GLC statement on the reclaiming motion appeal in Ali v. Serco Ltd and others

Govan Law Centre (GLC) has been instructed by Mrs Shakar Omar Ali, a Kurdish Iraqi national, to pursue a reclaiming motion (appeal) before the Inner House of the Court of Session, Scotland’s supreme civil court.  Reclaiming prints and a reclaiming motion to appeal the Opinion of Lord Tyre, handed down on 12 April 2019, will be lodged at the Court of Session tomorrow, Thursday, 2 May 2019.

GLC’s Mike Dailly, Solicitor Advocate said:  “With the decision of the Outer House judge being subject to live appeal proceedings GLC would trust that Serco Ltd will continue their previous undertaking not to undertake lock-change evictions in Glasgow pending the appeal.   The failure to do so would occasion the unnecessary legal expense of raising multiple interim interdict actions at Glasgow Sheriff Court pending the outcome of the appeal to Scotland’s supreme civil court”. 

“GLC believes our client has reasonably good prospects and grounds of appeal.  We were delighted that Lord Tyre held Serco was a public body for the purpose of the Human Rights Act 1998 - something that both Serco and the Home Office had strongly resisted at the debate in February this year.  Our understanding is that jurisprudence from the European Court of Human Rights - which has been followed in appellate courts in the UK - requires the interference with our client’s human rights by a lock-change eviction to be compatible with the rule of law, and not just her article 8 right to respect for her home and family life”.

“That requires UK or Scots law to be sufficient precise and foreseeable in its effect, and the safeguards suggested by the Outer House judge in our client’s case require numerous administrative hurdles to be overcome, none of which directly stop a lock change eviction.  With the greatest of respect, we can see no precise or foreseeable adequate safeguards for asylum seekers by making section 4 applications to the Home Office, or thereafter appealing refusals of further support to the First Tier Immigration Tribunal”.

“An appeal to the First Tier Tribunal does not stop or prevent an eviction – there is nothing in the Tribunal rules to empower the Tribunal to put a lock change eviction on hold pending an appeal.  Further, the court in our client’s case relied upon the English UK Supreme Court decision of R(N) V. Lewisham Borough Council [2015] A.C. 1259. This concerned people who had a day to day licence to stay in accommodation overnight. Because of the very temporary nature of their occupation the UK Supreme Court held they did not live in a dwelling - as their residence was too transient and short. Such transient occupiers also had numerous rights of appeal to prevent an eviction”. 

“Our client has lived in her home for over a year and a half. In these circumstances such occupiers are entitled to be taken to court before eviction – and can then defend those proceedings – there is a significant body of UK Supreme Court and European Court of Human Rights case law that confirm occupiers of dwelling have this right.  Ultimately, both Serco and the Home Office placed considerable reliance on their “goodwill” not to undertake a lock change eviction on 7 days notice - despite there being no legal rules underpinning such goodwill, and the fact that the rule of law is concerned with precise legal rights, and not goodwill or speculation”. 

GLC statement on the reclaiming motion appeal in Ali v. Serco Ltd and others

GLC raises concerns over Local Housing Allowance for private sector tenants in Scotland

On 28 March 2019, representatives of Govan Law Centre gave evidence to the Scottish Parliament's Social Security Committee alongside Shelter Scotland and Living Rent Edinburgh. A video of of the evidence session is available on the Scottish Parliament's website here. The Official Report of the meeting is available here (opens as a PDF).

GLC raises concerns over Local Housing Allowance for private sector tenants in Scotland

Scottish rents spiralling at double the rate of inflation don’t tell the full story: GLC raises concern over the private rented sector in Scotland

Unlawful and unfair exploitation of vulnerable tenants lie beneath Scottish Government statistics 

Rents in Glasgow and Edinburgh’s private rented sector (PRS) have risen more than anywhere else in Scotland, and Govan Law Centre (GLC) believes spiralling rent costs are leading to more homelessness and poverty.

We believe the story beneath the Scottish Government’s official statistics is stark, and deeply worrying.  Casework from GLC’s Citywide Private Rented Sector service in Glasgow reveals how many private landlords aren’t following the legal protections in place for rent increases. 

Some tenants end up paying for the repairs their landlords are obliged by law to carry out.

Many vulnerable tenants are being pushed into financial hardship and misery, and being forced to live below “the breadline” and rely on foodbanks to make ends meet.

In Glasgow, private rents have been hiked up by almost one third between 2010 and 2018 (31.13%) - almost double the rate of inflation (the consumer price index rose by a total of 18.7% over the last eight years - see further Chart 1 below).

GLC’s PRS Co-ordinator Wendy Malloy said: “We can evidence that rent increases being implemented during lets are having a serious impact on household financial sustainability, and increasing the risk of homelessness. A lot of the time these increases are being done without proper legal notice being served and with tenants simply accepting they have to pay”.

“We are seeing many households struggle with arrears and we are providing legal advice and representation in these circumstances. We believe this highlights the need to get the message out to people that there is a formal process in place for increasing rents and mechanisms to appeal should the tenant disagree with the proposed increase. Always seek free advice from your local law centre or advice agency”.

GLC’s Principal Solicitor Mike Dailly said: “Our casework provides cogent evidence of unlawful rent hikes across the City by private landlords. One of our clients is a disabled single parent whose landlord increased her rent by 43% during one month to £1,500 p.m. The housing benefit ‘local housing allowance’ was only £800 p.m. Other clients already struggling to make up housing benefit shortfalls have been trying to cope with rent increases of around £100 p.m. Tenants can apply for discretionary housing payments to help, but these are generally temporary. In practice, many tenants are meeting rent hikes by using their social security money for food and heating costs”.

“There is clearly a need for greater public awareness that rent hikes require formal written notice and must comply with certain legal procedures to be valid. There is always a right to appeal, although the law on market rents tends to favour private landlords. Govan Law Centre believes the private rented sector remains largely unregulated and in practice is too often a free-for-all for landlords out to squeeze as much money as they can from a tenant with limited options”.

