There are many key components to success in litigation, but a lesser known stumbling block can be your title to sue.
Similarly, when defending an action brought against you, a useful preliminary defence can be to challenge the pursuing party's title and interest to sue in the action.
But what actually is title to sue? And what are the key aspects to be aware of to protect you from or entitle you to raise a challenge on these points?
What is title to sue?
At its simplest, title to sue requires that a person who wishes to raise a court action (called the Pursuer in Scotland) has a legal relationship of some kind with another person (called the Defender). That relationship might be voluntary, for example a contractual relationship, or it might arise out of the defender harming the pursuer in some way, for example by negligence.
This legal relationship means that the Pursuer is entitled to ask the court to decide the issue which lies at the root of the case.
Interest to sue requires that the Pursuer has or would derive some benefit from asserting the right that the defender has either infringed or denied. In other words, it must be a right actually worth asserting in the real world, and not just, for instance, of academic interest.
Both come together under Scots law to form the principle of standing. There are some circumstances where a party will have title to sue and not interest and vice versa, and in these cases the party will not have standing and therefore cannot raise a court action. However it is much rarer to find that a party with title will not have an interest to sue than the other way around, so it is particularly important to be sure you have title before embarking on court proceedings.
If you have a legal action brought against you (so you are the Defender), you will automatically have title to defend the action in the court process.
But what are the most common ways in which title to sue can arise for a potential Pursuer who wishes to launch a court action against someone who has wronged them? And when might a potential Pursuer not have title, even if they have interest?
The simplest examples of title to sue are through ownership and contract:
Where a person has a legal right of ownership they have title to sue in all actions which deal with the ownership of their property.
Where a person is a party to a contract, the legal relationship of the contract between the parties gives one party the right to insist on performance of the contract by suing the other if necessary.
A rival trader hoping to sue a competitor doing something injurious to them will have an interest to sue (because they are losing money) but not title (because there is no legal relationship). Similarly, having a responsibility to maintain or manage property or assets will not necessarily be sufficient to establish title to sue on its own and may be susceptible to challenge without an additional right to back it up.
If you are a bankrupt with a permanent trustee then you will not have title to sue in any action which may involve your sequestrated assets without the trustee giving their consent to the action.
Some tricky examples:
Title to sue can become tricky and therefore more susceptible to challenge when company structures are involved.
- A company should sue or be sued under the company name, but it can also be sued under its trading name if its incorporated name is unknown, as my colleague Daniel McClymont recently explained in this blog. If the company decides to change its name after legal proceedings are raised this will not make the proceedings defective.
- An unincorporated entity (such as a club or association) should also sue or be sued under its trading name if it carries out business under that name, but it is also advisable to include the names of the individual members of the unincorporated entity as named pursuers or defenders. In particular, this helps with enforcement of the final decree if awarded in the suing party's favour.
- Similarly for partnerships, a firm of partners can sue or be sued under the firm name alone in the Sheriff Court, but the names of at least three of the partners (or two if the firm has only two partners) must be included with the firm name if the action is being raised in the Court of Session.
It should always be made clear on what basis a party has a right to raise an action in the court papers. If title to sue arises out of a particular document (for example, a land certificate proving ownership of land) this should be lodged with the court when proceedings are raised to prevent challenge from the very outset.
How are challenges regarding title to sue dealt with?
Any challenge to title to sue will be dealt with by the courts as a preliminary matter, so that it can be resolved before the parties go to the expense of preparing for a hearing on the substance of the case.
If a challenge regarding title to sue is successful this will lead to dismissal of the action, and depending on factors such as time limits it may not always be possible to raise the action again.
Therefore, time should be taken before commencing litigation to ensure that the party wishing to raise an action has the legal right to do so, and that this is correctly framed in the pleadings to protect the action from challenge or dismissal. Similarly, if you are on the receiving end of court papers, make sure you consider whether you might be able to challenge the Pursuer's title to sue, as such a challenge generally has to be made at an early stage of the proceedings.
If you would like any further information, please do not hesitate to get in touch with a member of Brodies' Dispute Resolution team.