issn 0036-9314. february 2004. vol 72, no 1. …...issn 0036-9314. february 2004. vol 72, no 1....

ISSN 0036-9314. February 2004. Vol 72, No 1.

SCOTTISHL A WGAZETTE

ARTL, Remortgages and Free-standingSecurities

Conveyancing

Criminal Law

Evidence

Family Law

Financial Services

Profit in Practice

Selected Scottish Cases

A Message from the President • Editorial • What’s NewChristmas Quiz Answers • Counci l News • Book Reviews

A Message from the President‘It fell aboot the Lammas time …’ Writing this onCandlemas (the 2nd of February to you) I found myselfstruggling to remember the four traditional quarterlyterm dates. I looked them up in (where else) the WeeRed Book. Since then I have been unable to get the oldtune out of my mind. Older members will tell you thatit was once unthinkable that any solicitor could not

recall these dates instantly but how things change.

I note the Scottish Parliament may reject parts of the Lord Bonomy proposals forchange, particularly trial in absence. Janice Webster and I had the interesting experience of giving evidence to the Justice 1 Committee. Janice spoke eloquently on this particular subject and could well have influenced the Committee’s thinking.That is a change we could do without.

Other changes which must be resisted are David Blunkett’s dangerous ideas about new measures to find more alleged terrorists guilty by watering down the necessarystandard of proof and abandoning fair trials, the presumption of innocence and independent representation. Apparently if the intelligence services (of all people) saythey are guilty they must be.

A spot of light relief. The Barty Lecture was a treat and our speaker Alexander McCallSmith, part Professor of Medical Law, part author, was excellent. Gents, if you andyour lady have not yet read his delightful detective agency books buy them for her.I guarantee you brownie points.

The change, or perhaps I should say diversification, from lawyer to best selling authoris beyond the talents of most of us. Increasingly however we see media stories oflawyers giving up the rat race for other ventures, some of them far removed from thelaw such as opening art galleries. Who can blame them. For example if predictionsabout changes in criminal legal aid funding are accurate, there will be lawyers who willstop doing such work for the simple reason that they can no longer make a living.

Still on change, I tend to feel a little disorientated at this time of year. I suspect this isrooted in my Shetland childhood when Christmas and Ne’erday were respectively 6 and 13 January. The change from the Julian to the Gregorian calendar was not fullyembraced in Unst for about two hundred years after everywhere else! Now that’s aresistance to change you almost have to admire.

Perhaps at the beginning of February I am still in an early January frame of mind and wondering what 2004 will bring. Be sure that in 2004 change will seek you out.The old song ends ‘The Jardines widnae wi’ him ride and they rue it tae this day.’Be prepared and grasp your opportunities.

A. PATRICK FORDYCE,President.

SCOTTISH LAW GAZETTE

ISSN 0036-9314. February 2004. Vol 72, No 1.

Contents

Inside front cover – A Message from the President

1 Editorial

1 What’s New

7 ARTL, Remortgages and Free-standing Securitiesby Ken Swinton

12 Conveyancingby Ken Swinton

15 Council and Committees’ News

Criminal Lawby Dr Sarah Christie

17 Distinctions in Concert

Evidence19 by Derek Auchie

Family Lawby Professor Joe Thomson

21 Unplanned Conceptions from Failed Sterilisations

23 Financial Servicesby Ken Swinton

Profit in Practiceby Brian Allingham

24 Fees and Feeing

Selected Scottish Casesby Kenneth H Forrest

26 The value of a carHunter v Thomson and Perfect

27 Loss of ProfitWatts v Bell & Scott WS

28 Definition of a personal injuries actionTudhope v Findlay Park t/a Park Hutchison

Book Reviews28 Dilapidations in Scotland 2nd ed29 Directory of Services for Conveyancers 200329 Education Law in Scotland30 Adult Incapacity

Membershipsee page 6

First Issued: March 1933

Published every second month bythe Council of the Scottish LawAgents Society for circulationamongst members of the Society.

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The months of issue:February, April, June, August, October, December.

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SCOTTISH LAW AGENTS SOCIETYIncorporated (as ‘The Incorporated Society of Law Agents in Scotland’) by Royal Charter sealed

on 18 January 1884 with Supplementary Charter sealed on 6 May 1925

The Society’s Memorandum BookPublished annuallyEditor: John H Sinclair10 Carr CrescentCRAILFifeKY10 3XRtel: 01333-451738fax: 01333-451738e-mail: [email protected]

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Vice-President: Ken SwintonDundee Business SchoolUniversity of Abertay DundeeOld College, Bell StreetDUNDEE DD1 1HGtel: 01382-308413fax: 01382-308400e-mail:[email protected]

Quiz AnswersThe answers to The Christmas Quiz – Memory Failure,

published in December 2003, are as follows:

1 Accession2 Arrestment3 Accessory Obligation4 Anticipatory Breach5 Acquiescence6 Adjudication7 Alimentary Liferent8 Apparent Authority9 Acceptilation

10 Approbate and reprobate11 Apportionment12 Aqueduct13 Ascription14 Attachment15 Ademption16 Attestation17 Abatement18 Absolute Privilege19 Accretion20 Accommodation Bill

Editorial 1

Editorial

I tried to find the press releasetoday on the Executive websiteregarding the Tenement (Scotland)Bill. My eye was taken however bythe document of the month. Thisrelated to the celebrated case ofDonoghue v Stevenson. Last year Idrew to your attention theFentimans.com website which wascelebrating the 75th Anniversary ofthe event giving rise to the courtcase. This was certainly more funthan the present offering. I sup-pose the Executive are celebratingthe 75th anniversary of theprogress of the case through theCourt of Session on its way to theHouse of Lords. The Executivehave published digital images ofthe closed record and a transcript.This can be found athttp://www.scotland.gov.uk/about/FCSD/MCGNW/00018811/page1912089186.aspx

This is described in the followingterms ‘The Snail in the Bottle. Thedocument of the month comesfrom the case of The Snail in theBottle at the Court of Session. Theoriginal document held at theNational Archives of Scotlandincludes the judge’s legal summingup, details of the fine and methodimposed on the manufacturer, andthe recording of the facts of thecase as alleged by the plaintiff’.

Nice to know that the ScottishLegal System is safe in theExecutive’s hands!

The same pleadings are used torather better effect as a model ofclarity by John McKenzie’s in hisnew book on pleading which willbe reviewed in a forthcomingissue.

The pilot areas for the single sur-vey experiment are supposed to beoperational from 2 April and asthis is the last issue of the Gazetteprior to April I was hoping to beable to deal with the pilot schemein some detail. However it appears

that deliberations are lastinglonger than anticipated and practi-tioners have received very littleinformation at the time of writingand there is nothing to write about.Although SPCs have beenapproached as part of the processthe same does not appear to be thecase with local faculties. This is aquite unsatisfactory state of affairs.If practitioners are going to sup-port this initiative they ought tohave been brought into the loopwell before now. The key issueremains while it is good for pur-chasers is it good for sellers?

In this issue I am pleased to welcome the appearance of a newcolumn on evidence from DerekAuchie of The Robert GordonUniversity. I am still looking toexpand regular columns. The newMoney Laundering Regulations,after a series of false starts havenow been promulgated and comeinto force on 1 March. I haveincluded something on thembecause in terms of the AccountsRules we have to comply withthem automatically.

What’s NewLand Reform

Bills in ProgressAnti-social Behaviour etc.(Scotland) Bill – to make provisions in relation to antisocialbehaviour; criminal justice; childwelfare and associated purposes.

Criminal Procedure Amendment(Scotland) Bill

Education (Additional Support ofLearning) (Scotland) Bill – tomake provision for additional support in connection with theschool education of children andyoung persons with additional

support needs and for connectedpurposes

Local Government (Scotland) Bill– for the election of councillors bysingle transferable vote and in relation to certain restrictions upona councillor as well as making provision for remuneration

National Health Service Reform(Scotland) Bill

Nature Conservation Bill

Primary Medical (Scotland) Bill

Prostitution Tolerance (Scotland)Bill

Stirling, Alloa, KincardineRailway and LinkedImprovements Bill

Vulnerable Witnesses (Scotland)Bill

Waverly Railway (Scotland) Bill

New Proposd Members’BillsAbolition of Council (Scotland)Bill – to replace Council tax with atax based on personal income –introduced by Tommy SheridanSSP.

Civil Appeals (Scotland) Bill – toabolish the right of Appeal in civilcases to the House of Lords and tocreate a Civil Appeals Committeein the Court of Session as the finalappeals possibility – introduced byAdam Ingram SNP.

Community-Based Drug Facilities(Scotland) Bill – to provide forlocal facilities to treat drug misuseincluding detoxification programmes, rehabilitation andcounselling. Introduced byRosemary Byrne SSP.

Environmental Levy Bill – to givelocal authorities powers to impose

2 Scottish Law Gazette 2003

an environmental levy on certaintypes of plastic bags, payable bythe consumer at the point of sale.Introduced by Mike Pringle,LibDem.

ConsultationsMany Papers are out for consultation at present. Theseinclude:

Employee Checks – deadline9/1/04 – proposed changes to thecurrent fitness requirements foremployees of services regulated bythe Care Commission. ScottishExecutive, Health Department.

Personal Bankruptcy – deadline20/2/04 – Scottish Executive, JusticeDepartment.

Trust Law – deadline 31/12/03 –SLC Discussion Papers No 123 and124.

Dental Services – deadline 5/3/04– modernising NHS dental ser-vices, Primary Care Division,SEHD.

Health and Safety – deadline31/3/04 – draft Regulations toimplement the European Agents(Vibration) Directive and on draftguidance in relation to Hand ArmVibration – also on whole bodyvibration. Health and SafetyExecutive, Physical Agents, PolicyUnit, London.

Housing Grants – deadline20/1/04 – draft Regulations withrespect to S 93 (2) of the Housing(Scotland) Act 2001; Assistance toRegistered Social Landlords andOther Persons (Grants) –Investment and performanceDepartment, CommunitiesScotland, Thistle House, 91Haymarket Terrace, EdinburghEH12 5HE:

SLC Invites suggestions for legislation

The Scottish Law Commission isinviting suggestions for inclusion

in its Seventh Programme of LawReform. The Council of SLAS hasidentified the area of successionrights as a possibility as well as thelaw relating to heritable securities.

Statute Law Revision: 17th Report

On 16 December The Scottish LawCommission and the LawCommission published a Reportrecommending the repeal of enactments which have becomeobsolete.

SSIS2003 No 536 Court of SessionAct of Sederunt (Fees ofMessengers-at-Arms) 2003

Made: 7/11/03Came into force: 1/ 1/04

This amends the Schedule to theAct of Sederunt (Fees ofMessengers-at-Arms) (No 2) 2002(SSI 2002/566) by increasing thefees payable to Messengers –at-Arms by 3.2%.

No 537 Court of Session

Act of Sederunt (Rules of the Courtof Session Amendment No 6)(Diligence on the Dependence)2003

Made: 7/11/03Came into Force: 10/11/03

Amends the Rules of the Court ofSession 1994 (SI 1994/1443) so that a motion is required for thegranting of authority for arrest-ment to found jurisdiction or fordiligence on the dependence of anaction.

No 538 Sheriff CourtAct of Sederunt (Fees of SheriffOfficers) 2003

Made: 7/11/03Came into force: 1/1/04

Amends SSI 2002/567 by increasing the fees by 3.2%

No 556 Sheriff CourtAct of Sederunt (SummaryApplications, Statutory

Applications and Appeals etcRules) Amendment (InternationalProtection of Adults) 2003

Made: 13/11/03Came into force: 14/11/03

Amends Act of Sederunt(Summary Applications, Statutoryapplications and Appeals etcRules) 1999.

Article 2 inserts a new Part XXIVinto Chapter 3 of the 1999 Rules.The new part provides rules forapplications by any interestedparty for registration of a measure,made under the law of a countryother than Scotland, or the per-sonal welfare or the protection ofthe property of an adult with incapacity. Schedule 3 of theAdults with Incapacity (Scotland)Act 2000 provides for this possi-bility. And at paragraph 7 sets out the circumstances in whichrecognition is to take place.

Rule 3.24.2 provides that the appli-cation will be by summary applica-tion and will include a copy of themeasure (translated if required).

Rule 3.24.3 specifies those towhom intimation must be madeRule 3.24.4 provides for intimationto the Public Guardian and

Rule 3.24.5 provides for the registration of international measures which have been registered under the new Part.

Professional PracticeReferral fees – English LawSociety to permit payments tothird parties

The Law Society of England andWales has decided to allow solici-tors to pay referral fees to thirdparties, such as banks, insurancecompanies and estate agenciesintroducing clients to them. Theclient must be told of the paymentand there must be no ‘cold calling’.This is a major departure from theprevious rules and it is interestingto note that the decision by theCouncil of the Law Society was

What’s New continued

What’s New 3

taken on a majority vote ratherthan being unanimous. The rulewill not apply to legal aid work orany criminal proceedings.Some conveyancers have com-plained that this change of heartwill result in financial loss forthem, as the referral fee will haveto be funded somehow.

Establishment Directive – failureto implement

France and Ireland have been reprimanded by the EuropeanCommission for failure to imple-ment the Establishment Directive.

Copyright – Considerations ofcopyright and confidentiality inrelation to Opinions stored bylaw firms

The Law Society of England andWales has reminded solicitors thatbefore they put Counsels’Opinions onto their databases fromwhich the Opinions can beaccessed by members of the firm,they must have the consent of theclients concerned. If they do not,questions of copyright and confi-dentiality arises. The guidanceissued is that the copyright ofOpinions lies with the counsel who framed them. It is suggestedthat reference to the storage ofOpinions etc should be made inthe Letters of Engagement and that barristers should be given an ‘opt-out’ clause in their instruc-tions, acknowledging that theOpinion will be stored by the firm,with due regard to confidentiality,unless the barrister directs otherwise.

CompensationMust reflect the time before actually paid

Evans v Secretary of State for theEnvironment, Transport and theRegions and Another Case C- 63/01– ECJ judgment – 4/12/03, TimesLaw Reports 9/12/03

Held: Compensation paid by the

Motor Insurer’s Bureau to the victim of a road traffic accidentcaused by an unidentified personor an uninsured or insufficientlyinsured driver must be such as totake account of the passage of timebefore actual payment is made.

Employment LawWall v British Compressed AirSociety – Court of Appeal 6/1/04,Times Law Report 9/1/04 – Whatis the normal retirement age for aunique employee?

This case concerned the allegedunfair dismissal of someone whowas the Director-General of theBritish Compressed Air Societyand it was assumed that he had acontractual agreement to retire at70. It was suggested this was notthe normal retiring age under theEmployment Rights Act 1996. Thisline had been taken in two earlierdecisions Age Concern Scotland v Hines [1983] IRLR477 andDormers Wells Infant School v Gill,unreported, 16 July 1999,EAT. The Court of Appeal took a different view, saying that the useof the word ‘normal’ did not meanthat there had to be a comparator.

Church of England – newemployment rights

The Church of England hasannounced plans to give clericssome basic employment law rights.In the past these have been deniedthem on the basis that they areemployed by God!

Data Protection Act 1998 – curtailment of right of employeeto demand information – Durantv Financial Services AuthorityTimes, 2 January, 2004

This is a landmark decisionbecause it gives a very differentresult from that expected by commentators on the operation ofthe Act. It should be read for theguidance given on exactly what anemployee is entitled to see and thedefinition of ‘personal data’ The

Court said that for data stored oncomputer or in a manual file to be‘personal’ meant that it must nameor directly refer to an individual.Mere mention of an individual’sname in a document was notenough. For disclosure the infor-mation must be biographical in asufficient degree and should havethe data subject as its focus. Thepurpose of the Act is to protectpersonal data not the document. If the documents are not structuredby reference to that data, then theAct does not come into play.

Copyright – Section 215 of theCopyright Designs and PatentsAct 1988

Ultraframe (UK) Ltd v Fieldingand Others, Court of Appeal,judgment 12 December 2003, TLR12/1/04 – designer’s rights – heldin trust for the company

Section 215(2) of the 1988 Act provides that where a design iscreated in pursuance of a commission, the person commis-sioning the design is the firstowner of any design right in it and215(3) states that if a case does notfall within 215(2) and a design iscreated by an employee in thecourse of his employment, theemployer is the first owner of thedesign. In this case Mr Davies, adesigner and a Director ofUltraframe, brought an actionagainst the defenders who claimedto have acquired the company. Theoriginal judge dealing with thecase had taken the view that MrDavies never owned the designrights in components used to man-ufacture conservatories. The Courtof Appeal however held that adesigner who was the director and100% shareholder of the designcompany, held the rights in trustfor the company, subject to anylawful act of the company.Directors of a company had to use their powers in the interests of the company and could not gobeyond the powers of the company.