“For low income tenants there is no consumer choice or genuine market competition in this sector. We believe there is a case for national regulation - there is no national regulation at present unlike for the social rented sector. There is a need for a ‘living rent’ in this dysfunctional market, and strengthening the rights of private sector tenants in Scotland. The present system is unsustainable and is costing the taxpayer in terms of the social, human, and medical problems it creates”.

Case study Mrs J
Mrs J is a widowed woman with 3 adult children living in private rented property. Mrs J’s has a number of health problems and her own income derives from sickness and disability benefits. Mrs J’s also has an entitlement to housing benefit of £800 per month which was capped at the maximum level of local housing allowance. The client with the assistance of her family were able to pay the difference of £250 towards the contractual rent of £1,050 each month. Mrs J’s landlord came to the clients home to advise that he was increasing the rent to £1,500 each month and that this was to be effective from the next date rent was due. Govan Law Centre were able to advise that this increase had not been intimated to her in the prescribed form and insufficient notice had been given and also advised this to the landlord. A few months on from this her landlord returned and provided the correct intimation and notice which meant there was to be an increase of £450 per month towards the rent. Mrs J and her family were unable to afford this increase despite significant reductions in their household spending. As a result of this increase Mrs J and her family had to make an application for Homelessness on the basis that their rent was unaffordable and can no longer sustain their tenancy.

Case study Mr K
Mr K is a single man living in private rented property. Mr K has lived in the property for over 12 years. Due to poor mental health Mr K has been unable to work throughout the period of his tenancy. Mr K’s housing benefit was capped at the maximum local housing allowance for the property but only had to pay a few pounds from his Employment Support Allowance to meet the contractual rent. At the start of the year his landlord advised that the level of rent was to be increased by £91 per month. Mr K has had some assistance with Discretionary Housing Payment to help meet this increase however due to the nature of the award this was only a short term award. Mr K started further utilising his Employment & Support Allowance to help cover the shortfall but this has meant he has had to cut back significantly on essential expenditure such as food, heating and lighting. Mr K was unable to sustain these cut backs and as such his rent has become affordable. Mr K is now currently looking to move into Registered Social Landlord housing stock but due to the level of housing stock available has yet to find suitable alternative accommodation. As a consequence Mr K has accrued arrears to the value of the monthly rental shortfall.

Case study Ms B
Ms B is a single parent to two boys and lives in private rented accommodation. Ms B works full time, so was paying rent herself until the landlord increased this from £650 to £750 pcm. As the property was also suffering disrepair and dampness, Ms B’s income was being used to provide additional heating and fixing repairs the landlord was refusing to do, such as replace a broken window, clean and paint over dampness. When the rent was increased Ms B begun to miss payments and accrued arrears of £1300 and late payments. Ms B has applied for DHP but this was refused. She was now borrowing from family and friends to manage the arrears and pay full rent. Govan Law Centre were able to report the landlord to Landlord Registration and the Housing and Property Chamber for Scotland and as a consequence a rent relief order and repair enforcement order were granted. Govan Law Centre were also able to ascertain that the rent increase was unlawfully implemented as no rent increase notice had been served. Ms B gave up her private tenancy a few weeks after the enforcement orders were granted to move in with family while seeking social housing.

PRS stats for Scotland from 2010 to 2018 (year end September)

https://www.gov.scot/publications/private-sector-rent-statistics-2010-2018/

Scottish rents spiralling at double the rate of inflation don’t tell the full story: GLC raises concern over the private rented sector in Scotland

GLC settles Sheriff Appeal Court eviction appeal: Elderpark Housing Assn v. M

Govan Law Centre has settled a Sheriff Appeal Court (SAC) case where a single female parent and her children were due to be evicted following an unsuccessful evidential hearing (proof) which had been conducted by a private firm of solicitors in Glasgow. Parties have agreed to allow the appeal insofar as it relates to the eviction, while adhering to the payment decree, with the appeal being dismissed on a no expenses basis. The Glasgow Scottish Secure tenant will remain in her home with the threat of physical eviction lifted.

The case of Elderpark Housing Association v. M concerned an appeal by way of Stated Case is in relation to a decree for recovery of heritable possession granted by the sheriff in summary cause proceedings in July 2017. The appellant argued that the proceedings were incompetent for the social landlord’s failure to comply with section 14(2)(a) of the Housing (Scotland) Act 2001 (“the 2001 Act”). As a matter of law, the appellant contented that the court was not entitled nor empowered to grant decree in the proceedings. The appellant’s arguments did not require to be tested by the SAC, however, the issues raised may be of interest to housing advisors and solicitors generally.

In the appellant’s submission section 14(2) of the 2001 Act is a fundamental statutory requirement that goes to the competency of the eviction proceedings. From a plain reading of section 14, a landlord cannot raise recovery of possession proceedings without complying precisely with the requirements of subsection (2). The language used in subjection (2) sets out the clear intention of the 2001 Act, namely that “proceedings may not be raised unless” a landlord complies with subjection (2). In the appellant’s submission, the use of these words meant that proceedings raised without compliance with section 14(2) are incompetent as a matter of law. There is no provision in section 14 for relief for non-compliance with section 14(2), nor is any power or discretion given to the court on this issue of jurisdictional competency. Section 14(1) and (2) provides as follows:

“14 Proceedings for possession
(1) The landlord under a Scottish secure tenancy may raise proceedings by way of summary cause for recovery of possession of the house.
(2) Such proceedings may not be raised unless—
(a) the landlord has served on the tenant and any qualifying occupier a notice complying with subsection (4),
(b) the proceedings are raised on or after the date specified in the notice, and
(c) the notice is in force at the time when the proceedings are raised”.

The appellant’s appeal point was that the respondent did not comply with section 14(2)(a) of the 2001 Act by failing to serve a notice complying with subsection (4) (the Notice of Proceedings for Recovery of Possession or “NPRP”) on a qualifying occupier within the appellant’s household. Subjection (6) of section 14 of the 2001 Act provides the following statutory definition of a “qualifying occupier”:

“(6) In this section and section 15, “qualifying occupier” means a person who occupies the house as that person's only or principal home and who is—
(a) a member of the tenant's family aged at least 16 years,
(b) a person to whom the tenant has, with the landlord's consent under section 32(1), assigned, sublet or otherwise given up possession of the house or any part of it, or
(c) a person whom the tenant has, with such consent, taken in as a lodger”.

