Further hearing in Scottish repossession test cases on pre-action requirements

The court has appointed parties be heard further in the Scottish repossession test cases of RBS plc v. McConnell and NRAM plc v. Millar next week. Sheriff AF Deutsch has given parties an opportunity to be heard on a new point in relation to the Interpretation Act 1978.

Since the Scottish Government's Home Owner and Debtor Protection (Scotland) Act 2010, a lender must now give certain information to a debtor upon entering into 'default' before a repossession action is raised in court. This is known as the 'pre-action requirement' and failure to comply with this requirement can render the court action incompetent.

Many lenders and law firms in Scotland have interpreted 'default' to mean merely a failure to pay sums due under a mortgage, whereas Govan Law Centre has argued that 'default' is a technical term which means the failure to comply with a calling-up notice.

The cases of RBS plc v. McConnell and NRAM plc v. Millar look set to provide clarity on this point. Many repossession actions across Scotland have been continued or sisted (stayed) pending the court's judgment in these cases.