IT goes without saying that any good legal system should treat everyone equally. But what happens when it’s stacked in favour of a particular group of people? This can happen by accident as opposed to unfair design – and the Scottish legal system is no exception.
Our legal system has a number of injustices that seriously disadvantage consumers, but the good news is that these would be easy to fix in a Scottish Government Bill, especially as the Government in Scotland has already been reviewing "diligence" – the process of enforcing debts.
Here are just a few that are in need of fixing, starting with first-time buyers. Getting on the rung of the homeowner ladder is elusive for most people these days. In practice young people or students starting-out will generally look to rent in the private rented sector.
It’s not unusual for landlords to look for a guarantor – usually mum or dad, who is asked to sign a separate agreement guaranteeing any defaults by their tenant son or daughter. Sounds reasonable, but these guarantee agreements generally have a clause allowing the landlord to "register them for execution". This means they can claim any sum without having to prove the debt in court.
In practice this is misused. I dealt with a case recently where the landlord had registered the guarantee agreement in the "Books of Council and Session" in Edinburgh, claiming thousands in rent and damages to the flat. It was nonsense, but this registration allows the landlord to obtain the equivalent of a court order.
This is clearly unfair. It’s completely one-sided, with no opportunity for you to challenge what could be an entirely fictitious claim. The first you might know about anything is when sheriff officers knock on your door.
In theory this could lead to you being made bankrupt, or worse still, threatened with the loss of the roof over your head. In the case I was involved in, a court action had to be raised to interdict the use of the registered agreement, and then we had to ask a judge to reduce or cancel it. But the point is no private creditor should be able to get the equivalent of a court order on nothing more than their own say so.
This doesn’t only occur with guarantee agreements, it can happen to any homeowner in Scotland who has a dispute with their factor or neighbour. Under the 2004 Tenements (Scotland) Act, a property manager or neighbour in a tenement can register a Notice of Potential Liability of a debt in the Land Register.
There is no need to prove the debt. The fact it’s registered against your title deeds means it is unlikely you will be able to sell your home without paying it. This system is open to abuse without any requirement for independent scrutiny. It was only three years ago the Scottish Government got round to introducing a form for the notice to be removed.
One of the most ubiquitous forms of injustice can occur with council tax disputes. You may be entitled to a single-person discount, or council tax benefit, or perhaps the figure has just been miscalculated. Disagreements over council tax can hang around someone’s neck like an albatross.
Your local authority will often simply proceed to send what they think is your bill, together with a 10 per cent surcharge to the sheriff court, who will issue a summary warrant. This is like a court decree. Since April 2008, you can now apply to the court for time to pay if you accept the debt. But if the figure is wrong, technically you have a right to apply to the local Valuation Appeal Committee. Most people aren’t aware of this route, although even if they are it’s not fast, and doesn’t help if your council has passed the warrant to sheriff officers who are threatening various forms of recovery.
Local authorities in Scotland are also the worst offenders for making people bankrupt for arrears of three thousand pounds or more – even if they are disputed. Once bankrupt, with legal and trustee fees, plus 8 per cent statutory interest, a debt of £3,000 can mushroom into £15,000 to £20,000. This isn’t in the public interest, especially, if the original debt was wrong.
A final example of an area of law in need of reform must be the Scottish Government’s Debt Arrangement Scheme. It was designed to enable people in financial difficulties to obtain respite to make payments to their creditors in a manageable way.
In practice, people who use the scheme end up paying back 100 per cent of their debts over seven to eight years. Once discharged from the scheme their credit rating may be affected for up to six years. Contrast this with trust deeds, which you can access from private firms. You can pay back as little as 10 per cent of your debts over four years.
Why do we have a public scheme that offers no real incentive to Scottish consumers, giving them an impaired credit rating that could last as long as 14 years? The balance is wrong. There is an easy fix these problems. It just takes the will to do it.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here