No NPRP was served on the appellant’s daughter who was 16 when defences were lodged. She had been aged 16 for over four months when the NPRP was served on the appellant. This was not a matter in dispute between the parties. The 2001 Act places a duty upon the respondent to ascertain whether there are any qualifying occupiers in the tenancy subjects before serving a NPRP. Section 14(3) of the 2001 Act provides as follows:

“(3) Before serving a notice under subsection (2) the landlord must make such inquiries as may be necessary to establish so far as is reasonably practicable whether there are any qualifying occupiers of the house and, if so, their identities”.

The appellant’s submission was that the sheriff was not entitled in law to grant decree in July 2017. Reference was made to the House of Lords decision in Regina v Soneji and another [2005] UKHL 49, [2006] 1 AC 340. This opinion considers questions of statutory interpretation in relation to whether a provision is mandatory or directory.  The general position has been that where there is a failure to comply with a mandatory statutory provision what then follows is a nullity.  Reference was made to Lord Steyn’s judgment starting at page 349, paragraph 14: “A recurrent theme in the drafting of statutes is that Parliament casts its commands in imperative form without expressly spelling out the consequences of a failure to comply”.

This approach was consistent with the decision of the Sheriff Principal in North Lanarkshire Council v. Cairns 2012 SLT (Sh Ct) 128. This opinion of the court concerned a qualifying occupier – a tenant’s son - unsuccessfully arguing that he had a right to minute for recall of decree. He was not a “party” to the proceedings. However, the Sheriff Principal held that his Article 6 rights in terms of section 6 and schedule 1 of the Human Rights Act 1998 were safeguarded by the requirement for a NPRP to be served on him in terms of section 14 – reference was made to paragraph 32 at page 10 of the court’s opinion. The qualifying occupier had been served with a NPRP in Cairns, and had the opportunity had he so wished to apply to become a party to the action under section 15 of the 2001 Act.

The issue of an NPRP not being served on a qualifying occupier was not pled or argued before the sheriff at first instance. However, the appellant contended that it was pars judicis for the court to consider competency if the issue goes to nullity.

This point was recently considered by the Inner House in Simpson v. Downie 2013 SLT 178 – reference was made to paragraph 10: “By reference to Macphail, Sheriff Court Practice (3rd edn), para.2.09, and to the opinion of Lord Young in Douglas v Tait at (1884) 12 R., p.14, it should not be regarded as pars judicis for the court to take a technical point on competency unless either a nullity, or some important external interest, could be identified”. In Simpson the Inner House dismissed the action as incompetent as the issue was one that went to jurisdictional competency.

The appellant was represented by GLC’s Mike Dailly, Solicitor Advocate.

GLC settles Sheriff Appeal Court eviction appeal: Elderpark Housing Assn v. M

GLC secures recall of mortgage repossession decree despite defender having appeared in court: Santander UK plc v. P

Following the decision of the Sheriff Appeal Court in NRAM plc v. Cordiner last year, it is generally thought that a homeowner cannot recall a decree by a "Minute for Recall of Decree' where he or she had appeared in court, or been represented.  

This week, Govan Law Centre (GLC) was able to secure a recall of a mortgage repossession decree despite the homeowner having previously appeared before the sheriff.  A summary of the case is set out below. 

Mr P consulted Govan Law Centre through the Ayrshire Homelessness Prevention Project because his mortgage lender, Santander UK plc, had raised a repossession action against him. His mortgage had matured and the full balance had become due. His lenders had obtained decree for repossession. As a result, Mr P was facing homelessness.

Mr P had not attended the first hearing of the case, as his lenders’ solicitors had told him he did not need to, since they would ask for the case to be continued for him to get financial advice. Mr P attended the next hearing of the case personally, and he was given further time again by the Sheriff. Mr P was not aware of the next hearing date, and therefore did not attend. Unfortunately, at this hearing, decree was granted in his absence. Mr P had not been represented in the process, nor put forward any defence. 

Mr P instructed Govan Law Centre to lodge a Minute for Recall of Decree on his behalf. This was lodged and a hearing was held at Kilmarnock Sheriff Court. The Pursuers opposed the Minute for Recall on the basis of a recent decision of the Sheriff Appeal Court, in NRAM plc v Cordiner (2017) SAC (Civ) 27. They argued that the Minute for Recall was not competent on the basis of this decision. The Sheriff refused the Minute for Recall. 

Section 24D of the Conveyancing and Feudal Reform (Scotland) Act 1970 states: 

“(1) A person mentioned in subsection (2) below may apply to the court for recall of a decree granted on an application under section 24 (1B) of this Act

(2) Those persons are (…) (b) the debtor, but only if the debtor did not appear and was not represented in the proceedings on the application under section 24(1B); “

In Cordiner, the Defender had lodged defences, been represented at previous hearings, consented to decree, amongst various other procedural stages. On appeal, the Sheriff Appeal Court held that, as the Defender had appeared and been represented in the proceedings, she was prevented from using the recall process. 

Mr P instructed us to lodge an appeal of the Sheriff’s decision refusing the Minute for Recall on the basis that his case could be distinguished from Cordiner, and on the basis that the Sheriff’s decision was incompatible with his Convention Rights under the European Convention on Human Rights. 

Having regard to the reasoning in Cordiner, it was Mr P’s position that the question to be determined was whether in his case litiscontestation had occurred, in which case, the appellant would have been prevented from seeking a recall of decree. This was the case in Cordiner, which had a particularly extensive procedural history. This had not occurred in the present case, as confirmed by the Sheriff in her note. She stated “At no time did he offer any defence to the action”

Additionally, in Cordiner, the court was not persuaded that they required to fully consider the requirement to read down the relevant section of the legislation in line with the European Convention on Human Rights, as the defender had fully engaged in proceedings, having lodged pleadings and been represented in numerous hearings. This was not the case in the present proceedings, and Mr P submitted that the Appeal Court should fully consider these submissions, and read down the legislation to be compliant with his Convention Rights.

