Scotland’s potential as a base for debt recovery litigation highlighted

Andrew Foyle

Andrew Foyle, a solicitor advocate and litigation partner in the Edinburgh office of Shoosmiths gave delegates attending the annual Law Society of Scotland Debt Recovery Conference in Glasgow plenty of food for thought on the main challenges and opportunities in the business of debt recovery litigation in Scotland.

Mr Foyle highlighted some of the challenges within the system, including elements of civil procedure, but also firmly expressed his opinion that in Scotland debt recovery litigators benefit from robust enforcement mechanisms.

He cited frustration throughout the profession with aspects of simple procedure, including his hope for greater consistency in interpretation of the rules. However, he reiterated his belief in the core strengths of the Scottish courts, stating: “We are very much in a swings and roundabouts situation in Scotland whereby the (perceived) pain of going through the litigation process is worthwhile, once decree is obtained and a creditor can go on to enforce.

“In my opinion, the speed at which we in Scotland can put an inhibition in place or serve an earnings arrestment, as opposed to the court applications required for a Charging Order or Attachment of Earnings in England & Wales is an attractive selling point for our sector in Scotland.  We should take every opportunity to highlight the flexibility and efficiency afforded by Scotland’s enforcement process.”

The solicitor advocate touched on many issues, including around the Simple Procedure Rules (he encouraged delegates to input to the SCJC consultation that runs until 31 May), reform of the Ordinary Cause Rules and on volume litigation.

But he offered little comfort for delegates considering establishing their own debt recovery business, commenting: “I am fortunate that over the past five years we have had the support of Shoosmiths, a national full-service law firm, to develop and grow. Without that, and due to a number of formidable entry barriers including price and FCA licensing, I think it would be incredibly difficult for a new practitioner to gain a foothold in the market. All operators in our sector need to be extremely efficient and willing to continually invest in the quality of their (case management) systems.”

Mr Foyle was at pains to emphasise key factors that should make Scotland an appealing legal environment for clients to bring their debt recovery work. As he explained: “In addition to our enforcement methods, summary diligence is another benefit of (non consumer) lending in Scotland. The idea that enforcement can be done off the back of a document of debt fascinates my clients down south. In my view it is a selling point as to why more lenders should tailor their documents to Scots law.”

He also highlighted the benefits of holding a FCA license, stating: “With the entry into the market of a barrage of new lenders, challenger banks and debt purchase companies, there are real opportunities for those that embrace FCA regulation. Shoosmiths holds an FCA license and there is an increasing expectation that firms acting for lenders (even in an unregulated space) will have equivalent standards.”

Concluding his talk, the solicitor advocate offered his own thoughts on what a debt recovery firm of the future will look like.

Mr Foyle believes there will be an ever-increasing emphasis on developing efficiencies, with the potential for firms to ultimately embrace and integrate both litigation and the ‘pre-legal collections and recoveries environment’ into their client offering.  In the years to come, he also referenced the potential of firms deploying artificial intelligence (AI) methods to drive efficiencies in the debt recovery environment.