Scottish Litigation - Caveats

A caveat is a document lodged in the Court of Session (the Scottish civil high court) or Sheriff Courts (the local courts akin to the County Courts in England and Wales) that obliges the court to inform solicitors acting for a defendant (defender in Scotland) if an application for certain types of interim order is made against their client in a relevant Scottish Court. It can be lodged on behalf of a wide range of clients: individuals, companies, partnerships, charities etc.

What types of interim orders do caveats apply to?

Interim orders in Scotland seek primarily to preserve or prevent something from happening, thereby maintaining the status quo on an interim basis pending the outcome of an action. Caveats can be put in place so that solicitors are notified on some of the following applications or actions:

1. An interim interdict (akin to an interlocutory injunction) prohibiting the defender in an action from doing something;
2. An interim positive order making a defender in an action do something (referred to in Scotland as an order ad factum praestandum or an order for specific implement);
3. An order for intimation, service and advertisement of either corporate or personal insolvency proceedings; or
4. Group proceedings (in the Court of Session only).

With a caveat in place, the relevant court will notify the solicitor when an application for an interim order is made. This gives the solicitor the chance to appear at the hearing for the interim order and argue against it being granted. If no caveat is lodged, that order can be granted against the client, in their absence, and without giving them any notice or an opportunity to input into the hearing.

In which court should I lodge a caveat?

The Court of Session is generally thought to be the most useful forum in which to lodge a caveat as it has jurisdiction over the whole of Scotland. However, recent changes mean that any action under £100,000 must be brought in the Sheriff Court, instead of the Court of Session. It is therefore also prudent to lodge caveats in the relevant Sheriff Courts in which an action could be raised – for example, the Sheriff Court which has jurisdiction over your client’s places of business. Multiple caveats can be lodged.

What benefits are there to lodging a caveat?

The default position in Scotland is for interim orders to be granted without prior warning being given to the other party. According to a recent Court of Session dataset, interim interdict was granted in 71.7 per cent of cases where it was sought, and in most instances, this was without notice. The only way to ensure notice is given, is to have in place a caveat at the relevant court prior to any application being made to the court.  It is for this reason that we recommend caveats are routinely maintained at the relevant courts and annually renewed.

Recalling an interim order

If an interim order is granted without notice, the interim order remains in place unless recalled. The defendant may apply at any time to have it recalled if there are reasons justifying recall. There is accordingly disruption to a client’s business which may cause potentially irreversible damage for example to earnings or disruption of business operations by virtue of an order preventing the client’s business from doing something.

From a practical and commercial perspective, it is therefore more prudent to oppose the initial application rather than to rely upon any subsequent recall hearing.

Caveats last for a year. At Harper Macleod, we lodge, monitor and renew caveats for clients for a fixed fee. Our Dispute Resolution team is experienced at dealing with interim orders hearing across all of the courts in Scotland, which require urgent attention and detailed preparation over a short period of time.