The banks’ role
Banks (the arrestee) are legally obliged to act upon the lawful instruction of a schedule of arrestment and must tell the creditor within three weeks of the arrestment being served by the sheriff officer if it has been successful. If a bank fails to disclose details of a successful arrestment to the creditor, it can be ordered by the court to pay the creditor the lesser of:
•the sum due by the client to the creditor; or
•the amount representing the protected minimum balance (PMB).
This amount reduces the debt owed by the client and the creditor cannot recover this sum from the client. The bank, however, does not need to disclose anything if the arrestment has been unsuccessful.
The date and time of ‘execution of the arrestment’ is important, as only the funds in an account on this date and time can be arrested. The arrestment fails if no funds are in an account on this date.
Note that banks often charge a client’s account when they action an arrestment. This can happen even if the arrestment fails and is not affected by any subsequent recall/restriction of an arrestment. Clients and advisers may have to negotiate refunds separately from any subsequent action they take against the bank arrestment.