PART ONE
Ministerial Foreword
I am delighted to publish for consultation this report, these proposals for reforms, and a draft Bill. This marks a further significant step towards fulfilling the Executive's commitment to reform of the laws of bankruptcy and diligence.
Scotland has proud traditions of fairness and enterprise. The Executive intends to build on those traditions, so that Scotland will always be a modern and efficient place to live and to do business in. We will reform the law where necessary to deliver that.
The enforcement of the orders of the civil courts, known as diligence, is a key part of our civil justice system. An order for payment, or for delivery, or to prevent the disposal of assets pending the results of a court case, must have effect. If that were not to happen, suppliers would not be willing to enter into the many contracts and agreements we rely on and our economy and our society would suffer greatly.
There are those who may choose not to pay when they can, and we need a flexible and efficient system of enforcement to realise their assets if necessary. Many people want to pay, but need to be given a bit of time. A fair system will help them to understand their options, take preventative action and get free money advice on how to manage their repayments, and in doing so help creditors as well. A modern system should protect debtors from excessive or unfair debt enforcement measures.
For diligence, this document builds on work of an earlier consultation which proposed a major modernisation. Most of our proposals for reform were first set out in ' Enforcement of Civil Obligations in Scotland', which I published in April 2002. We have carefully considered and welcome the detailed comments in the responses to that consultation. This document reports on the progress made. In respect of many of our proposals, we have put sections into the draft Bill for illustration and through this consultation, invite your comments.
We were also asked to look at the ways in which Messengers-at-Arms and Sheriff Officers' businesses are governed to make sure that the standards of the profession are being upheld. We consulted a limited section of key stakeholders in December 2003 on the business organisation of such officers, as a fact finding exercise. This document reports on the responses to that consultation which informed our proposals for further reform in this wide consultation.
Some people are not able to manage their debts, even if the court enforcement system gives them reasonable time to pay. This may be because they risked everything on a business that could have been very successful, but has failed. Bankruptcy offers them relief from paying their debts.
A modern economy needs to strike the right balance between paying creditors what they are due, and the debtors' need for protection. We need to encourage our entrepreneurs, and well as helping those stuck in a debt trap from which they can't escape.
For bankruptcy, this document builds on the work of our earlier consultation. Our proposals for reform were first set out there. This document reports on the responses to that consultation, and sets out some proposals for further reform. In most cases we have been able to put sections into the draft Bill and through this consultation, invite your comments.
We shall look forward to the responses to this further consultation, so that we may work towards completing the many reforms and improvements detailed in this document. In due course I plan to introduce the reforms in these areas in legislation before the Scottish Parliament.
The Rt Hon Jim Wallace, QC, MSP
Deputy First Minister and Minister for Enterprise and Lifelong Learning