KNOWLEDGE

Caveats - a small price for peace of mind

Morton Fraser_Bill Stark
Author
Bill Stark
Director of Debt and Asset Recovery
PUBLISHED:
30 November 2018
Audience:
category:
Blog

Imagine the scene. You're the finance director of a Scottish SME, quietly getting on with your job, when the Managing Director storms in. Through a stream of expletives, he tells you that there's an insolvency practitioner in reception who claims to have been appointed as a provisional liquidator to the company and is there to take control until the company is wound up formally by the court.

Wracking your brains, you remember that creditor.  The one that was only owed £1,200 and you disputed that the money was due anyway. They'd not delivered what they had promised.  Except that you didn't get around to actually disputing it.  You were busy.  You meant to write to the creditor setting out why the money wasn't due and you were going to get around to responding to that Short Form Demand which was only delivered three days ago.  It was on your "to do" list today.

After a call with the company lawyers you are relieved to find out that you can fix this. Except that fixing it is going to cost time and expense. But at this stage of the game you know you don't have any choice. 

Until it's too late, many don't realise that it's possible for a third party to obtain a court order against your company without you knowing anything about it - until that court order is served on you.  That court order (known as an interim order) might be for the appointment of a provisional liquidator or it might require the company to immediately stop doing something - an interim interdict. So, for example, in the midst of constructing a building development, an interim order could be granted stopping construction.

What can you do to prevent this sort of nightmare scenario? It's easy - and it's incredibly cost effective. Instruct your lawyer to lodge in the relevant court a document known as a caveat.  Having a caveat lodged means that, before any interim order is granted by a court, the court has to call your solicitor giving you the time to either sort things out with the third party or oppose the order being sought.  And it's a 24 hour service!  The courts have our out of hours contact details so whether it's over a weekend or at 8pm at night, we're on hand to help sort things out.

Having access to your solicitor in an emergency 24/7, must surely be expensive though? Not at all, our fee for lodging a caveat is £50 plus vat so, inclusive of the court lodging fee and VAT, it can cost as little as £103.

If you'd like a bit of peace of mind in uncertain times, we'd be delighted to talk to you about lodging caveats for you.  

Disclaimer

The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers.  Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.