Moveable Transactions (Scotland) Act 2023

Moveable Transactions (Scotland) Act 2023

2023 asp 3

Commentary on Sections

Part 1 – Assignation

Chapter 1 – Assignation of claims, protection of debtors and related matters

Assignation of claims

Section 1 – Assignation of claims: general

5. Section 1 sets out key rules on assignation (i.e. transfer) of claims. A claim is the right to the performance of an obligation, usually the right to payment of a debt. See section 41(1) of the Act for the full meaning of “claim”.

6. Subsection (1) has the effect that a claim must be assigned by means of a document (an “assignation document”) which is executed or authenticated by the assignor. This means that it must be signed by or on behalf of the assignor, either in ink if a hard copy (“executed”) or with an electronic signature if an e-­document (“authenticated”). The assignor means the person assigning the claim. See section 41 for the definition of “assignor” and section 120(2) for the meaning of “executed” and “authenticated”.

7. Subsection (2) requires the claim to be identified, but subsection (3) makes it clear that claims do not need to be individually identified in the assignation document, provided that these fall within an identifiable class and are identified as such. Thus, for example, it would be possible for a business to assign all invoices raised against a particular customer, or all invoices rendered in a period specified in the assignation document.

8. Subsection (4) provides that a claim that is not yet held by the assignor at the date of the assignation, including a claim that has not yet come into being, can be assigned. For example, a plumbing business may wish to assign to a factor the invoices for work not yet instructed by a customer. It is not possible to complete the assignation by intimating such a claim until the work has been done and the debtor can be identified. However, it will be possible to assign such a future claim by registering it in the Register of Assignations under section 19 of the Act.

9. Subsection (5) clarifies that the ways in which a claim can be identified in an assignation document include by making reference to another document, the terms of which are not reproduced. The term “document” is defined broadly in schedule 1 of the Interpretation and Legislative Reform (Scotland) Act 2010 and this provision would therefore include, for example, making reference to information uploaded to an electronic database.

10. Subsection (6) provides that nothing in Part 1 applies to the assignation of a claim as part of a financial collateral arrangement within the meaning of the Financial Collateral Arrangements (No.2) Regulations 2003. For example, a credit card company assigning the amounts due to it by its customers to its bank as security for its obligations would constitute such an arrangement (specifically, a title transfer financial collateral agreement). The law in relation to such matters is left unchanged by the Act.