Before the appeal hearing was due to be heard in his case, Mr P’s lenders agreed to the decree being recalled. The appeal was therefore dropped, and the case referred back to the Sheriff court. There is an evidential hearing fixed. Mr P is proceeding through the Mortgage to Rent Scheme and hopes he will soon be in a position to discharge his liabilities to his lenders, and remain in his home. 

It certainly would have been beneficial for borrowers in general to have received some clarity from the Appeal Court about the position of Minute for Recalls being lodged in similar circumstances, where no formal defence has previously been tendered and decree in absence is granted. However, this is an extremely good result for Mr P. We urge anyone in similar circumstances to seek urgent legal advice. 

The defender and appellant was represented by GLC's senior solicitor, Laura Simpson, and Mike Dailly, Solicitor Advocate was instructed in the appellate proceedings. 

GLC secures recall of mortgage repossession decree despite defender having appeared in court: Santander UK plc v. P

Permission for homelessness petition for judicial review to proceed against Glasgow City Integration Joint Board (Glasgow City Health and Social Care Partnership)

Lady Paton has granted permission today for a petition to proceed for judicial review of a homelessness decision against the Glasgow City Integration Joint Board (GCIJB; also known as the 'Glasgow City Health and Social Care Partnership'). A procedural hearing has been assigned for 22 August, and a substantive hearing for 3 October 2018 at 10am in Zungunde v. Glasgow City Integration Joint Board.

The intentional homelessness decision was made by Glasgow City Council on behalf of the GCIJB. It is believed that this may be the first petition for judicial review in Scotland against an Integrated Joint Board with respect to its delegated statutory responsibilities and duties.

The GCIJB is a body corporate established by Order under section 9 of the Public Bodies (Joint Working) (Scotland) Act 2014 (the 2014 Act).  On 6 February 2016, the GCIJB assumed delegated duties and decision-making power under Part II of the Housing (Scotland) Act 1987 (the 1987 Act) in terms of section 1(5) of the 2014 Act, its Integration Scheme approved under section 7 of the 2014 Act, and The Public Bodies (Joint Working) (Integration Joint Board Establishment) (Scotland) Amendment Order 2016 (SSI 2016/2).

Although the GCIJB subsequently issued a Direction under section 26 of the 2014 Act for Glasgow City Council to carry out its functions under the Part II of the 1987 Act, the petitioner's position is that in terms of inter alia section 25(3) of the 2014 Act, the duties and powers under Part II of the 1987 Act rest with the GCIJB, and that Glasgow City Council act on the GCIJB's behalf.

The GCIJB is represented by the NHS Scotland Central Legal Office, the petitioner is represented by GLC's Mike Dailly, Solicitor Advocate.

Permission for homelessness petition for judicial review to proceed against Glasgow City Integration Joint Board (Glasgow City Health and Social Care Partnership)

Sheriff Appeal Court case on credit card debt & prescription scheduled for 23 August 2018

A fresh appeal diet before the Sheriff Appeal Court was assigned today by Sheriff Principal Turnbull in PRA Group (UK) Ltd v. MacPherson, for 23 August 2018.  The new diet will allow time for the appellant's civil legal aid application to be determined by the Scottish Legal Aid Board.

The appeal case deals with a novel point of Scots law, which potentially affects many consumer credit cases across Scotland, where old credit card debt has been sold on to UK and international debt-purchasing companies and then pursued through the Scottish courts.

The appellant's position is that court proceedings for debt were not raised until over five years from when his monthly credit card payment was last due. The claimant and creditor's position is that the starting point for prescription is after it serves a default notice under the Consumer Credit Act 1974, which was before the five year prescriptive period in Scots law.

The appellant believes that the creditor is conflating UK consumer credit law and the enforcement of credit agreements, with the Scots law of prescription. The appellant contends that credit card agreements clearly make "provision" for the date when the whole balance due is to be repaid, which is the date upon which a monthly payment has been missed.

The appellant is represented by GLC's Mike Dailly, Solicitor Advocate.  The creditor is represented by Brodies LLP.

Sheriff Appeal Court case on credit card debt & prescription scheduled for 23 August 2018

GLC meets Maggie Craig, Financial Conduct Authority's Head of Department, Scotland

Govan Law Centre (GLC) has had a very productive and helpful meeting with the Financial Conduct Authority's (FCA) new Head of Department, Scotland, Maggie Craig in Govan this morning. Before joining the FCA, Maggie held a variety of roles at the Association of British Insurers (ABI) including Director of Scottish Affairs, Acting Director General and, latterly, Director of Financial Conduct Regulation.

Maggie set out the new business strategy for the FCA's increased presence in Scotland, which now employs 101 people in Edinburgh's Fountainbridge, as well as the new opportunities for Scotland's growing 'fintech' (financial technology) industry. The financial services sector contributes around £8bn to the Scottish economy.

Principal Solicitor, Mike Dailly set out GLC's hope and aspiration for fintech solutions to revolutionise the free money advice sector in Scotland, by utlising opening banking developments from the revision to the EU's Payment Services Directive ('PSD2') to streamline debt advice for both advisors and consumers. A good example of some of the opportunities for fintech solutions to help and empower consumers were set out in a Money Advice Service 'Financial Capability Lab' report last week.

Mike also discussed a number of concerns around some particular high cost credit card products, and mortgage lenders fees and charges, as well as recent developments with respect to potentially prescribed credit debt cases in Scotland, and excessive and punitive interest charges in cases where secured debt has been sold on.  GLC agreed to keep in touch with Maggie on relevant areas of consumer interest in Scotland.

GLC meets Maggie Craig, Financial Conduct Authority's Head of Department, Scotland

Scottish Government should return to first principles to be fair to consumers in reforming the law of prescription in Scotland

Govan Law Centre (GLC) has argued that the Scottish Government's reform of the law of prescription - the date that obligations are extinguished in law - should go back to first principles. GLC's Principal Solicitor set out our position yesterday before the Scottish Parliament's Delegated Powers and Law Reform Committee, which is leading the Stage 1 inquiry on the Prescription (Scotland) Bill.  The evidence session is available to watch on YouTube.