Human RightsSecretary of State for Work andPensions v Gillies (Court ofSession) 28 November 2003 –composition of Tribunal – independence of medical member

This decision has been long awaited, as many Tribunal caseshave had to be adjourned pendingthe outcome. The challenge aroseover doctors who examine appli-cants for benefits also sat asTribunal members, not dealingwith the cases in which they hadexamined, but similar cases. Theperceived mischief was that theymight not be truly independentand forming an approach to casesas a result of their experience inrelation to examining claimants.There was a feeling that they wereperceived by the public to be ‘theDepartment’s doctors’ The Courthowever took the view thatSEMA/NESTOR doctors were not‘Department doctors’ but inde-pendent advisers. That being so, it followed that they were equallyable to be independent as members of Tribunals.

This case was decided on the basisof common law and the Court didnot address any Article 6 argu-ments because the Human RightsAct was not in force at the time theTribunal in the Gillies case reachedits decision. The general consensushowever seems to be that the ques-tion of the basic independence of aprofessional person would be thecentral point and it would nothave made any difference had theAct been in force. Others, however,feel that this case may go to theHouse of Lords.

From a practical point of view it ispossible that Tribunals faced withchallenges to doctors on theHuman Rights argument may have to adjourn until this issue isaddressed, but it seems unlikelythat a different result from theGillies case will be the outcome.

CIS/43320/2002 – Income Support

It was held that the £100,000 capon the Allowance of Mortgagecosts is not ultra vires or in breachof ECHR. The claimant here was aparent with five dependent chil-dren and the estranged husbandwas making no contribution to theupkeep of the family home. Thelatter had a mortgage over itamounting to about £200,000 andrepossession was to take place.Income Support was withdrawn.A challenge was made over the capon the allowance on the groundsthat it was in breach of Article 8 of the Convention (the right torespect for family life). TheCommissioner took the view thatrepossession was not inevitablebecause it could be avoided byselling the house and using theproceeds to pay off the mortgageand to rent somewhere suitableuntil income support could beapplied for again, in addition toHousing Benefit, and Child Benefitwould continue. She would ofcourse be deprived of her capitalasset, but one, which many peoplein the country could not afford topossess. An argument of indirectdiscrimination under Article 14was also rejected. She argued thatthe cap had a greater adverse effecton herself and her children than itwould be for a smaller familywhich could more easily find alter-native accommodation for whichthey would need a smaller mort-gage than that required by theclaimant.

Martin v McGuiness 2003 SLT1424 – alleged breach of Article 8ECHR – evidence obtained by private investigators – surveillance

The pursuer sought damages forinjuries arising out of a road trafficaccident and a declarator that theactions of a private detective hiredby the defender in relation to.obtaining evidence breachedArticle 8 of the European Conven-tion on Human Rights. It wasalleged that the detective had

obtained evidence by deceit andunauthorised covert surveillance,which had intruded on his familylife. The pursuer conceded that noaction by a public authority wasinvolved which would trigger theoperation of the Convention andHuman Rights Act, but argued thathe was being denied an effectiveremedy in so far as the commonlaw made no similar provision forthe protection of private and fami-ly life, which in itself raised issuesunder the Convention. Referencewas made to the cases of Robertsonv Keith 1936 SLT 9, or to the actioiniuriarum.

Held: (1) that it was for the judge todecide whether or not it was fair toadmit evidence obtained in theway described.

(2) That the court’s admission ofthe evidence would not be incom-patible with the pursuer’s Article 8rights. While possible breaches hadbeen identified it had t be consid-ered whether the actions had beenproportionate and reasonable, hav-ing regard to protecting the inter-ests of his client and the widerpublic interest. The case for adeclarator was dismissed. It wasobserved that whether an infringe-ment of Article 8 by one privateindividual causing loss to another,which had not in the past givenrise to a successful claim, shouldnow have that result, and the basison which such a claim might bemade, remained to be determinedin a case where those issuesremained live.

Cooper v UK (Application No48843/98) and Grieves v UK(Application No 57067/00) – NavalCourts Martial – deemed to becontrary to Article 6 ECHR – RAFsystem acceptable. Judgment16/12/03. TLR 12/1/04

The independence of the Tribunalwas challenged in these cases. Oneinvolved the RAF and the otherthe Navy. The Court said that indetermining whether or not a

What’s New 5

Tribunal was fair and impartial theimpression of the defendant wasimportant, although not decisive.What was decisive was whetherhis doubts about fairness wereobjectively justifiable. In Cooper,involving the RAF, the Courtrejected the argument that all service Tribunals were inherentlybiased and also rejected his partic-ular claim that the court martialwhich dealt with him lacked independence. The presence of anadvocate who was a civilian withprofessional qualifications pro-vided the necessary guarantee ofindependence. In the Grieves case,however, the court martial run by the Navy did not have suchsafeguards.

The Royal Navy prosecutingauthority could appoint aProsecutor from the ranks of uni-formed naval barristers outside itsown staff. In Grieves case, how-ever, the prosecutor was from thestaff, although the administrativeofficer was a civilian. The post ofPermanent President of CourtsMartial did not exist in the navalsystem, the President beingappointed for each court martialon an ad hoc basis. It was alsonoted that although the advocatesin the naval system fulfilled thesame role as in the RAF arrange-ments, they were serving navalofficers who when not sitting carried out usual naval duties. TheRAF Judge Advocate was a civilianworking full-time for the JudgeAdvocate General, himself a civilian The Royal Navy JudgeAdvocates were appointed by anaval officer, the Chief NavalJudge Advocate. The lack of acivilian in the pivotal role of Judge Advocate was seen to be a fundamental flaw. The Courtconsidered Mr Grieve’s misgivingsabout the lack of independence tobe objectively justifiable and therefore the trial was deemed tobe unfair.

Property – BoundariesRoads, streets and verges

David Runciman & Sons vScottish Borders Council, 28/11/032003 SLT 19/12/03

Action for judicial review anddeclarator inter alia that an orderby a local authority to issue noticesunder Section 87(1) of the Roads(Scotland) Act 1984 was ultra vires.The notice required the removal offences from a grass verge and itwas averred that the powers wererestricted only to areas formingparts of a road and its verges. Thearea in the present case, it was sug-gested was neither. The road ranthrough the land of the Petitioners,a firm of farmers and partners, andhad a verge on each side, whichwas bounded by an old beechhedge. The Petitioners had erecteda stob and wire fence on each sideof the road which they claimed layunder the growth of the hedge andreflected the average maximumgrowth before the hedge wastrimmed. The respondents averredthat the verge extended to the mid-point of the hedge or to the road-ward side of the trunks of thehedge. The Petitioners argued thatthe verge extended only as far as aline, which represented the meanannual growth of the hedge on itsroadward side, prior to any trim-ming. The definition of ‘road’under Section 151 was examined inrelation to the public having aright of access over it.

Held: that where a road wasbounded by a hedge this served asa physical boundary which had tolie along the roadward side of thetrunks of the shrubs or trees thatmade up the hedge, providing areasonably clear and definiteboundary. It was not necessary toshow that passage by the publicwas possible or practical overevery area of it. The Petition wasdismissed.

ReparationRailway worker exposed tovibrating tools- development ofRaynaud’s phenomenon –whether due to work or constitutional – level to reflectinability to work and impact ondaily life

McKenna v British Railway Board2003 SLT 1300 – industrial disease-level of solatium

Railway worker experienced handsbecoming numb, cold and whitewhen working outside and usingvibrating tools. It was held that thedisease was work-related and thatthe appropriate level of compensa-tion for solatium was £12,000.

Lambie v Toffolo Jackson (inLiquidation) 2003 SLT 1415 – limitation of action-time bar, date pursuer became aware ofproblems

The pursuer claimed damagesagainst the defenders because hehad pleural plaques on his lungswhich he attributed to his work.The plaques had shown up on X-rays taken. in 1995. Such plaquesare usually without symptoms andthere was no evidence of anyactive pulmonary disease. FurtherX -rays taken in Aril 1996 made noreference to pleural plaques, butwhen he was examined in connec-tion with a claim for industrialinjury disablement benefit on 20May 1996, the examining doctorsaid that he did not have diffusebilateral pleural thickening anddid not therefore have the pre-scribed disease for which he wasclaiming, he did have pleuralplaques and could make a civilclaim. An action was raised on 14May 1999, but was dismissed asbeing time barred. The questionwas when did the pursuer becomeaware that he had pleural plaques?His GP had referred to an X -rayreport and expressed the view thathe had pleural plaques, but theCourt held that the GP was notjustified in making the statementbecause there was no evidential



basis for it. It could therefore beargued that the pursuer did nottherefore become ‘aware’ of hiscondition until informed by theexamining doctor in connectionwith the claim for benefit. TheLord Ordinary had gone too far inassuming the pursuer must havehad the necessary knowledge andit would be necessary to test this ina proof. The reclaiming motionwas therefore allowed and the caseremitted for a proof before answer.

AdoptionCameron v GibsonReducation of Adoption OrderCase Reference: A1952/02Outer House 2 December 2003

The pursuer sought reduction of the order whereby he wasadopted. The adoption order hadbeen granted on his 21st birthdayin 1951 but he had been unawareof it until his natural brother diedin 1999. The legislation prevailingin 1951 only permitted adoption ofpersons under 21 therefore heclaimed that the order was incom-petent on that ground and furtherthat as he had not signed the consent form (despite appearancesto the contrary), the adoption hadproceeded by means of a fraudand was objectionable for that reason too. The adoption was anullity due to first, the vitiating,patent error regarding his agewhich appeared ex facie the courtprocess and, separately, due to thefalsely signed consent form whichalthough not obvious, neverthelessperpetrated a fraud on the court.

The action was defended by theexecutor of the late brother on thebasis that the remedy sought wasunprecedented and incompetentand that the Court of Session hadno inherent power to reduce adop-tion orders which were final for allpurposes. Authorities were cited insupport and it was also arguedthat finality could be inferred fromthe limited statutory provisions forrevocation under ss 46 and 47 of

the 1978 Act. There were also public policy grounds and, sepa-rately, reduction was incompetentas restitutio in integrum was impossible.

Among the authorities reviewedby the court was J & J v C’s Curator1948 SC 636 (essential error not avalid ground for reduction ofadoption with the possible excep-tion of mistaken identity). In thatcase, the court rejected an argu-ment that non-compliance withstatutory procedures could vitiatean order where the party seekingreduction was responsible for thenon-compliance in issue; thus, itwas said that J & J is authority forthe impossibility of reducing anadoption on grounds of misrepre-sentation or error or non-compli-ance with statutory formalitieswhere the party seeking reductionwas responsible for the error etcbut J & J is not to be taken as ruling out reduction of adoption in all circumstances.

In the instant case, his lordshipstates that an adoption obtained by a fraud on the court can bereduced and that it must also be apossibility where the court lacksjurisdiction in the wide (not geographical) sense. Adoptionorders in such exceptional casesare legal nullities. A breach of natural justice (eg petition notserved on the birth mother) mightalso permit reduction and theremight be other instances althoughit was not possible to lay downgeneral rules. Otherwise reductionwas not competent.

However, for reasons of public policy, reduction should not begranted for mere procedural errorsor errors of fact or of law (in contrast with errors induced byfraud). In this case, there was anerror of fact or law in regard to the adoption being granted on theday of the pursuer’s 21st birthdaywhen he was too old in law butthis was not due to any fraud nor any other defect of such a

fundamental nature that mighttake this case outwith the publicpolicy reasons against reduction inthe normal situation. It was not afundamental error such as mightvitiate the adoption therefore noproof would be allowed on thatground. The matter of the falselysigned consent form was a differ-ent matter; it involved a fraud perpetrated on the court and thatmight have a bearing on thecourt’s discretion to refuse a decreeon equitable grounds but it couldonly be exercised once the full circumstances were known there-fore a proof would be allowed onthe pursuer’s second ground. Theissue of restitutio in integrum andwhether or not it could beachieved might also have a relevant bearing on the court’s ultimate exercise of its discretion to refuse reduction.

New Members

P CrozierCroziers, Dumbarton

C ShaughnessyTaits, Kelso

R C B FormanMcKay & Norwell,Edinburgh

E SibbaldAustins, Dalbeattie

W G PeeblesMclean & Stewart, Dunblane

Deaths

Miss M F AngusGlasgow

R A PatersonEdinburgh

ARTL, Remortgages and Free-standing Securities 7

ARTL, Remortgages and Free-standing Securitiesby Ken Swinton, Lecturer in Law, University of Abertay Dundee

One of the problem areas facingthe Keeper in relation to the intro-duction of Automated Registrationof Title to Land [ARTL] is how tofacilitate re-mortgage transactionswhere increasingly the work is carried out not by the borrower’ssolicitor but by a bulk convey-ancing firm acting exclusively forthe lender. The result is that theborrower is unrepresented in thetransaction. Under the ARTLsystem the agent completing thetransaction will authenticate thedeeds on behalf of the client bymeans of a digital signature. Atpresent, discussions on ARTL areproceeding on the basis that indi-viduals will not purchase digitalsignatures hence the need for theagent to authenticate on theirbehalf. If the borrower is unrepre-sented then the agent has noauthority to digitally sign. Onesuggestion has been made to givethe firm acting for the lender written authority on behalf of theborrower to sign on his behalfwithout coming under any furtherduty of care. Theoretically possiblethis conventional solicitor-clientrelationships and would need thealteration of existing ProfessionalPractice Rules. This paper suggestsan alternative solution.

Analysis of the mortgage contractWhen a borrower takes out a mort-gage there are two components tothis – the personal obligation andthe real security granted overproperty. The principal obligationis the obligation to repay the sumof money or other obligationssecured. The security is an acces-sory obligation. The Conveyancingand Feudal Reform (Scotland) Act1970 s9(2) provides that it shall becompetent to grant a standardsecurity in conformity with one ofthe forms in Schedule 2 to the Act.Form A has the personal obliga-tion in gremio and Form B refers

to a personal obligation containedelsewhere. The requirement is toconform with either form as nearly as possible. Initially afterthe passage of the 1970 Act mostsecurities followed style A, perhaps because of the influentialstyles published by the lateProfessor Halliday in his work onthe 1970 Act. Over the years therehas been a drift towards whatmight be termed a hybrid stylewhere the security specifies an initial sum but also acts as securityfor any further sums which maybecome due. This appears to combine elements of forms A andB and it is at least arguable that assuch it does not conform as closelyas possible to either style and istherefore invalid as s9(4) providesthat a security not in the form of astandard security shall be void andunenforceable. On the other handthe general enabling effect of s9(5)might be construed purposively topermit such hybrid securities. It isimplicit in s9 that the granter of astandard security need not be thedebtor. This however is made clearin s19 dealing with calling upnotices which requires this to beserved on both the debtor and theproprietor. A similar provisionexists in s21 in relation to defaultnotices.

Irrespective of which form isadopted the Act the security ismerely an accessory obligation.S11(1) ‘Where a standard securityis duly recorded, it shall operate tovest the interest over which it isgranted in the grantee as a securityfor the performance of the contractto which the security relates’. Thecorollary of this is that if the prin-cipal obligation ceases to beenforceable then the security ceas-es to be effective whether or not itis actually discharged. In Kaur vSingh [No 2]1 the loan had beenrepaid from the sale proceeds ofthe property before the dischargewas recorded and accordingly it

was accepted that the Keeper’sindemnity fell to be calculated byreference to the gross value of theproperty rather than the net value. Albatown v Credential Group2

illustrates another facet of thisproblem. A standard security was granted by the purchaser ofproperty to the seller for the balance of the purchase price thenunpaid. However the securitymade reference to the obligationsof the seller under the missives.These contained the usual non-supersession clause limited to theperiod of two years. The purchasersold on and the new owner raisedthe action after the expiry of thetwo years for declarator that hewas entitled to a discharge on thebasis that there was no subsistingobligation and the security fell tobe discharged without any pay-ment being made. This argumentwas accepted.

