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Stopping a bank arrestment
Bank account arrestments can be stopped legally by being recalled or restricted. It is often necessary to raise an objection in court, but can be done by negotiation with the sheriff officer or the creditor.
Technically, only the following have the authority to recall or restrict and arrestment:
    sheriff officers, on the instructions of the creditors who authorised them to arrest the bank account; or
    a sheriff at the sheriff court.
Negotiating with a sheriff officer
It is worthwhile contacting the sheriff officer to negotiate the lifting of a client’s bank arrestment before raising an objection through the court. An adviser’s or their agency’s relationship with sheriff officers often plays a part in how successful they are using these tactics. You can argue that the arrestment will cause hardship, that the client is vulnerable or has mental health issues. The sheriff officer may ask that a repayment plan is proposed, and if the client is employed will ask for their employer’s details (often to action an earnings arrestment if the client defaults on a repayment plan). Note that a client’s record of maintaining any previous arrangements will be looked at by the sheriff officers/creditor and, if they have had previous defaults, the negotiation is less likely to be successful.
If the arrestment was for council tax or another local authority debt, the adviser can contact the local authority directly and ask for the arrestment to be lifted on the grounds of hardship, especially if the arrestment means that other debts or priority payments cannot be met – eg, rent payments.
If an adviser is unable to get the sheriff officer or the creditor to agree to lifting or restricting the arrestment, they may need to raise an objection in court.
Raising a notice of objection in the sheriff court
Submitting a notice of objection in court is a formal legal process.1s73M D(S)A 1987 Forms are available at the local sheriff court or can be found in the Act of Sederunt (Sheriff Court Rules Amendment) (Diligence) 2009 No.107.
To submit a notice of objection, there are specific grounds the objection must be based on. These are:2s73M D(S)A 1987
    the warrant the arrestment was executed on was invalid; or
    the arrestment has been executed incompetently or irregularly; or
    the funds attached are owed to a third party solely or in common with the debtor.
Notices of objection must be submitted within four weeks of the bank arrestment being executed.
 
1     s73M D(S)A 1987 »
2     s73M D(S)A 1987 »
The warrant the arrestment was executed on was invalid
This is rarely used as warrants are rarely invalid. However, if creditors have not served the client with a charge for payment (under the summary warrant process) or have served the charge for payment but not waited until it expires before actioning the arrestment, it can be argued that they had no valid warrant for arrestment and the action taken was invalid.
Under the summary diligence procedure, if there has been an error by the creditor in extracting the warrant from the Books of Council and Session (eg, the client had not defaulted on their agreement), it may be possible to argue that it was invalid, and a sheriff may lift the arrestment.
While a moratorium on diligence1ss195-198 B(S)A 2016 is in place, it is not valid to serve a bank arrestment on a client’s bank. If this does happen and the schedule was dated after the date the statutory moratorium was granted, you can object, citing section 197(3)(b) of the Bankruptcy (Scotland) Act 2016.
197(3) While a moratorium on diligence applies in relation to the person it is not competent–
(a) to serve a charge for payment in respect of any debt owed by the person, or
(b) to commence or execute any diligence to enforce payment of any debt owed by the person,
(c) to found on any debt owed by the person in presenting, or concurring in the presentation of, a petition for sequestration of the person’s estate, or
(d) where an arrestment mentioned in subsection (1) of section 73J of the Debtors (Scotland) Act 1987 has been granted in respect of funds due to the person, to release funds to the creditor under subsection (2) of that section.
 
1     ss195-198 B(S)A 2016 »
The arrestment has been executed incompetently or irregularly
The other ground that could be argued is that an arrestment is incompetent or has been executed irregularly.
One argument in terms of incompetency is that the funds that were attached could not competently be attached – eg, the only funds going into the client’s account are solely from benefits income.
Certain social security benefits are said to be ’inalienable’, which means they cannot be attached.
Sheriff officers often argue this does not apply anymore since the PMB for bank arrestments came into force stating these protections were superseded by the PMB. However, their argument is flawed for a number of reasons.
With regards to Scottish benefits, the protection written into the legislation was done so after PMB for bank arrestment was introduced. Earlier legislation cannot have overwritten more recent legislation.
Further, in terms of the UK protections that were introduced in 1992, this area of law was not devolved to the Scottish parliament at the time the PMB was introduced, so it would not have been competent for the Scottish parliament to have amended UK laws in this area.
This can be an easier argument when the only deposits in the client’s account are from benefits, although there is a counter argument from the banks that deposits lose their status when they go into an account, so identifying benefits-only income is impossible.
It can also be difficult if there is a mixture of benefits and other income. Technically, only the income that is not benefits should be arrested and only such income that is beyond the PMB as benefits should be treated as not being there, as they are inalienable from diligence.
This is a complex area of the law and, although recent caselaw in Mackenzie v Edinburgh Council and Bank of Scotland1[2023] SC EDIN 21, 5 July 2023 is encouraging, it is always worth speaking to experienced colleagues or specialist advisers if you are unsure how to proceed.
An example of irregularly executing an arrestment is when a bank does not execute the arrestment on the date and time it is received, but waits until there are funds in the client’s account – eg, a day or two after receiving the schedule of arrestment from sheriff officers. This is an irregular execution as bank arrestments can only arrest funds in an account on the date and time they are served. If there are no funds, they fail, even if funds are subsequently deposited in the account.
 