The Scottish Government's aim - and the starting point of the Scottish Law Commission original Discussion Paper thinking - was to create clarity, simplicity, certainty and fairness in the law on prescription.  GLC believes that this should mean all legal obligations are subject to a five year prescriptive period as a matter of principle. The current law, contained in the Prescription and Limitation (Scotland) Act 1973, is almost half a century old and the justification for requiring 20 years to pursue debts and obligations is outdated with today's standards and technology.

While the Scottish Law Commission originally envisaged Scots law being simplified so that all statutory obligations would be subject to the five year 'quinquennium', the Bill makes a number of exceptions to this rule for tax generally, national insurance, council tax, child maintenance and reserved social security benefits. These exceptions result in a 20 year prescriptive period.

GLC notes that public policy arguments have been accepted for differential treatment, but we still believe that the five-year prescriptive period should apply to all statutory obligations.  For example, there is no justification for council tax to be subject to a six year prescriptive period in England but 20 years in Scotland.

If the Scottish Government is not willing to amend the Bill, GLC has encouraged the Parliament's Committee to do so, which failing to consider a fall back compromise position.  For example, the Bill’s current exceptions could be subject to five years, and an extended period of 10 years in the following exceptional circumstances:

• Where there has been willful, false or misleading information by the debtor which has resulted in a material delay in enforcing the debt due, or

• The creditor can prove that the delay in enforcing the obligation was not due to a material delay on its part, and it would be in the public interest to allow an extended period.

As a matter of public policy, we can see why there may be a case for individual exceptions, but they should be genuinely exceptional, otherwise what the Bill will fail in its goal of providing “certainty, clarity and fairness”, by allowing debts and obligations to linger for 20 years without being pursued as early as possible.

In relation to social security benefits, we believe there is no justification for not having all devolved and reserved benefits subject to the five year prescriptive period.  It is inequitable that people have a month to appeal a benefit decision, while the DWP would have 20 years to pursue reserved benefit debts.

GLC believes that the “appropriate date” for the start date of the running of the five year prescriptive period for consumer debts in terms of section 6 of the 1973 Act should start from the last payment made.  This current law is set out in section 6 and schedule 2 of the 1973 Act and depends on whether the contract makes provision for when repayment is due, which failing when a written demand for repayment is made.

We have a number of cases in court at present where old consumer credit debts have been sold by banks to debt collection companies, and we think the starting point for prescription for consumer debts should be simplified as the last payment made by the consumer.  The alternative is the current position of highly technical arguments where the creditor can argue that a later start date applies, for example, when it demands full repayment – which can add an extra year or more to the quinquennium.

GLC fully supports section 5 of the Bill which amends section 11 of the 1973 Act, and introduces a new "discoverability test'. Section 5 of the Bill would address the 2014 UKSC decision in Morrison & Co Ltd v. ICL Plastics Ltd, which established that the start date for prescription was when a pursuer knew they had suffered loss, injury or damage. This can result in unfairness when no-one knew who was culpable until some years later.

Section 5 of the Bill would require additional knowledge in relation to the fault/negligence and identity of a defender before the prescriptive period can begin in a damages claim.  We believe this represents practical common sense, and is a fair and reasonable approach.

GLC argued that section 8 of the Bill should be deleted.  There is no cogent case to change the law on when the 20 year prescriptive period begins. At present the period runs from the date of a pursuer's knowledge of a defender’s act or omission, however the Bill would run the period purely from the actual date of the act or omission.  We have no difficulty with section 6 of the Bill in relation to removing interruptions to the 20 year prescriptive period.

We have significant concerns over section 13 of the Bill, which would permit contracting out of the five prescriptive period by one year with a 'standstill agreement'. Very often consumers in financial difficulty are in a weak and vulnerable position, and may not seek independent advice until the last moment, so we believe this provision could result in serious injustice in practice.  We suggested a possible compromise that section 13 of the Bill should only engage where there is certification from a solicitor or accredited money advisor (in debt cases) that the consumer has taken independent legal advice and agrees to extend the five year prescriptive period.

Mike Dailly was giving evidence on behalf of GLC, along with Mike Holmyard of Citizens Advice Scotland. The Committee's Stage 1 inquiry on the Bill is ongoing, with the Minister scheduled to appear before the Committee next week.  

Scottish Government should return to first principles to be fair to consumers in reforming the law of prescription in Scotland

Scots lawyers should face ethics action over shell firm abuse

Here, Govan Law Centre's Principal Solicitor, Mike Dailly, argues that much more must be done to tackle the misuse of Scottish Limited Partnerships as shell firms in Scotland.  See also today's (Tuesday, 10 April 2018) news story in The Herald, "Scots lawyers should face ethics action over shell firm abuse".

When the Panama Papers scandal broke two years ago, few would have thought such murkiness would wash up on the shores of Scotland.  The use and abuse of shell companies to facilitate massive tax evasion, money laundering and organised crime didn’t happen here.  Or so we thought. 

A naïve belief that Scotland was somehow beyond the shady world of global finance and international crime has been shattered by good investigative journalism from The Herald, confirming that we are not so different to Panama.  The reality is that no country in the world is immune from international crime.  But that doesn’t mean to say we should make it easy for fraudsters.

While Scottish Limited Partnerships (SLPs) have been a respected and legitimate business model for over a century, this vehicle has now been car-jacked by those with something to hide.  In the four years before 2016, the number of SLPs registered in Scotland increased by 237%, while those registered elsewhere in the UK increased by 43%.  16,461 new SLPs were registered at just 10 addresses in Scotland.  Something was happening.

The attraction of SLPs is a combination of their secrecy and separate legal persona in law.  Unlike in England, a SLP is a legal entity in its own right that can enter into contracts, own and control assets.  As a partnership it is ‘tax transparent’ so only the partners are taxed as individuals, and no accounts need be filed with Companies House.  Until last year, the owners of a SLP were entitled to secrecy.  In short, it was the perfect partner to a shell company in Panama City.

Responding to growing concern over the abuse of SLPs for criminal activity, the UK Government introduced new transparency regulations last June requiring SLPs to disclose the identity of “people with significant influence or control” (PSCs) over them.  Companies House maintains a register of PSCs, and it was thought that removing the secrecy of SLPs would dissuade those with unlawful intentions.  However, many partners of SLPs routinely flout these new regulations.  