Assignation of the securityAssignation of the security by thecreditor is provided for in s14 ofthe Act. On recording of the assig-nation ‘the security, … shall bevested in the assignee as effectu-ally as if the security or the parthad been granted in his favour.’3

While this deals with the securitys14(2) is less clear with regard tothe personal obligations of thedebtor. It provides:

‘An assignation of a standard security shall, except so far as otherwise therein stated, bedeemed to convey to the granteeall rights competent to the grantorto the writs, and shall have theeffect inter alia of vesting in theassignee –

(a) the full benefit of all corrobora-tive or substitutional obligationsfor the debt, or any part thereof,whether those obligations are contained in any deed or arise by


ARTL continued

operation of law or otherwise,’

S14 does not refer to the personalobligation at all. Given that thepersonal obligation may be con-tained somewhere other than thesecurity document and that thesecurity may be granted by some-one other than the granter of thepersonal obligation this should notbe seen as a surprise. Where thepersonal obligation is contained in the security then an assignationof the security will assign the per-sonal obligation as well.4 Schedule4 to the 1970 Act does provide twostyles of assignation, Form A andForm B. The first is a separate styleand the second an endorsed style.Both make reference to securitiesfor fixed amounts or maxima. Note2 to Schedule 4 makes reference tosecurities for uncertain amountssuch as all sums securities. Here areference should be made to theinstrument(s) constituting the obli-gation. Exactly what is meant byall corroborative or substitutionalobligations for the debt is not alto-gether clear but Prof. Halliday5

was of the view that these termsdid not include an assignation ofthe personal obligation where thiswas separate from the security. Thematter has now been tested in thecourts in Watson v Bogue [No1]6.This was an action for professionalnegligence brought against soli-citors who, it was alleged, had prepared an assignation of theForm B security and the personalobligation had not been assignedalong with the security. At firstinstance it was held that the per-sonal obligation transmitted withthe security but on appeal toSheriff Principal Nicholson thatdecision was reversed. In dis-cussing the provisions set outabove he said: ‘In my opinion thatconsideration supports the viewthat the personal obligation istruly, as was suggested by counselfor the pursuer, a separate bundleof rights the totality of which cannot be assigned simply byimplication in the assignation of a security right’.

Given this analysis, the interest ofthe creditor in the security can beseparated from the interest of thecreditor in the personal obligationsof the debtor. This suggests anapproach which might bear fruit inrelation to re-mortgage cases. Sincethe 1980s we have become used tothe term securitisation of mort-gages. By this process a lender willsell a section of its mortgage bookto a third party often reserving theadministration of the loans toitself. This allows the lender tomove the loans off balance sheetand was a technique which waspioneered by National HomeLoans, now Paragon Finance. Thewriter has argued elsewhere7 thatin relation to mortgages which arecontracted on or subsequentlybecome, standard variable rateinterest loans there will be delectuspersonae which will prevent thelender assigning the loan8. Whilethis may be the case at commonlaw it is possible to contract out ofthis and this is of course routinelydone. For lenders another obstacleexists in relation to assigning partof its loan book in this way andthat is the reliance which thelender places on the report on titlegiven to the lender by the solicitoracting. This originally was a con-tractual obligation which couldonly be relied on by the party towhom it was addressed9. Howeverin current practice the under-takings given by the solicitor arestated as a matter of contract to be capable of being relied on bysuccessors in the creditor’s title10.That securitisation takes placessuggests that there are no technicalproblems with the assignation ofthe lender’s security and the assignation of the debtor’s personal obligations.

That however is not what isinvolved in re-mortgage transac-tions. For many high street legalfirms which are geared up to dealwith purchase and sale transac-tions re-mortgages are largelyunprofitable transactions and spe-cialist conveyancing firms dealing

in such transactions have sprungup. The market for re-mortgages isacutely sensitive to costs and thesefirms typically operate on the basisof special agreements with lendersso that the transactions are notundertaken under the CML ScottishSolicitors Handbook requirements11.The rationale appears to be thatthe transactions are largely freefrom risk because the conveyanc-ing will have been done properlybefore and the loan to equity valuein the transaction is comparativelylow so that even in the event ofdefault the risk of the lender suffering a loss is low. As a resultlocal authority certificates are notinsisted upon and no examinationof title is undertaken. The firmundertaking such work will oper-ate on the basis of indemnitiesgiven by the new lender. The bor-rower often sees no need to be rep-resented, perhaps wrongly, giventhe increasing complexity of newmortgage products which might bethought of as requiring legaladvice on redemption penaltiesetc. If the lenders are not gettingthe job done in the same way asthey would on a first purchase andsecurity and borrower sees noneed to be represented then it hasto be asked if the specialist firm isreally adding any value. If, asappears, it is not then perhaps oneshould be asking whether this sort of work is best carried out by highly qualified legal staff.

At present there is no provisioncontained in the 1970 Act permit-ting the debtor to assign the security but the debtor can disponethe property to a third party. This does not affect the debtor’spersonal obligations and the realsecurity remains with the propertyand burdens the new owner12.Again this illustrates the ability tosever the personal obligations fromthe real security. The Convey-ancing (S) Act 1924 provided astyle for a bond of corroborationwhich could be granted by theassignee of the debtor to the creditor. The 1970 Act has no style


for a bond of corroboration. Thegranting of such an obligation bythe new owner does not dischargethe original debtor of course butprovides an additional personalobligation to perform the obligation which the creditor can rely on.

Differing perspectiveson mortgagesThe conventional legal analysis ofa heritable security is that there are two interrelated contracts thepersonal obligations and the realsecurity. The personal obligationsare onerous obligations and thesecurity is the accessory obligationwhich burdens heritable property.That type of analysis was used bythe Law Society of Scotland in its evidence to the Joint Select Com-mittee of Commons and Lords onFinancial Services and Markets13

which was considering the thendraft Financial Services andMarkets Bill. One of the recom-mendations of the Committee14

was to extend the operation ofwhat is now the Financial Servicesand Markets Act 2000 to includemortgages should be taken. Thearguments which persuaded theCommittee were based on theimportance of mortgage transac-tions to consumers and the choiceof mortgages was ‘bewildering andcomplex’15. This is a fairly informalexpression of the idea but it onewhich would be more familiar toeconomists than lawyers.

‘There are many market imperfec-tions and failures in retail financialservices which create a rationalefor regulation:

• problems of inadequate informa-tion on the part of the consumer;

• problems of asymmetric infor-mation (consumers are less wellinformed than are suppliers offinancial services)16’

On such an analysis there is no distinction to be drawn between

an investment product and a mortgage product. The writer hasargued that standard variable ratemortgages exhibit such features ofinformation asymmetry17. This thenprovides the basis for imposing aduty of care on lenders and inter-mediaries in relation to the sale ofmortgage products by the promul-gation by the FSA of Conduct ofBusiness Rules. Similar Conduct ofBusiness Rules have been used inrelation to investment businesssince 1988 under firstly theFinancial Services Act 1986 andnow the Financial Services andMarkets Act 2000. The selling ofmortgages will of course be subjectto regulation by the FSA from N3day which is presently scheduledfor October 2004. Although therewill be differences in the detail ofregulation the principles and forms of regulation in relation to mortgages and investments will be essentially similar.

In relation to investment businessthe Courts, in England at least,have been prepared to employ thedevice of contractual good faith asa means of controlling discretionconferred in terms of the contract.The House of Lords has held thatthis is to be exercised in such asway as to take account of the rea-sonable expectations of the policy-holder18. A typical standard vari-able rate mortgage contract confersabsolute discretion on the lender toset the interest rates throughoutthe mortgage contract. The Courtof Appeal has found no difficultyin applying this new found powerto control discretion in relation tomortgages as well as investments19.The House of Lords has equallyfound the concept of good faithuseful in relation to standard securities in Scotland as a means of imposing new duties on lendersin relation to securities granted bythe spouses of debtors20. It seemsreasonable to extrapolate fromthese decisions that the ScottishCourts will similarly use the concept of good faith as a means of controlling the exercise of

contractual discretion in relation tomortgages to take account of thereasonable expectations of thedebtor.

The Unfair Terms in ConsumerContract Regulations21 provideredress for consumers where thecontract is in a standard form andthe consumer does not have theopportunity to individually negotiate the terms. Core termssuch as price are not subject toreview22. However, where the priceis sub-sequently determined by the supplier then that potentiallycontravenes the basis of contrac-tual good faith set out in Regu-lation 5. This is made clear by thenon-exhaustive list of potentiallyunfair terms set out in schedule 2para 1, in particular subparagraph(l). This stipulates where the supplier has such a discretionarypower then the consumer must begiven a right to withdraw from thecontract if the price is then toohigh. The Regulations apply toconsumer transactions of all types and certainly do not distinguishbetween investment business and mortgages.

In one sense a debtor does makesan investment in the standardsecurity. Standard Condition 1223

provides that the debtor is person-ally liable for all the expenses ofthe preparation and execution ofthe security. Where these are borneas part of the purchase costs theyare not seen as significant andagain if spread over 25 year termof a mortgage are not significant.However if he re-mortgages andthe existing security is dischargedand a new security is created hethen pays the costs again. In manyre-mortgages the lender defrayssome or all of these costs but intruth whether the costs are borneas an up front charge is irrelevantas the lender who defrays thosecosts will have figured into hislending rate the costs incurred in the re-mortgage.


ARTL continued

A negative investment?It is submitted that taking intoaccount these differing perspec-tives of mortgage transactions it ispossible to construct a view of aheritable security within a mort-gage package as a negative invest-ment of the debtor. This is not justanother way of describing a liabili-ty. Seen as a negative investment itno longer makes sense to retain theview that the security is an acces-sory obligation and must fall withthe principal obligation. If thedebtor has a negative investmentthen he should be able to deal withthis as with other assets which heowns. He should be able to assignthe negative asset in the shape ofthe security without the expense ofdischarging the security from theold lender and constituting thesecurity in favour of the newlender. At a stroke this wouldreduce the transaction costs.

The concept of the free-standingsecurity which can then beassigned to a loan may seem atodds with principle but it appearsthat the UK, Ireland and Denmarkare the only member states of theEuropean Community where thiscannot happen at present24. TheCommission has established anexpert group which it is antici-pated will report back this year.The European Mortgage Federa-tion, of which the CML is the UKrepresentative, has recommendedto this expert group that just suchfree-standing securities wouldreduce transactions costs andimprove the efficiency and trans-parency of the mortgage market.25

If this is adopted by the Commis-sion and the European Parliamentin due course will it require to beimplemented in UK law.

The shape of a free-standing first securityAs noted above the existing lawpermits the security to be grantedby a person other than the debtor.

On the basis of Watson v Bogue thesecurity and the debt can be sepa-rated by the creditor as well. Thusat this level little needs to be doneto adapt the existing legislativeframework. Some provision how-ever would need to be made toensure that the security persistsnotwithstanding the discharge ofan existing loan26.

The style of the security wouldalso need to be adapted by the pro-vision of a new Style in Schedule 2to the 1970 Act. This would notcontain any reference to a personalobligation to repay at all. The nextissue is who would be the grantee?The obvious choice would be toname the first lender. This has theattraction that it could be closelyrelated to existing practice. A newstyle of assignation could be addedto Schedule 4 which would narratethat the old lender at the request ofthe debtor assigned the security tothe new lender without discharg-ing the security but dischargingthe debtor from his personal obli-gations. However this may beunnecessary as a vehicle for varia-tion of securities already existsunder s16 and Form E of Schedule4. There are of course problemswith s16 in that variation cannot beused where the variation cannot beeffected by assignation, dischargeor restriction. In practice suchrestrictions appear to be routinelyignored. It might be preferable toprovide a new statutory stylewhich permitted the variation ofthe security to change the lenderwhen a new lender stepped in andrepaid the original charge holder.

Ranking of these new securitieswould be governed by the rulescontained in s13. Where there areno second charges, which is themost common position, there is noproblem. Where a second chargehas been registered then mattersbecome more complex but where are-mortgage does not involve anycapital raising then the existingcharge certificate could continue torank for the amount of principal

outstanding at the date of intima-tion of the second charge as withthe existing law. Where there hasbeen no intimation the new lendershould not be able to rely ons13(2)(a) and ought to be fixedwith the knowledge of what is inthe Land Registers. This is consis-tent with s13(2)(b). The new lenderwill require to make an assessmentof the debtor’s ability to repay andthe worth of the security offered. Itseems appropriate to continue tosearch in the Property andPersonal Registers as part of thisprocess and should this discloseany postponed security then thenew creditor ought to be fixedwith this information. Where thereis no intimation to the old lenderthen the preference for the newlender should be restricted to thebalance that was outstanding atthe time of redemption to the oldlender. This would need a newrule to be added to s13.

Which mortgages?The initiative proposed by theEuropean Mortgage Federation isin relation to first ranking securi-ties only. In the UK the regulationof mortgages by the FinancialServices Authority will commencelater this year and the types ofmortgage which will fall withinthe regulatory regime are specifiedin the Regulated Activities Order.27

The tests which require to be satis-fied are (i) that the security is afirst charge on heritable property,(ii) that the borrower is an individ-ual(s) or trustee(s) and (iii) that theborrower or a member of hisimmediate family must occupy atleast 40% as a residence28. Keepingthe definitions of the new free-standing first charge security inline with this regulatory require-ment would make sense.

The Report on TitleThe report on title issued by thesolicitor for the purchaser to thefirst lender is of great importanceto the lender but as noted above is


Rate of Interest onLanded SecuritiesThe Commissioners on therate of interest on LandedSecurities in Scotand haveresolved that the rate ofinterest on such First ClassLanded Securities shall be4·25% per annum for the 6months from and after the term of Martinmas (28 November) 2003.

of much less significance to lendersin re-mortgage transactions. Theintroduction of free-standing firstcharge certificates would not bringany automatic assignation of suchreports. These are not corrobora-tive or substitutional undertakingsso s14 would not be of application.Lenders granting re-mortgagesthat operate through specialist re-mortgage firms dispense withgreat chunks of the requirementsof the CML Scottish SolicitorsHandbook and would be no worseoff with free-standing securitiesunder the proposed regime wherethe security was assigned to themby the debtor than they would beat present.

It might also lead to the standardi-sation of documentation andreports on title which the CMLhave not as yet been able to deliver.29

Of course not every problem issolved by this approach. Just as atpresent where a single borrower isunrepresented in a re-mortgagetransaction it would be necessarythe have a Matrimonial Homesaffidavit sworn. At present the specialist firm does not do this butsends the borrower the affidavitand asks him to have it swornwhich is often the only time theborrower’s own solicitor isinvolved. That would not change.

ConclusionsRe-mortgage transactions nowmake up around half of all transac-tions which are suitable for ARTL.Free-standing charges would cutcosts in re-mortgage transactions.They could cut out work presentlyconcentrated in a very few firmsthat are not adding value forlenders or for borrowers. The prob-lem of the unrepresented borrowerin remortgage transactions whichcreates a problem for ARTL trans-actions could be removed andScotland could align itself withproposed changes from Europe.This seems to be work which the

Scottish Law Commission mighttake up in its 7th Programme ofWork. It is already working on areview of the Land Registration(Scotland) Act 1979 which will nodoubt prepare the way for ARTL.Free-standing heritable securitiesmight be part of the that exerciseor could also be undertaken as partof a larger review of the provisionsrelating to Standard Securities con-tained mainly the Conveyancingand Feudal Reform (Scotland) Act1970 which are now in need ofrevision.

Footnotes1 2000 SLT 1323.2 2001 GWD 13-823.3 s14(1).4 Halliday J M Conveyancing Law and

Practice 1st ed vol 3 para 40-14; 2nd edvol 2 para 55-04. See also McDonald A JConveyancing Manual 6th ed para 22.51and Cusine D J and Rennie R Standard Securities 2nd ed para 6.04.

5 ibid.6 2000 SLT (Sh Ct) 125, while shedding

no light on the issue of assignation seealso Watson v Bogue [No 2] 1998 SCLR1132.

7 Variable Mortgage Interest Rates 2002SLG 5.

8 see also Cusine and Rennie op. cit. para6.05 particularly footnote 2.

9 see generally Rennie R Solicitors’Negligence para 4.06.

10 ‘You should note that although your certificate of title will be addressed to us,we may at some time transfer our interestin the security. In those circumstances, oursuccessors in title to the security and persons deriving title under or through thesecurity will also rely on your certificate’.CML Scottish Solicitors Handbook 2nded para 10.4.

11 for a discussion of those requirementssee CML Handbook second edition by theauthor 2002 SLG 173.

12 see Cusine and Rennie op. Cit. Para 6.05and McDonald op. Cit. Para 22.49.

13 ‘The Society has some difficulty inunderstanding how a mortgage, whichis a debt over heritable property, couldbe defined as an investment in terms ofthe draft Bill’ http://www. publications.parliament.uk/pa/jt199899/jtselect/jtfinser/328/328ap58.htm para 14.

14 http://www.publications.parliament.uk/pa/jt199899/jtselect/jtfinser/328/32806.htm para 84.

