Publication of Macgregor report on DCFR

The report by Laura Macgregor (Edinburgh Law School) for the Scottish Government on the DCFR and Scots law was published on 5 March 2009.

The report can be accessed on the Scottish Government website, here.  See further our stablemate, the European Private Law News blog, here.  The general conclusion of the report is that the "DCFR represents a welcome opportunity to develop Scots law in a manner that is consistent with the theoretical foundations of Scots law".


Wilsonian statutory interpretation and banking insolvency

The writer was never lectured by the late Professor WA Wilson on the topic of statutory interpretation, but has read with great pleasure his many articles on the subject (detailed in note 1 to Professor Gerry Maher's "Statutory interpretation: the Wilsonian Analysis" in Scots Law into the 21st Century (ed HL MacQueen, 1996). His examples remain popular with students. 

For example, the Vehicles (Excise) Act 1971, s 8 (1) provided

“If any person … keeps on a public road any mechanically propelled vehicle for which a licence is not in force … he shall be liable to …” [penalty]

In relation to which Professor Wilson drew attention to Holliday v Henry (1974) RTR 101 which considered whether an unlicensed car, without a gearbox, balanced on four roller skates is “on” a public road?

In reading The Bank Insolvency (Scotland) rules (SI 2009/351)  (in force from 25th February) rule 3, in particular, seemed to be a provision that would have appealed to Professor Wilson

“(7) Where a rule in the 1986 Rules (Rule A) contains a reference to another such rule (Rule B)
(a) both Rule A and Rule B are applied by these Rules; or
(b) Rule A is applied by and the provision in Rule B to which Rule A refers is substantially
repeated in these Rules;
the reference in Rule A shall be treated, for the purpose of these Rules, as being, respectively, to the rule in these Rules that applies Rule B or the provision in these Rules that substantially repeats the provision in Rule B.
(8) Where a rule (Rule A) refers to another rule (Rule B) and Rule B applies a rule of the 1986
Rules (Rule C) with or without modifications, the reference in Rule A includes a reference to
Rule C as applied to Rule B”

Clearly, this is a provision which needs little explanation.

The Bank Administration Scotland Rules (SI 2009/350) also came into force on 25th February – with provisions that are similarly opaque.

Some time ago Roy Goode wrote of the general rules on administration that

“To read the amended Insolvency Act 1986 it no longer suffices to be a lawyer; it is necessary to become a physical geographer in order to find one’s way around provisions which are randomly dispersed among the body of the Act, the bizarrely numbered Schedules A1 and B1 and the Insolvency Rules, with seemingly no logic in the distribution nor any conception that it might be useful if all the provisions dealing with the same subject were brought together in clearly stated requirements. …  [T[hose who enjoy finding their way round mazes might give Hampton Court  a miss and try their hands at tracking down the meaning of “hire purchase agreement” in paragraph 43 (3).  All that is required is perseverance and a passion for concentric circles” [Principles of Corporate Insolvency (3rd edn, 2005), preface]

And while the new rules don’t seem to add to that last mentioned problem it would seem that they do not improve the difficulties Sir Roy identified.

Inhibitions, arrestments, and BAD law

The Bankruptcy and Diligence etc (Scotland) Act 2007 (known to many by its happy acronym "the BAD Act") included substantial reforms to the law of bankruptcy, the law of floating charges, and the law of diligence. The bankruptcy provisions have been in force since April last year; the implementation of the floating charge provisions has been delayed, pending resolution of problems arising from the interaction between the BAD Act and the provisions on registration of company charges in the Companies Act 2006; and the full implementation of the diligence reforms has been subject to some doubt.

It has now been confirmed that the provisions in the BAD Act on arrestments and inhibitions will come into force from 22nd April 2009 – following The Bankruptcy and Diligence etc. (Scotland) Act 2007 (Commencement No. 4, Savings and Transitionals) Order 2009 (SSI 2009/67).  Among the reforms: arrestment will be restricted to attachment of the amount due (under s 73E, Debtors (Scotland) Act 1987) rather than the full sum due from arrestee to the common debtor; and to the dismay of examiners in diligence the complex ranking rules relating to inhibitions are removed with inhibitions no longer conferring a preference in ranking (under s 154 of the BAD Act) and now only being breached by the inhibited debtor conveying or granting a right over heritable property (s 160 of the BAD Act).

The implementation of these provisions leaves the regime on land attachments as the only substantial part of the diligence reforms which has not yet come into force.  Given that the SNP voted against the BAD Act at Stage 3 due to concerns about the land attachment provisions it can be speculated that while the SNP remain in government these provisions will not be implemented. 

The brave new world of diligence in Scotland therefore includes, and is likely to include for some time to come, the law of adjudications.  So practitioners are advised not to throw away their copies of Parker, Notes on the Diligence of Adjudication (3rd edn, 1856) just yet.