The Coronavirus (Scotland) Act 2020 and restructuring and insolvency practice in Scotland

The purpose of (C(S)A 2020) is to respond to the emergency caused by the coronavirus (COVID-19) pandemic. C(S)A 2020 complements and supplements the Coronavirus Act 2020, passed by the UK Parliament on 25 March 2020, and which the Scottish Parliament gave its consent to on 24 March 2020.

The bill for C(S)A 2020 was passed by the Scottish Parliament on 1 April 2020 and the act came into force on 7 April 2020, after receiving royal assent.

C(S)A 2020, s 12 provides for the main provisions of the C(S)A 2020 to expire on 30 September 2020, unless the Scottish Parliament passes regulations providing for its effect to continue until 31 March 2021. If the Scottish Parliament does pass such regulations, it may then pass regulations allowing one further, final extension, until 30 September 2021, at which point any remaining provisions in the C(S)A 2020 will expire.

The Scottish Ministers also have the power, by regulations, to suspend any of the main provisions of the C(S)A 2020, to revive the effect of any suspended part and to cause any of the main provisions of the C(S)A 2020 to expire earlier than the schedule set out. This power allows any provision which is no longer, in the view of the Scottish Ministers, appropriate or proportionate, to be removed entirely or to be suspended if it may become necessary to use again.

The Accountant in Bankruptcy advises that this change is being made to:

C(S)A 2020, Sch 2, para 4(a) increases the length of the moratorium against diligence created by B(S)A 2016, ss 195–198, from six weeks to a period of six months, for moratoria established during the period covered by the emergency legislation.

Additionally, C(S)A 2020, Sch 2, paras two and three remove the prohibition against an individual benefitting from more than one moratorium in any 12-month period, so that those who have recently had a moratorium are not excluded from the effect of the changes.

C(S)A 2020, s 5 introduces C(S)A 2020, Sch 4, which includes provisions surrounding courts and tribunals conducting business by electronic means.

This provides for electronic signatures to fulfil the requirement for certain documents to be signed and allows for documents to be transmitted electronically. This will only impact insolvency practitioners to the extent that the courts are prepared to deal with insolvency-related matters. At the time of writing several Scottish courts are known to be essentially deeming insolvency business as non-urgent.

The description of ‘court’ within the C(S)A 2020 extends to any office-holder of a court. As the Accountant in Bankruptcy falls within that description, C(S)A 2020, Sch 4 will allow it to accept debtor bankruptcy application forms submitted with electronic signatures. The signature must be created by the individual and can be done through use of various software solutions or by the applicant emailing their money adviser/proposed trustee with a simple statement averring that the relevant form is being submitted electronically with their consent. The statement must include the applicant’s name, address and date of birth. It should be uploaded to the Accountant in Bankruptcy’s case management system along with the relevant form(s).

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