15 ibid para 79 quoting the FSA ConsumerPanel.

16 David Llewellyn The Economic Rationalefor Financial Regulation FSA OccasionalPaper 1 1999 p 21.

17 op. cit. note 4 supra.18 Equitable Life v Hyman [2002] 1 A.C. 408.19 Nash and Staunton v Paragon Finance plc

[2001] 2 All ER 1025.20 Smith v Bank of Scotland 1997 SLT 636

particularly the speech of Lord Clyde.21 SI 1999/2083.22 Ibid Regulation 6.23 of Schedule 3 to the 1970 Act.24 See presentation by Judith Hardt of the

European Mortgage Federation of 24 April 2003 on www.hypo.org

25 Recommendation 6 – Transferability ofthe mortgage collateral: the borrowermoving his loan from one lender toanother (re-mortgaging situation) should be granted the possibility tokeep and transfer his existing mortgagecollateral (instead of being obliged toredeem the existing one and to constitute a new one).Improvement of the transferability (re-mortgaging situation) of the mortgage would also contribute to thestrengthening of the efficiency of themortgage collateral.European Mortgage Federation recommendations to the EuropeanCommission 23/4/03.

26 See Kaur v Singh [No 2] and Albatown vCredential Group notes 1 & 2 supra.

27 Financial Services and Markets Act2000 Regulated Activities Order SI2001/544.

28 para 61(3)(a) of the Regulated ActivitiesOrder. For a more detailed discussionon this point see The Regulation of Mortgage Advice by the author 2002 SLG180.

29 see CML Handbook second edition by theauthor 2002 SLG 173.


Conveyancingby Ken Swinton, Lecturer in Law, University of Abertay Dundee

TenementsThe Tenement (Scotland) Bill wasintroduced to the Scottish Parlia-ment on 30 January and representsthe last of the three major billswhich originated from ScottishLaw Commission Reports. TheTenement Report was the first ofthe three to be published but is thelast of the three to be implementedby legislation, with abolition of thefeudal system and reform of realburdens already being on thestatute book and poised to becomeoperative on 28 November thisyear.

The Bill as introduced is simplerthan the original draft producedby the Commission largely becausethe development managementscheme will be given effect to bythe Title Conditions (Scotland) Act.A revised version of the Bill waspublished by the Commission in2002 that omitted the references toa development managementscheme and left only the tenementmanagement scheme. TheExecutive consulted on this draftin 2003 in March and published areport on the consultation exercisein September along with theresponses to the consultation. Aswell as the Bill, the Executive havepublished the usual explanatorymemorandum on the detailed provisions and a more helpful policy memorandum which setsout the policy options. If you areinterested in accessing all thesedocuments I have set up links tothem for convenience on my personal website at www.swinton98.freeserve.co.uk

The Default CodeThe Bill provides a default code for tenements but this can be contracted out of as required. Therules for the boundaries of indi-vidual units within the block contained in ss1 to 3 of the Billreplicate to a large extent the

existing common law. S2(7) doesappear to represent a change however. Under the existing lawthe roofspace above the roof isowned by the owners of the solumwhether the roof is pitched or flat.This effectively stops the top floorproprietor throwing out dormerwindows from the roofline with at consent of the owners of thesolum. Where negotiations takeplace to have a conveyance granted it is common to trade offthe repairing obligation, at leastover the new dormer, in exchangefor that conveyance. Under s2(7)the roofspace of a pitched roof isowned by the top floor up to theridge line of the original roof. Thusno consent would be required fromthe owners of the solum to con-struct a dormer. Such constructions typically have flat roofs which arewell known as having highermaintenance costs and shorterlives than conventional pitchedroofs. In terms of the TenementManagement Scheme rule 1.2(c)(iv) the roof, without any differen-tiation is made subject to thescheme, but by rule 1.3 any exten-sion which pertains exclusively to one flat is excluded from thedefinition in 1.2(c )(iv) so that current usual practice in such will be reflected as a matter of law. This is a rather neat solution.

The Service TestThe service test for pertinents isretained in the Bill so that any-thing, such as a pipe, which servesmore than one unit will be com-mon property of each unit servedby it. The language used now hasbeen subtly changed from the orig-inal bill so that the responsibilityfor maintenance will be based onequal shares rather than the extentto which it is used. As a result allusing the pertinent will be equallyliable to maintain it. The test basedon the use each made of it pro-duced horribly complex resultswhich are detailed in the SLAS

response consultation process lastyear. You can access this responseon the members website and alsoIt is pleasing to note that this beenacted upon.

Majority ruleEven where the title deeds makeprovision for repairs costs to beallocated according to a commonscheme in older deeds there isoften no provision for majorityvoting. A single owner can thusstymie repairs. Under the Billmajority rule is applied under theTenement Management Schemerule 2.5. This has to be most impor-tant provision in the whole Bill.The Bill however applies only tomaintenance and not to improve-ments in this regard.

Transmitting repairs costsNot everything in the Bill is sowelcome. S11 makes provision forthe purchaser of a flat to be sever-ally responsible for payment ofany costs of maintenance whichare outstanding. There is already asimilar provision in the TitleConditions (S) Act 2003 s10 whichis disapplied to tenements by s11.Difficult policy decisions arise inrelation to such repairs. There isclearly a public interest in securingthe maintenance of tenements forthe long term. As the costs relate tothe flat and the benefit of the workwill accrue to the owner of the flatthen having the responsibilitytransmit seems appropriate.However the purchaser buys theproperty for market value thenfinds he has costs to meet which ineffect means that he overpays forthe property. In David WatsonProperty Management v WoolwichEquitable Building Society 1992 SLT430 the House of Lords decidedthat when a repairing obligationcrystallises into a cost then as thatcost is not stated on the Record itmust be personal and did nottransmit to heritable creditors whosubsequently entered into posses-

Conveyancing 13

sion and would therefore nottransmit to purchasers. At presenttherefore there is a clear distinctionbetween obligations in real bur-dens which transmit and personalobligations which do not. The abil-ity to search the Registers for realburdens should therefore ensureno ‘unpleasant surprises’ for a pur-chaser. The distinction betweenreal and personal obligations is lost under the proposals in s11which is most clearly pointed outby Professor A J McDonald in hisresponse to the ExecutiveConsultation exercise. How is apurchaser to protect himself? Hecan’t search for repairs costsbecause they don’t appear any-where. He can ask the factor, ifthere is one. He can ask the sellerbut he may not get a truthfulanswer. He may not be able totrace him after the sale or he mayhave no funds. The Policy memo-randum deals with this glibly ‘It is envisaged that, in line with currentpractice, solicitors acting on behalf of apurchaser would ensure that the debtswere paid out of the proceeds of thesale’. [para 61]. That is all very wellwhere the costs are known but failsto address the position where theyare not disclosed. One has to ask ifthe policy gain is worth thedestruction of the basic distinctionbetween real and personal obliga-tions and the fundamental conceptof transacting on the faith of theRegisters which has been the cor-nerstone of the Scottish system ofconveyancing since 1617. AsProfessor McDonald points outwhat if a Land Certificate is issuedto the purchaser, there is no men-tion of such transmitting costsbeing an overriding interest in theBill so does the purchaser thenhave a claim for the costs he isobliged to bear on the Keeper’sindemnity. The Bill is silent.

Sinking fund burdensThe Housing Improvement TaskForce favoured the use of suchburdens. The Executive supportsthem as well as can be seen fromthe policy memorandum accompa-

nying the Bill [para 99]. The Billhowever makes no provision forsinking fund burdens.

If normal maintenance burdensdeal with regular maintenancethen that might be equated to revenue expenditure. When capitalexpenditure is required ownerswill normally fund this by a capitalpayment which may result in addi-tional borrowing. On the otherhand with a sinking fund theintention is estimate the lifespan ofcomponents of the building andfund for that capital expenditure.Let us suppose there is a new tene-ment block with a lift. It is knownthat the lifespan of the lift is 30years. With a normal burden oncethe lift has reached the end of thatlifespan the owners will agree toreplace it and the costs will be paidat that time. With a sinking fundthe lifespan of items is estimated,as is the cost of replacement. A cal-culation is then done about howmuch needs to be contributed eachyear which together with accruedinterest will be sufficient to replacethe item. The sums accumulated ina sinking fund can rack up quitequickly and become substantial.The issue here is related to theownership of the fund. If this isowned by the owners then canthey withdraw the money as it is not presently required? Does the money at credit transmit auto-matically when the flat is sold? Are the sums at credit attachableby creditors of the owner?

The Tenement ManagementScheme Rule 3.4. includes similarrules to those already enacted inthe Title Conditions (Scotland) Act2003. Rule 3.2 permits maintenanceworks to be instructed by majorityvote. This means that the majorityof owners can require all owners todeposit funds required for mainte-nance into a designated mainte-nance account. At first sight thismay look as though an appropriateregime is established which will bewide enough to cope with sinkingfund burdens. However the defini-

tion of maintenance in Rule 1.5 is‘repairs and replacement, cleaning,painting and other routine works, gardening, the day-to-day running ofa tenement and the reinstatement of apart (but not most) of the tenementbuilding, but does not include demolition, alteration or improvementunless reasonably incidental to themaintenance.’ If this covers onlyroutine repairs it will not coversubstantial capital expenditure. Itappears that it will exclude sumsdeposited not for repairs but to setaside for future replacements. Inany event Rule 3.2 only operateswhere sums are required where itis determined that maintenance isneeded. There is no such determi-nation with a sinking fund. Rather,it is a provision against a futurecontingency. So the provisionsrelating sums in the maintenanceaccount being held in trust for the depositor will not apply.

In any event that provision doesnot help in relation to attachmentof the funds in a sinking fundaccount at the instance of a credi-tor of an owner or his bankruptcy.If the policy objective is to securethe long term maintenance of tene-ments then depleting the fund byallowing a creditor to attach thefunds defeats the purpose of thesinking fund. The fund ought totransmit with ownership of theunit, and unlike the provisions of Rule 3.4 funds insofar as notrequired for maintenance shouldnot be returnable to the owner ondemand payable within 14 days.This is not to suggest that provi-sion should be made for com-pulsory sinking funds but an environment in which ownership,attachment and transmission ofsinking funds where these are provided for in the title deeds.

Compulsory InsuranceS15 of the Bill provides for com-pulsory insurance by owners forreinstatement value against a listof risks which will be prescribedby the Scottish Ministers. This isnot an absolute duty as s15(4)


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provides an exception where dueto the location of the tenement orotherwise either insurance cannotbe obtained or the cost would beunreasonably high. There has to be an issue here is ‘otherwise’ to be construed ejusdem generis to‘location’ ie property related matters or could matters personalto the owner such as previouscriminal convictions be sufficient?The SLC did discuss the arsonistseeking fire insurance in para 9.6of their report but the policy memorandum from the Executiveis silent on the matter. Not all theproblems here are resolved bymaking insurance compulsory.

It is not possible to deal with allaspects of the Bill in this columnbut it is welcome and ought to provide a more robust frameworkfor tenement management in thefuture.

Wishaw and District HAv Neary13 January 2004 Scottish Courts WebsiteQuite why short assured tenanciesare called ‘short’ has always beenone of the mysteries of theHousing (Scotland) Act 1988 whichprovides a special subset of rulesfor short assured tenancies in ss32-35. There is no minimum period for an assured tenancy butthere is for a short assured tenancywhich must not be less than 6months or exceed five years. Insome situations the tenant does notwant to commit to a period of sixmonths. Examples include the seller of a property who may wantto agree a short term let after thesale of a property, an employeemay have a fixed term engagementof three months in a location, or aSocrates exchange student who hasonly one semester of 15 weeks inthe UK. In any of these casesshould a lease be granted for theperiod sought by a tenant the land-lord risks creating a tenancy wheresecurity of tenure is given to the

tenant. The landlord seeks toensure that no security is createdand may be unwilling to run therisk.

Conveyancers have puzzled foryears how to exclude security oftenure while giving the tenantwhat they wanted – a short term.Given the purposive interpretationof housing statutes by courts therehas been no advice or draftingwhich was thought to be foolproof.The usual technique has been togrant a six month lease and togrant a separate back-letter by thelandlord confirming that no actionwould be taken should the tenantremove prematurely after what isin fact the agreed minimum term.That has always looked artificial.

In the Wishaw case the leaseincluded an option to break whichcould be exercised only by the ten-ant on four weeks notice at anytime during the tenancy. The argu-ment when the case came beforean Extra Division, was that byincorporation of the term the leasewas not in fact a short assured ten-ancy as the tenant could break thelease on four weeks notice. Thecourt held however that a leasewas a lease for the whole term andthe existence of an option to breakdid not change that. Of course, theoption in this case was exercisableonly by the tenant and theDivision reserved its opinion as tothe position should the landlord begiven a similar right.

The result is a sensible one andwill allow a greater flexibility forlandlords faced with this situationin the future. It may seem odd thata social landlord such as a housingassociation would not wish to givesecurity of tenure but shortassured tenancies have been regu-larly used as a means of providinga probationary tenancy which canbe brought to an end should thetenant prove to be unsatisfactorywithout the necessity of having toprove grounds for recovery of possession.

Stamp Duty Land TaxThe introduction of this new tax on1 December 2003 did not prove tobe trouble free as many predicted[See 2003 SLG 165 and 178]. Giventhe Inland Revenue’s insistence onusing their forms with a uniqueidentifier which was required bytheir new computer system it must have come as something of asurprise when the tax certificatescame back handwritten. That hasnot been the only problem. Insome cases certificates have con-tained errors – two disponees onthe deed and the SDLT1 but onlythe first named on the certificate.The experience of certificatesappearing was mixed with a bot-tleneck at Bootle occurring by mid-December which now appears tobe reducing. The electronic versionof the form on the Inland Revenuewebsite was not ready when thetax was introduced but is nowworking provided you have a supply of payslips with the uniqueidentifier. Legal software solutionsproviders now also seem to haveelectronic forms working.

The problems relating to letters ofobligation remains. If the certificateis not received from the InlandRevenue before the seller’s solicitor’s letter of obligationexpires then the purchaser is atrisk should the seller become insolvent in the meantime. Well, at least that is the position in relation to individual sellers at thetime of writing.

Burnett’s Tr v GraingerThe decision of the House of Lords in Burnett’s Tr v Grainger isexpected later this month. This willdetermine whether the principle inSharp v Thomson applies only toreceiverships or whether it alsoapplies to personal insolvency ofthe seller. It seems that this is a straightforward ‘race to the registers’ case. If the finding is infavour of Grainger then a lot ofrethinking will be required as to

Conveyancing 15

what the fundamentals of Scotsproperty law are. Hopefully therewill be an analysis of the decisionin the next issue.

Single surveys pilotareasThe pilot areas for the single survey experiment are due to commence on 2 April 2004.

Unfortunately, at the time of writing there has been insufficientinformation from the SingleSurvey Steering Group to give anyadvice as to what is happening.

Council and Committees’ NewsChristmas Luncheon, 18 DecemberThe Society’s Christmas Luncheon,which was held in the premises ofThe Royal College of Physiciansand Surgeons of Glasgow, was ahappy affair which put everyonein the right mood for the FestiveSeason. The guest speaker was Bill Macreath of the Legal DefenceUnion, who gave a stimulatingaddress about the challenges facing the profession, the impact of regulation and the role of theLDU. In keeping with the occasionit was not, however, all doom andgloom and the audience muchappreciated Bill’s approach to apotentially disturbing topic.

Our other guest was Judge DavidEdward QC, to mark his retire-ment from the Court of Justice ofthe European Communities. TheCouncil of the Society decided to make him an honorary lifemember of the Society and thePresident presented him with aCertificate of Membership and agift.

Bill Macreath.

Presentation to Judge David EdwardQC.

Top Table Guests.

We were delighted to learn afterthe event that he had been award-ed a well-deserved KCMG in theHonours List. His contribution tothe legal scene is immeasurable.His enthusiasm for the Europeandream has never waned from histime as a founder member of theScottish Lawyers’ EuropeanGroup, and over the years he has

passed on that enthusiasm tocountless young Scots who havebeen his students at EdinburghUniversity or who worked for him.Many Scots lawyers have knownthe challenge and excitement ofworking in other parts of Europeas a result of his encouragement.He has also been a great championof Scots law and in his work at theECJ always displayed the flexibili-ty of approach and common sensewhich most of us would like toassociate with Scots law. Whilstemphasising the importance of our legal system, with its civiliantraditions and the ability to act as a bridge between the common law systems and the continentalsystems, he has always cautionedagainst over-emphasising itsuniqueness, less it be viewed as an‘animal in the zoo’ – interesting,but not of practical use. We wish


Judge Sir David Edward a longand happy retirement.

