What is a caveat?

A caveat is a warning system.  It is unique to Scotland – it is not possible to obtain a caveat in England.

A caveat is a legal document lodged at the Court of Session and/or any sheriff court on behalf of a party (known as the “caveator” so that certain interim orders, as set out in the caveat, cannot be granted without notice being given. The caveat will contain contact details for the party’s solicitor to ensure that the warning can be received at any time of day.

Caveats last for one year from the date that they are lodged and can be renewed annually for as long as required.

Where a caveat has been lodged by a party, and where an order is sought against that party, they will be provided with notice of the action being taken against them. The court must be satisfied that all reasonable steps have been taken to afford the caveator the opportunity to be heard before any order will be granted.

If there is no caveat in place, no notice of a hearing would be given and the defender would have no opportunity to oppose the order being sought against them. In those circumstances, the court can grant the order in the defender’s absence. The first they may hear of it may be when enforcement of the order, already granted, is being sought.

So, prevention is better than cure. It is far better for businesses and organisations to have lodged caveats at court in case interim orders are sought against them. Interim orders can be recalled (reversed), but even if one is in place for a short time it can have serious repercussions. For example, a court order prohibiting a business from trading could have significant financial consequences.

Against which orders is a caveat effective?

An individual can be warned against the following orders:

• interim interdict
• certain orders in relation to a petition to wind up, or appoint an administrator to, a company in which the individual has an interest;
• certain orders in relation to the individual’s bankruptcy.

A company can be warned against the following orders:

• interim interdict;
• the appointment of a provisional liquidator or interim administrator to the company;
• certain orders in relation to a petition to wind up the company.
• an application for permission to start group proceedings.

Caveats do not apply to the following orders:

• a pre action “dawn raid” (where evidence is sought to be recovered without notice);
• an order for arrestment of money ie. a bank account;
• an order to prevent the sale of heritable property.
   

How much does a caveat cost?

Our fee for lodging a caveat is £140 plus VAT. The court dues for lodging a caveat are £58 for any caveat lodged with a Sheriff Court and £53 for any caveat lodged with the Court of Session. You may wish to lodge a caveat in more than one court where appropriate.
 

In which court should a party lodge caveats?

The 39 sheriff courts in Scotland hear all cases where the sum being sought is £100,000 or less. There is no upper monetary limit on the cases that can be heard in the sheriff court. Cases where the sum sued for is over £100,000 can be brought in the Court of Session. It is recommended that those with business and/or property interests in Scotland lodge caveats in both the Court of Session and all relevant sheriff courts.
 
 

Further information

This note is intended to provide a helpful summary. It is for information only and must not be regarded as formal legal advice.  If you require further information, please do not hesitate to contact us.

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