Section 113 – Interpretation of Part 2
474.This section defines key terms used in this Part. It should be read alongside section 120 which defines some terms for the purposes of the whole Act, as well as schedule 1 of the Interpretation and Legislative Reform (Scotland) Act 2010.
475.In particular, subsection (1) defines a “right in security” so that, unless the context requires otherwise, it includes a floating charge but does not include a right to use diligence – diligence being the Scots law term for the several methods of enforcing a debt due under a court order (or equivalent). The effect is that an effectively executed diligence is not to be treated as a security right for the purposes of the Part. The expression “right in security” can be used in various legal senses, including being limited to “true” securities where the secured creditor has a subordinate real right in the asset. For floating charges, however, there is no such real right prior to attachment (crystallisation) of the charge as a result of the insolvency of the legal person who granted the charge.
476.It should also be noted that the terms “provider” and “secured creditor” can include or, as the case may be, consist of successors in title. For example, if the secured creditor assigns their right as creditor to another person, it would be their successor in title who would be required to serve various notices if they wished to take enforcement action.
