Caveats – the early warning protection system you should not be without!

Peculiar to Scotland, caveats are a simple and cost effective way in which protection can be provided from service of a court order, without warning and are something which should be at the forefront of the mind of any business, with connections to Scotland, from a risk management point of view.

What is a caveat?

A caveat is a document which can be lodged, in any Scottish court, on behalf of a company, LLP or individual – the effect of which requires the court to contact the lodging solicitor, to provide an early warning, if another party seeks an immediate (or interim) court order against the individual / business. The Caveat is a personalised tripwire, providing the lodging solicitor with the opportunity to be heard by the court, in relation to the order being sought by the other party.

The position without a caveat

If no caveat has been lodged, a party raising a court action can ask the court to grant various interim orders, before proceedings have even been served on an individual / business, without there being any opportunity to object to the orders being sought. Such orders include: interim interdict; those relating to a petition for the winding up (liquidation) of a company, including the proposed appointment of a provisional liquidator; orders in respect of the appointment of an administrator to a company and, specific to individuals – orders arising from a bankruptcy (sequestration) petition. Where no caveat has been lodged, the court can proceed to hear the other party’s application straight away and that may, in suitably urgent cases, often mean on the same day as the application is lodged.

How long does a caveat last?

For a period of twelve months, with annual renewal required.

Why be without a protection, which is easily put in place?

In our view and experience, no business with links to Scotland should be without caveats in place. We recommend that you lodge caveats in any relevant Sheriff Court, where you have a place of business or, registered office, as well as in the Court of Session in Edinburgh.

Next steps? Take action NOW and ensure protection!

We charge a very competitive fee for the lodging of caveats and have diary systems in place, which ensure that we will be in touch with you, in advance of the expiry of any caveats lodged for you, to seek your instructions on renewal.