Most businesses appreciate that when they receive legal papers starting proceedings against them it's important to instruct lawyers without delay. If the court knows that the action is defended, both parties will be given the chance to put their case.
However, things don't always go to plan. In practice there are all sorts of reasons why legal papers might be missed or mislaid. Mistakes happen. However, failure to respond to the court document initiating a case means the court can grant what the pursuer is asking for without a hearing. This is called a decree in absence.
Is all lost if decree in absence passes against you?
Not necessarily, but you should move swiftly.
Court of Session
In the Court of Session a defender has the right to recall a decree in absence provided they make an application to the court within seven days, lodge defences, and pay the modest sum of £25 to the pursuer.
If more than seven days have elapsed all is still not necessarily lost, but granting recall in this scenario is no formality by any means. Speed is still important. In a case where recall of a decree in absence after the seven day period was allowed, the court made specific reference to the speed at which a defender reacted once it realised that decree had passed.
Unlike in the Court of Session, there is no automatic right to have a decree recalled in sheriff court actions with a value over £5000. In these cases a defender must ask to be "reponed" if decree in absence has passed against them. The defender must lodge a formal court document (a "note") setting out the proposed defence to the claim and explaining their failure to appear. It is normal for a court hearing to be fixed to allow the defender to address the sheriff.
If successful the decree will be recalled and defences will be allowed to be received.
Case law has developed over the years but the current position is that the sheriff does not need to be satisfied that the defender's explanation for their failure to respond to the initial court papers is a reasonable one. Nor does the proposed defence require to be fully developed. Nevertheless, success cannot be guaranteed since the sheriff will take all the circumstances into account when deciding whether to allow the decree to be recalled.
In simple procedure actions in the sheriff court (which are the rules used when the value of the claim is under £5000) a decree in absence can be recalled by making an application to the court. The pursuer will have the chance to object to this, and the sheriff may order a hearing in court to decide whether to grant the application.
Key thing to note
The granting of a decree in absence can cause serious problems. This type of decree is enforceable in the same way as one that comes at the end of a contested court case. The pursuer can take steps to recover any money that the decree states is owed to them. This could end up with funds in a bank account being frozen and/or assets being removed from a property.
It is essential for businesses to put in place internal procedures to ensure that any court writ received in the post or left with reception staff or other employees is dealt with promptly. If for any reason those procedures fail then, to avoid missing the chance to defend the court action, time is absolutely of the essence. At the very least, further delay is a factor that can count against you when the court considers whether to allow decree in absence to be recalled. Instruct a solicitor to seek recall as soon as you become aware that decree in absence has passed.