05 Jun 2013

Consolidation of Bankruptcy Law in Scotland

Consolidation of Bankruptcy Law in Scotland

Grant Milne, Trainee Solicitor, discusses the recent Report published by the Scottish Law Commission on the consolidation of bankruptcy legislation in Scotland.

Grant Milne, Trainee Solicitor, discusses the recent Report published by the Scottish Law Commission on the consolidation of bankruptcy legislation in Scotland.

The consolidation of bankruptcy law in Scotland has been a topic long under consideration by the Scottish Law Commission dating back to February 2010. A consultation paper was subsequently published in August of 2011 highlighting the proposed amendments to the often criticised Bankruptcy (Scotland) Act 1985.

The Bankruptcy (Scotland) 1985 Act has been heavily amended over the years with the most notable amendment being the Bankruptcy and Diligence etc (Scotland) Act 2007. Many of the provisions contained within the 1985 Act are viewed as being excessively long and its structure has become difficult to apply and follow. As a result the Commission was tasked with restoring some coherence to bankruptcy legislation to save time and money in the application of the law in Scotland.

The Commission has since published its Report on 14th of May containing an appended draft of the Bankruptcy (Scotland) Bill 2013. The Report contains a number of proposals intended to remove anomalies, treat like cases in the same way, and omit provisions that no longer serve any purpose. The simplification and clarification of the law relates to a number of areas which have proven to be problematic in their current legislative form. These include the expression of “right or interest”, the meaning of apparent insolvency and the termination of the Accountant in Bankruptcy’s and original trustee’s functions.

There has been mixed responses to the publication of the Commission’s Report, Lady Clark of Calton whom chairs the Commission and was in charge of the project said: "It is important that the law on bankruptcy should be stated in a clear and accessible form. The existing statutory provisions dealing with bankruptcy are cumbersome and difficult to use. We hope that consolidating the legislation will make it easier and more efficient for practitioners and others to provide advice to people faced with personal bankruptcy.”

Rosemary Winter-Scott, Chief Executive of Accountant in Bankruptcy also welcomed the Report stating that: “Bankruptcy legislation in Scotland has been heavily amended over the years and the consolidation will ensure that the legislation is more accessible for practitioners and those affected by it.... This will bring bankruptcy legislation in Scotland into the 21st century.”

Criticisms have been levelled at the Commission with some viewing the proposals as a “missed opportunity” or as a failure to “address the most pressing & critical problems involving sequestrations & bankruptcies in Scotland”.

Regardless of viewpoint or personal interest in the matter, it is important to consider that the primary aim of the Commission was to bring the earlier enactments into one statute making the law more accessible to those who practise or are affected by it. The commission was not tasked with radical reforms of the legislation in place rather a reordering of the existing legislation. The Bill can therefore be viewed as a forward step in bringing bankruptcy legislation in Scotland into the 21st century albeit not the final one.

The Report is available for view at:

http://www.scotlawcom.gov.uk/law-reform-projects/joint-projects/consolidation-of-statutes/

Grant Milne, Trainee Solicitor


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