The interventionist approach required of sheriffs in the new simple procedure in the sheriff court does not extend to undefended cases, the Sheriff Appeal Court ruled yesterday.

In three test appeals, Sheriffs Principal Mhairi Stephen QC, Ian Aberbrombie QC and Douglas Murray allowed appeals by Cabot Financial UK Ltd, which had acquired the creditor's rights under various mail order agreements, against decisions to dismiss their actions for payment, although the claims were undefended and in on case the defender sought a time to pay order.

Reasons for dismissal included a question as to title to sue, where there was no specification of initmation of the assignation of the claim, and failure to comply with an "unless order" under rule 8.4 of the Simple Procedure Rules, requiring similar imformation and information as to whether the requirements of consumer credit legislation had been complied with.

Giving the opinion of the court, Sheriff Principal Stephen said the main change with simple procedure was "the focus on the court's power to intervene to assist parties resolve or settle their disputes... The court's powers do appear wide and constitute, in effect, a more inquisitorial and proactive approach" – as well as the procedure being designed with party litigants in mind.

She continued: "We recognise that on a proper construction of the simple procedure rules they are designed to promote the court's powers in disputed claims. It is not evident to us that the legislative intention behind the rules extends the court's very limited inherent jurisdiction to enquire into the merits of an undefended action. The interventionist and problem-solving approach required of the sheriff in the context of the principles is that such powers are directed at defended claims where there is litiscontestation."

As regards "unless orders", " In our view they are technically competent but designed for defended cases where there is litiscontestation. The mere existence of a power to make an 'unless order' does not innovate on the existing common law and practice, nor does it extend the sheriff's jurisdiction in undefended cases in the absence of an express and clear power within the rules." 

The consumer protection legislation expressly envisaged consensual enforcement against a borrower, and "We consider this to be a matter of some importance when analysing the extent of the court's duty in undefended proceedings involving consumer protection legislation. A debtor who decides not to defend an action or respond to a claim may be considered to have admitted not only the validity of the claim but liability for the debt... We accept the submission made on behalf of the appellant that it is not necessary in actions concerning regulated consumer credit agreements to produce the contractual documentation at the commencement of the action."

Case law on the approach of the court in undefended ordinary procedure actions was relevant and the sheriffs had erred in declining to grant decree. The appeals were allowed.

Click here to view the opinion of the court.