Caveats are instruments that give you prior warning of any attempt to obtain interim interdict or an interim winding up order against your business or a bankruptcy order against you in the Scottish courts.
As a business owner or senior member of staff within your organisation, wouldn’t you like to have advance notice if someone serves an interim court order in Scotland on your business?
If so, a caveat is what you need. A caveat is a document which can be lodged in both the Court of Session and the Sheriff Court in Scotland. With a caveat in place, the court must tell your solicitors if an application for an interim interdict, an interim winding up order or a bankruptcy order has been made against you or your business in court.
An interim interdict is the Scottish equivalent of an English injunction and is an application made in court to stop the infringement of legal rights. Interim interdicts are lodged for a number of legal reasons from financial matters to employment and property disputes. It’s therefore important to be made aware of this at the earliest opportunity.
Without a caveat in place the court is under no obligation to inform you that an application for an interim interdict has been made against you and an order can be granted without notice in your absence.
How a caveat can help you
The primary benefit of a caveat is the advance notice and the time it buys you. Being able to oppose the interim order is an otherwise unavailable opportunity to prevent the order being granted. It can even open doors for out of court negotiations, potentially leading to a resolution being reached outside of the court room.
The extra time can also work in your favour in the case of a winding-up petition against your business. Prior warning of an application to wind-up a Scottish registered company allows you and your solicitors to work to stop the advertisement of the petition and limit the damages done to your business if a prompt resolution is found.
Remember, without a caveat in place, an interim order can be granted undefended. This means a party with whom you are in dispute can send sheriff officers (i.e. bailiffs) to arrive at your place of business, totally unannounced, with a court order that can grind your business to a halt. The complete surprise of an order like an interim interdict is often the most damaging and distressing part of the whole ordeal.
How MacRoberts can help
At MacRoberts we believe no business should be without caveats in place. We recommend you lodge caveats in any relevant Sheriff Court (the Sheriff Court where your registered office and any place of business is) and the Court of Session. Caveats last for twelve months and must be renewed annually.
We charge a competitive fee for lodging caveats in both the Sheriff Courts and the Court of Session. We will also remind you one month before they are due to expire and ask if you wish to have your caveats renewed.
If you would like to arrange for a caveat in order to protect your business or require any further assistance or information, please contact Julie Hamilton.
Additional dispute resolution services available can be found on our Commercial Dispute Resolution page.