In this E-notes:

• Philosophy of execution
• History of execution, philosophically considered
• Main differences in procedures for attachment
• Outline of attachment process

Philosophy of execution

The subjects that ly [lie] open to execution for payment of debt, are, 1st, The debtor's moveables. 2ndly, His land. And, 3rdly, His person.^[1]

Henry Home, Lord Kames (1696-1782), judge and philosopher, a major figure in the Scottish Enlightenment of the eighteenth century, gives some of the still clearest statements about the law, as it affects creditors and debtors. The third sort of execution, imprisonment for debt, has not been available to ordinary creditors in Scotland since 1880.^[2] The second, land attachment, is currently almost a dead letter: adjudication for debt, an old and little-used process, is abolished by section 79 of the Bankruptcy and Diligence etc. (Scotland) Act 2007, which enacts (at Part 4, Chap. 2) "a form of diligence over land to be known as land attachment". None of that law has yet come into force.

So, in present practice, enforcement is almost exclusively directed against the first subjects: the debtor's moveables. These the modern lawyer or philosopher divides into three categories: 1^st, the debtor's corporeal moveables in his own hands, or in the hands of the creditor. 2ndly, all sorts of corporeal and incorporeal assets of the debtor, excluding his earnings as an employee, in the hands of third parties.^[3] And, 3rdly, the earnings of a debtor in the hands of his employer.

History of execution, philosophically considered

Attachment of corporeal moveable property, as Lord Kames's Historical Law Tracts (1758) make clear, is the oldest type of execution in Scotland. Returning to Roman law, he explains the main practical difference between the Scottish process, then called poinding, and the English - which was then, and is still, called the writ of fieri facias. We quote the opening of his tract X, 'History of Execution against Moveables and Land for payment of debt', as the clearest explanation of a special feature of Scots law:

Against a debtor refractory or negligent, the proper legal remedy is to lay hold of his effects for paying his creditors. This is the method prescribed by the Roman Law [L.15.2.de re judic.], with the following addition, that the moveables, as of less importance than the land, should be first sold. But the Roman law is defective in one respect, that the creditor was disappointed, if no buyer was found. The defect was supplied by a rescript of the Emperor [L.15.3.de re judic.], appointing, that, failing a purchaser, the goods shall be adjudged to the creditor by a reasonable extent.^[4]

. . . . In England, attachment of moveables for payment of debt, is warranted by the King's letter directed to the Sheriff, commonly called a Fieri Facias; and this practice is derived from common law without a statute. The sheriff is commanded, "to sell as many of the debtor's moveables as will satisfy the debt, and to return the money with the writ into the court at Westminster." The method is the same at this day, without any remedy, in the case where a purchaser is not found.^[5]

. . . . Letters of poinding in Scotland, correspond to the writ of Fieri Facias in England: but the defect above mentioned in the fieri facias, is supplied in our execution against moveables according to its ancient form, which is copied from the Roman law. The execution was in the following manner: "The goods upon the debtor's land ... are carried to the market cross of the head burgh of the sheriffdom, and there sold for payment of the debt. But if a purchaser be not found, goods are apprized to the value of the debt, and delivered to the creditor for his payment."^[6]

Although the market cross has been replaced by the public auction room, this may be said to be exactly the way in which Scots law still uses a debtor's corporeal moveable articles to pay his debt: they are sold, or if not sold, they are delivered, or adjudged, to the creditor, at appraised values. This is the current law:

Where the sum recoverable is not realised by the proceeds of auction and any article remains unsold after being exposed for auction - (a) ownership of the article shall, without prejudice to the rights of any third party, pass to the creditor; and (b) the value of that article shall be credited against the sum recoverable.^[7]

Until the coming into force of the Debt Arrangement and Attachment (Scotland) Act 2002, the diligence (enforcement process) by which a creditor, in the way described above, made the goods of his debtor available for the payment of his debt, was always called poinding (cf. empounding). This is not the place in which to explain why the process came to be renamed attachment.^[8] But what needs to be understood is that, by section 58 of the 2002 Act, the historic diligence of poinding was abolished.^[9] It is remarkable that attachment is an enforcement measure that is, in effect, codified by statute with, at present, probably no relevant body of common law.

