(172)  Spousal guarantees: not following the House of Lords in Etridge

An Extra Division held on 10 May 2002 that the decision of the House of Lords in the English case of Royal Bank of Scotland v Etridge (No 2) [2001] 3 WLR 1021 was not binding in Scotland (Clydesdale Bank v Black 2002 GWD 16-526).  In Etridge the House issued speeches laying down more specifically and at length when a bank would be put upon its inquiry as to the position of a prospective guarantor of a connected person’s debt to the bank, setting out the steps to be taken by the bank in these circumstances in advising the prospective guarantor to obtain independent legal advice, explaining what the content of the legal advice should be, defining what would make that advice independent, and stating how the bank should check that independent advice had in fact been taken.  But Lord Clyde, making his last appearance as a Law Lord, seemed to address himself to Scotland as much as to England.  He referred to his leading speech in Smith v Bank of Scotland 1997 SC (HL) 111, and observed that the steps being set out in Etridge are not matters of ritual