The funds attached are owed to a third party solely or in common with the debtor
This can arise where a client has a joint account with someone else and the funds are arrested. As a result, the joint account holder may lose their money because of the other person’s debt.
This does not necessarily mean that it will be presumed 50 per cent of the money belongs to the other person, but will very much depend on who has been contributing to the account and for what purpose and to what extent.
It may also depend on, for example, where there is a joint debt like council tax, whether the other account holder was also liable for that debt (even if the bank arrestment did not name them specifically). These are factors that a sheriff will consider when deciding whether or not the funds arrested should be restricted.
Where it is not a joint account, this argument could still be used where someone else has been using the account – eg, if it can be shown that someone else’s wages or benefits were paid into the account. Based on the facts of the case, a sheriff may lift the arrestment.
 
How to submit a notice of objection
A notice of objection is submitted to the sheriff clerk’s office in the client’s local sheriff court using Form 63F.2Act of Sederunt (Sheriff Court Rules Amendment) (Diligence) 2009 No.107 This must be submitted within four weeks of the date on the schedule of arrestment.
On receipt of the application, the sheriff clerk sets a hearing date when the application will be heard by the sheriff and notifies all the relevant parties, including the creditors and the bank.
There is no cost to raising an action under the Debtors (Scotland) Act 1987. Clients can either represent themselves or have a lay representative. They can also employ a solicitor, but this may incur a significant cost to the client (unless they qualify for legal aid).
Note that if the action is unsuccessful, the sheriff can order the client to pay the other parties’ legal expenses in responding to the application.
 
Unduly harsh
Clients may feel that their bank arrestment is harsh. However, there is a difference between an action being ’harsh’ and being ’unduly harsh’. Meeting the threshold of ’unduly harsh’ has become problematic since the introduction of the PMB, as creditors argue that clients are left with money to meet their obligations. However, it does not mean that making an application citing the action as being unduly harsh should not be attempted.
Some common examples of situations where a bank arrestment may be considered unduly harsh include the following.
    Earnings arrestment – if a creditor is already arresting a client’s wages and then arrests their bank account, this could be considered as unduly harsh. Note, though, that ‘double diligence’ is allowed under the law and is often used by local authorities when council tax becomes due for payment at the start of a new year.
    Client’s current commitments – although the PMB is left in a client’s account after the arrestment, if they have existing commitments such as rent/mortgage which will leave them with no money for food, heating or other essentials, it can be argued as being unduly harsh, especially if it impacts on the welfare and safety of children or others in the household.
    Mixed income – if a client has income from benefits (which is supposed to be alimentary in nature) as well as a small amount of earnings, it can be argued that this is unduly harsh as it has denied the client access to benefit income that legally parliament had intended to be protected from such diligences.
    It is too late to lodge a notice of objection with the sheriff court, the four-week period has passed and therefore the raising of an application using ‘unduly harsh’ on the same grounds is appropriate.
This list is not exhaustive and clients who do not meet any of the above may still have a valid case for arguing that the action of arrestment was unduly harsh. It is important to remember that when arguing that the action is unduly harsh, the focus should be on the factors that make it so, how it affects not just the client, but also their family, or anyone else who relies on them, as well as (with explicit consent) advising the court about any illness or disability that is impacted by the action.
 
How to object using ‘unduly harsh’
An application to the sheriff court on the grounds that a bank arrestment is unduly harsh is made using Form 63G,3Act of Sederunt (Sheriff Court Rules Amendment) (Diligence) 2009 No.107 which is submitted to the sheriff clerk’s office in client’s local sheriff court.
There is no fee for making the application and the sheriff clerk should notify the relevant parties and schedule a hearing in front of the sheriff where all parties can be heard. Clients can either represent themselves or have a lay representative. They can also employ a solicitor, but this may incur a significant cost to the client (unless they qualify for legal aid).
These actions are not quick processes, and it can take several weeks before the case is heard in court. During this time the client may need help with essentials such as food/housing and utilities as well sorting other creditor commitments, which will be impacted by the bank arrestment.
 
1     [2023] SC EDIN 21, 5 July 2023 »
2     Act of Sederunt (Sheriff Court Rules Amendment) (Diligence) 2009 No.107 »
3     Act of Sederunt (Sheriff Court Rules Amendment) (Diligence) 2009 No.107 »