However, there is one last examination of a narrow aspect of historic poinding required, before we can simply state the current law. Although, as a general rule, all corporeal moveables belonging to the debtor in his possession natural or civil, or in the hands of the creditor, or of a third party, could be poinded, the learned author, J. Graham Stewart, explains that, in practice, poinding was only used to attach goods which were either actually or constructively in the possession of the debtor,^[10] arrestment being the diligence used if a third party held the debtor's asset. It was a grey area whether bank notes or money so possessed could be poinded; but it had become an accepted practice to exclude money from poinding.^[11] It was not stated whether cash would or would not by attachable, in terms of the 2002 Act.

The uncertainty of centuries, however, was dispelled by the Bankruptcy and Diligence etc. (Scotland) Act 2007. At its section 174 was enacted "a form of diligence over money owned by a debtor to be known as money attachment." Section 175 provides that "money" includes coins and banknotes in any currency; cheques, promissory notes, other negotiable instruments, money orders and postal orders. Money attachment is not competent if arrestment in the hands of a third party were possible.^[12] This brings us to the conclusion that within the compass of Parts 2 and 3 of the Debt Arrangement and Attachment (Scotland) Act 2002 and Parts 7 and 8 of the Bankruptcy and Diligence etc. (Scotland) Act 2007, and subordinate legislation (subject to the exception, mentioned in note 3 on page 1), are found all the Scottish laws relating to the diligence of attachment of corporeal moveable property of a debtor.

Main differences in procedures for attachment

1. Before and after judgment

We have introduced above the diligence of money attachment as something which is part of the procedure of attachment - whereas, by statute, money attachment is, in fact, a separate diligence. But the two do share the main characteristics. They are only available to a creditor in execution, i.e. once judgment has been given, or a document of debt has warrant for enforcement, and only once a charge for payment has been served on the debtor, with the days of charge or warning (usually 14) having passed, without payment having been made.^[13]

There is another form of attachment of corporeal moveables to mention: interim attachment, as enacted by Part 7 of the 2007 Act. Money may not be attached by an interim attachment; but, that apart, the court may grant warrant for diligence on the dependence of an action - i.e. before the court has given final judgment - by attachment of such corporeal moveable property owned (whether alone or in common) by the debtor as would be available for attachment in execution. This means that a judicial officer may now make an inventory of moveables, thus securing them, at a much earlier stage than was ever possible under the old law of poinding.

2. Between articles kept outwith or in dwellinghouses

Money attachment and interim attachment may not be carried out within any dwellinghouse.^[14] The restriction in the use of diligence at residential properties has been the seemingly relentless trend in the cause of creating greater debtor-protection over some thirty years.^[15] The attachment of articles kept in dwellinghouses is a special procedure, the diligence not to be undertaken without an exceptional attachment order.^[16] It is little used by creditors. There is no need here to describe the stages that must be gone through before a judicial officer may enter a dwellinghouse to execute an attachment of non-exempt items within.^[17] But what it is necessary to do is to state that the special restrictions applying "in a dwellinghouse" do not apply "outwith" it, even within the house's grounds or outbuildings. So there is not a simple division in procedure between attachments at commercial or residential premises; the distinction is between the inside and the outside of a dwellinghouse.

