A briefing from the Scottish Law Commission on the new Legal Writings Act, which is coming to a contract near you
The Scottish Parliament has recently approved the Legal Writings (Counterparts and Delivery) (Scotland) Bill, which now awaits Royal Assent. It is expected to come into force in the next couple of months. The legislation, which is short, can be found at www.scottish.parliament.uk/parliamentarybusiness/Bills/76414.aspx.
It will herald two major innovations of particular relevance to practitioners:
First, it will provide a secure legal basis for the execution of documents in counterpart (s 1). This means that multi-party documents need no longer be signed by way of round robin or a signing ceremony. Instead, each party signs its copy (or counterpart) of the document, at a time and place which is convenient to it and without the need to meet up in person. The document takes effect when parties have delivered their counterparts to each other (or it can take effect at a later time, allowing them to be “held as undelivered”, if parties so wish).
There is a specific provision permitting parties to send the signed counterparts to an agreed nominee, often the solicitor for one of the parties, rather than to each other (s 2). It is up to parties to agree what the nominee’s role will be, but the default duty is to hold and preserve the executed counterparts for the signing parties’ benefit.
Secondly, a signed paper document may be delivered by electronic means (s 4). This includes, but is not limited to, counterparts. It will put an end to considerable doubt about the competence of this method of delivery and will allow modern technology to be used to make business more efficient. For example, a signed document may be delivered by fax or by being scanned and attached to an email. (The delivery of an electronic document by electronic means is provided for under s 9F of the Requirements of Writing (Scotland) Act 1995, as recently amended.)
There is a further reform: if parties agree, delivery may be effected by sending only part of the document. But, as a statutory minimum, what is sent must be sufficient to show that it is part of the document in question and must include the executed signature page. This will have obvious practical advantages. For example, a person will not necessarily have to fax or to scan the whole of a lengthy document, once signed.
Beyond this, the legislation leaves the current methods of executing and delivering documents intact.
A brief history of the bill
The bill came about as part of the Scottish Law Commission’s current review into the law of contract (see here for more information). It was the subject of widespread consultation, which is discussed in an earlier article by Paul Hally (Journal, January 2013, 22). This meant that the SLC was able to adjust the final recommendations to fit the needs of the profession and others.
As a result, there was clear support for the bill as it passed through the Scottish Parliament, though some points of concern were raised, notably by the Faculty of Advocates’ evidence. This support was welcomed by the MSPs on the Delegated Powers & Law Reform Committee who were primarily responsible for scrutinising the legislation. As the SLC’s chief executive, Malcolm McMillan, explained in a recent article (Journal, January 2015, 22), this committee has been recently formed and part of its remit is to consider SLC Bills. The Legal Writings Bill is the first to be considered by it, and others are expected to follow.