Lay Representation for Companies
2 December 2016
The new Simplified Procedure Rules came into force on 28 November. On the same date another significant change was introduced regarding lay representation by non-natural persons. Until now, companies and partnerships could only be represented in court by solicitors, unlike individuals.
The new rules allow companies and other bodies to apply to be represented by non-lawyers in Scotland's civil courts. These representatives can be directors or partners who have been formally authorised by the company.
Previous court decisions have held such bodies to be incapable of acting as party litigants, unlike individuals. Under the
Act of Sederunt (Lay Representation for Non-Natural Persons) 2016,>, however, they will be able to apply to the court for permission for a lay representative to conduct proceedings on their behalf, on production of an authorisation document. The rules lay down the functions and duties of a lay representative. In the application, the company will require to narrate why they cannot afford legal representation. Until applications are made there is no way of pre-judging what will amount to acceptable reasons. and provide for occasions where the court may find a lay representative and non-natural person liable in expenses.
The court can impose conditions on lay representatives, "where it is necessary to do so in the interests of justice", and can grant permission in respect of one or more specified hearings. Permission can also be withdrawn.
One significant deterrent to lay representatives is the power of the court to award expenses against them as an individual where the court considers the lay representative has acted unreasonably or the expenses of the case are awarded against their company. It is specifically provided that there may be joint and several liabilities between the company and the lay representative for any award of expenses. On that basis, directors and partners will have to think carefully before going down the lay representative route.