Outline of attachment process

A judgment from another Member State has been registered by order of the Court of Session in Edinburgh (Scotland's supreme civil court); the sum to be recovered is £10,000; the debtors are a partnership, carrying on business from commercial premises in Edinburgh and Glasgow. A messenger-at-arms might enforce the judgment as follows:

1. A charge for payment is given to the debtors - a document which, having announced that judgment has been given, in name and authority of the Queen, calls on the debtors to pay the sums recoverable, with expenses, to the creditor, within a period of 14 days. The charge is addressed to the partnership (firm) and to the partners as individuals. The firm is served at a place of business; the partners might receive their charges at either of their places of business or at their homes. If required, the charges, contained within sealed envelopes, could be served by depositing them through the letterboxes.

2. A copy of the debt advice and information package, as referred to in section 10 of the 2002 Act, is "provided" to the debtor by the creditor. Usually, this means that the messenger-at-arms serves a copy of the package with the charge for payment. This provision having been made, the period of 14 full days having passed, without payment having been made, the creditor may instruct the messenger-at-arms to attempt to execute one attachment at each of the addresses of the firm and the partners, only the inside of their dwellinghouses excepted.

3. All between the hours of 8 a.m. and 8 p.m., on a day which is not a Sunday or a day which is a public holiday in the area, the messenger-at-arms and one assistant, who acts as witness, return to the place of business in Edinburgh. The officer demands payment in full. Failing to receive this, he inquires about the ownership of the articles he proposes to attach^[18]; he makes an inventory of the articles, including valuations, which total £4,000; he completes the attachment by leaving the completed schedule of attachment at the address.

4. The messenger-at-arms goes to the home address of one of the partners in Livingston, West Lothian. No one is at home, but he finds a motor car in the drive which he believes to be the property of the partner. Having valued it at £4,000, he completes a second schedule of attachment and deposits that into the house.^[19]

5. The messenger-at-arms, having now secured moveables to a value of £8,000, goes to the business premises in Glasgow, where he repeats the process in 3, having made an inventory of items valued at £4,000. Whereas section 25 of the 2002 Act (Second attachment at the same place) limits the making of more than one attachment for the same debt, this restriction does not bear to apply where the debtor's assets could be attached at more than one place.

6. Items to a value of £12,000 have therefore now been attached - to cover the sum recoverable, with costs. The placing of the valuations is a matter of great importance: if an article were subsequently to be sold at auction at a price below the value placed on it when it was attached, it is that appraised value, not the lower auction price, which would be credited against the sum recoverable.^[20] Moreover, returning to the quotation from Lord Kames about the amendment to the Roman law, "failing a purchaser, the goods shall be adjudged to the creditor by a reasonable extent", it is the value placed at the time of attachment which determines how much credit an unsold article is to give towards the sum recoverable.^[21] The debtor-protection of the valuation is also shown in the debtor's right of redemption. Within 14 days from the date of attachment, the debtor has the right to redeem all or any of the attached articles, by paying to the officer a sum equal to the value fixed at the attachment.^[22]

7. Three attachments have been executed and each must be reported to court. The appropriate court is that sheriff court which has jurisdiction over the place where the attachment was executed. In this scenario, therefore, reports of attachment would need to be sent for reporting, all within 14 days of the date of each attachment, to the sheriff courts at Edinburgh, Livingston and Glasgow. (Unless the messenger had three official extracts of the registration document - i.e. the judgment - he might find it impossible to lodge all the papers in time!)

8. Once the court has reported the attachment, arrangements can be made immediately to auction the attached articles. The sale must be by public auction, held either in an auction room or, unusually, if it is impractical to hold the auction in such an auction room, at such other place (other than the debtor's dwellinghouse) as the officer considers appropriate.^[23] Usually, therefore, the articles will firstly be removed from the debtor's premises. A notice must be given to the debtor, stating the date and location of the auction and the date of removal of the attached article, no later than seven days before the date of removal.^[24] The auction should not take place unless at least seven and never more than 28 days have passed since the article was removed.^[25] The messenger-at-arms therefore gives the required notices and keeps the court informed. (It is not perfectly clear which of the sheriff courts has jurisdiction: in our scenario, three courts have received reports of attachment, but the auction of all the articles is arranged to take place at one sale room in Livingston. It is probably good practice to intimate information about the auction to each court which received a report of attachment.)

