[Project now completed]
Patrick Layden QC TD
Gillian Swanson, Project Manager
Joanna Bain, Legal Assistant
We have published a Report and draft Bill on Judicial Factors. A Business and Regulatory Impact Assessment and news release are also available.
A judicial factor is someone appointed by the court to look after or to ingather and distribute property belonging to someone else. Anyone can be appointed as a judicial factor although the majority taking up the role tend to be accountants or solicitors. The appointment can be made in a variety of circumstances such as at the instance of the Law Society of Scotland to firms of solicitors where there has been a breach of professional practice and the firm’s liabilities exceed, or appear likely to exceed, its assets. Other examples include those appointed where a partnership is in dispute or where those running a charity appear to have been managing it inappropriately.
The legislation relating to judicial factors is archaic and no longer fit for purpose. Accordingly, we have published a set of recommendations and a draft Bill which, if implemented, would put in place an updated and comprehensive regime which would bring clarity, accessibility and efficiency to this vital but outmoded area of the law. Furthermore, the flexibility introduced by the regime would mean that the solution of appointing a judicial factor could become more attractive in a wider range of circumstances. We recommend that the grounds for the appointment of a judicial factor should be that there is property which requires to be managed properly and (a) that it appears to the court that it is not possible, or not practicable, or not sensible, for those responsible to manage it; or (b) that there would otherwise be benefit in having it managed by a judicial factor.
Further recommendations include requirements for a judicial factor to prepare a management plan which must be agreed with the Accountant of Court and, where the parties with an interest in the estate are in disagreement, to mediate or otherwise to attempt to persuade them to come to an agreement. Where it proves impossible to persuade the parties to resolve their differences, the factor must prepare a scheme for resolution of the difficulty. We also recommend simplified processes for bringing a judicial factory to an end. Under the new regime, it would continue to be the function of the Accountant of Court to audit the factor’s annual accounts and to supervise the conduct of judicial factors.
The Scottish Government gave their initial response on 2 June 2015 to the Report.
The Discussion Paper on Judicial Factors (DP 146) which preceded the Report can be accessed here.
For more information, please contact: firstname.lastname@example.org.