Lawbite: Our regular reminder: if you trade or have a place of business or property in Scotland, think caveats!

Protection for businesses

Any business which trades, has a place of business or any property interests in Scotland can lodge caveats with the Scottish Courts. When a caveat is lodged the Court must give it (or most usually its solicitor) advance notice that certain orders – such as an interim interdict (interim injunction) and interim winding up orders for Scottish registered companies - are being sought against them.

The granting of these type of orders can have significant implications for businesses, as such having advance notice of the possibility of these orders is a significant benefit. If no caveats have been lodged the order can be granted without the business having any opportunity to object. It will only become aware of the order when it is served, and when it has to be complied with. Challenging an order which is already in place is more difficult than opposing the application when it is first made (and more costly).

We strongly recommend that all clients with any Scottish interests lodge caveats to ensure that they receive advance notice of any such application, and remember to renew them!

Caveats - main features

• caveats apply to certain interim orders including interdict (injunction), winding up and administration. Businesses can now also be warned about applications for group litigation – with the increase in group litigations this is likely to be become increasingly important
• they can be lodged in the name of limited companies, partnerships, LLPs, trustees etc.
• once in place, when a third party applies to court for the relevant order the caveat is "triggered" and the court contacts the solicitor named on the caveat to let them know about the application (even out of hours), to let them take instructions, appear at the hearing and oppose the application. The hearing usually takes place about 24 hours after notification, although that period can be shorter or longer depending on circumstances
• caveats cost only £140 each plus Court fees (currently £58 per caveat) and last for one year
• they can be lodged in the Court of Session, with jurisdiction over all of Scotland, and in the 39 Sheriff Courts. In other words they can be lodged in any Scottish court in which the business may be sued.  We recommend lodging in both
• some orders can’t be caveated against, such as dawn raids. But for those that can, caveats present a simple, inexpensive means of managing risk.  They mean that businesses receive advance notice of, and therefore an opportunity to deal with, orders that could have far reaching implications