5.Section 1 provides, at subsection (1), for the court to appoint a judicial factor on an estate if the conditions for appointment, set out in section 4, are met. For appointment to take place, an application must be made to the court by an interested person, defined in subsection (7) as a person that the court is satisfied has an interest in the appointment of a judicial factor on the estate. This might be a person who has an interest directly in the estate itself, or a person whose interests are affected by the estate, for example the owner of a property which adjoins property forming part of the estate, where that estate property is in a state of disrepair such that damage might be caused to the neighbouring property.
6.Subsection (7) also contains a definition of “
a part of the estate comprising at least one fifth of its value is located in the sheriffdom of that court,
the person who made the application to the court, or any other person with an interest in the estate, is resident in the sheriffdom of that court, or
where the estate belongs to a person who is not an individual, such as a limited company, the person has their registered office or a place of business in the sheriffdom of that court.
7.Subsection (2) places a requirement on persons applying for the appointment of a judicial factor to notify every person with an interest in the estate. Subsection (3) provides a further route for appointment of a judicial factor on an estate, by providing that the court may appoint a judicial factor during the course of proceedings in that court. The conditions of appointment set out in section 4 again require to be met, and the proceedings must have some connection to the estate on which the court wishes to appoint a judicial factor. Appointment can be done by the court without an application having been made, or a person who is party to the proceedings can make an application provided they fall within the definition of “interested person” set out in subsection (7). Subsection (4) places a requirement on the clerk of court to notify every person with an interest in the estate that the court is minded to make an appointment under subsection (3)(a)(i), while subsection (5) places that requirement on a party who makes a motion for appointment under subsection (3)(a)(ii). Subsection (6) then sets out the circumstances in which the court may determine that intimation does not require to be given under subsection (2), (4) or (5).
8.Section 2 adds further intimation requirements which are to apply, in addition to those set out in section 1, in relation to the appointment or potential appointment of a judicial factor to the estate of a charity.
9.Subsection (1) places a requirement on persons applying for the appointment of a judicial factor to the estate of a charity to notify the Office of the Scottish Charity Regulator (“
10.Section 3(1) makes provision for the appointment of an interim judicial factor. This can be done while an application under section 1(1), or a motion under section 1(3)(a)(ii), for appointment of a permanent judicial factor is undergoing consideration. In either case, to appoint an interim judicial factor the court must consider that the appointment would be necessary or expedient, for example where a business partnership has deteriorated to the extent that the business is at risk unless immediate action is taken. Applications for the appointment of an interim judicial factor can be made by the original applicant under subsection 1(1), or, where a motion has been made under section 1(3)(a)(ii), by the applicant or another party to the proceedings provided they fall within the definition of “interested person” in section 1(7). The court may also appoint an interim judicial factor, pending determination of an application under section 1(1) or a motion under section 1(3)(a)(ii), without any application having been made. There is no requirement for the conditions of appointment set out in section 4 to apply in order for an interim judicial factor to be appointed.
11.Subsection (2) makes clear that the provisions of the Act apply to an interim judicial factor, unless the context requires otherwise or the court makes different provision when appointing the interim judicial factor. Subsection (3) requires the Accountant to review the progress being made by any interim judicial factory – since appointment of interim judicial factors will be open-ended, there will be no need for the court to order extensions to their appointment. The review provision therefore provides a mechanism by which to ensure that satisfactory progress is being made.
12.Section 4 sets out the conditions which a court must consider to be satisfied in relation to an estate in order to appoint a judicial factor under section 1(1) or (3). If the court does not consider that the conditions are met, then it will not be competent for the court to appoint a judicial factor.
13.The first condition, set out in subsection (1)(a), is that an estate either requires to be managed, or requires actings to be carried out in relation to it. Subsection (2) provides that “
14.The second condition, set out in subsection 1(b), is that the court must be satisfied either that it is not possible, practicable, or sensible for the person who would ordinarily be responsible for the required actings or management to carry them out, or that it would be to the advantage of the estate for a judicial factor to be appointed to carry them out. It might not be possible for a person to carry out actings if, for example, they are not old enough to legally do so. It might not be practical for a person to carry out actings if that person lives abroad, or it might not be sensible for a person to carry out actings where there is a dispute between partners of a partnership which would otherwise be responsible for the estate.
15.Section 5(1) sets out the requirements which a person must fulfil in order for that person to be appointed as a judicial factor. A person must be an individual of full legal capacity, meaning over the age 16 and not subject to any legal incapacity which would prevent them carrying out any actions. The individual must, in the opinion of the court making the appointment, be suitable to act as judicial factor on the estate. There is no requirement that they hold any specific qualification such as a legal or accounting qualification, although it is expected that in practice the majority of judicial factors appointed will be legal or financial professionals. Subsection (2) makes clear that the Scottish courts have jurisdiction in relation to the judicial factory even if the person who is appointed as judicial factor is domiciled outside of Scotland.
16.Section 6 gives a power to any court which appoints a judicial factor to require the judicial factor to find caution for their performance of the functions of judicial factor, where there are exceptional circumstances which justify it. This means that the judicial factor would be required to lodge with the court a bond of caution, which would act as financial security to allow the court to recover from the judicial factor any financial losses suffered by the estate as a result of the judicial factor’s actions in managing the estate.