ConveyancingCommitteeThe Committee continues with itslaw reform work. The followingare matters under review:

• Letters of Comfort – it has beenreported to the Committee thatsome Local Authorities are notissuing Letters of Comfort. Thismatter is still under discussion butif anyone has any experience ofdifficulties please contact the convener.

• Seller’s Survey – the committeeis considering the impact on theseller’s solicitor and whether thereare any implications under theProperty Misdescriptions Act.

• Cross-border ElectronicPayments – the Committee notedthe Commission’s proposals andwelcomed them.

• Lawseal – the Committee wasdisappointed to note that the LawSociety had decided not to proceedwith Lawseal, despite the expensealready incurred in the project.

• Stamp duty – the working of thenew regime will be monitored.

• Crofting and the CommunityRight to Buy – the draft regula-tions will be considered at the nextmeeting.

• Breach of Trust andApportionment of Trust Receiptsand Outgoings – the response onapportionments was approvedwhile the paper on Breach of Trustwas being finalised.

All committees of the Society areconsidering an invitation from the Scottish Law Commission tosuggest areas of law which might benefit from reform. So far the conveyancing committee has identified succession and StandardSecurities and the revision of the1970 Act as possibilities. All suggestions will be gratefully

received.

In relation to succession the committee has under discussion:

1 The abolition of the distinctionbetween heritable and moveable estate for the calculation of legal rights.

2 Raising the financial thresholdin relation to the capital valueof the family home in relationto prior rights

3 Providing for subsequent marriage to revoke prior wills

4 Creating rights of intestate succession for co-habiting couples

5 Creating a right to disinheritchildren or remote issue forgood cause

6 Providing that actings of aguardian or attorney for anincapax should not adeem specific legacies, and

7 Removing doubt whether specific legacies of shares inlimited companies should notbe adeemed by take-over ofsuch companies where the consideration is in the form of shares in the acquiring company which are retained by the testator.

Convener: John C Burn, Primrose &Gordon, Dumfries.

Court and Legal AidCommitteeThis Committee is also busy with anumber of Law Reform issues. Work is continuing on the responseto the proposals for a CriminalLaw Code and the ScottishExecutive’s Paper on PersonalBankruptcy Reform.

The Committee is to discuss aConsultation Paper on theProtection of Emergency Workersand a Secondary ConsultationPaper from the Scottish Executiveon the enforcement of Civil

Obligations in Scotland and the Business Organisation ofEnforcement Officers. In connec-tion with the latter views aresought inter alia on the impact ofthe Limited Liability PartnershipAct 2002 on Messengers-at Armsand Sheriff Officers, the monopolyposition occupied by such officersand questions of accountability.

The Committee has also discussedthe impact of the Durant case (see‘What’s New’) in relation to theinterpretation of the DataProtection Act and the view thatemployees might not have as greata right of access to personal dataheld by their employees as previ-ously thought. This is clearly verytopical in the light of recent public-ity given to the interpretation ofthe Act in relation to the Sohammurder. Solicitors should be awareof the scope of the Act in relationto the keeping of their own recordsand in relation to advising clientsas to how to proceed. It will beinteresting to see whether there areany revisions to the Act in the lightof practice or simply some morepragmatic guidance as to bestpractice.

On 3 December, the President, MrPatrick Fordyce and the Secretarygave evidence to the Justice 1Committee on the CriminalProcedure (Amendment) ScotlandBill at Stage 1. This was an interesting experience and thePresident had taken the oppor-tunity to raise a point concerningtrial diets and sittings, which hadbeen duly noted.

Convener: Mr David Rattray, A & J C Allan, Falkirk.

Membership and PublicRelations CommitteeLively seminars have taken placein Ayr, Cupar, Dundee andDumfries on the topic of the newLand Tenure Reforms in relation toBurdens. The Society is mostindebted to the Vice-President,

Council and Committees’ News continued

Council and Committees’ News 17

Kenneth Swinton, for all his hardwork in connection with theseevents, not just in speaking andpassing on his knowledge, but alsofor the preparation of his presenta-tion and the excellent handoutsgiven to participants. Anyoneattending the Seminars will be alltoo well aware of the pitfalls whichcan arise and, armed with theinformation given by him, shouldbe in a better position to givesound advice to clients.

These events were run jointly withthe local Faculties, and if otherswould like us to run similar

seminars on this or other topicsplease get in touch with the convener or Secretary.

The AGM will take place on 10June 2004 in Dudhope Castle inDundee. Lord Fraser of Carmylliehas kindly agreed to be the guestspeaker, so it is hoped there will bea good turn out of members andfriends. Full particulars will follow.

Recruitment of new membersremains a priority, particularly atthe time when the subscriptionnotices have gone out and somehave decided not to renew their

membership. We believe thatmembers receive value for theirmoney, but we want to be able tomaintain our level of service,which means we must continue togrow rather than diminish in size.Notices will soon appear inCommon Rooms of the SheriffCourts and some Libraries toencourage people to join but youcan do your parts too. Please try topersuade at least one of yourfriends to join.

Convener: Mr Craig Bennet,Morgans, Dunfermline.

Criminal Lawby Dr Sarah Christie, The Robert Gordon University

Distinctions in ConcertThe doctrine of art and part lia-bility serves to make each accusedjointly responsible for the eventualactus reus, even though each willonly have contributed in part to itscommission. It is, however, estab-lished that in some cases it isappropriate for the court to distin-guish between the co-accused andenter different verdicts againsteach accused. Thus, in Melvin vHMA (1984 SCCR 113), the twoaccused were charged with rob-bery and murder, but while onewas convicted of murder, the otherwas convicted of culpable homi-cide on the grounds that his par-ticipation was so much less andthat there was no evidence ofantecedent concert. An appealagainst this verdict was rejected,on the grounds that, if an intent tokill could not be established and ifthere was no evidence of prior con-cert between the parties, then thejury could assess the recklessnessof each accused separately. Thus itcould be appropriate to find oneaccused guilty of murder on thebasis of the level of recklessness heexhibited, but find that the other

accused had not demonstratedsuch a level of recklessness. Thesecond accused could then only befound guilty of culpable homicide.However, it was made clear inMalone v HMA (1988 SCCR 498)that such a distinction would onlybe made if there were clear differ-ences between the conduct of each.Indeed, the High Court noted itssurprise that the jury in Malonehad distinguished between the twoaccused as their respective conductin the course of the fatal assaultwas virtually identical, but for evidence that Malone had inflicteda few more kicks than had his co-accused.

In Docherty v HMA (2003 SLT1337), the appellant had been convicted at trial of murder,although his co-accused had onlybeen charged with culpable homi-cide. According to the deceased’swidow, the appellant had struckthe deceased about the head with aknife and, after the deceased hadcollapsed to the ground, his co-accused had also stabbed thedeceased repeatedly along with theappellant. Other witnesses had notbeen able to assert whether the

appellant started the attack, butthere was evidence of a phone callmade by the co-accused duringwhich he had admitted that a mur-der had been carried out and that,when asked who had done it, theappellant was heard laughing inthe background. Medical evidenceshowed that the blows to the headhad not caused any major damage,and that death was attributablerather to the blows to the chestwhich had damaged a lung andruptured major arteries. It couldnot, however, be proved which ofthe assailants had inflicted thesewounds. Docherty appealedagainst his conviction for murderon the grounds that it was clearthat the trial judge had instructedthe jury that, if they were to relyon the doctrine of concert to con-vict both accused, it was stillappropriate for them to considerwhether to convict each accused ofmurder or culpable homicide.Counsel for the appellant acceptedthat it is possible for a jury to reachdifferent verdicts in some cases, asshown in Melvin and the morerecent case of McKinnon v HMA(2003 SLT 281). In Melvin, as notedabove, the two accused were tried


Criminal Law continued

together for murder and were con-victed respectively for murder andculpable homicide. Melvinappealed against his conviction,arguing that it would not be possi-ble to convict him of murder hav-ing convicted his co-accused ofculpable homicide. His appeal wasrefused on the grounds that therewas a very clear distinction to bemade between to two accused;Melvin had carried out a seriousassault whereas his co-accused hadjoined in the assault in its latterstages, and had only inflicted afew injuries. His actions were notsufficient to justify convicting himof murder as they did not exhibitthe appropriate level of reckless-ness necessary for such a convic-tion. However, it was contendedthat Docherty was not such a case,and further, that the trial judge hadfailed to alert the jury to the factthat, if they were to distinguishbetween the two accused, therehad to be striking differences intheir conduct. Since there were nosuch differences, the distinctionbetween the verdicts returnedagainst each accused was not war-ranted, and the jury should havebeen directed to return the sameverdict against each co-accused.Docherty’s conviction for murdershould therefore be overturnedand one of culpable homicide sub-stituted in order to marry with theverdict against his co-accused.

The appeal court agreed thatMelvin and Malone both estab-lished that it was appropriate todistinguish between co-accused insome circumstances. However, theissue before them was whether, inthe circumstances of this case, thejury would have been entitled tocome to the conclusion that therewere clear differences between thebehaviour exhibited by Dochertyand by his co-accused, and thatthese differences were strikingenough to justify drawing a dis-tinction between them. It was clearfrom the evidence presented attrial that the jury could have cometo a decision that Docherty had

taken the lead in the attack (therewas evidence from at least onesource which identified Dochertyas the first to assault the deceased).It was further accepted thatDocherty’s state of mind at thetime of the offence could begauged from the fact that he washeard laughing in response toquestions put to the co-accusedabout the events in question. Thetrial judge had viewed this as evi-dence capable of showing that, atthe time of the attack, Dochertyhad acted with callous disregardfor the life of the deceased. Thisallowed the jury to conclude thatonly Docherty had the mens rea forthe crime of murder, and to distin-guish between the two accused onthat basis. As a result, his appealwas refused.

The importance of the decision inDocherty lies in the way in which itinterprets the caveat expressed byLord Avonside in Melvin at p 367.‘I am anxious to stress that, in myopinion, the facts of this case(Melvin) were very special. Thedecision in this appeal must not bethought to encourage or license infuture cases inquiry into minute orunimportant differences betweenthe actings of those who arecharged jointly with acts of vio-lence. It is only relevant, at themost, to situations in which theremight be demonstrated strikingdifferences of relevant conduct.’ Itwas clear that the distinctionbetween Melvin’s acts and those ofhis co-accused were fundamentallydifferent. Melvin had been the ini-tial, and to a very considerableextent, the main assailant. So faras Docherty was concerned, thecourt felt that there was a distinc-tion to be drawn, based on evi-dence of his callous attitudetowards the deceased, and evi-dence that Docherty had taken thelead in the attack. However, if thefacts of Docherty are comparedwith those of Melvin, it mightappear that the difference in act-ings between Docherty and his co-accused are less than striking.

Although Docherty had appearedto take the lead in the attack, hisco-accused was present at thescene of the attack throughout, andafter Docherty’s initial attack, hisco-accused had immediately joinedin with the subsequent repeatedstabbing. Although the evidencepointed to Docherty’s behaviourafter the event (specifically to thefact that he had laughed about theincident) and used this as evidenceof his callous disregard for the lifeof his victim, it is also clear that hisco-accused had joined in with therepeated stabbing of a victim whohad already collapsed, and had lefthim on the ground in a seriouscondition. This surely points to atleast an uncaring attitude towardsthe victim. Although it could stillbe argued that the co-accused’sacts do not show the level of disre-gard necessary to convict of mur-der, they show a state of mindwhich comes relatively close. Thiscan be contrasted with the positionin Melvin where the main assailanthad carried out a large proportionof the attack on his own, and wasjoined by his co-accused only inthe latter stages. His co-accusedhad carried out a very limitedattack on the victim and so thelevel of participation and reckless-ness exhibited by the two accusedwas very different. The need forstriking differences between theconduct of the accused was rein-forced in Malone. Although theyrefused the appeal and upheld thejury’s original and differing ver-dicts, the appeal court noted thatthey found it hard to understandwhy the jury had distinguishedbetween the two accused, giventhat the evidence showed that theirconduct was virtually identical.There seems to be a much greaterdegree of differentiation betweenthe actings of each accused inMelvin than was present inDocherty and, given the force ofLord Avonside’s comments, partic-ularly the emphasis on ‘strikingdifferences’, it could be argued thatthe rationale from Melvin shouldnot have been applied.

Evidence 19

Evidenceby Derek Auchie

Hearsay Evidence andHuman Rights Campbell and Hill v HMA, 2002 GWD 39-1057, High Courtof Justiciary, 13 November 2003(full opinion available on ScottishCourts website at www.scotcourts.gov.uk).

There have been a number of criminal cases reported in the pastfew years, (most of them in 2003),dealing with the question ofwhether the use of hearsay evidence is compatible with therights enshrined in Article 6 of theECHR (see HMA v Bain 2001 SCCR461 [first instance-appeal hearingfixed for end of January 2004];Nulty v HMA 2003 SCCR 378;McKenna v HMA (No 2) 2003 SCCR399, 2003 SLT 769; Daly v HMA2003 SCCR 393, 2003 SLT 773 andHMA v M 2003 SLT 1151). In theCampbell case, however, for thefirst time the main question for thecourt involved compatibilitybetween hearsay evidence andArticle 6 where the hearsay wasrelied upon by the Crown as thesole corroborative source. Thecourt in this case also takes theopportunity to affirm some of thepoints in this area covered by theearlier decisions.

The factsThe Campbell case comprised twoappeals heard together. Theaccused Campbell, facing anassault to severe injury charge,pled a special defence of incrimi-nation. The incriminee had disap-peared by the date of the trial, buthad earlier given a tape recordedinterview to the police. The com-plainer had given a clear accountfrom the witness box blaming theaccused. To corroborate this, theCrown sought to rely upon theinterview with the absent incrimi-nee in terms of s 259 of theCriminal Procedure (Scotland) Act

1995, as she was missing. This wasobjected to, but the evidence wasadmitted by the trial judge, wholater directed the jury on the sig-nificance of the nature of hearsayevidence. The jury convicted andthe accused appealed.

The accused Hill was convicted ina separate case of two theftcharges. The Crown sought, in thiscase, to rely partly upon a state-ment by the appellant’s girlfriendin a tape recorded interview withpolice. She had since gone missing,so the statement was one adducedin terms of s 259(2)(c) of the 1995Act. However, unlike the case forthe appellant Campbell, the Crownin Hill’s case relied upon evidencefrom more than one other source,namely, in one charge, on an identification on CCTV of theappellant Hill leaving a pawnshophaving pawned certain of theitems stolen; on the other chargeupon eye-witness evidence indicating that the accused hadbeen seen shortly after one of thethefts driving the stolen vehicle;and for both charges upon sub-stantial property found three daysafter the thefts in a cellar and caravan owned by the accused andhis girlfriend. Despite the existenceof this other evidence, the decisionby the trial judge to admit theinterview evidence, albeit againunder directions to the jury, waschallenged on appeal.

The appeal was heard by LordJustice General Cullen, LordHamilton and Lady Cosgrove and the unanimous opinion wasdelivered by Lord Hamilton.

The grounds of appealThe grounds argued in both caseswere identical. It should be notedthat, for the purposes of theappeals, the court proceeded onthe basis that the requirements of s 259 were satisfied. There is an

indication in the opinion that atleast in the case of Hill this question remained a ground ofappeal, to be argued separately.

Ground 1: Applicability of Article 6(3)(d)

That part of Article 6 provides:

‘Everyone charged with a criminaloffence has the following minimum rights: …

… (d) to examine or have exam-ined witnesses against him …’

It was argued that this was aConvention right, and in terms of s 57(2) of the Scotland Act 1998,the Lord Advocate, as a member of the Scottish Executive, cannotact incompatibly with it. It wasaccepted by counsel for the appel-lants that it was not an absoluteright, like the general right to a fair trial under Article 6(1).However, it was a Conventionright, and could not be breached,given the wording of the ScotlandAct 1998. The argument continuedthat the Crown, in seeking to relyon hearsay evidence, was denyingthe accused his Convention rightto examine the evidence of the witness adduced against him. Suchan act by the Crown was ultravires, quite apart from the questionof whether the fairness of the trialwas affected. This argumentinvolved, therefore, the dissectionof Article 6, requiring the court totreat Article 6(1) as a separate anddistinct right from those in Articles6(2) and 6(3).