We must do much more to tackle this problem in Scotland.  While SLPs and company law is generally reserved to Westminster, the regulation of Scotland’s professions isn’t.  Why should Scottish solicitors, accountants and others act for SLPs who flout the law?  Simply explaining that the responsibility for compliance with transparency regulations rests with the SLP isn’t good enough.  This should be a matter of professional conduct and ethics.

For example, it isn’t in the public interest for Scottish solicitors to continue to provide services and/or host SLPs who ignore transparency regulations.  There is a very real risk that continuing to act for SLPs with something to hide will damage the public interest and reputation of the legal profession in Scotland. 

There is nothing to prevent the Law Society of Scotland introducing a professional conduct rule to prohibit a Scottish solicitor from acting for a SLP who fails to demonstrate compliance with the transparency regulations.  It should be a matter of professional ethics.  The power to do so exists under section 34 of the Solicitors (Scotland) Act 1980. 

Scottish law firms could be required to declare the number of SLPs they act for on a six monthly basis, and give a declaration they are satisfied the SLP has complied with the transparency rules. The professional regulatory bodies for accountants and other professionals could easily do likewise using conduct rule making powers. 

No professional in Scotland should act for a SLP flouting the 2017 transparency regulations.  To do so should give rise to professional misconduct.  If regulatory bodies in Scotland are unwilling to do more to combat the misuse of SLPs then there is nothing to stop the Scottish Parliament from legislating.  Govan Law Centre offers its support to MSPs in framing an appropriate member’s bill, if so required. 

* This commentary first appeared in The Herald.

Scots lawyers should face ethics action over shell firm abuse

Govanhill Law Centre persuades local authority to treble rate of pay for overnight care workers

Govanhill Law Centre has been successful in persuading a local authority in Scotland to almost treble its rate of pay for overnight "sleepover care".  A self-directed care funding package had made provision for £3.51 per hour gross pay for overnight care workers - £3.03 per hour net.  That figure has now been revised to £9.38 per hour in a disabled person's care package. The funding package had previously made no provision for the cost of paying the National Minimum Wage (NMW) to carers providing overnight care. 

The requirement to pay the NMW is a statutory right is set out in the National Minimum Wage Act 1998, as amended, and the National Minimum Wage Regulations 2015. The NMW from April 2017 was £7.50 per hour (£8.54 gross), for those aged 25 and over. It will be £7.83 per hour net from April 2018. 

The local authority's position was that funding for overnight care was being considered nationally by local authorities in discussion with the Scottish Government. In dismissing the client's complaint pursued by Govanhill Law Centre's senior solicitor Laura Simpson, the council argued that "it would not be fair or equitable to increase funding to your client alone". 

A petition for judicial review was drafted in-house by Govan Law Centre's Principal Solicitor to challenge the local authority's decision in the Court of Session in relation to the relevant law.  The petition sought reduction of the local authority's decision as ultra vires and illegal. However, the local authority chose to review and increase its rate of pay above the NMW rate while the petition was sisted at the Court of Session pending determination of a full civil legal application.

The petitioner's position was that overnight carers were entitled to the NMW having regard to Whittlestone v. BJP Home Support Limited [2014] I.C.R 275, and J Esparon t/a Middle West Residential Care Home v. Slavikovska [2014] I.C.R. 1037.; and Wright v Scottbridge Construction Ltd 2003 SC 520, where the Inner House of the Court of Session held that for the purpose of Regulation 3 of the National Minimum Wage Regulations 1999 where an employee was contractually required to be at a work throughout a shift, the entire period of the shift was “time work” for the purpose of Regulation 3.

Govanhill Law Centre persuades local authority to treble rate of pay for overnight care workers

Tackling rough sleeping this winter: new actions in Scotland welcomed by Govan Law Centre

Govan Law Centre (GLC) has welcomed new actions announced today by the First Minister to further tackle rough sleeping this winter.  The actions were recommended by the Scottish Government’s Homelessness and Rough Sleeping Action Group (HARSAG).

Today's announcement is backed by an initial £328,000 worth of investment from government and group members, including an additional caseworker/solicitor in Glasgow provided by Govan Law Centre.

Measures include increasing emergency accommodation and support in areas with the greatest numbers of rough sleepers, making personal budgets available to front line workers to meet immediate housing needs, and supporting greater use of the emergency Nightstop service.

HARSAG member, and GLC's Principal Solicitor, Mike Dailly said: "No-one should have to sleep rough this winter and these additional resources will make a real difference. All public and third sector agencies have a part to play this winter if we are to realise the ambition of making rough sleeping rare and unnecessary in Scotland. This is a key step towards delivering the First Minister’s commitment to eradicating rough sleeping in Scotland".

Further details of the new actions for this winter are available here, and include:

• Increased emergency accommodation in Edinburgh, and increased outreach capacity in Edinburgh, Glasgow, and Aberdeen
• Multi-agency partnership working boosted, adopting ‘by name lists’ and empowering front line workers through direct access to services and dedicated accommodation
• Making personal budgets and/or flexible emergency fund available for front line staff to employ where maximum flexibility is required to meet immediate housing needs
• At times of extreme weather, ensure flexible provision is available in Edinburgh and Glasgow for anyone who will not use winter night shelters, despite all efforts
• Maximise use of Nightstop – which provide young people with emergency accommodation for up to 2 weeks in the homes of approved volunteers – in Edinburgh and support implementation in Glasgow by January 2018

Tackling rough sleeping this winter: new actions in Scotland welcomed by Govan Law Centre

Inner House declares ‘Sword of Damocles’ contractual term unlawful: GLC Public Interest Litigation Unit

A homeowner involved in a legal dispute with a Scottish local authority has won his appeal after arguing the council acted beyond its powers in imposing a condition to an award of grant assistance, which required homeowners to pay their share of the cost of repairs by the time the final account for works was issued or lose all grant assistance.

