Does Harry Potter do Summary Diligence?

You may have come across the words "…registration for preservation and execution…" at the end of some Scottish legal documents and thought it was like a spell cast at Hogwarts! They are not in fact from some mystical spell but are the words included where the parties agree that the financial obligation in a document can be enforced using a uniquely Scottish procedure known as summary diligence. Diligence is just the Scottish word for enforcement and summary diligence is effectively an accelerated procedure whereby enforcement can proceed without first obtaining a court decree (judgment).

Requirements for Summary Diligence

If the summary diligence procedure is to be used then the parties to the document must "…consent to registration for preservation and execution….". These words are regularly seen in guarantees, leases and minutes of agreement dealing with financial obligations such as separation and settlement agreements. It should be noted however that summary diligence is not competent to enforce payment of debts due under agreements regulated by the Consumer Credit Act 1974.

Consent to registration for preservation enables the document to be registered and preserved in perpetuity, whilst consent to registration for execution is what allows the summary diligence procedure to be invoked. The document must first be registered in the public Books of Council and Session in Scotland Alternatively, it is possible for registration to take place in the books of one of the Scottish sheriff courts but this option is rarely used. Following registration an extract of the document is returned with appropriate wording allowing summary diligence if/when necessary. Further extracts of the document can be obtained if required.

Secondly, to enforce by way of summary diligence the financial obligation in the document must be directly ascertainable from the deed itself or the deed must set out some mechanism for ascertaining the financial obligation. In practice, you will often see wording in such a document setting out the mechanism along these lines: " …a certificate signed for on or behalf of the creditor shall, save in the case of manifest error, be conclusive evidence of the sums due…". When drafting a document where it is intended that summary diligence is to be the method of enforcement it is worth making sure the debt is ascertainable from the deed or there is a mechanism to ascertain it to save any enforcement difficulties or challenges at a later date.

The third requirement is that the document to be registered must be "self-proving". This is achieved by ensuring that the signature of the person who grants the document has been witnessed. One witness is sufficient in Scotland for this purpose.

Assuming all the formalities have been met then the registered document can be passed to sheriff officers with details of the sums due to take enforcement steps since the registered document is effectively equivalent to a court decree (judgment). In most cases the first enforcement step will be to be serve a Charge for Payment. This a final demand served by sheriff officers which gives the debtor 14 days to make payment of the sums due and if he does not do so further enforcement can proceed. All enforcement options are open to a creditor proceeding by way of summary diligence so Inhibition (Charging Order), Earnings Arrestment, Bank/Third Party Arrestment, Attachment and Liquidation/Bankruptcy can all proceed in the same way as if a court decree (judgment) had been obtained.

What if the debt is disputed?

If the debtor disputes the sums due to the creditor then the debtor will have to seek an interdict (injunction) to prevent further enforcement action by the creditor. Where enforcement action has already taken place the debtor may also seek to set aside/recall that action. This can be a costly for a debtor.

Advantages of Summary Diligence

For both parties to a document the opportunity to enforce by way of summary diligence can be advantageous since it avoids the need for potentially lengthy and expensive litigation via the courts. For a debtor who wants to avoid the implications of a court decree being registered against him but is prepared to admit sums are due and repay in instalments then it is possible to set out the accepted liability and means of repayment with a clause for consent to registration for preservation and execution. This allow the debtor to avoid a court decree and gives the creditor the comfort that he can enforce if necessary without having to go to court at a later date.