17.Section 7 requires the clerk of a court which appoints a judicial factor to notify the Accountant of the appointment, and to arrange for notice of the appointment to be recorded in the Register of Inhibitions(2). Under subsection (3), the notice must include an address at which documents can be served on the judicial factor. Both the notification and the recording must be done as soon as reasonably practicable after the court has issued its order or decision (in the form of an interlocutor) confirming the appointment of the judicial factor. However, under subsection (2), if the court has required the judicial factor to find caution under section 6, then the clerk of court is not to send the notice for recording until the Accountant has confirmed that caution has been found.
18.Subsection (4) then provides that, if the judicial factory lasts for 5 years or longer, the judicial factor must re-record the appointment in the Register of Inhibitions 5 years after the original recording, and confirm to the Accountant when this has been done. This obligation repeats every 5 years for the duration of the judicial factory. Subsection (5) provides that all fees for recording or re-rerecording in the Register of Inhibitions are to be paid from the factory estate.
19.Section 8(1) places a requirement on the Scottish Ministers to periodically review the appropriateness of the recording of notices of appointment of judicial factors in the Register of Inhibitions. If the outcome of such a review is that another register would be more appropriate, then the Scottish Ministers may make regulations which change the requirement to record such notices in the Register of Inhibitions, and which specify which register is to be used instead. This can either be a register which already exists, or a bespoke register specifically for judicial factories. Any such regulations are subject to the affirmative procedure.
20.Subsection (2) provides that if the Scottish Ministers make regulations which specify that notices are to be registered in an existing register, then the regulations must also make the legal provision necessary for that register to be used.
21.Subsection (3) provides that if the Scottish Ministers make regulations which specify that a bespoke register specifically for judicial factories is to be used, then the regulations must establish such a register, and may provide for another person, such as the Accountant, to be responsible for its maintenance. Subsection (3) then goes on to set out further detail which may be included in such regulations.
22.Section 9 provides for the whole of the factory estate to vest in the judicial factor on appointment, unless the court has required the judicial factor to find caution, under section 6. In that case, the factory estate will vest in the judicial factor on the date on which the Accountant confirms in writing, to both the court and the judicial factor, that this requirement has been met. When the estate vests in the judicial factor, the judicial factor has full legal rights in relation to the estate as though they were the owner of the estate. “Estate” is defined in section 53 as including moveable and heritable property.
23.Subsection (2) and (3) make clear that in relation to a judicial factor appointed on the estate of a solicitor under section 41 of the Solicitors (Scotland) Act 1980, the estate which vests in the judicial factor includes property or assets which are held by the solicitor on behalf of other people, such as clients, whether or not that property is held by the solicitor in their capacity as a solicitor. This means that funds held by the solicitor as, for example, a trustee or executor are also included in the factory estate.
24.Section 10 requires the clerk of the court which appoints a judicial factor to issue the judicial factor with a certified copy of the interlocutor confirming the appointment without delay. Subsection (2) provides that the certified copy gives the judicial factor evidence of their right to access and deal with the property which vests in them by virtue of section 9. Subsection (3) prevents the clerk of court from issuing the copy until any bond of caution required by virtue of section 6 has been received.
25.Section 11(1) entitles judicial factors to be remunerated for carrying out their functions as judicial factor. Subsection (2)(a) places a requirement on the Accountant to fix rates of such remuneration, after carrying out appropriate consultation. Paragraph (b) requires the Accountant to consult each individual judicial factor appointed and to set the frequency of payment for that judicial factor following that consultation.
26.Subsection (3) allows the Accountant to fix different payment rates in respect of different kinds of work that might be carried out by judicial factors, or for different circumstances. It also allows the Accountant to fix different rates for interim judicial factors. Subsection (4) requires the Accountant to review the rates of payment at least annually. Under subsection (5), the remuneration payable to a particular judicial factor does not require to be fixed in accordance with this section – for example, a rate of remuneration might be fixed for a particular judicial factor which is not based on any consultation having been carried out.
27.Subsection (6) allows judicial factors to appeal to the court which appointed that judicial factor in relation to both the rate and frequency of remuneration determined by the Accountant in relation to that judicial factor. Subsection (7) makes clear that there is no further right of appeal in relation to a determination by the court following an appeal made under subsection (6). Subsection (8) allows the judicial factor to recover from the factory estate any outlays which the judicial factor incurs in carrying out their functions, whenever those outlays are incurred.
28.Section 12 places a requirement on the Scottish Ministers to issue guidance about the appointment of judicial factors to the estates of missing persons. Under subsection (2), this guidance can be reviewed and revised by the Scottish Ministers. Subsection (3) requires the publication of the guidance when originally prepared, or when updated. It allows for the guidance to form part of another document, such as guidance about the appointment of judicial factors generally. Any such guidance might cover how to evidence a person as missing when making an application for appointment under section 1, the ability of a judicial factor to request specific powers under section 11, situations where the interests of the estate may not align with the wishes of the missing person, what happens if a missing person returns, and any interaction with the Presumption of Death (Scotland) Act 1977.
A register, maintained by the Registers of Scotland, of legal documents and proceedings which prevent the person affected by the document or proceedings from selling or transacting in relation to their property.