Judges in the Inner House of the Court of Session allowed an appeal by a homeowner, who argued that Glasgow City Council, in imposing a “pre-payment condition” as a term of grant assistance, acted ultra vires of its powers in terms of Part 2 of the Housing (Scotland) Act 2006. Lord Malcolm and Lord Glennie heard that the homeowner co-owned a flat in Govanhill, Glasgow, with his wife.

Following a survey of properties in the area, in April 2011 the council served a work notice on the owners of the flats stating that their tenement building in Langside Road was in “disrepair” and that certain repair works required to be carried out to put right a number of defects.

For the petitioner solicitor advocate Mike Dailly argued that there was nothing in Part 2 of the 2006 Act relating to the provision of grants which allowed the council to impose a “pre-payment condition” as a condition of a grant, failing compliance with which the grant would be revoked. Such a condition was “contrary to the policy objective” of part 2 and was not mentioned in the council's policy statement on assistance.  It was argued that as the council had made a decision to award the petitioner a 75% grant for the cost of repairs, it could not be withdrawn on the basis of the imposition of a condition which was ultra vires.

On behalf of the council, Gavin MacColl Q.C submitted that the pre-payment condition of the grant was intra vires, being permitted in terms of sections 74(4) and 81(1)(d) of the Act, and that it was imposed for a relating to Part of the Act - to encourage people to pay their share of the cost of repairs. However, the appeal judges ruled that the pre-condition did not fairly or reasonably relate to the grant and that it “goes well beyond what is legitimate”.

The judges also observed that it seemed to be “counter-intuitive” that an individual who had been found to be eligible for a mean-tested grant of 75% of the costs of the work should have the availability of that grant made subject to a condition with which he would “almost certainly find it difficult, if not impossible, to comply”.

Rt Hon Lord Glennie

Delivering the opinion of the court, Lord Glennie said: “It may be intended as a kind of sword of Damocles, hanging over the owner of the property to encourage him to pay the sum due from him for his share of the cost of the repairs. But, if activated, the effect goes much wider than enforcing payment of the sums already due; it takes away the whole of his grant.  

“The grant itself, and the threat to withhold it if the non-grant part of the cost is not paid in full and on time, is being used as a lever, a stick, to encourage payment by the owner of the part of the repair cost which he already is under an obligation to pay. This is not a condition which is attached to the grant for the purposes of the grant – to make sure that it is properly applied, that the work is carried out satisfactorily, or whatever".  

"It is attached to the grant for the purpose of ensuring payment of other sums which are and have always been the responsibility of the owner of the property. In those circumstances we consider that the pre-condition goes much further than is justified in terms of the Act. It is ultra vires the council.”

Inner House declares ‘Sword of Damocles’ contractual term unlawful: GLC Public Interest Litigation Unit

Celebrating financial capability in Scotland

Last night stakeholders and guests at the Scottish Parliament celebrated financial capability work taking place across Scotland, as part of UK "Financial Capability Week".

The event was hosted by Ayrshire MSP, Ruth Maguire, and heard from Yvonne MacDermid, Chair of the Scottish Financial Capability Partnership, Govan Law Centre's Mike Dailly, Alison Hardie of Young Scot, Alison Watson of Shelter Scotland, Simon Watson of the Royal Bank of Scotland, Jonathan Baxter, Head Teacher and pupils from Flora Stevenson Primary School

As part of #TalkMoneyScotland week, Govan Law Centre will be providing a free financial capability and money advice session at Homes for Good, 97 Main Street in Glasgow’s Bridgeton this Thursday 16 November 2017 from 10am to 3pm. No appointment is necessary.

GLC's Principal Solicitor Mike Dailly said: "Good money skills are always key to resolving financial challenges and difficulties. But most importantly they are essential as a preventative tool: to avoid being scammed, fleeced, being hit with excessive fees and charges, borrowing at uncompetitive rates, buying financial products you don’t need or aren’t suitable for you, or ultimately just getting a bad deal as a consumer".

"Key life events – for good or for bad – will affect all of us throughout our life and having some financial resilience and support can make an unbelievable difference in a crisis. Knowledge truly is power, and we are a point in time where we can make financial capability skills and knowledge freely and instantly accessible to consumers when they need it if we utlise new opportunities next year from Opening Banking and the new Payment Services Directive".

Mike's talk is available here (opens as a PDF).

Celebrating financial capability in Scotland

Law as a tool for social change & justice: UK Law Centres Network 2017 annual conference

The annual conference of the UK Law Centres Network (LCN) took place for this first time in Glasgow this week, with representatives from law centres from Scotland, England and Northern Ireland in attendance.

Conference was opened by Scottish Minister for Legal Affairs and Communities, Annabelle Ewing MSP, who also read a personal welcome note to delegates from Scotland's First Minister, Nicola Sturgeon MSP.

Delegates were welcomed to a Civic Reception in Glasgow City Council by the Leader of the Council, Cllr Susan Aitken, and Depute Lord Provost, Cllr Philip Braat; and heard from the Dean of the Faculty of Advocates, Gordon Jackson Q.C. and former President of the Law Society of Scotland, Austin Lafferty.

The two-day event took place over 9 and 10 November 2017, and included a wide ranging plenary discussion on the law as a tool for social change. Conference heard from Matthew Smerdon, Chief Executive of the Legal Education Foundation, and Annabel Davidson Knight of Collaborate and the University of Newcastle.

GLC's Principal Solicitor, Mike Dailly addressing conference argued that unemployment, poverty, discrimination, poor housing and destitution were never accidental. They were the product of political choices, and the politics of omission.  In his view it was the job of law centres to campaign for change, and until change happened, use the law as best as possible to mitigate detriment to the communities law centres served.  Mike's speech to the LCN conference is available here (opens as a PDF)

Law as a tool for social change & justice: UK Law Centres Network 2017 annual conference

People struggling to make ends meet will suffer from today's UK base rate rise

The Monetary Policy Committee (MPC) of the Bank of England today voted 7-2 today to increase the UK base interest rate by 0.25% to 0.5%. What does this mean for those with problem debts in the UK? GLC's Mike Dailly believes there are a lot more losers than winners from the Bank's decision today.

