Judicial Factors (Scotland) Act 2025

Part 3 Dealings etc. with third parties and validity of certain transactions

23 Protection of person acquiring title

Where a person has, in good faith and for value, acquired title from—

(a) a judicial factor, the title acquired is not challengeable on the ground that, subsequent to the acquisition, the judicial factor’s appointment was recalled,

(b) a person who derived title from a judicial factor, the title acquired is not challengeable on the ground that the title should not have been transferred to that person.

24 Entitlements and liabilities of judicial factor

A judicial factor stands in place of the factory estate in any dealings with a third party and accordingly the judicial factor, in the judicial factor’s capacity as such—

(a) is liable for any debt or obligation of the estate to the third party,

(b) is entitled to—

(i) receive any amount due to the estate by the third party,

(ii) enforce any obligation due to the estate by the third party.

25 Contracts entered into by judicial factor

(1) Subsection (2) applies where a judicial factor, in the capacity of judicial factor, enters into a contract with a person who is or ought to be aware that the judicial factor is entering into the contract in that capacity.

(2) Subject to section 27—

(a) any rights which that person or any third party has under or by virtue of the contract are enforceable against the factory estate only, and

(b) if the contract gives rise to legal proceedings, the action is to be raised by, or, as the case may be, directed against, the judicial factor in the judicial factor’s capacity as such.

26 Expenses of legal proceedings on behalf of factory estate

Subject to section 27, where a judicial factor engages in legal proceedings on behalf of the factory estate, any expenses of the proceedings awarded against the judicial factor fall to be met from the factory estate.

27 Claims arising from acts or omissions of judicial factor

(1) This section applies where a claim for damages arises as a result of the acts or omissions of—

(a) a judicial factor, in the capacity of judicial factor,

(b) an agent appointed, or person employed, by the judicial factor to carry out the business of the judicial factory.

(2) Any action to enforce a claim must be brought against the judicial factor in that capacity.

(3) Any damages awarded in respect of, or liability (including the expenses of the proceedings) arising from, the claim fall to be met out of the factory estate unless the court—

(a) finds that the liability arose by virtue of a breach of duty on the part of the judicial factor, and

(b) considers it appropriate that the judicial factor be found personally liable for all, or some part of, the liability.

28 Prescription of obligations

(1) Subject to subsection (2), obligations due to or by a factory estate prescribe as if there had been no appointment of a judicial factor on the estate.

(2) The period during which a person is appointed as judicial factor on an estate does not form part of the prescriptive period in respect of any obligation due by that person to the estate.

29 Validity of certain transactions by judicial factor appointed on trust estate

(1) This section applies where a judicial factor is appointed on a trust estate and in relation to the trust estate, or any part of it, the judicial factor—

(a) wishes to exercise a function which the judicial factor holds by virtue of this Act or any other enactment and would otherwise be entitled to exercise, and

(b) considers that the exercise of the function might be at variance with the terms or purposes of the trust.

(2) Before exercising the function, the judicial factor must—

(a) apply to the Accountant for consent to exercise the function, and

(b) notify each person or class of person specified in rules of court of the judicial factor’s intention to exercise the function.

(3) On an application under subsection (2)(a) being made, the Accountant may grant consent to the exercise of the function if the Accountant is satisfied that—

(a) the exercise is in the best interest of every person who has an interest in the trust estate,

(b) the judicial factor has complied with—

(i) subsection (2)(b) (in so far as is, in the opinion of the Accountant, reasonably practicable), and

(ii) any applicable rules of court, and

(c) either—

(i) no objection has been made under subsection (5)(c), or

(ii) any such objection is not sufficient cause for rejecting the application.

(4) In granting consent to the exercise of the function, the Accountant may specify that consent is given subject to such conditions as the Accountant considers appropriate.

(5) Notification under subsection (2)(b) must—

(a) be given in the manner specified in rules of court,

(b) set out what the exercise of the function would involve,

(c) set out the manner and time frame in which the person receiving the notification may object to the application (as such manner and time frame may be specified in rules of court).

(6) The judicial factor must not exercise the function unless consent is granted under subsection (3).

(7) Where a judicial factor exercises a function in accordance with consent granted under subsection (3), the exercise is to be treated as not being at variance with the terms or purposes of the trust.