Officer class

If the recession has brought testing times for the legal profession, much the same can be said of the profession on which it relies to give effect to its clients’ rights, that of the officers of court. Although one might expect the number of debt actions, and therefore the amount of diligence-related work, to increase in difficult economic times, such has not been the experience in practice.

Well-publicised reductions in a number of core business activities, such as a 25% fall in debt recovery court actions in the last two years and a 50% reduction in the requirement for social housing evictions in the last four years, bear out the words of one sheriff officer that “Creditors are only using the courts if they have to.”

“The downturn has affected all sectors,” comments David McLaughlin, managing partner of Scott + Co. “Nowhere in the private or public sector has been immune. But we have also seen how adversity has unleashed innovation right across the board as companies and organisations have found new ways of creating value and identifying cost reduction.”

Such trends have led to the messenger-at-arms and sheriff officer profession assessing potential new areas of work for which it considers itself well qualified. At the same time, the profession has been undergoing changes that should result in increased standards of service and professionalism on the part of individual members and their firms.

Professional body

On 1 April 2011, the Society of Messengers-at-Arms and Sheriff Officers (SMASO), formerly a voluntary body only, achieved its longstanding ambition to be officially designated as the professional association to which all officers of court are now required to belong.

This was followed by the approval of a revised constitution for SMASO in order to fulfil the requirements of the Officers of Court’s Professional Association (Scotland) Regulations 2011. One such requirement is compulsory continuous professional development, introduced on 1 November 2011.

“These are extremely positive developments for officers of court in Scotland, and represent an increase in professional standards to a level enjoyed by solicitors and accountants,” says William Cameron, current President of SMASO. “SMASO holds a minimum of two CPD events a year, and would welcome input from Law Society of Scotland members in matters that may impact on both our professions. Indeed, at our most recent CPD seminar, we were delighted to host a very experienced litigation solicitor who provided a presentation on the practical implications of the Home Owner and Debtor Protection (Scotland) Act 2010 and, in particular, the changes to repossession actions.”

In addition to the legislative impact, he observes, levels of business have been affected at the stage of serving calling-up notices where, following the judgment of Sheriff Mackie at Edinburgh in Santander v Gallagher (26 July 2011), many such notices are bypassing sheriff officer service and are being sent directly to the office of the Extractor of the Court of Session. SMASO is currently discussing this issue with a number of interested parties.

A very recent significant development is the introduction, with effect from 23 January 2012, of a revised and simplified table of fees for officers of court (see panel on p20). As narrated there, SMASO now has a continuing formal role in the process of reviewing fees, for which it is introducing a new formula for requesting future fee increases. The Lord President has directed it towards utilising a similar process to the Society’s annual Cost of Time Survey to assist this purpose.

The hot topic of alternative business structures (ABS) has also reached the officers’ profession. The Scottish Government issued a consultation on the business organisation of firms of officers of court during 2011, the findings of which are still to be published.

Future proofing

But the profession is also responding by paying attention to changing business methods within its clients, in particular the possibilities offered by IT developments.

“Many people we work with have found efficiencies through better or innovative use of new technology,” McLaughlin says. “Improved customer service comes through faster communication. Streamlining systems by using technology to reduce the number of stages in a process has transformed many companies. It’s an area we have looked at ourselves in relation to our own operations and the service we can offer customers. We’ve seen very promising results from systems we have developed using encrypted mobile technology.”

And as client businesses attempt to diversify in order to replace declining areas of work, new trends are emerging for officer firms. “One of the most striking aspects of our business has been a tenfold increase in overseas business in the last 10 years,” McLaughlin notes. “Much of this work is in Europe, but increasingly Scottish companies are working in markets in Asia and South America.” This involves Scott + Co working with court officers in other jurisdictions to serve papers and pursue actions.

Like other professions, officers of court are facing the challenge of securing the future by providing sufficient opportunities for young people seeking a career. “Having worked with the Scottish Young Lawyers Association last year, we are very aware of the impact reduced opportunities can have on the profession as a whole,” says McLaughlin. “To have the next generation of professionals making their way through the ranks and bringing new ideas and energy, is how professions adapt and grow over time, and the restriction of opportunities for young professionals may be one of the recession’s most damaging long-term effects.”

On the agenda

The officer profession is determined to remain outward looking, and plays an active role with a number of stakeholders. SMASO regularly participates at, for example, the Diligence and Insolvency Forum organised by the Accountant in Bankruptcy, and the Money Advice Liaison Group.

It is also honoured to host the next meeting of the European Judicial Enforcement Project, in Edinburgh this month. The main purpose of the project is to facilitate better execution of court judgments throughout Europe by offering all citizens and judicial officers access to necessary information and a network of professional agents in other member states. It also seeks to promote enhanced co-operation and communication among judicial officers throughout Europe.

David Walker of Walker Love, organiser of the event and UK permanent secretary for UIHJ, the international association of judicial officers, commented: “From an international perspective, Scotland has an enviable reputation in terms of the professional qualities of the officers of court presently managing our civil enforcement. However, a big issue is the lack of access to useful enforcement intelligence. Unlike most European jurisdictions, we are very poorly served in Scotland in respect of data sharing.

“We had hoped for more flexible enforcement following the enactment of the Bankruptcy and Diligence Act 2007, such as land and residual attachment. It is also a tremendous shame that Part 16, which should have introduced information disclosure orders, shows no signs of materialising any time soon. It is imperative that SMASO and all other stakeholders re-engage with the Scottish Government to ensure we have the proper tools to meet the challenges of civil enforcement in today’s debtor and data protected society.”

Single fee band replaces three tiers

The fee structure for Scotland’s sheriff officers and messengers-at-arms has been simplified following a two-year review.

The review, carried out by the Society of Messengers-at-Arms and Sheriff Officers (SMASO) in consultation with their professional advisers Baker Tilly, was undertaken as a result of a changing marketplace, including legislative changes resulting in reductions to core activities of officers of court, and increased operating and fuel costs.

A report was submitted to the Lord President in December 2010, and following subsequent discussions, SMASO agreed to the removal of the three fee bands which formerly applied depending on the distance to be travelled in carrying out an instruction. Now there is only one band, the former band 2 fee, but for work carried out in areas defined by a Scottish Government publication as remote rural, there will be a 30% uplift for service. In practice, this uplift will not exceed the former band 3 fee.

The changes apply from 23 January 2012.

The Lord President has also agreed to a SMASO proposal that an additional fee should be chargeable when officers deal with higher value actions exceeding £100,000. In these cases, an additional fee at the rate of 0.01% of the action value can be charged in addition to the service fee.

Other fees such as interdicts, repossessions and ejections remain unaltered by these changes, subject to an inflationary increase of 3.8%.

SMASO will be also required to submit an annual “cost of time” type survey similar to that prepared by the Law Society of Scotland, and this will be accompanied by a request for changes to fees and any other regulation changes that SMASO feels is necessary. Future submissions for fee increases will be presented to the Advisory Council on Messengers-at-Arms and Sheriff Officers, who would then advise the Lord President on any appropriate changes.

William Cameron, President of SMASO, commented: “These changes will ensure our members can continue to operate in a challenging environment and provide court users in Scotland with the first class service they have come to expect, and continued transparency of fees.”

SMASO reminds all court users that the fees are mandatory and discounting is prohibited.