjudicator usually invites both parties to provide written submissions. The submissions can be accompanied by relevant evidence.

There is no general statutory duty of confidentiality in relation to adjudication of construction disputes under the Housing Grants, Construction and Regeneration Act 1996. However, a party can expressly request that any evidence they submit is treated as confidential and is not disclosed to third parties.

Adjudication proceedings are conducted in private, unless the adjudicator's decision is subsequently the subject of enforcement proceedings.

 
33. How are costs dealt with in ADR?

In Scotland, costs are known as "expenses".

In mediation it is common for parties to split the cost of the mediator equally but this is a matter for agreement between the parties.

In the arbitration, the parties are in principle liable for an equal share of the arbitrator's and the tribunal's fees and expenses (Arbitration (Scotland) Act 2010). The tribunal can allocate the parties' liability for any arbitration costs between them. The normal rule is that costs follow success.

In adjudication, it is normal practice that each party bears their own costs. However an adjudicator may make an order that the losing party is to bear the costs.

 
34. What are the main bodies that offer ADR services in your jurisdiction?
 

The Scottish Mediation Network provides access to mediation services in Scotland (www.scottishmediation.org.uk). These are in addition to several private sector mediation service providers.

For arbitration services, the Chartered Institute of Arbitrators (Scottish branch) and the Scottish Arbitration Centre can help identify and appoint an appropriate arbitrator (www.ciarb.org/scotland).

Nominating bodies for the purpose of appointing an adjudicator include the Royal Incorporation of Architects in Scotland, The Royal Institution of Chartered Surveyors and the Chartered Institute of Arbitrators (Scottish Branch).

 

Proposals for reform

35. Are there any proposals for dispute resolution reform? If yes, when are they likely to come into force?

Changes to the funding of civil litigation are anticipated following the publication of the Expenses and Funding of Civil Litigation Bill. This proposes a cap on the level of success fees recoverable, allowing damage based (contingency fee) agreements and introducing qualified one way costs shifting in personal injury cases. The Scottish Government has concluded a consultation on this, and intends to take these recommendations forward by way of legislation.

A recent report recommends changes to the rules on televised reporting of court proceedings, including the introduction of filming of civil and criminal appeals and the filming of criminal trials for documentary purposes (subject to exceptions such as cases with vulnerable parties). Guidance is due to be published on the implementation of these recommendations. The Scottish Law Commission published a discussion paper in February 2016 on possible reform of prescription.

 

Online resources

Scottish Courts website

W www.scotcourts.gov.uk

Description. This website is run by the Scottish Court Service and gives information about the courts in Scotland and provides online access to the court rules.

The Law Society of Scotland

W www.lawscot.org.uk

Description. This is the website of the professional governing body for Scottish solicitors. It contains the professional practice rules and guidance.



Contributor profile

Joanna Fulton, Director

Burness Paull LLP

T +44 131 473 6305
F +44 131 473 6006
E joanna.fulton@burnesspaull.com
W www.burnesspaull.com

Professional qualifications. Scotland, Solicitor, 2008; Hong Kong, Solicitor, 2002; England & Wales, Solicitor, 2000

Areas of practice. Commercial dispute resolution; product liability.

Languages. English, French, German

Non-professional qualifications. MA Hons European Studies, Aberdeen University

Recent transactions

  • Acting for global and domestic manufacturers in the pharmaceutical, medical device, automotive, consumer product and food and drinks sectors in defence of claims in Scotland, often as part of global litigation.
  • Advising manufacturers on safety issues and risk management.
  • Advising on high value breach of contract and related claims for a variety of commercial clients, and settlement of those claims.

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