"The Money Advice Service estimates there are roughly 700,000 adults with problem debts in Scotland, with 8.3 million people struggling to cope financially across the UK. Those already on a financial knife-edge are the ones who will be tipped over, and this will ultimately result in defaults for credit cards, loans, mortgages and bills - with the extra charges that come with this - as consumer borrowing costs more, and those already squeezed can't cope".

“Millions of people across the UK have had to borrow to cope with low wages over the last few years, the gig economy and exponential household prices for food and bills. A rate rise right can only tip them over the edge when they’re already seriously struggling and financially squeezed". 

"It’s fully understandable that the Bank of England wants to put a brake on inflation running at 3 per cent this year. However,  increasing the cost of borrowing won’t calm inflation. The reality is Scotland and the UK relies on imports, and you get inflation when the pound is devalued. It's down 13% since the Brexit referendum, and may get weaker still.”

"While the Bank points to a historic 42 year low unemployment rate, this belies the fact real wages have been cut, and there is much more job insecurity and unpredictable pay with zero hours contracts. The cost of living has risen exponentially in the UK for utilities and food; in Scotland private sector rents have increase by 25% on average in the last 6 years, double the rate of inflation".

"Increasing the base rate, means that millions of people already struggling to cope will have to pay more for their debt. We've had a 10% growth in consumer borrowing - now sitting at over £200bn - as people borrow at low rates to make up shortfalls from the real economy.  It's fair to say, millions of people across the UK are now being hit twice; their incomes are cut due to the weak pound, and now their borrowings cost more because of the Bank's interest rate rise". 

"In reality, the economic circumstances which led to the Bank to cut interest rates to 0.25 last August haven't changed and there is no cogent monetary or economic basis for today's hike".

People struggling to make ends meet will suffer from today's UK base rate rise

Is the buy-to-let market a property bubble waiting to burst?

GLC's Principal Solicitor, Mike Dailly writes: "SCOTLAND’S private rented sector is a phenomenon. It has trebled in size over the last 15 years and now makes up over 15 per cent of all Scottish households. For our cities the story is more profound.  

Scottish Government figures published last month show that private lets represent 19 per cent of all homes in Glasgow, Edinburgh and Perth. For Dundee the figure rises to 23 per cent and peaks at 26 per cent in Edinburgh.

How did this happen? Almost half a million homes have been lost from Scotland’s social rented sector since the right to buy was introduced in 1980. While the Scottish Parliament ended that right last July, the impact coupled with the growth of the buy-to-let mortgage market has fuelled the private let sector".  Read the full column in The Herald here (Saturday, 7 October 2017).

Is the buy-to-let market a property bubble waiting to burst?

GLC's Principal Solicitor appointed to Scottish Government's Homelessness & Rough Sleeping Action Group

A panel of homelessness experts from across Scotland met for the first time yesterday (5 October 2017)  as work to address the challenges of rough sleeping, and how temporary accommodation can best be utilised, officially got underway.

Announced as part of the Programme for Government last month, the short-term Homelessness and Rough Sleeping Action Group came together with the immediate task of outlining urgent recommendations to minimise rough sleeping this winter.

The group, which draws on expertise from across the sector, will examine how the Scottish Government’s commitment to end rough sleeping can be achieved and how best a new £50 million fund can support this.  Membership of the Action Group includes:

• Jon Sparkes, chief executive, Crisis (chair)
• Russell Barr, former moderator, Church of Scotland
• Maggie Brunjes, Glasgow Homelessness Network
• Mike Dailly, Govan Law Centre
• David Duke, Street Soccer Scotland
• Suzanne Fitzpatrick, Heriot Watt University
• Josh Littlejohn, Social Bite
• Lorraine McGrath, Simon Community Scotland/Street Wise
• Susanne Miller, Glasgow City Council
• John Mills, Fife Council & ALACHO
• Shona Stephen, Queens Cross Housing Association
• Alison Watson, Shelter Scotland

Housing Minister Kevin Stewart said: "The Homelessness and Rough Sleeping Action Group will be recommending immediate steps we can take to minimise rough sleeping, both this winter and for good, as well as ways to transform temporary accommodation. The members bring a wide range of expertise, experience and enthusiasm and I know they will provide invaluable advice".

"The group will be engaging with all partners who deal with homelessness, including in local authorities and the third sector, so we can harness the wealth of knowledge available. We are committed to ending rough sleeping, preventing homelessness, and transforming outcomes for those who experience it. The action group and the new £50m fund are important steps in achieving this."

GLC's Principal Solicitor appointed to Scottish Government's Homelessness & Rough Sleeping Action Group

Civil court & tribunal solicitor vacancy at Govan Law Centre

GOVAN LAW CENTRE seeks a qualified solicitor to join our legal team in Glasgow.  Competitive salary. We are seeking a qualified solicitor with good civil court and, preferably, tribunal experience.  Experience in the legal fields of housing, homelessness, employment, equalities and public law would be an advantage.

The successful candidate will work from our main office in Orkney Street in Govan.  Regular court appearances will be required.  This is a full time post, however, job sharing will be considered.

This position is in our general court and legal team and will include provision of legal advice and representation for clients in terms of mainly housing, homelessness, employment, debt, public law, community care and disability rights and welfare rights. It will also involve providing legal representation at court and tribunals.

There will be an opportunity to become involved in some of our public interest litigation, test case work, law reform and social policy work.

The successful candidate MUST:

1.     Hold a degree in Scots Law

2.     A diploma in legal practice

3.     An unrestricted Law Society of Scotland practising certificate

4.     Have good research and analytical skills

5.     Ability to work well under supervision

It would be desirable if the candidate had:

1.     Knowledge and experience of issues relating to social welfare law

2.     Experience in appearing in court or tribunal settings

3.     Experience in dealing with vulnerable clients

4.     Experience in handling a large and varied workload

5.     Experience in working within a team setting

Please send a CV and covering letter explaining why you are interested in this post to: Mike Dailly, Principal Solicitor and Solicitor Advocate, Govan Law Centre, 18-20 Orkney Street, Glasgow, G51 2BX or m@ govanlc.com.  CLOSING DATE: Friday 6^th October 2017 at 4pm.

Civil court & tribunal solicitor vacancy at Govan Law Centre