Can you be taken to court for debt in Scotland?
Yes. Most court action is started in the Sheriff Court. These are local courts that deal with a range of civil and criminal cases.
For larger or more difficult cases, your creditors may start a case in the Court of Session, Scotland's supreme civil court. This court will only take on cases worth more than £100,000.
For debts regulated by the Consumer Credit Act, the creditor must have already sent you a default notice. They must also give you at least 14 days to comply before starting court action.
In Scotland, there are two main routes creditors can take to get a judgment against an unpaid debt:
- The Simple Procedure
- Ordinary Cause
What is the Simple Procedure?
The Simple Procedure is an informal court process for dealing with debts under £5,000.
Before a creditor can use the Simple Procedure, they must show they have tried to arrange a way for you to deal with the debt, such as a settlement. Either you or your creditor can opt for mediation via the Alternative Dispute Resolution (ADR) service. Creditors who cannot do this will have to submit a form to the court instead.
When the claim has been registered by the court, the creditor will need to serve notice to you. They can do this by email, first class post or by sending a Sheriff officer.
The notice must include:
- The claim form
- A response form
- A copy of the timetable of the claim
- A Time to Pay application
If they do not do this, you can object to the order as the creditor has not followed the correct procedure.
Ways you can respond to a Simple Procedure claim
You must send a response back to the Sheriff Clerk's Office within 21 days of receiving the claim. There are different ways to respond:
- Admit to the claim and pay the debt before the final response date. The court will take the claim no further if you pay the debt in full before the final response date
- Admit to the claim and ask the court for time to pay. Ask for time to pay by completing the Time to Pay application that was included in your notice
- Dispute all or part of the claim. You can dispute the claim if you believe something is wrong with it
A decision will be made by the court once the response form is received.
Do not ignore the claim form. If you do not respond in time, the court is likely to make a decision in favour of your creditor. They can also take steps to enforce the order.
What is Ordinary Cause?
The Ordinary Cause procedure is used by the Sheriff Court in Scotland for claims over £5,000, with a maximum amount of £100,000.
To apply for an Ordinary Cause, a creditor must first raise an 'Initial Writ' with the Sheriff's Court and pay a fee. At this point, you or your creditors can opt to use Alternative Dispute Resolution (ADR) to resolve the situation before it goes to court.
Once the court has agreed to the action a creditor wants to take, the creditor must then serve the writ to you using a Form of Citation. They can do this by first class post or by sending a Sheriff Officer.
The writ should include:
- A Notice of Intention to Defend
- A Time to Pay application
If the writ does not include these things, you can let the Sheriff Court know your creditor has not followed the correct process and failed to include the documents you need to properly respond to the claim.
Ways you can respond to an Ordinary Cause claim
You have 21 days to respond after being served the writ. There are different ways you can respond:
- Admit the claim and settle the debt. This means you pay the debt in full and the court takes no further action against you
- Admit the claim and apply for time to pay. You can do this using the Time to Pay application
- Dispute all or part of the claim. You can dispute the claim if you believe something is wrong with it
- Make a counterclaim. Seek advice from a solicitor first to see if you have a case to counterclaim successfully
If you dispute the claim or offer a time to pay direction, you may end up at a hearing if your creditor does not accept the arrangement.
Do not ignore the initial writ. If you do not respond in time, the court is likely to make a decision in favour of your creditor and order you to pay the debt, interest and court expenses. They can also take steps to enforce the order.
What is Alternative Dispute Resolution (ADR)?
Alternative Dispute Resolution (ADR) is a mediation service that helps you and your creditors come to a settlement agreement. It can be used before Simple Procedure and Ordinary Cause claims go to court.
You may be able to avoid going through court if you can both come to an agreement.
ADR is often used because:
- It costs less for creditors
- It can help you and your creditors maintain your relationship
- It can help solve the issue quickly as you are both on neutral terms with a mediator
If ADR cannot help the situation, your creditor can continue with their claim against you.