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Farm tenancy changes proposed in wake of Supreme Court ruling

25 November 2013

Scottish ministers have published their proposals to correct the human rights issue in the farm tenancy legislation ruled on by the UK Supreme Court earlier this year.

In April the court ruled that a provision in the Agricultural Holdings (Scotland) Act 2003 was beyond the powers of the Scottish Parliament, because it infringed the rights of landlords under the European Convention on Human Rights. This related to situations where dissolution notices were served on limited partnership arrangements between 16 September 2002 and 30 June 2003, while the bill that became the Act was in progress contained provisions for full 1991 agricultural tenancy under certain circumstances.

The Supreme Court regarded the different treatment of landlords who had served their notices before and after the cut-off date as being “without logical justification” and “unfair and disproportionate”. However, in view of the fact that some arrangements would have been made in reliance on the legislation, the court made an order postponing the effect of its finding for up to 12 months, for the legislation to be corrected. (Click here for the Journal briefing on the ruling.)

The draft order now published is the ministers' response. It identifies three groups of cases for which a solution is required:

  • cases where a dissolution notice has been served under section 72(3) of the 2003 Act for a date in the future;
  • cases where the landlord has not contested, or withdrawn from contesting, the tenant becoming tenant under a 1991 Act tenancy;
  • cases where court proceedings were sisted pending the outcome of the Supreme Court appeal.

For each group the order proposes a way for the procedure for service of a notice of termination by the landlord under section 73 of the Act to apply.

Cabinet Secretary for Rural Affairs and Environment Richard Lochhead commented: “This is an important step towards resolving legal uncertainty that has been hanging over a part of the tenant farming sector for some time, and I am grateful to stakeholder organisations for their constructive engagement over the past few months in the preparation of this draft order.

“The Order provides for individual tenancy arrangements to be amended, and according to our research, the number of cases is thankfully much smaller than had previously been thought.

“In order to help reach fair and balanced outcomes, the Scottish Government will offer independent mediation to the small number of landlords and tenants affected."

Click here to view the consultation. The deadline for responses is 7 February 2014.

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