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Court Caveats – Beware!

Date: 20/08/2020 | Dispute Resolution

Did you know that a Scottish court can issue orders on a temporary basis without you or your business having an opportunity to defend the granting of such temporary order?

This can have the effect that: 

  • the first you know of a winding up application is when the provisional liquidator attends your office and takes control of your company; or
  • the first you know of an interim interdict (a temporary restraining order) is when a court officer serves that interdict requiring absolute compliance with its terms, no matter how commercially prejudicial.

It can be time consuming and awkward recalling these interim orders which apply until recalled but this nightmare scenario can be mitigated. 

The Scottish courts’ rules provide for the lodging of caveats.  A caveat is a straightforward court document, the effect of which means that an interim order cannot be made until the application is first notified to the other party and they are given the opportunity to appear at court and to oppose the application. 

Caveats can also be used as a warning that you are about to have group proceedings raised against you, following the new group proceedings rules that came into force on 31 July 2020 and which we have covered separately here.

Caveats can be lodged by individuals, partnerships or companies and it makes commercial sense that all businesses consider lodging these, especially where they are aware of impending litigation. 

We put caveats in place for many clients and do so for a fixed fee of £50 plus VAT and court fees per caveat. Current court fees are £45 per court.

The caveat lasts for a year and, as part of the fixed fee, we contact our clients prior to their expiry to discuss renewal.

If you would like to arrange to have caveats put in place, please contact any member of our Dispute Resolution team

Disclaimer 
The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.


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