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argue this does not apply anymore since the PMB for bank arrestments came into force stating these protections were superseded by the PMB.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.