Part 5 – Accountant of Court
Accountant of Court and Depute Accountant
80.Section 38 makes provision for the appointment of the Accountant of Court. The power to appoint the Accountant is already vested in the Scottish Courts and Tribunals Service (SCTS) under section 25 of the Administration of Justice (Scotland) Act 1933. Subsection (1) requires that the person appointed to the office of Accountant by SCTS must be appropriately qualified or experienced in law and accounting. Subsection (2) places a duty on the Scottish Ministers to periodically review that criteria and, if appropriate, change it by regulations, subject to the affirmative procedure.
81.Subsection (4) prevents the Accountant from holding any other office, unless express provision is made elsewhere in legislation in relation to a particular office which allows the Accountant to hold that office in addition to the office of Accountant. Subsection (5) makes provision for the SCTS to pay the Accountant for performing the role of Accountant and makes clear that payment from SCTS is the only payment that the Accountant is entitled to for carrying out the role of Accountant.
82.Subsection (6) requires the Accountant to charge fees for the Accountant’s activities under the Act, and subsection (7) makes clear that those fees must cover any outlays which the Accountant reasonably incurs in carrying out those activities, and are to be paid from the factory estate. The exception to this is fees charged under section 46, which relates to the Accountant complying with requests to provide information or allow access to documents to persons with an interest in the factory estate. In those cases, the fee is to be paid by the person making the request. Subsection (8) requires the Accountant to account, in the manner directed by SCTS, for any sums received by the Accountant other than remuneration. Subsection (9) allows the Accountant to waive the right to recover any fee that the Accountant considers that they are unlikely to be able to recover.
83.Section 39(1) establishes a power for SCTS to appoint a Depute Accountant on terms and conditions determined by SCTS. In practice, a Depute Accountant is already appointed by SCTS, and this provision creates a statutory basis for that appointment. Subsection (2) applies the same requirements to any person appointed to the role as apply to persons appointed to the role of the Accountant – they must be appropriately qualified in law and accounting, while subsection (3) places the same duty on the Scottish Ministers to review the criteria, and the power to change it by regulations, subject to the affirmative procedure, if appropriate. Subsection (5) provides that the role of the Depute Accountant is to carry out the role of Accountant when the Accountant is unable to do so, and makes clear that during any such period the Depute Accountant is to act and be treated as if they were the Accountant.
84.Section 40(1) sets out the general function of the Accountant, which is to supervise the performance by all judicial factors of the functions conferred on those judicial factors, however the functions were conferred. The Accountant must also seek to ensure that judicial factors perform their functions in accordance with any applicable legal requirements and guidance. Subsection (2) allows the Accountant to issue instructions to a particular judicial factor as to how that judicial factor is to carry out their functions.
Misconduct or failure of judicial factor
85.Section 41 makes provision for the Accountant to take actions where the Accountant has reason to believe that there is, or has been, misconduct, failure to discharge duties, or failure to comply with an instruction from the Accountant, on the part of a judicial factor. Such belief on the part of the Accountant may, for example, arise as a result of a report being made to the Accountant by a third party in relation to the conduct of the judicial factor.
86.Subsection (2) requires the Accountant to make investigations and allow the judicial factor to make representations about the suspected misconduct or failure. Subsections (3) and (4) provide that if, following that process, the Accountant is of the view that there has been serious misconduct or material failure, the Accountant is required to report that misconduct or failure to the court, and to any professional body of which the judicial factor is a member, or another body which has responsibility for dealing with complaints made in relation to members of that professional body. For example, if the judicial factor is a Scottish solicitor, the Accountant would be required to report the matter to the Scottish Legal Complaints Commission. The Accountant has discretion to determine what constitutes serious misconduct or material failure in the case of a particular judicial factor but this may include, for example, failing to comply with an instruction of the Accountant under section 40(2) without good reason.
87.Subsections (5) and (6) set out what happens when a matter is reported to the court under subsection (4). The court is required to allow the judicial factor the opportunity to make representations on the matter, and thereafter the court is empowered to dispose of the matter in any manner that the court considers appropriate. Subsection (6)(a) makes clear that a disposal by the court is final, meaning that there is no right of appeal against the court’s decision by either the Accountant or the judicial factor. Paragraph (b) provides that any right any person has to seek legal recovery of loss they have suffered as a result of the misconduct or failure of the judicial factor is retained, and that right is not affected by disposal by the court under this section.
88.Section 41 will cease to apply in relation to judicial factors when they are discharged.
Power of the Accountant to require information
89.Subsection 42(1) gives the Accountant the power to serve notice on any person requesting that the person supply information which the Accountant reasonably considers relevant to the Accountant’s functions. This might be, for example, banks with whom a judicial factor has interacted in relation to the factory estate, where the Accountant has reason to believe there may have been misconduct on the part of the judicial factor. Subsection (2) places a requirement on persons receiving notice under subsection (1) to comply with the notice, unless, as set out in subsection (3), they are a reserved body by virtue of paragraph 3 of Part III of schedule 5 of the Scotland Act 1998, a Minister of the Crown, a department of the Government of the United Kingdom, or a public body operating wholly in relation to a reserved matter in accordance with the Scotland Act 1998. Such persons may choose to supply the information requested, but are not required to do so.