Ground 2: Applicability of Article 6(1)

This argument involved the pro-position that in a case wherethe Crown relied upon hearsayevidence as the single corrobora-tive source to the principal evidence against the accused, thisresulted in a breach of the


Criminal Law continued

accused’s right to a fair trial. Thekey to this argument was the oper-ation of the corroboration rule. Invarious recent European Court ofHuman Rights cases, examined bythe court in Campbell, it had beenheld that where convictions werebased ‘solely or decisively’ uponevidence from witnesses who wereunable to be examined by theaccused, the resultant convictionwas a breach of Article 6. Theappellants in Campbell argued thatwhere the hearsay evidence wasthe only source of corroborationrelied upon, it had to be ‘decisive’since the Crown could not dowithout it.

Ground 3: Adequacy of directions tothe jury

The appellants argued that even ifthe evidence relied upon by theCrown did not result in an auto-matic breach of the Article 6 rightsof the accused, the directions bythe trial judges in both cases on theweight to be attached to hearsayevidence were inadequate, leadingto an unfair trial. The appellantsrelied on the guidance given byLord Justice-Clerk Gill in Nulty(paragraph 37 of that opinion). Itwas argued that in both presentcases the directions fell short ofwhat was deemed necessary inthat case.

The decision of thecourtGround 1: Applicability of Article6(3)(d)

The High Court dealt with thisshortly. It had already been con-cluded in the Privy Council thatthe rights specifically provided forin Article 6(2) and (3) were not(unlike the general right in Article6(1)) absolute (Stott v Brown 2001SCCR 62, per Lord Bingham p 80E). The court concluded thatthe right enshrined in 6(3)(d) wasonly one aspect of the general rightto a fair trial and had to be lookedat in the context of general fair-

ness. In enacting the Scotland Act1998, Parliament, it was held, hadnot sought to detract from thisidea, which was already wellestablished in European jurispru-dence before 1998. In fact, it waspointed out that the statutory definition of ‘Convention rights’ in s 126(1) of the Scotland Act, by referring to the Human RightsAct 1998 definition, impliedlyimported the provision in s 2 ofthat Act (dealing with interpreta-tion of Convention rights with ref-erence to European jurisprudence)into the Scotland Act. This groundof appeal was firmly rejected.

Ground 2: Applicability of Article 6(1)

The court spent considerably moretime on this ground. Given thatthis argument, in the circum-stances of the case had not beenauthoritatively decided upon inScotland prior to Campbell, therewas much reference to EuropeanCourt of Human Rights case law.Although counsel for the appel-lants referred the court to numer-ous decisions, the High Courtfocussed in on three: Luca v Italy(2003) 36 EHRR 46; PS v Germany(2003) 36 EHRR 61 and Birutis andothers v Lithuania (28 March 2002,unreported). In doing so, theyadopted the ‘solely or decisively’benchmark discussed above.However, the court also adopted apurposive, as opposed to a literalapproach in applying that bench-mark to the argument adopted inCampbell. In none of the Europeancases had the Court looked at thequestion from a sufficiency per-spective. This was because, as thecourt in Campbell accepted, in noneof the other jurisdictions is there arule requiring corroboration tosecure a conviction. The courtwent on to say that the ‘solely ordecisive’ formula involved, essen-tially, a question of weight, not sufficiency. It could not be said,therefore, that in every case wherethe sole corroborative source consisted of hearsay evidence there

was automatically a breach ofArticle 6. This must be correct, notonly because the European author-ities are concerned only withweight, but also since to decideotherwise would involve, in effect,penalising a system (the onlyEuropean system) where there is inplace the protection of a largelyinflexible corroboration rule.

However, where hearsay evidenceis proffered in support of a convic-tion, there might be a breach ofArticle 6 (albeit not automatically)and the court in Campbell referredto the options of the trial judge, asset out by the court in Nulty (atparagraph 36 of that opinion),when facing such an argumentwhich succeeds. The court inCampbell went on to hold that inthe case of both appeals, applyingthe ‘solely or decisively’ test as aquestion of weight, the Crown’sreliance on hearsay evidence didnot breach the Article 6 rights ofeither accused. In the case ofaccused Campbell, the complainerhad given clear evidence implicat-ing him. In Hill’s case, there wasample evidence from a number ofother sources other than thehearsay evidence which, from asufficiency point of view, was notstrictly required to secure the convictions anyway.

Ground 3: Adequacy of directions tothe jury

Here, the appellant Campbell metwith more success. When directingthe jury, the trial judge had indi-cated a ‘word of caution’ whenaddressing the question of how toapproach the hearsay evidence ofthe incriminee. The appeal courtheld that the directions given inthis area fell ‘far short’ of the kindof directions that should have beentendered in terms of the guidancein Nulty. On this basis only, theappeal was allowed. By contrast,the directions by the trial judge inHill’s case were adequate, and onthis ground also that appeal wasrefused.

Evidence 21

It should be noted that the appealcourt in Campbell made it clear that the guidance given by LordJustice-Clerk Gill in Nulty need notbe followed to the letter: as long asthe substance of the direction is asindicated in Nulty, any appeal onthe basis of a misdirection wouldbe unsuccessful.

ConclusionThe year 2003 has seen a numberof appeals concerned with the useof secondary hearsay evidence andits fairness under Article 6. Itmight be convenient to summarisethe present position, taking intoaccount these authorities. The fol-lowing points can now be made:

1 Where hearsay is being tenderedwith the support of s 259 of the1995 Act, as long as the require-ments of s 259 are met, the evidence cannot be declaredinadmissible: it must be admitted (Nulty, Daly).

2 However, this does not mean

that the evidence must go to thejury or beyond the Crown casein a summary trial: the trialjudge must, throughout the trial,consider whether the impact ofthe evidence is infringing theaccused’s right to a fair trialunder Article 6, and if he sofinds, he may uphold a submis-sion of no case to answer on thatbasis or desert the trial. (Nultysupported by Campbell). Thismight even mean taking a decision on this point inadvance of the trial, althoughthis would be exceptional(Nulty; HMA v M)

3 If the evidence does go to thejury, the judge can, if he thinksthe accused’s Article 6 rights arebeing infringed, direct them todisregard the hearsay evidenceor direct them to acquit. (Nulty,supported in Campbell).

4 If he does not do this, and thecase is to go to the jury, theymust be directed in accordancewith the substance (although notnecessarily the letter) of the

guidelines set out by LordJustice-Clerk Gill in the Nultycase, otherwise the accused willnot have had a fair trial (Nulty;Campbell).

5 Hearsay evidence can be reliedupon by the Crown as the solesource of corroborative evidenceagainst the accused, and thiswill not automatically breachArticle 6. (Campbell) However, ifthe hearsay evidence producedis of such weight that it ‘solelyor decisively’ contributes to aconviction, the right of theaccused to a fair trial underArticle 6 will have beenbreached, irrespective of theterms of the judge’s directions(McKenna; HMA v M; Campbell).

Given all of the attention paid thisyear to the subject, one would beinclined to suppose (and evenhope) that we have now seen most,if not all, of the fundamentalhuman rights challenges in thisarea.

Family Lawby Professor Joe Thomson, Scottish Law Commissioner

Unplanned Conceptionsfrom Failed SterilisationsMacFarlane v Tayside Health Board2000 SC(HL)1 was one of the lastScottish appeals to the House ofLords in the twentieth century. Itwas also one of the most contro-versial. There, the House held thatparents could not recover the eco-nomic costs of bringing up ahealthy child who had been theresult of an unplanned conceptioncaused by a failed sterilisationwhich, in turn, was a consequenceof a doctor’s negligence. The diffi-culty, of course, is that as theunplanned conception is thewrong suffered by the parents,under the ordinary delict remote-

ness rules, they are entitled torecover compensation for all physi-cal and economic damage which isa reasonably foreseeable conse-quence of that wrong. This wouldinclude the mother’s pain and suffering, her loss of wages duringpregnancy and the cost of aliment-ing the child. The cost of thechild’s upbringing is not pure economic loss but, like the moth-er’s loss of earnings, is parasiticupon the wrong viz. the unplannedconception. Put another way, as amatter of corrective justice, damages for the cost of the child’saliment should have been recover-able. However, their Lordshipsconsidered that as a matter of distributive justice it was not fair,

just or reasonable that there shouldbe liability for the cost of maintain-ing the child. In so doing, legalprinciple was abandoned in favourof ‘legal’ policy: the right of a citizen to obtain reparation for awrong undermined in favour of autilitarian desire to preserve thelimited resources of the NationalHealth Service.

In MacFarlane their Lordshipsstressed that they were only con-cerned with whether parents couldrecover the cost of alimenting ahealthy child. This enabled anExtra Division of the Court ofSession in McLelland v GreaterGlasgow Health Board 2001 SLT 446to award parents damages for


Family Law continued

the extra cost of maintaining amentally handicapped child(whose mental handicap the hospital had negligently failed todiagnose when he was in utero).This approach was followed by theCourt of Appeal in Parkinson v StJames and Seacroft UniversityHospital NHS Trust [2002] QB 266.Accordingly, while damages forthe cost of rearing a healthy childare not recoverable, where thechild is mentally or physicallyhandicapped the extra – but notthe basic – costs of looking afterthe child can be recovered. Sinceone of the strands of the reasoningfor denying reparation inMacFarlane was the impossibilityof balancing the joys of parenting a child against the cost of main-taining him, how can this be donewith apparent ease when the childis physically or mentally handi-capped? Moreover, the cases pro-ceed on the basis that the cost ofbringing up a handicapped childwill be more expensive than bringing up a ‘normal’ child. But is it too cynical to suggest thatdefenders are unlikely to fail toquestion liability when the handi-capped child has a life expectancywhich is less than that of a healthychild?

In Rees v Darlington MemorialHospital [2003] 4 All ER 987 thebaby conceived as a consequenceof a failed sterilisation was perfect-ly healthy but the mother wasseverely visually disabled. Themother sued for the extra costs toher as a disabled person in rearinga healthy child. She succeeded inthe Court of Appeal but that deci-sion was reversed in the House ofLords by a majority of four tothree. All their Lordships endorsedthe ‘principle’ in MacFarlane thatparents could not recover as damages the cost of rearing ahealthy and normal child born as a result of medical negligence. But,three of their Lordships consideredthat there could be exceptions tothis principle and were prepared toaccept that Ms Rees’ disablement

justified her recovering for theincreased costs she would have toexpend in bringing up her healthychild.

The reasoning is not particularlyconvincing. Consider for examplethis passage from the speech ofLord Hutton:

‘I consider that the decision inMacFarlane’s case was grounded onthe principle that it is not just, fairor reasonable to award damages tohealthy parents for the costs ofbringing up a healthy baby; theHouse did not consider the posi-tion where the mother was dis-abled. In my opinion where themother is disabled it is not unjust,unfair or unreasonable to awarddamages for the extra costs ofbringing up the child’; ibid at 1018.

He also thought that prima faciethe parents in MacFarlane shouldhave recovered under the ordinaryprinciples of the law of negligenceand the House of Lords’ policydecision to refuse reparation whereboth child and parents werehealthy was thus an exception tothose rules. Consequently, byallowing Ms Rees to recover, hewas merely recognising that theMacFarlane exception did not applywhere the parent or child was dis-abled. (Perhaps Lord Hutton hadother matters in mind when hewas writing this opinion!)

Lord Steyn and Lord Hope werealso prepared to allow Ms Rees theextra costs of bringing up the baby:doing so did not undermine thepolicy factors which led to thedecision in MacFarlane because ‘itis the inescapable fact that the seri-ously disabled parent cannot, how-ever hard she tries, do all thethings that a normal healthy par-ent can do when carrying out theordinary tasks involved in a child’supbringing that place this parent’scase into [a] distinct category’; ibidper Lord Hope at 1008.

The majority, however, refused to

make an exception fromMacFarlane for the severely dis-abled parent. There are three mainreasons why they refused to do so.First, the incalculability in mone-tary terms of the birth of a healthychild applies equally to severelydisabled as well as healthy parents:in other words, the extra costsincurred by a disabled parentwould still be outweighed by theincalculable blessings she wouldreceive from having given birth toa healthy child. Second, the needto protect the limited resources ofthe NHS from the cost of maintain-ing a healthy child remainedwhether or not the parent washandicapped. Put another way,even where the mother was severe-ly disabled, it would still constitutea disproportionate response to adoctor’s negligence if a NHS hos-pital trust were held liable for theeconomic costs of rearing a healthychild. Finally, why should severelydisabled parents be treated asexceptional cases when a healthyparent could incur serious finan-cial or health problems unless sheincurred ‘extra’ expenses, forexample, child care to enable herto take up or continue employmentor relieve her from the additionalburden of looking after a new babywhich might undermine herhealth? Indeed, a handicappedmother might simply be very richwhile a healthy mother could bevery poor. (The last reason carriesless force since the House of Lordshas subsequently held that in adelict claim the pursuer’s want ofmeans can be taken into account inassessing his loss; Lagden vO’Connor 4 December 2003).

Having dismissed her claim for thecost of rearing her child, the major-ity then added insult to injury byawarding her a non-compensatory‘conventional’ award of £15k. Suchan award is to be paid in additionto solatium to all mothers of chil-dren who are the result of failedsterilisations – not only those whoare severely handicapped. While itis not entirely clear, it is thought

Family Law 23

that a similar award should bemade to the child’s father (in hisopinion Lord Bingham refers to‘parent’; ibid at 993). This sum is tobe paid regardless of the meansand circumstances of the parents.Why? According to their Lord-ships, it is to mark the fact that afailed sterilisation leading to anunplanned conception and birth ofa child constitutes a wrong ie an

invasion of the parents’ freedom tolive their lives in the way they hadplanned. Such an award bristleswith difficulties. If we take theview that it is the wrongful con-ception that is the actionablewrong and that the award is noncompensatory, it should be avail-able even if the child is not bornalive, for example, if the mothersuffers a miscarriage or the preg-

nancy is terminated. Indeed, it wasbecause the Inner House of theCourt of Session in MacFarlanerecognised that an unplanned conception was a wrong sufferedby the parents that the court heldthat they were entitled to repara-tion for all the foreseeable lossesarising from the conception which,of course, included the cost of alimenting the child!

Financial Servicesby Ken Swinton, Lecturer in Law, University of Abertay Dundee

Money LaunderingRegulations 2003

The scope of the regulationsThe new Money LaunderingRegulations [SI2003/3075] largelycome into force on 1 March 2004and repeal the 1993 and 2001Regulations. Scottish solicitors willhardly notice the difference how-ever. The writer recalls the LawSociety seminars given when theprevious regulations came intoforce on 1 April 1994. At that timethe Law Society gave out advicewhich appeared to differ depend-ing on which officer of the Societywas giving it out. That persisteduntil the passage of the 1995Scottish Solicitors Accounts Rules.The 1993 Money LaunderingRegulations applied to financialtransactions and mortgages butnot, for example, to the sale andpurchase of heritage. The LawSociety took a very far sightedapproach to regulation and appliedthe provisions of the MoneyLaundering Regulations to requiresolicitors to identify all new clientsirrespective of whether the MoneyLaundering Regulations applied tothem. Those procedures are nowcontained in the Accounts Rules2001 rule 24. This makes reference

to the Money LaunderingRegulations which are thendefined in the interpretation sec-tion, rule 2, to the 1993 Regulationsincluding the SI number but notany statutory re-enactment thereof.If these Regulations are repealedwith effect from 1 March it wouldappear that the Accounts Rulesmay no longer effective requireidentification in all cases and thatonly in those situations which arerequired by the 2003 Regulationsneed clients be identified in thefuture. The categories of ‘relevantbusiness’ (note the removal offinancial from the title) are exten-sive and are set out at considerablelength in Regulation 2. As well ascarrying forward all relevant financial business from the previ-ous Regulations there are now specific categories in 2(2)(f) ofestate agency business, tax advice(i), accountancy and audit services(j)+(k), legal services in relation toproperty or financial transactions(l) the formation or management oftrusts or companies are ones thatare of obvious application the legalprofession.

The Regulations were of courseone part of the armour againstmoney laundering activity and theother were the associated criminaloffences. Those offences have nowbeen consolidated and far more

clearly set out in the Proceeds ofCrime Act 2002. In 2001 the UKgovernment amended the MoneyLaundering Regulations to includebureaux de change and casinos tobring the UK into line with thenew European Directive on MoneyLaundering. 2001/97/EC whichamends the original Directive91/308/EEC.

