The Coronavirus (Scotland) Act 2020: key changes for disputes
The Coronavirus (Scotland) Bill was passed last night, having been introduced on Tuesday this week as an Emergency Bill. It will come into force after receiving royal assent and will be known as the Coronavirus (Scotland) Act 2020 (“the Act”). The Act should not be confused with the Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020, which came into force at the end of last week. Those regulations are aimed at preventing and controlling the spread of infection with restrictions on movement and gatherings (subject to a reasonable excuse) and requirements for certain businesses to close. You can read more about the potential impact of those regulations on your business here.
The Act will supplement the Coronavirus Act 2020, which has UK wide application. It introduces a variety of changes for Scotland with the aim of allowing the justice system and public services to cope during this period of uncertainty. Some of the changes will be of particular relevance to many of our clients, particularly those with disputes relating to property and debt. In addition to the key changes set out below, it should be noted that the Act also deals with other areas such as the protection of vulnerable adults and children, alcohol licencing and various other functions of public bodies and local authorities, Freedom of Information requests and planning permission.
The provisions of the Act will expire after 6 months. However, the Act allows this to be brought forward or extended up to 30 September 2021. The Scottish Ministers are required to review the operation of the provisions every 2 months until they expire.
Last week, we reported on the guidance issued by the courts in relation to the changes and restrictions on court business. The new Act doesn’t change that but reinforces those changes and the court’s ability to make more changes. The Act provides that electronic signatures will fulfil the requirement for certain documents to be signed and allows for documents to be transmitted electronically where they would normally be required to be handed to someone or the court in person.
The Act will also suspend the requirement to physically appear in court unless the court directs otherwise. The court can only direct that personal appearance is required if it considers that failure to appear physically “would prejudice the fairness of the proceedings” or be “contrary to the interests of justice”. The exception is trials, where personal appearance is still required unless the court directs otherwise. Where parties are excused from physical attendance, they must attend electronically.
The majority of the provisions relating to the functioning of the court relate to criminal cases including increases to the maximum level of fixed penalties (fines) and exceptions to the rules on the admissibility of hearsay evidence. The draft Bill included provisions to allow trials which would normally be heard by a judge and jury to be heard by a judge sitting alone. However, in light of strong objections from MSPs and lawyers, these provisions have been removed from the Bill, with a view to further legislation being brought in at the end of April if changes are considered necessary.
In addition to the changes to court business, the Act contains the following provisions which will have an impact on particular areas of dispute resolution.
The Act will extend the period of protection available to individuals and unincorporated organisations who apply for sequestration, a protected trust deed or a debt arrangement scheme. Normally, there is a period of 6 weeks during which it is incompetent to take certain steps to enforce payment of the debt. However the Act extends this to 6 months. The Act also removes the prohibition against a debtor benefiting from this period of protection more than once in any 12 month period.
Normally, before a landlord can terminate a lease due to non-payment, they are required to serve on the tenant a notice requiring payment to be made within 14 days and specifying that if payment is not made, the lease may be terminated. The Act will increase the notice period from 14 days to 14 weeks. This applies to all notices served after the coming into force of the Act and also to notices served before which have not expired before the Act came into force. A more detailed look at the impact on commercial leases can be found here.
The Act also provides increased protection from eviction for private and social tenants. The minimum notice period for eviction has been increased from 6 weeks to 6 months in most cases, depending on the grounds for eviction. A shorter period is required where there is criminal or anti-social behaviour or the landlord needs to move in. The provisions apply only to notices that are served after the Act came into force.
These are difficult times and it is likely that many more individuals and businesses than usual will experience difficulties with keeping up payments, particularly those who have had to close or significantly reduce their business. These measures seek to delay the impact and hopefully buy them more time to get back on their feet. The overall effect of the Act is that while things are not grinding to a halt there may be significant delays to the resolution of some disputes and, as with all areas of life at the moment, we are going to have to get used to doing things differently.
If you have any questions about how these changes might affect you or your business, please get in touch.
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