90.Subsection (4) provides that if the information can be obtained by the Accountant under any other enactment, a person who receives notice sent under subsection (1) can, instead of supplying the information, direct the judicial factor to the other means by which the Accountant can obtain the information. Subsection (5) makes clear that, while this section does not authorise a person to charge a fee for supplying information in compliance with a notice sent under subsection (1), if another enactment authorises the charging of a fee for supplying that information then that fee may be charged. Subsections (6) and (7) make clear that this section does not override the provisions of data protection legislation as defined in the Data Protection Act 2018, meaning that a person is not required to supply information where to do so would be in breach of a provision of that legislation – but the provisions of the Act are relevant in determining whether or not that is the case.
Audit by Accountant
91.Section 43 requires the Accountant to audit any accounts received from a judicial factor under a provision of the Act in accordance with the procedure set out in this section. Subsection (2) gives the Accountant the power to examine further information, and to send the accounts to an external accountant for auditing if the Accountant considers that it is necessary, or would be beneficial, to do so. If the Accountant does send the accounts to an external auditor, subsection (3) places the Accountant under a duty to supervise that external audit, and provides that the Accountant is still the person who is ultimately responsible for the accuracy of the audit. Under subsection (4), the Accountant is required to send a copy of the report on the audit to the judicial factor whose accounts have been audited. Subsection (5) requires the Accountant, or external auditor, to give the judicial factor an opportunity to explain anything in the accounts which requires explanation, and to explain any correction made to the accounts in the course of the audit, to the judicial factor. Subsection (6) requires the costs of any external audit to be paid from the factory estate.
92.Section 44 sets out the process which will apply when any objection or appeal is made by the judicial factor in relation to an audit carried out in accordance with section 43. The effect of subsection (1) is that, other than by the process set out in this section, the results of the audit are not open to challenge. Subsection (2) gives the judicial factor 21 days from the day on which they receive the report on the audit to send a written objection to the Accountant. Subsection (3) requires the Accountant to consider any objection received, after which the Accountant can either amend the results of the audit based on the objection, or dismiss the objection. In the event that the Accountant dismisses the objection, subsection (4) allows the judicial factor to require the Accountant to refer the objection to the court. Subsection (5) makes clear that there is no right of appeal in respect of a decision made by the court following such referral.
Annual review
93.Section 45(1) places the Accountant under an obligation to publish an annual review detailing the Accountant’s activities in relation to the relevant judicial factories, for the reporting year to which the report relates. The meaning of “relevant judicial factories” is set out in subsection (5), and it covers every judicial factory which is in place during the relevant reporting year. This means that judicial factories which existed at any time during, or for any portion of, the reporting year must be included within the scope of the report, whether or not they were in place at the time the reporting year started, or were still in place at the time the reporting year ended.
94.Subsection (2) gives the Scottish Ministers a power to make regulations setting out further detail about the reporting requirement. The regulations are subject to the negative procedure. Such detail must include how the review must be published, the information it must contain, and the timing of the reporting year. Subsection (3) allows the Accountant to include in each review further information which is not specified in the regulations made by the Scottish Ministers under subsection (2).
Inspection of records held by Accountant
95.Section 46 places the Accountant under an obligation to make certain documents relating to a factory estate available for inspection, or to provide copies of the documents, to a person with an interest in the factory estate who requests such copies or inspection. The documents are defined in subsection (4) as being the management plan, the inventory, the balance sheet, the annual accounts, and the audit report in relation to the relevant estate.
96.Subsection (1) requires the person to submit a request to the Accountant, and demonstrate a reason for requiring the copies or to inspect the documents. Subsection (2) requires the Accountant to charge the person making the request a fee for inspecting the documents or for the copies, while subsection (3) provides that any copies supplied under this section have the same evidential status as the original documents, meaning the person receiving the copies can rely on them in the same way as they could rely on the original documents, such as in court proceedings.
Inconsistency in judgement or practice
97.Section 47 requires the Accountant to submit a report to the Lord President of the Court of Session if the Accountant is of the view that the sheriff courts in Scotland are not consistent in their dealings in relation to judicial factors or factories. The Accountant must propose a rule of practice in relation to the inconsistency identified, and the Lord President may take such action as the Lord President considers appropriate – which may include adopting the rule proposed by the Accountant.
Right of judicial factor to require determination as regards decision of Accountant
98.Section 48 gives judicial factors a right to apply to the court which appointed them for a determination in relation to any decision that the Accountant has made in relation to the judicial factory. Essentially this is a right for the judicial factor to appeal such decisions to the court. Subsection (2) restricts the decisions in relation to which the judicial factor can make an application, by excluding decisions to dismiss an objection made in relation to an audit, under section 44(3), since section 44(4) already gives the judicial factor power to require the Accountant to refer such objections to the court. Decisions that the Accountant makes in relation to the amount or frequency of remuneration of the judicial factor are also excluded, since judicial factors already have a right of appeal by virtue of section 11(6). Subsection (3) provides that there is no right of appeal, by either the judicial factor or the Accountant, in respect of any decision made by the court following a referral made under this section.
