Simple procedure is governed by the Simple Procedure Rules (SPR), which were designed to change the culture of raising actions for claims with a value of less than £5,000 and to introduce a more proactive approach by the court to try to resolve disputes in a timeous and cost effective way.
In simple procedure cases, the sheriffs' responsibilities are as follows (SPR 1.4):
(1) The sheriff must take into account the principles of simple procedure when managing cases and when interpreting these rules.
(2) The sheriff must ensure that parties who are not represented, or parties who do not have legal representation, are not unfairly disadvantaged.
(3) The sheriff must encourage cases to be resolved by negotiation or alternative dispute resolution, where possible.
(4) If a case cannot be resolved by negotiation or alternative dispute resolution, the sheriff must decide the case.
Three simple procedure cases have recently come before the Sheriff Appeal Court, (Cabot Financial UK Limited v Robert McGregor; Cabot Financial UK Limited v Liam Gardner; and Cabot Financial UK Limited v Kirsty Brown where the focus of each appeal was about whether the sheriff who dealt with each of the original cases had overstepped their authority by dismissing each case. These cases were test cases for multiple other cases which had been paused pending the outcome of these appeals.
In each case, Cabot Financial UK Limited (Cabot) raised a simple procedure claim against the defender for payment of sums due to them by virtue of a debt which had been assigned to Cabot from a mail order clothing company.
In the Cabot Financial UK Limited v Robert McGregor action, upon being served with the action, Mr McGregor lodged a time to pay application seeking time to pay the sum claimed. Neither Mr Gardner nor Ms Brown responded to the actions served on them. In the normal way, Cabot applied for decree (judgment) to be granted.
However, rather than granting the decree, in each of the actions the sheriffs made an "unless order" in terms of SPR 8.4 in which they ordered Cabot to lodge various documents including a copy of the agreement, a copy of the assignation of the debt and a copy of the intimation of assignation of the debt. The order confirmed that if Cabot failed to lodge the documents requested within 28 days, the actions would be dismissed.
In each action, Cabot chose not to lodge the documents requested by the sheriff, with their agents confirming to the court that the reason the documents were not being lodged was because there was no requirement for such documents to be lodged in undefended simple procedure actions. Each action was subsequently dismissed.
Cabot appealed all three dismissals and each action was informally conjoined by the Sheriff Appeal Court for the purposes of appeal. Cabot's position in all three appeals was that the sheriff in each action acted out with their jurisdiction in respect of the SPR by dismissing the actions as a result of the unless orders being complied with.
When considering the appeals, the appeal sheriffs considered the action against Mr McGregor separately from the actions against Mr Gardner and Ms Brown, on the basis that Mr McGregor had lodged a time to pay application, so had admitted that he was due to pay the debt, whereas neither Mr Gardner nor Ms Brown had responded to the claim.
In reaching their decision in respect of all three appeals, the appeal sheriffs considered the extent of authority conferred on sheriffs in undefended simple procedure actions and whether or not SPR 8.4 (the unless orders) extended to undefended actions. The appeal sheriffs noted that there is no SPR which requires documentation to be lodged at court when the action is raised. They noted that it was "surprising and irregular that the sheriffs had not only required that such documentation be produced, but in the absence of such documentation declined to grant decree in absence and dismissed the claims." and that "Accordingly, to the extent that the sheriffs rely on rule 1.4 (the sheriff's responsibilities) as justification for the making of unless orders and then to dismiss the claim when the orders are not complied with, they fell into error."
The appeal sheriffs considered that if the sheriffs' reasoning to dismiss the actions based on the failure of Cabot to comply with the unless orders in SPR 8.4 was based on SPR 1.4(2), which states that "The sheriff must ensure that parties who are not represented, or parties who do not have legal representation, are not unfairly disadvantaged," then this was an error, since that SPR is directed at defended actions, which none of the appeals were.
The appeal sheriffs ultimately agreed that the sheriffs in each action acted in error when dismissing the actions and that the sheriff's jurisdiction in undefended actions is "largely unaltered" by the SPR. Each of the three appeals was accordingly allowed.
So, what next?
These three appeals are test appeals and there are a further 17 appeals involving similar grounds pending.
Going forward, until another case comes along that comes to a contrary decision, we would expect to see fewer unless orders issued by sheriffs in undefended simple procedure actions and certainly fewer, if any, undefended actions being dismissed by sheriffs for non -compliance with such orders. Documentation to evidence the claim will be continued to be required in defended simple procedure actions.