So, you think you’d be the first to know if there was a court order against you or your business? Think again.
The caveat may not currently feature as a great Scottish invention but it really should. This little word has potentially great significance when it comes to you or your business.
Its literal Latin meaning, ‘let him beware’, gives you some insight into what a caveat can do for you.
So, what is a caveat?
Quite simply, it’s an electronic document that your solicitor lodges with the Court of Session and/or any of the Sheriff Courts throughout Scotland.
"Without a caveat in place, the first you could hear about some types of court orders would be once the order is served on you."
What it does is much more significant. Where a caveat is in place, a court must tell your solicitor if a third party is seeking to obtain any one or more of a variety of court orders against you or your business without prior notice.
The court lodging dues for caveats are currently £58 in the Sheriff Court and £53 in the Court of Session. The caveat lasts 12 months and needs to be renewed annually to remain effective.
Why do you need a caveat?
Having a caveat in place means you can be alerted immediately by your lawyers should various types of court orders be sought against you. That could be:
- An interim order to prevent you undertaking building works
- To prevent you from selling a product where your right to do so is disputed by a third party
- To allow the service and advertisement of a petition: for the sequestration (ie. bankruptcy) of your estate; or to wind up your company
Without a caveat lodged, the first you could hear about some types of court orders would be once the order is served on you. While you could still defend the proceedings, by that stage you may have already suffered damage to your reputation and face long-running financial consequences.
Who should have a caveat?
It’s not just individuals and businesses that should consider caveats. Trusts, charities and other organisations could also benefit from the early warning system that is the often-overlooked caveat.
How does it actually work?
If the caveat is triggered your solicitor will be notified by the relevant court. That notification provides an opportunity to act swiftly to resolve the situation before it spirals into something much more damaging. The caveat’s mechanism effectively ‘buys’ you time and provides you with an opportunity to avoid costly court proceedings and reputational damage.
The envy of the world
The caveat is often a source of envy to those outwith Scotland as it is such a simple device that can provide invaluable protection from the consequences of otherwise unforeseen court proceedings. We’re lucky to have it in our risk management toolkit and it could be the perfect way for you to avoid future strife.
Eve Skimins, Accredited Paralegal, Dispute Resolution and Litigation
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