9. The articles having been removed and the date and time of the auction arrived, the officer and one assistant, to act as witness, attend the auction and maintain a record of the attached articles which are sold, specifying the amount for which each article is sold.^[26] The creditor must be careful to uplift and remove any article which now belongs to him within three working days after the day of the auction - failing which, ownership could revert to the debtor.^[27]

10. Finally, the officer who arranged the auction, within 14 days after the date of auction, makes a report of it to the court. It will be audited by the court and provide a statement of the balance which may be due to or from the debtor.^[28]

1. [Henry Home, Lord Kames] Historical Law-Tracts, 2^nd ed. (Edinburgh, 1761), p. 331.

2. Debtors (Scotland) Act 1880.

3. In this context, corporeal moveables are arrested in the hands of the third party, not attached. The diligence of arrestment, however, is treated in E-note 4, the present one being restricted to the procedures for attachment.

4. Historical Law-Tracts, p.313.

5. Ibid., p.314.

6. Ibid., p.317.

7. Debt Arrangement and Attachment (Scotland) Act 2002, 31(2).

8. See Scottish Law Commission Report on Poinding and Warrant Sale (Scot Law Com No 177), e.g. at 2.51: "We recognise that the word 'poinding' and even more the phrase 'warrant sale' have highly emotive connotations, and that there may be some symbolic value in changing the name of the diligence while retaining its substantive provisions. However we would stress the limited nature of this change. It is not one we recommend." See also Work of the congress committee, XVIII Congress of the Union Internationale des Huissiers de Justice et Officiers Judiciaires (Tunis, 2003), 9.11 et seq.

9. Poinding was not abolished by the Abolition of Poindings and Warrant Sales Act 2001 (asp 1). That statute was never brought into force and was repealed under Schedule 3, 27 of the 2002 Act.

10. J. Graham Stewart, A Treatise on the Law of Diligence (Edinburgh, 1898), pp.338/9.

11. G. Maher and D.J. Cusine, The Law & Practice of Diligence (Edinburgh, 1990), 7.53 (where they suppose specie to be incorporeal, not corporeal moveable property).

12. 2007 Act, 174(3)(b).

13. For attachment, 2002 Act, 10(3)(a); for money attachment, 2007 Act, 174(2).

14. For money attachment, 2007 Act, 174(3)(a); for interim attachment, 2002 Act, 9B(a).

15. The title of the major study by the Scottish Law Commission, Scot Law Com No 95 (2 vols., Edinburgh, 1985), acknowledged the social and political awareness required to reform enforcement law: Report on Diligence and Debtor Protection.

16. 2002 Act, Part 3.

17. For the information, see 2002 Act, 47-49 and Act of Sederunt (Debt Arrangement and Attachment (Scotland) Act 2002) 2002, Chapter 3.

18. There is a statutory presumption of ownership: an officer may proceed on the assumption that the debtor owns, solely or in common with a third party, any article which is in the debtor's possession (2002 Act, 13(1)).

19. It is not competent to attach any vehicle, the use of which is reasonably required by the debtor in the practice of his profession, trade or business, not exceeding in value £3,000 (2002 Act, 11.(1)(b), as amended by Bankruptcy (Scotland) Amendment Regulations 2010).

20. 2002 Act, 31(1A). (This exactly replicates a feature of the abolished law on poinding. It was, however, a later addition to the 2002 Act, the section having been inserted by the 2007 Act.)

21. 2002 Act, 31(2).

22. 2002 Act, 18.

23. 2002 Act, 27.

24. Act of Sederunt (Debt Arrangement and Attachment (Scotland) Act 2002) 2002, 19(2).

25. 2002 Act, 19(6) and 24(1)(a)(ii).

26. 2002 Act, 30.

27. 2002 Act, 31(5).

28. 2002 Act, 32 and 33.