IdentificationThe approach is similar to the ear-lier Regulations. Regulation 4 dealswith the requirement to establishand operate identification proce-dures. This retains the familiarapproach of defining these proce-dures as applying to transactionsof €15,000 or where a continuingbusiness relationship is estab-lished. To this is added a new cate-gory of knowing or suspecting thatthe transaction involves moneylaundering irrespective of size. Thedefinition of Money Laundering iscross referred to the Proceeds ofCrime Act 2002. This was discus-sed in 2003 SLG p 45 in relation tothat Act and includes any criminalactivity such as tax evasion andnot just terrorist or drug relatedactivity. Identification must be carried out ‘as soon as reasonablypracticable after first contact’. Onceagain the Regulations are silent onwhat is satisfactory evidence of


Financial Services continued

identity and guidance can continueto be found in the advice issued bythe Joint Money LaunderingSteering Group.

Record keepingThere remains the need to main-tain records in relation to identifi-cation (Regulation 6). One has onlyto look at the fines handed out bythe FSA to major financial institu-tions in recent years to appreciatethe importance of retaining ade-quate records. The best sort of evi-dence is to copy what is submittedbut equally information as towhere a copy may be obtained.Information enabling evidence ofidentity to be re-obtained can beused as a substitute only where itis not reasonably practicable.Records are to be retained general-ly for five years. There are excep-tions so that where the client isintroduced by a third party andthere is a written assurance fromthe third party that they will havecarried out identity checks thenthere is no need to comply withthe procedures (Rule 5(3)). Thiswould be a very useful exceptionfor bulk conveyancers who carryout remortgage transactions forlenders. There does seem to be aproblem with this exception in theMoney Laundering Regulations inthat there is no correspondingexemption in the Accounts Rulewhich require the solicitor to com-ply with them. This presumablyprecludes reliance on a third partycarrying out those checks and certifying this.

ReportingThe need to have a MoneyLaundering Reporting Office (‘thenominated officer’ in terms ofRegulation 7) remains. This ofcourse is very closely tied to themoney laundering offences in theProceeds of Crime Act 2002.Anyone in an organisation mustinform the MLRO if they knowsuspect or have reasonablegrounds to suspect that a person

is engaged in money laundering.The MLRO must evaluate thatinformation and if necessary makea disclosure to NCIS. There is anexemption for professional legalprivilege. This covers a personseeking legal advice or the givingof legal advice on in connectionwith proceedings of contemplatedproceedings. It does not apply toany information given or commu-nicated with the intention of fur-ther a criminal purpose. The prob-lems associated with the Proceedsof Crime Act definitions of crimi-nal purpose are now well known.When a duty to disclose arises wasconsidered in P v P 9 October 2003which is referred to at 2003 SLG180where the agents acting for a wifein a divorce action were held to beunder a duty to disclose where thehusband assets over which thewife sought an order may havebeen in part derived from incomewhich had not been disclosed fortax purposes.

ComplianceRegulation 3 requires every personto whom the regulations apply tocomply with the identification,record keeping and internal report-ing procedures. Contravention isan offence punishable with a maxi-mum of two years imprisonmentand an unlimited fine on indict-ment or the statutory maximum finon summary conviction. In consid-ering whether the offence has been

committed the court shall take intoaccount any guidance issued bythe relevant professional body. TheLaw Society has, as yet not issuedany such advice.

ConclusionsThe 1993 Regulations were restricted in their ambit to financialtransactions; while the 2001amendments brought on bureauxde change and casinos. The 2003Regulations operate over a widerarea of commercial activity andwill bring many within the scopeof the Regulations for the firsttime. For Scottish solicitors therewill be no significant changes asthe Accounts Rules apply to allclients and all matters. The LawSociety will now have to revisit theAccounts Rules and may wish tooffer advice of their own regardingmoney laundering. A problem with the 1993 Regulations was thatprofessional and regulatory bodieshad no positive inspection andcompliance role but now underregulation 26 supervisory bodieshave a greater role. The LawSociety is such as body because itis designated under Part XX of theFinancial Services and Markets Act2000 must disclose information or suspicions regarding moneylaundering activities to the police.The Society will, no doubt, continue to pay close attention tocompliance with the Regulations in Accounts Rules inspections.

Profit in Practiceby Brian Allingham

Fees and FeeingIf there is one thing which annoysme about most law firms (and,despite my unflappable nature,usually there is more than one

thing) then it is their approach tofee-charging. Our services arevaluable and we deserve to beproperly paid for the work we do.Yet, we regularly charge less thanwe are worth and (worse) less than

Profit in Practice 25

we are entitled to charge.

You should have received recentlyfrom the Law Society, along withyour Christmas card (don’t tell meyou don’t get a Christmas card!), acopy of the latest edition of theTable of Fees and I warmly recom-mend it to you as important read-ing material. Don’t assume that (a)you know what it contains or (b)someone else in the firm will readit. You will probably be wrong onboth accounts.

Get to know properly the chapterswhich affect you most. Be fullyaware of how fees can be chargedand make sure that everyone elsehas that information too. In partic-ular, be aware that a good startingpoint for your calculation of feescan be the value of the propertyinvolved, not just the time spent.

Serving TimeIf we charge our clients accordingto the time spent, we leave our-selves open to all sorts of accusa-tions, such as ‘Why did it takeyou so long to draft that deed?’ or‘How do I know that your timerecords are accurate?’or even ‘Didyou deliberately take longer overthat meeting/trial/whatever justto increase your fee?’ This is a poorbasis for a long-term relationshipbuilt on mutual respect, which iswhat we should be aiming for withour best clients.

To many of our clients it looks as ifwe are selling them our time,when what they really want is ourexpertise, our intelligence and ourknow-how. Of course, expertise ispretty hard to evaluate. If you arethe sole expert in your locality onlicensing law, agricultural tenan-cies or medical negligence, youshould be charging a hefty premi-um for your services. Your knowl-edge is valuable to your clientsand, provided you can show themthe worth of your services, you cancharge them a good fee based onsomething more than time (even at

a premium hourly rate).

Terms of EngagementHowever, you cannot simply com-plete the work and then tell themwhat the fee is, especially if thefee is greater than the Auditor islikely to allow on taxation. As weadapt to this new era of sendingout Terms of Engagement letters inmore and more cases, it is impor-tant to use these letters to spell outeither what your fee will be or, atleast, how it will be calculated.And not just in conveyancingcases.

Ideally, you will have a differentletter for each different service youprovide. Because, ideally, you willbe calculating your fee in a differ-ent way for each service. One lettercovering all services simply willnot do. Either the letter will beincomprehensible or it will be several pages long, unless you can use a separate letter for eachservice. It’s not that difficult; andwe all have word-processors now,don’t we?

Minimum FeesTo begin with, let’s make sure thatwe have a minimum fee for eachservice. Most of us already havethis for conveyancing, but itshould be checked regularly tomake sure that it is not too low.You don’t want to appear cheap,you don’t want to lose money onsmall-value transactions and youdon’t want to attract clients whoare coming to you just because youare low-priced, now do you? Somake sure that your minimumconveyancing fee is not less than£500. If you lose some bottom-of-the-market business, that is no bigloss. And you will be making moremoney on each of the cases you dohandle, so what’s the problemhere?

In executry cases, your minimumfee could be £500 or even higher.That should deal with the awk-

ward character who is going toargue your fee whatever youcharge and whose auntie had onlya Building Society account andsome National Savings Certificates.Either he goes elsewhere to annoyanother solicitor, or you are at leastguaranteed some sort of return forhaving to put up with his continu-al calls demanding faster progress.(I think you know the guy I amreferring to – that weasel-facedcharacter with bad breath and thehabit of popping in to the officejust as you are trying to get out).

In court cases, a decent minimumfee is absolutely essential, not justfor Mr Weasel-Face, but for every-one, coupled with a clause requir-ing payment of the minimum fee,plus something for outlays, beforeyou do anything at all. Your termsof engagement should also make itclear that interim fees will beissued as the matter progressesand that these will have to bepromptly paid (unless some otheragreement is reached) if you are tocontinue to act.

Scale FeesNext, make sure you have a proper scale of fees to quoteclients. This is standard in mostconveyancing firms, although thescale is not applied as strictly as itshould be. Forbid deviation fromthe scale except in specific cases(close relatives, regular clients etc)and make sure that everyoneknows the scale and the permitteddeviations. Far too often, agreedfees are modified for no very goodreason, leaving the client toassume that the fee originallyquoted was a rip-off.

Review the scale regularly andmake sure it is pitched at the typeof business you most want toattract. It may make sense toreduce fees at the top end of themarket, but rarely at the bottomend.

It is possible to have quotable fees


Profit in Practice continued

1 – Make sure everyone is record-ing properly everything they do infiles where this matters. A lot ofwork is not charged because it isnot recorded on the file.

2 – Forbid fee modifications exceptin pre-agreed cases for good rea-sons.

3 – Use Minimum and Scale Feeswherever possible and make surethey are reflecting what you needto charge to make a profit.

4 – Use your Terms of EngagementLetters to spell out what is in-cluded and what is not covered

by the fee quoted. These lettersshould also explain how additionalfees will be calculated for extrawork.

5 – Review all your fees annuallyto make sure that each service iscontributing to your profitability.There is no rule which requires usto offer unprofitable services to ourclients.

Brian Allingham founded Allingham & Coin 1982. He also has an MBA in LegalPractice and a Certificate in E-Business andis now a Management Consultant to smalland medium-sized law firms and a regularwriter and lecturer on management matters. He can be contacted by email [email protected]

for executries and court work too,provided you are prepared to statewhat is included in the fee and,more importantly, what is notincluded. However, it is rare tofind anyone who even wants toconsider this proposal and thearguments would require morespace than I have here. But, soonerrather than later, fixed fees for allkinds of work will be the normand there could be big advantagesin being first to the starting line inyour locality.

Meanwhile, here are some simplerules to follow.

Selected Scottish Casesby Kenneth H Forrest, Advocate

The value of a car

Hunter v Thomson andPerfect Edinburgh Sheriff Court31 December 2003

IntroductionThe pursuer’s car was repairedafter an accident for which thedefenders admitted liability.Although the cost of repairs wasagreed the defenders challengedthe relevancy of the pursuer’saverments claiming damages forthe extent to which the value of thecar had been reduced because ithad undergone repairs after theaccident. The Sheriff upheld theirplea and dismissed the action. Thepursuer appealed to the SheriffPrincipal.

Facts and ArgumentThe pursuer incorporated into hispleadings a motor engineer’sreport the crucial part of whichstated that when a car has to be

repaired after an accident, therewas ‘… no doubt that diminutionin market value takes place.’ Hethen compared the possible saleprices of two identical cars, thefirst of which had undergonerepairs after an accident, but thesecond of which had not. The latter, in his view, was bound toobtain a higher price on resale thanthe first. The diminution in valuewould be evident as soon asrepairs had been completed.

The pursuer submitted that theSheriff had failed to correctlyapply the principle of restitutio inintegrum. In a thorough review ofanalogous authorities, it was alsosubmitted that that the result ofapplying this principle had been toachieve the purpose of actions ofreparation, viz to restore the pursuer’s property, so far asmoney allowed, to what it hadbeen before the accident. Othercases were distinguishable becauseit had not been physically possibleto do this. For the defender it wassubmitted that the pursuer’s losswas either the cost of repairs or the

diminution in value, but not both.In any even it was not impossiblethat the pursuer would be able tore-sell that car at no loss – or evena profit. The Sheriff was correct,because it was not possible to predict – at this stage – whetherthere would be any loss under thisheading at all.

DecisionThe Sheriff Principal upheld thepursuer’s submissions, reversedthe sheriff’s decision and alloweda Proof before Answer. He exam-ined all the authorities which hadbeen submitted to him. The casewhich appeared most importantwas one (GUS Property ManagementLtd v Littlewoods Mail Order StoresLtd 1982 SC(HL) 157) where theowners of a damaged buildingsued for the cost of repairs or thediminution in value of a building.The Sheriff Principal noted thatthis case had been relied on by the defenders because the LordPresident had said ‘… the propermeasure of the loss suffered by the owners of property which has

Selected Scottish Cases 27

suffered partial damage is the costof repair.’

However, he preceded that by thewords ‘prima facie’, thereby indicat-ing that although – in principlethis was one method of measuringloss, it was not the only way inwhich this could be done. Thisappeared to be confirmed by thestatement of Lord Keith, when thecase went to the House of Lords,that such an action should be dismissed only if ‘… the propermeasure is so clearly the cost ofmaking good the damage thataverments about diminution invalue are irrelevant.’

The Sheriff principal concluded,having examined older cases inwhich clams for the diminution invalue of moveable property hadbeen affirmed as relevant andother cases (included cases in othercountries) in which damages hadbeen awarded on the same basis,that the Sheriff’s decision was notconsistent with the principle to bederived from these cases. He thenconcluded that the decision wasnot consistent with practice inmotor accident claims. There wasno reason, in these circumstances,why the pursuer should not beallowed the opportunity to provethat he has suffered loss not onlyas a result of repair costs, but alsodiminution in value.

ConclusionThere seems little doubt that, as amatter of relevancy, the decisionmust be correct, but the pursuerstill has to prove that (a) the carhas actually declined in value; and(b) the extent of this. Although theSheriff Principal extensivelyreviewed authorities and analyzedthe relevant principle, he did notdiscuss the importance of thenature of the property involved. Itmay be that items such as ships,yachts or buildings (mostly theones involved in the analogousauthorities) will almost alwaysdecline in value if they suffer

damage but the same cannotalways be said for cars. It is difficult not to sympathize withthe defenders’ submission that acar, even after an accident, may besold, or traded in at a price orvalue which often ignores anyreduction in value which although,as a matter of law, may be relevant,as a matter of practice, is frequentlyignored.

Loss of profit

Watts v Bell & Scott WSwww.scotcourts.gov.uk/opinions/TGC050 1.html

IntroductionThis is another case in which therewas discussion of the correct wayto assess damages. The pursuerwas a property developer. He suedthe defenders for damagers forfailing on his behalf to submit anoffer to purchase commercial property he planned to renovateand re-develop. He claimed that as a result of their negligence hesustained a loss of profit. Thedefenders admitted liability butaverred that the pursuers aver-ments of loss were irrelevant. Theyinsisted on debating their prelimi-nary plea and the case was heardbefore a temporary judge at aProcedure Roll Hearing.

ArgumentThe pursuer averred in detail whathe planned to do and the profit hewould have realised had the offerbeen submitted and accepted. Thedefenders argued that there wereno relevant averments of loss. Allthat the pursuer had lost becauseof the defenders’ admitted negli-gence was the opportunity to buythis property – nothing more.There was no basis for his arguingthat he had sustained further lossby way of loss of profit. This wastoo remote and there were no averments that the defendersshould have known of this. The

pursuer argued that it would bepremature to exclude the aver-ments of loss of profit withouthearing evidence about exactly –or even generally – what loss wasreasonably foreseeable to thedefenders based on what was orshould have been known by themat the time the offer should havebeen submitted.

DecisionThe temporary judge fixed a Proofbefore Answer on the extent of thedamages, including damages forloss of profit sustained by the pursuer, thereby affording him theopportunity to prove (i) that hehad sustained loss under this head;and (ii) that the defenders knew orshould have known that theywould. In so deciding he quotedfrom the ‘classic’ case of Hadley v Baxendale (1854) 9 EX 355 and the formulation of the rule forclaiming damages for breach ofcontract. In particular he quotedfrom the section of this case whereit is said that only if the special circumstances giving rise to theplaintiff’s losses were known orshould have been known to thedefenders will they incur liabilityto pay damages for these. Other-wise, the extent of the loss forwhich they will be liable will belimited only to that which wouldforeseeably arise generally. This formula was consistent with modern authority. Its applicationto this case meant that it was notpossible before hearing evidence tosay whether the defenders shouldhave anticipated that the pursuerwould lose profits and if so howmuch.

CommentThis seems a perfectly sensibledecision. Whether a commercialproperty developer would havesustained any loss and if so howmuch is clearly a matter for proof.The defenders would be entitled to be disappointed only if the circumstances in which the offer


Selected Scottish Cases continued

was submitted, the prospects of itsbeing accepted and the extent towhich the pursuer will suffer anyloss of profit were all factors whichwere plainly irrelevant in any special circumstances whichapplied. Since there appeared to be none, they will still be able toattack at Proof any attempt by thepursuer to exaggerate his loss.

Definition of a personalinjuries actionTudhope v Findlay Parkt/a Park Hutchisonwww.scotcourts.gov.uk/opinions/PD912 html

IntroductionThe pursuer sued the defenders for damages which arose out ofpersonal injury sustained by himas a result of vibration inducedwhite finger. The defenders werenot his employers (or ex employ-ers). They were his solicitors (or exsolicitors) who had allegedly failedto raise proceedings against hisemployers timeously. As a resulthis claim had become time barred.He sought to raise proceedingsunder the new ‘fast track’ proce-dure in the Court of Session forpersonal injuries actions. Thedefenders sought to have the caseexcluded from this procedurebecause it was not properly a ‘apersonal injuries action’ within themeaning of the new rule (RCS 43).

