Are your Scottish interests protected?

• United Kingdom

• Real estate
• Real estate sector

11-11-2016

If you trade, have a place of business or property in Scotland, think caveats!

Any business which trades, has a place of business or any property interests in Scotland can lodge a “caveat” with the Scottish Courts. This obliges the Court to give advance notice to the business (or more usually, its solicitor) that certain orders including interim interdicts (interim injunctions) and interim winding up orders of Scottish registered companies, are being sought against them.

The granting of such orders can have significant implications for businesses. If no caveats have been lodged the order can be made without you having any opportunity to object before the order is granted. You will only become aware of the order when it is served, at which point it must be complied with. Challenging an order already in place is more difficult than opposing the application when it is first made. We therefore strongly recommend that all clients with any Scottish interests lodge caveats to ensure that they receive advance notice of any such application.

Key features:

• They apply to certain interim orders including interdict (injunction), winding up and administration.
• Can be lodged in the name of limited companies, partnerships, LLPs, trustees etc. 
• If one is in place and a third party applies to court for the relevant order the caveat is “triggered” and the court contacts the solicitor named on the caveat to let them know about the application (even out of hours), to allow them the opportunity to take instructions in advance of the hearing, and to oppose the application.
• The hearing usually takes place about 24 hours after notification, although that period can be shorter or longer depending on circumstances.
• Caveats cost only £90 each plus Court fees (currently £45 in the Court of Session and £34 in each Sheriff Court) and last for one year.
• Can be lodged in the Court of Session, which has jurisdiction over all of Scotland, and in the Sheriff Court local to their location or property interest essentially in any Scottish court in which the business may be sued. We recommend lodging in both.

Caveats present a simple, inexpensive means of managing risk. They mean that businesses receive advance notice of, and therefore an opportunity to deal with, orders that could have far reaching implications.

This briefing is correct as at 11 November 2016. It is intended as general guidance and is not a substitute for detailed advice in specific circumstances.