New Petitions

I will be brief. The Solicitors (Scotland) Act 1980 makes it a criminal offence for a corporate body to draft or prepare a writ. The Scottish courts have used that fact to prevent companies in Scotland from acting on their own behalf in court proceedings. Unfortunately, that means that a company that cannot afford a solicitor is denied the right to defend itself when an action is raised against it. It also means that a business that has not been paid and cannot afford a solicitor is not allowed to try to recover the moneys that it is due. Corporate bodies in Scotland do not qualify for legal aid. The main victims of that abnormality are small businesses that do not have the resources to employ solicitors. I believe that this situation is unfair and unjust. Further, as the cost of legal representation increases, more businesses will find themselves in the predicament that I describe.The courts have held that corporate bodies are entitled to human rights under article 6 of the Human Rights Act 1998 but will not allow them those rights unless they can afford a solicitor. Regrettably, the catch-22 is that any business that would like to challenge that interpretation of the act is denied the right to appear unless it has a solicitor. I believe that businesses should be given the right to represent themselves or, alternatively, be granted legal aid in the same way that individuals are.

In practical terms, most of the instances that I have come across have been to do with small businesses. However, determining a financial limit as a point of law is difficult. How would we define what a small business is? A large business with cash-flow problems might face liquidation because it is not able to afford a solicitor. It is equally important that it be given the right to represent itself if the circumstances are suitable. The issue is about giving businesses access to justice in situations in which they cannot afford it.

Under the Solicitors (Scotland) Act 1980, there is such a problem. However, in a case called Karl Construction v Palisade Properties, the inner house of the Court of Session determined that limited companies have human rights in that they have the right to a fair hearing at an impartial tribunal under article 6 of the Human Rights Act 1998. However, in some of the sheriff courts, the judges have decided that limited companies will not be able to get those rights unless they are represented by a solicitor, which has resulted in a strange situation developing in law.

No.

No.

You are probably right—I have not thought about that. I was more interested in trying to get something done. I have usually found that if a matter has been raised in Parliament and has the committee's support, that has much more effect than operating through different bodies.

Trying to change the justice system in Scotland can be difficult unless a person is a member of one of the bodies that the Executive likes to deal with. If someone is not from the Law Society of Scotland or the Faculty of Advocates, they tend not to have much credence with the Executive.The other problem is one of reality. If a small business is struggling financially, cannot bring in money and stops trading, after which a different set of problems arises because personal guarantees have been given and the directors must deal with banks pursuing them or with liquidators, the principles behind the issue tend to fall away.

Yes, but the extension is being considered not for businesses but for individuals.

I can think of no reason not to extend legal aid to businesses, if they are not given the right to represent themselves. The honest truth is that I do not know.

No research has been undertaken. My experience of trying to help small businesses is that they cannot go past a sheriff clerk, who will not accept a writ or allow a party to appear. A decree is awarded against a business, after which the insolvency process takes place. Insolvency practitioners rarely say that a business went under because it could not access the court. They will usually say that a business had cash-flow problems, bad debts or whatever.

No.

I have a law degree, but I am not a lawyer. I do pro bono work for individuals and companies and I supplement my income by doing construction litigation. I speak just from practical experience.

I am not sure whether the insurance covers situations in which a company pursues a party for bad debts; I think that it tends to cover situations in which a company is being pursued. I do not know what the cost of such insurance is. As with all insurance, the cost tends to go up, so slowly and surely some businesses will not be able to afford insurance.

There is no question but that there are differences. Businesses do not have the same priority as individuals have in accessing justice. However, the issue is important and should be considered.

Thank you.