News In Focus
24 November 2006
Law centre attacks minister over Diligence Bill
A Scottish Executive minister has been accused of giving misleading evidence to Holyrood's Enterprise Committee over the Bankruptcy and Diligence (Scotland) Bill.
The claim was made by Mike Dailly, principal solicitor at Govan Law Centre, after Allan Wilson, the Deputy Minister for Enterprise & Life Long Learning, stated to the committee that a number of strong debtor protections were build into the land attachment provisions of the Bankruptcy and Diligence (Scotland) Bill.
Land attachment is a new form of diligence (the term for attaching a person's assets to ensure payment of a debt) introduced by the bill. The provisions have caused controversy because they could result in a person's house being sold to obtain payment of a debt of relatively low value.
In his evidence the minister said that depending how you count them, there are about 21 protections in the bill. But Mr Dailly said that an analysis of the debtor protections in the bill relating to land attachment, published by the law centre, revealed that most of them were "either misleading, legally incompetent, ineffective or repetitive".
"We can identify four actual protections in the bill, one which results in your home being sold, albeit not immediately, one relating to procedural competency, and another most people will find impossible to use", he added.
"The key protection is the right to apply to the Debt Arrangement Scheme (DAS). But there are only 77 advisers in Scotland authorised to set up a DAS – three for the whole of Glasgow. DAS is wholly incapable of providing the minimum protection necessary to prevent land attachment homelessness."
What was more worrying, Mr Dailly continued, was the fact that the deputy minister "appears to have seriously misled the public and the Scottish Parliament over debtor protections in the bill. There are real concerns that the minister has been poorly advised by the same civil servants responsible for the flawed DAS".
He said that whereas the minister suggested that a sheriff could refuse a warrant for sale having regard to a homeowner’s personal circumstances, no power to do so had been provided in the bill, which only directed the court to "have regard" to personal circumstances and under section 87 could only defer a sale.
"In conclusion, while the principles of the English charging order have been imported into Scotland, they have been done so very badly, and without the basic protection that exists in England from the Charging Orders Act 1979 and Trust of Lands and Appointment of Trustees Act 1996".
The bill's stage 3 debate takes place in the parliament on 30 November. The Executive has so far resisted pressure for further concessions on the land attachment provisions, which the law centre fears will lead to a significant increase in homelessness in Scotland.