ArgumentsThe pursuer argued that the actionwas one which was correctlyraised under the new procedurebecause the basis of the claim wasa personal injury sustained by him.Had this not occurred, he wouldnot have been forced to raise theseproceedings, the purpose of whichwas to obtain an award of damages, just as it would havebeen if he had sued his (ex)employers. The fact that thedefenders were not his (ex)

employers, but his (ex) solicitorswas irrelevant. The amount of losswould be very similar, and thepurpose of the proceedings identical.

The defenders argued that the loss arose from personal injuriessustained by the pursuer only incidentally. The proper questionto be asked was whether the damages sought were either forpersonal injuries or at least weredamages arising from personalinjury. The real cause of actionwas the alleged professional negli-gence of the defenders in failing toraise proceedings in time, and thefact that this alleged negligencearose in the context of injuries sus-tained by the pursuer was irrele-vant. This approach was entirelyconsistent with the ratio in casesbefore the introduction of the newrules. In any event, it was plainlyinappropriate for an action basedon professional negligence ratherthan personal injury to undergomuch of the procedure envisagedin terms of RCS 43.

DecisionIn rejecting the pursuer’s andupholding the defenders’ sub-missions, Lord Cameron ofLochbroom stated that althoughthe categories of personal injuriesactions contemplated by the newwere less restrictive than under the old rules, detailed considera-tion of their respective terms didnot justify dealing with the presentaction under the new procedure.He analyzed the terms ‘personalinjury’ and ‘arising from personalinjury’ by reference not only to theold rules, but to other analogousstatutory provisions (including theDamages (Scotland) Act 1976 asamended). The correct conclusionhad to be that the ‘defender’ interms of RCS 43 could refer only tothe person directly responsible forcausing the personal injury.Although some statutory provi-sions enable persons other thanthose who have sustained injury

to raise proceedings (eg relativesfollowing the death of the injuredperson) there was no justificationfor extending this to the definitionof the defender, even in terms ofthe wider category of the newrules.

ConclusionThe reasons for excluding the casefrom new procedure were basedlargely on a detailed analysis ofthe provisions of the new rules and comparison with the old onesand procedure. On this basis, theconclusions were sound and the‘letter’ of the decision plainly correct. However, the purpose –and the ‘spirit’ – of the new ‘fasttrack’ procedure was to make it easier and quicker for a pursuerwho has sustained personal injuryto progress his/her case. It wouldtherefore not be unreasonable tohope that, unless a case based onpersonal injury should clearly beexcluded, every effort should bemade to have it included. Sadly forthe pursuer that has not happenedhere, so he will be unable to takeadvantage of the speeded up provisions in the fast track procedure.

Book ReviewsDilapidations in Scotland 2nd edMalcolm Fleming, June McKinleyand Alan McMillanW. GREENISBN 0 414 01513 4Softback £27, 78 pages

This is a short text aimed princi-pally at surveyors who deal withschedules of dilapidation butmight also be consulted by legalpractitioners. The subject matter issuch that it is inevitable that therehas to be consideration of the common law on a variety of areas of the law of leases to set

Book Reviews 29

dilapidations in context.

The book opens with the classicstatements of implied warranty inthe Scots law of leases andincludes the familiar quotationfrom Lord President Dunedin inWolfson v Forrester. The discussionwhich follows uses the contraction‘Ltd’ for ‘limited’. In the context ofcompanies this is acceptable butnot in the sense in which it is usedhere. It might be thought that thiswould have been picked up inproof reading but the same erroroccurs on p 43 and again on p 49.

The same quotation reappears on p 59 which seems unnecessary anda segment is also quoted at p 65which does not suggest a totallyintegrated text. The suggestion thatthe law has been extended to a certain extent to include risingdamp really does not address thearguments here very fully.Reference to institutional authoritysuch as Erskine on the point wouldhelp and McAllister sets this outclearly in his Scottish Law of Leases.When the need to intimate beforethe landlord comes under a dutyto repair is explained by SheriffPrincipal Edward Bowen in Neilsonv Scottish Homes 1998 GWD 6-286but this case is not referred to.

There is a very useful section onthe duties of landlords and tenantsunder the Disability Discrimina-tion Act. The inclusion of a chapteron residential tenancies was a surprise. It is a helpful discussionof the issues here and includescomment on the impact of humanrights legislation through article 8,the right to respect for private andfamily life. Elsewhere humanrights issues might also have beenconsidered in relation to irritancyand the respect for possessions inart1 of protocol 1. McAllister incomparison deals with this well.While the Scottish Executive’s consultation on the draft Tene-ments Bill gets a mention there isno reference to the Scottish LawCommission Discussion Paper on

Irritancy which demonstrates a little unevenness in the approach.

This modest little book probablymeets the requirements of its targetsurveyor audience. It might alsopoint you in the right direction forfurther research and does contain areasonable survey of recent caselaw.

Directory of Services for Conveyancers 2003LexisNexis/ButterworthsISBN 0 406 97107 2Softback £12, 200 pages

As Professor Stewart Brymer, theConvener of the Law SocietyConveyancing says in his forewordthe Directory was first publishedby the Law Society in 1999. As partof the publication deal with theLaw Society and LexisNexis/-Butterworths it is now availablefrom the latter for £12 which is abargain. No doubt some of the costis offset by the inclusion five pagesof advertising. There are two hundred pages of spiral boundcontent and this format shouldensure that the book remains intacteven after heavy use.

The contents comprise a list ofaddresses of deeds centres for allmain lender, information regardingproperty inquiry certificate applications, fire certificate infor-mation, coal mining reports information, short details of theRegisters, the Stamp Office andsome common deduction of titleclauses charting the mergers anddemutualisations in the lendingsector.

Perhaps the most useful part however is the collecting togetherof the various Guidance Notes forthe benefit of conveyancers issuedby the Law Society through itsProfessional Practice Committee.This is the section where you willfind an answer quickly to the problems of conflict of interest orclosing dates. Even if the answer is

not to be found at least it meanswhen you phone DrumsheughGardens for advice you can soundknowledgeable and frame a sensible question. Perhaps weshould all re-read the advice foravoidance of delay in concludingmissives.

The two pages on stamp duty provide a quick reference pointboth to stamp duty and to StampDuty Land Tax. While the addressand contact details of the StampOffice is given the details of theBootle centre for SDLT do notappear but given the stated aim ofbeing correct to September 2003this is not a fault. The list of somecommon deduction of title clausesis useful but one is left wonderingsome are past their sell by date.How many loans granted by theformer Kirkcaldy Building andInvestment Society are still on theDunfemline’s books when theInstrument of transfer of Engage-ments was registered in B of C&Son 26 August 1953?

This book is designed to deliverstraightforward information in astraightforward manner at a modest price. It meets those aimsadmirably and will no doubt bewell used by conveyancers, particularly where they find themselves operating outwith their local area.

Education Law inScotlandJanys M Scott, MA (Cantab),AdvocateW. GREEN/Sweet & Maxwell Ltd,EdinburghISBN 0 414 01 4529Hardback £75, 396 pages, 2003

Janys Scott’s Education Law inScotland fills an obvious but hither-to neglected gap in the legal text-book marketplace. The only otherdedicated Scots Education Lawbook (that this reviewer is awareof) is Marr & Marr’s 1995 textwhich is a basic (and now dated)


Book Reviews continued

treatment aimed at parents, teach-ers and administrators rather thanlawyers. Scott’s book is an entirelymore detailed and ambitiousundertaking which is clearlyaimed at legal practitioners andother professionals in educationauthorities and beyond. Written bya busy advocate on sabbatical, ingeneral terms it is a very welcomeaddition to the legal adviser’s toolkit. Ideally, some topics could havebeen dealt with in more depth,some chapters might usefully havegone a little beyond the merelydescriptive and perhaps therecould have been more analysishere and there. However, that is topreach a counsel of perfection. Thepractitioners I consulted found thebook readable and informative – egthe explanation of the 2002 Houseof Lords’ decision in the Lister case(vicarious liability) was typicallyclear and a boon to the busy localauthority solicitor.

Together with the usual tables ofcases, statutes and statutory instru-ments plus an appendix setting outthe main schedule to the Education(Publication and Consultation)(Scotland) Regulations 1981 andthe index, there are twenty chap-ters covering everything fromChildren’s Rights, EducationAuthorities, Places of Education,and Curriculum and Discipline toPupil Records, School Attendance,Placing Requests, Exclusion fromSchool, Special Educational Needsand Delictual Liability. Within the discrete chapters there aresubtopics dealing with such potentially litigious issues asHome Education, Choice of School,Bullying and so on.

I cannot imagine that any localauthority law department willwant to be without Scott’s booksince it will certainly provide alaunching pad for deeper originalresearch where required and onother occasions, it will provide afinger tip guide to the correct legalposition. There were a few mis-spellings and assorted typos such

as a lack of synchronisationbetween page references in theContents and the body of the text(chapter 8) but none that reallydetracted from the book’s manyvirtues.

I am sure that my colleagues inlocal authority practice will hopethat Scott on Education willbecome a periodically updatedtext. However, if the law isreformed or, indeed, codified assuggested in Scott’s introductionthat may necessitate another sabbatical to effect the rewriting.

Phil Forte.

Adult IncapacityAdrian Ward AdvocateISBN 0 414 01 4723Hardback £85, 572 pages

The Adults with Incapacity(Scotland) Act 2000 was one of thefirst Acts of the Scottish Parlia-ment. The Act has gradually beenbrought into effect and this bookoffers a timely account of the newlaw.

In addition to the commentary theAct itself is reproduced as arenumerous statutory instrumentsand extracts from the Codes ofPractice which have been promul-gated by the Executive. Havingconstructed a web based resourcewith these materials I know howdifficult it can be to find exactlywhat you are looking for but hav-ing these collected together willsave considerable effort and timefor busy practitioners. In additionAdrian Ward has supplied stylesfor summary applications for inter-vention orders and guardianshipapplications. A style power ofattorney is also included coveringall aspects of financial and welfareprovisions. A note of caution isattached to this that it illustratesmany options but it ought to beread in conjunction with chapter 6which explains clauses and alter-natives more fully. Ward is

acknowledged as the leading prac-titioner in Scotland in this fieldand these styles contain the distil-lation of many years of experience.They deserve careful considerationif you are required to prepare anyof these documents and I am surethey will be widely adopted.

Chapter 1 deals with disability,capacity and assessment. There isfamiliar discussion of facility andcircumvention and undue influ-ence as well as the problems ofassessing capacity and role to beplayed by lawyers and doctors.Chapter 2 deals with professionalresponsibility and is worthy ofreading for any practitioner whodeals with elderly clients. There isthen a discussion of the back-ground leading up to the Act fol-lowed by a chapter on the generalprinciples. Powers of attorney arecovered in one chapter and twochapters are devoted to interven-tion and guardianship orders. Thechapters on authority to intromitwith funds and management ofresidents finances will probably beof less interest to most legal practi-tioners but will be of relevance toother professional who may alsouse this book.

Ward also discusses fully othertechniques which may be usedsuch as trusts, including tax andbenefits consequences. Howadvance directives may be usedand in conjunction with welfarepower of attorney is considered asare issues regarding health care.Throughout there is an impressiveuse of sources not only legal butalso from the medical sphere.

Practical experience, an excellentknowledge of the issues relating tolegal and medical professions, anda well informed and clearly statedexposition of the new law as wellas the primary texts make this anexcellent book for which Mr Warddeserves congratulations. Otherpractitioners who will use this textowe him a considerable debt.

S C O T T I S H L A W A G E N T S ’ S O C I E T Y

Annual General Meetingwill take place this year on Thursday 10 June, 2004

in Dudhope Castle, Dundee

Guest Speaker:Lord Fraser of Carmyllie

For more than 20 years, this title has provided solicitors, students and trainees with an accessible and practicalguide to best professional practice and to the ethical issues involved.The text has been updated and expandedto incorporate recent developments in law and practice, including:

• Effects of Human Rights Act 1998• Money Laundering Regulations• IT in day-to-day practice• Adults with Incapacity (Scotland) Act 2000• Role and duties of solicitor advocates

ISBN 0-9543423-5-6 Due April 2004

SPECIAL PRE-PUBLICATION PRICE OF ONLY £29.95! (PRICE ON PUBLICATION £34)

For further information, or to order, contact:Avizandum Publishing Ltd58 Candlemaker RowEdinburgh EH1 2QETel/fax: 0131 220 3373 E-mail: [email protected]

PROFESSIONAL ETHICS AND PRACTICE FOR SCOTTISH SOLICITORS4th Edition � Janice H Webster

NEWEDITION

Reproduced by kind permission of the Scottish Archive Network

Visit www.scan.org.uk

The GlossaryThe Scottish language has changed over the years, being influencedby other languages and cultures. This section provides you with adefinition of those words and phrases commonly found with documents and records throughout Scotland’s archives.

T (continued)

tercea widow’s legal entitlement to a liferent of one-third ofher husband’s heritable property, (her entitlement inrespect of his moveable property being the jus relictae).If a special, alternative provision has been made for her inher marriage contract (the jointure), she would, after1681, have lost her right to a terce, unless it had beenspecified in the contract that she should have that as well

termswhen rents and feu-duties fell due to be paid, usually halfat Pentecost or Whitsun and half at Martinmas or ‘thefeast of St Martin in winter’ (11 November)

testamenta written deed appointing an executor to administer aperson’s moveable property after his death. That is all ithas to do; it needn’t contain any bequests or instructionson disposal of the property, and the two possible typesdepended on how the executor has been appointed.If this is done by the person making the testament duringhis life-time, it is called a testament testamentar, if the person died without making a testament theCommissionary Court would appoint the executor andthe deed by which this was done was a testamentdative. One of the deceased’s creditors could beappointed as his executor, so that he could recover thedebt due him, and he was called an ‘executor creditor’ or ‘qua creditor’. Testaments were not really wills; theyhad no bearing on the disposal or administration of anyheritable property the deceased might have had, and forthat reason they were gradually replaced by the trust disposition and settlement

tetherhalter

thirdsor ‘thirds of benefices’. When the property of themedieval Church was available to acquisitive laymen afterthe Reformation, the king took over one-third of the revenues of all church benefices to make sure that something would still be left for the ministers of thereformed church; appropriate parts of these revenueswere assigned to the ministers, and any surplus wasretained by the Crown. This was not really sufficient,which was why the Teind Court came into being

thirlagereally another name for astriction; it was the servitudewhereby the proprietors and tenants of lands were boundto take their grain to one particular mill only for grinding,for which they would have to pay multures and sequels;the lands they held which were bound to the mill, werethe mill’s sucken, and those bound to use the mill weretermed its ‘in-sucken multurers’

threav, threave, thravemeasure of cut grain, straw, reeds or other thatchingmaterial, consisting of two stooks, usually with twelvesheaves each but varying locally

tinsel of the feuthe name for forfeiture of landed property caused not just by failure to pay feu-duty or render service to thesuperior, but by the commission of penal offence

tocherthe dowry brought by a wife to her husband at the timeof their marriage

trespassan offence committed by causing illegal damage, eg by spuilzie or ejection

tronerthe officer in charge of the official weighing machie (thetron) in a burgh

truncher, trainchirtrencher

trust disposition and settlementa deed enabling someone to dispose of their whole property, both heritable and moveable, for example, inthe event of death; it replaces the testament which couldeffect the disposal of moveables only

tutora person who is legal representative, guardian or administrator of the estate of a pupil, a child under 12 iffemale or 14 if male. (Older children who were still under21 were minors, and had curators instead of tutors to dothese things for them)

Uudal righta method of holding lands in Orkney and Shetland whichdid not require the holder to have sasine, or even to havea charter to the lands, but only to have evidence of hisundisturbed occupation of the lands; such lands wereheld direct from the Crown for a payment called ‘skat’

ultimus haeres‘last heir’; the right of the Crown to succeed to all heritable property where no other heir, successor orassignee to the property can be identified

umquhilelate, deceased

usucapio, or usucaptionthe Latin legal terms for long, uninterrupted and unchallenged possession of a thing or a right, which conferred an entitlement to that property or right

utencilis & domiceillishousehold goods

More to follow in next issue of the Gazette.

issn 0036-9314. february 2004. vol 72, no 1. …...issn 0036-9314. february 2004. vol 72, no 1....

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