The Implications the Coronavirus (Scotland) Bill

Published bySteven Docherty

1st February 2022

Steven Docherty, Partner at Wright, Johnston & Mackenzie LLP, examines the Coronavirus Bill which was recently introduced into the Scottish Parliament, and explains what impact the proposed legislation could have.

The Scottish Government has set out its stall on how to update some of the protective measures put in place to protect individuals during the Coronavirus pandemic. On 25 January 2022, the Coronavirus (Recovery and Reform) (Scotland) Bill was introduced into the Scottish Parliament. In the Bill, the Scottish Government looks to bed in some of the protective measures that have been taken during the pandemic for the long-term, while putting sunset clauses on some other measures.

The pandemic required extraordinary steps to be taken by the Scottish Government to make sure that aspects of economy could continue to function while everyone was locked down and employees were furloughed, etc. Many such changes were made in the Coronavirus (Scotland) Act 2020, as well as some other Acts and Regulations, all of which introduced measures expressly on a temporary basis – they all had sunset clauses which required the measures to be renewed frequently by Parliament (to avoid any accusation that the Government was legislating without proper scrutiny).

Some of those temporary changes will now be made permanent in the new Bill.

For example, the debt threshold for bankruptcy petitions, which had been £3,000 and was temporarily increased to £10,000 during the pandemic, will now be set at £5,000 for the foreseeable future. Documents relating to bankruptcy, which used to have to be served in person on individuals, were able to be served electronically during the pandemic subject to certain restrictions, and those provisions will continue in place. There will also now be a rule about “deemed service” of documents in bankruptcy cases, meaning that a debtor won’t be able to avoid such proceedings simply by avoiding the postman or the Sheriff Officer.

Together, these measures should help re-balance the bankruptcy process between creditors, who just want a fair crack of the whip against their debtors, and the debtors themselves who may be struggling financially because of the pandemic. During the crisis, virtually no bankruptcy cases could be advanced, because of the restrictions.

A significant change for landlords of domestic houses and flats during the pandemic was the removal of the “mandatory” nature of some of the statutory grounds on which tenants could be evicted. For example, if a landlord brought an eviction action on the ground that the tenant was in three months of arrears of rent, the Housing Tribunal did not have a discretion, and would have to order the tenant to be evicted.

During the pandemic, recognising that some tenants won’t have paid rent because they were in financial difficulties due to Coronavirus-related restrictions, the rules were changed so that the Tribunal would have a discretion – if it was satisfied that the reason for non-payment was because of the pandemic, the Tribunal could decide not to evict.

That change from “mandatory” to “discretionary” grounds will now become permanent – all grounds for eviction will now be “discretionary”, and the Tribunal will have to be satisfied that it is reasonable in the circumstances of a given case to grant eviction.

Further, before bringing an eviction action, a landlord will need to show compliance with a Pre-Action Protocol to be set out by the Scottish Ministers. The intention here is to require landlords to exhaust other options before seeking to evict a tenant, such as allowing them time to pay arrears. If an eviction action is brought but the Tribunal is not satisfied that the landlord has done enough to comply with the Protocol, the Tribunal will be entitled to refuse to order eviction.

Overall, the changes in relation to residential tenancies will be of benefit to tenants, and will make it harder for landlords to evict. Depending on your perspective, that might be a good or a bad thing. Either way, though, what such a system seeks to ensure is that no-one is evicted unjustly, which is surely a laudable aim.

Changes made during the pandemic in relation to the registration of documents electronically will now become permanent. This will apply to documents such as Dispositions relating to property sales, and other deeds such as Inhibitions and Discharges. Registers of Scotland’s portal for uploading such documents has been a huge success, and the Bill should continue to make it easier (and perhaps quicker) for such documents to be registered.

Another change relates to the process for signing documents. Under the pre-pandemic law, documents which needed to be notarised (such as Affidavits) would require the granter to sign in front of a notary public who was physically with them in the room, and who would add his or her signature to the same page. That requirement was abandoned during the pandemic, and “virtual signing” became permissible, with documents being signed and notarised during Zoom calls. This concession will become permanent, which should make it easier for such documents to be executed, particularly for those living abroad, or in remote locations where there might not be a handy notary public around.

The Bill will be considered by the Scottish Parliament, and of course can be amended as it passes through that process. We’ll report on the Bill once it becomes an Act, which should be later in the year.