Diligence against earnings
Section 16 – Service of documents and employers’ etc. duty of disclosure
51.Section 16(2) modifies the 1987 Act to make provision about how earnings arrestment schedules and current maintenance arrestment schedules are to be served on employers. It substitutes section 70(3) of the 1987 Act for 5 new subsections ((3), (3A), (3B), (3C), and (3D)). New subsection (3) sets out the ways in which an earnings arrestment schedule or a current maintenance arrestment schedule can be served: documents must be served on the arrestee either by being sent to the proper address of the employer, or by being transmitted to the employer electronically. However, if it is impossible or impracticable for the documents to be served as described, documents may instead be effected by any other competent mode of service (subsection (3A)). Subsection (3B) stipulates that the proper address of the employer for postal purposes is defined in subsection (3) as the address of the registered or principal office of the body corporate (in the case of a body corporate), the address of the principal office of the partnership (in the case of a partnership), or the last known address of the employer (in any other case). Any posted document is considered to be received at a United Kingdom address 48 hours after it is sent unless the contrary is shown (subsection (3C)). Provisions relevant to electronic service are set out in subsection (3D), and include that electronic transmission must be done in a way that the employer has indicated to an officer of the court that they are willing to receive the document. An indication of willingness may be specific to the particular document in question (or documents of that kind), expressed specifically to the officer of the court or more generally (e.g. on a website), or inferred from past conduct with no indication of unwillingness to receive documents in such a way again. Electronic transmission of a document may also be by uploading a document to an electronic storage system for download by the employer, as long as the employer is sent a notification that the document has been uploaded. Documents transmitted electronically are taken to have been received on the day of transmission (unless the contrary is shown).
52.Section 16(2) also substitutes a new subsection (5) in section 70 of the 1987 Act. It makes it competent to serve an earnings arrestment schedule or current maintenance arrestment schedule on a Sunday, public holiday, or such other day as may be prescribed by Act of Sederunt, where such service is by post or electronic transmission. It also updates the language used in subsection (5) from “poinding” to “an attachment”, given that the former diligence of poinding was abolished and replaced with attachment by the Debt Arrangement and Attachment (Scotland) Act 2002 (the “
53.Section 70A of the 1987 Act places a duty on an employer, on whom an earnings arrestment schedule, a current maintenance arrestment schedule or a conjoined arrestment order is served, to provide the creditor and, in the case of a conjoined arrestment order, the sheriff clerk with certain specified information. Earnings arrestment is a form of diligence which can be used to recover debt owed by a debtor to a creditor by taking money from a debtor’s earnings (e.g. wages). This section modifies section 70A so that where the debtor is not employed by the person who received the schedule or order, or the debtor is employed by that person but the sum to be deducted on any pay-day would be nil (e.g. because their earnings are too low, see sections 48, 53 and 61 and schedule 2 of the 1987 Act), the person who received the schedule or order must respond. They must, within 21 days of receiving the schedule or order, send to the creditor or, in the case of a conjoined arrestment order, the sheriff clerk, notice of the reason nothing has attached (as appropriate) in such form as may be prescribed by regulations made by the Scottish Ministers (negative procedure). In such cases this disclosure would be a one-off obligation and so, following the disclosure to the creditor or sheriff clerk, the person would have no further obligation to provide information under section 70A. Where earnings have attached the obligations on the employer will remain as they are. They must send to the creditor or the sheriff clerk the information set out in subsection (3) (which relates to details of the debtor’s pay and any deductions from it) as soon as reasonably practicable following the order or schedule being served. They must also provide that information at subsequent intervals, as set out in subsection (4) of section 70A.
54.There also remains a duty on the employer under section 70A to notify the creditor when a debtor’s employment is terminated and provide details of any new employment. This section of the Act changes this but only so that such information must be given in such form as may be prescribed by regulations made by the Scottish Ministers (negative regulations). Section 70B(1) provides that where an employer fails to do this without a reasonable excuse, the sheriff may, on the application of any creditor, make an order requiring the employer to provide whatever information is known by that employer to the creditor. The sheriff may also order the employer to pay the creditor an amount not exceeding twice the amount which that creditor would have received on the debtor’s next pay day had the debtor still been employed by the employer. This section inserts a new subsection (A1) which would mirror the sanction in subsection (1) for cases in which a person fails to give any notice required under section 70(1A) or (2), as modified by this section of the Act. The sheriff may make an order requiring the person who received the schedule or order to send the information to the creditor and to pay a sum to the creditor. The sum payable by the person to the creditor is the sum due to the creditor by the debtor, or the sum of £500, whichever is the lesser. This section also modifies subsection (1) so that the amount payable under an order made by the sheriff under that provision aligns with new subsection (A1) (i.e. £500 instead of an amount exceeding twice the amount that the creditor would have received on the debtor’s next pay day). Section 70B(2) provides that payment of the sum under subsection (1) will reduce the debt owed to the creditor by the same amount and the employer is not entitled to recover that sum from the debtor. This section modifies section 70B(2) so that this extends to sums paid by virtue of new subsection (A1). A person aggrieved by an order under section 70B(A1) or (1) may appeal in terms of section 70B(3) (see also section 109 of the Courts Reform (Scotland) Act 2014). This section also inserts a power for the Scottish Ministers to amend the sum in the future through negative procedure regulations.
See the glossary in the Policy Memorandum for definition of terms.
