The reform of the court system has received a lot of publicity and a mixed reaction amongst practitioners. Given that the changes affect all of us and that the commentary on them is mainly from lawyers, it is sometimes difficult to find unbiased opinion on how they will affect us and so we have tried to look at them as objectively as possible in the article below. Court reform will, of course, run hand-in-hand with the proposed reforms in relation to the way in which expenses are dealt with in court. As these changes come in it will put increasing pressure on lawyers to be clear about the costs they are charging clients. At Morton Fraser, we are tackling these new challenges head on and are now offering fixed fees for court actions, whether undefended or defended. We hope that it will give our clients the sort of clarity and certainty they need in relation to costs which will, in turn, encourage them to make use of the judicial system.
Given the publicity which court reform has had in the press together with the publicity which has been given (quite rightly) to the proposed changes to the law of corroboration, we may be forgiven for thinking that there are no other significant changes to the law in the coming year. That is, of course, not the case. In my practice, the changes which springs to mind most readily are those which will be made to the law of bankruptcy in Scotland. Bankruptcy used to be an area which was rarely touched by the legislative. It wasn't until 1913 that Parliament decided to enact a piece of consolidated bankruptcy legislation and, having done so, didn't do it again until 1985. Since the turn of the century, however, bankruptcy legislation has been in fashion. The Enterprise Act in 2002 revised bankruptcy law significantly in England & Wales and Scotland followed suit in 2007 with the Bankruptcy & Diligence (Scotland) Act. That was followed in 2010 by the Home Owner and Debtor Protection (Scotland) Act and this year we will have the Bankruptcy & Debt Advice (Scotland) Act.
I wrote more extensively on the proposed Act in the Scotsman on 12 May this year but at the heart of the legislation is debt relief. The emphasis on debtors is understandable, particularly following such a deep and troubling recession. However, it is difficult not to reflect on how much the pendulum has swung in favour of debtors in recent years. If the Accountant in Bankruptcy had had her way, creditors' petitions would have been reduced to administrative applications rather than being dealt with by the Sheriff which would have been a significant change in the nature of the process. Whether that sort of change would be perceived as reducing the seriousness of bankruptcy is open to discussion, but few of us would argue that continued judicial involvement is a bad thing. Debt relief is a commendable goal and possibly the right one but a balance needs struck with the rights of creditors or, when the recession is long behind us and we are back to business as usual (which may take a few years yet), we'll just need more legislation at that stage to redress the balance again.
I and my colleagues at Morton Fraser, look forward to working with you in the New Year.