The Commercial Action procedure is available for certain cases in various sheriff courts throughout Scotland and is curiously underutilised. A similar procedure is available in the Court of Session; however, this article focuses exclusively on the sheriff court procedure. These courts have exclusive jurisdiction for payment actions where the principal sum is £100,000 or less.
Commercial procedure is available as an elective procedure in Edinburgh, Aberdeen, Glasgow, Jedburgh, Selkirk, Duns, Inverness, Dingwall and Portree Sheriff Courts. Additionally, the Tayside Commercial Court (based in Perth Sheriff Court) serves Dundee, Forfar and Perth. Although commercial procedure is not presently available in every sheriffdom, the parties to a commercial dispute can agree to prorogate jurisdiction to one of the commercial courts. Good practice is to include such a clause in contracts where Scottish courts would have jurisdiction in the event of a dispute.
Commercial procedure is suitable for cases that fall within the definition of a “commercial action”. The term is one that is (and should be) interpreted broadly. The mere fact that both parties to the dispute are not commercial entities is not of itself a bar to an action being raised under commercial procedure. Essentially, three things are required:
1. The chosen forum offers commercial procedure; 2.The particular sheriff court has jurisdiction over the defender; and 3. The action is a “commercial action”.
The primary features of commercial procedure are expediency and cost efficiency. Where commercial procedure is elected, the period of notice for the defender to intimate an intention to defend the action is 21 days. Thereafter the defender must lodge written defences within seven days, rather than the usual 14-day period. There is no automatic “adjustment period”, where parties can amend their pleadings. This can reduce the length of the court action significantly. The court assigns a Case Management Conference (CMC) to take place within seven weeks of commencement of the action. The CMC expressly requires the commercial sheriff to “seek to ensure the expeditious resolution of the action”.
The CMC is a peculiar feature of commercial procedure. Ordinarily it can be four months after the initiation of the case before the court would first consider further procedure. CMCs commonly take place by telephone. This has the advantage of reduced expenditure for clients, as opposed to costs incurred by a solicitor charging her travel time to court on an hourly rate!
The role of the commercial sheriff significantly differs to that of the role of the sheriff under ordinary procedure – less passive arbiter, more proactive case manager. A nominated commercial sheriff is assigned to each case and sees it through to its conclusion. As with continuity of representation, so too should continuity of the court be welcomed.
The flexibility of commercial procedure cannot be overstated. The commercial sheriff is at liberty to direct the progress of the action as he or she thinks fit. Much of the typical procedural requirements can be dispensed with. Many commercial sheriffs are happy to be contacted by e-mail and to accept and deal with motions in the same manner. The formalities of court pleadings are more relaxed and technical legal debate – which adds to delay and additional cost – is discouraged. Greater emphasis is placed on “front loading” the case at the outset. Lengthy narrative is, however, discouraged and innovative means of setting out the facts of the dispute in an abbreviated form, e.g. spreadsheets or schedules, is actively encouraged.
It is testament to the sound operation of commercial procedure that there are few reported cases on the operation of its rules. The legal futurist, Richard Susskind, has written in his recent works about an incremental move away from a legal world of “wigs and Rumpole” towards one of virtual courtrooms and online dispute resolution. If this is to be, then the innovative operation of commercial procedure is certainly on the right side of change.
Scott Clair is a Solicitor with Balfour+Manson