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Opposing exceptional attachment orders - GLC guide on what to do after an order has been granted
In practice, many factoring companies (private bodies employed by the owners of tenement flats) are currently using Exceptional Attachment Orders (EAO - the replacement diligence to poindings and warrant sales) to enforce payment of modest debts. For example, it is not uncommon at Glasgow Sheriff Court to see factors seeking EAOs against their customers for two or three hundred pounds. Unfortunately, many people will only seek advice after an EAO has been granted - missing the opportunity to oppose the application directly. Is there anything that can be done after the court has granted an EAO?
It may be possible to appeal the order to the Sheriff Principal, however, the debtor must first obtain 'leave to appeal' from the sheriff who granted the order. This can be requested by way of a Motion (an application to the court). The legal basis for challenging the EAO may be as follows (please note: this ground of appeal may not be available in all cases: it will depend upon the facts and circumstances in each case) -
"Section 47(1) of the Debt Arrangement & Attachment (Scotland) Act 2002 provides that the court may grant an exceptional attachment order on being satisfied that there are exceptional circumstances. Section 48(1) defines the meaning of the term exceptional circumstances for the purpose of section 47(1).
Section 48(1)(c) provides that the court must be satisfied that there is a reasonable prospect that the sum recovered from an auction of the debtors non-essential assets would be at least equal to the aggregate of the following (i) a reasonable estimate of any chargeable expenses; and (ii) £100.
The defender did not enter an appearance or instruct agents to appear at the calling of the exceptional attachment order (EAO) application at the Sheriff Court. He/she confirms that at no time did the pursuers or any agents instructed by them call at his/her home, or ask him/her about non-essential assets in her home. It was therefore impossible for any evidence to be presented to the court to enable it to be satisfied in terms of section 48(1)(c).
The court cannot determine a question of fact without relevant evidence being presented. It is submitted that any evidence submitted by the pursuer could only have been conjecture or speculation and would therefore be irrelevant. In the absence of any evidence being presented on what non-essential assets were in the defenders home, the court erred in law in finding that is was satisfied section 48(1)(c) was engaged".
The paragraphs above could form the basis of a Note of Appeal; in some cases the debtor may have few if any goods which could be competently attached by way of an EAO. In that eventuality, an additional paragraph may be added setting out how the debtor has no goods worth attaching - for example:
"Had the pursuer presented evidence of what non-essential assets were in the defenders home (or had the court instructed an independent advisor to visit the defenders in terms of section 47(5)) the court would have been advised that she was caring for a disabled child and her 91 year old grandmother who is in the terminal stages of cancer; that she was in receipt of income support and benefits only; that she had second hand furniture, was quite poor and had no non-essential assets of any value to satisfy section 48(1)(c)".
Defenders should also check to see if their factor has applied 'administration charges'. Many factors charge customers a high rate of 'late interest' at several percent per month, plus a £15 'administration charge' for each reminder letter. Some factors appear to repeatedly issue reminder letters as way to generate fees. Such administration charges are really penalty charges, and could be challenged on the same basis as unfair bank charges: see Govan Law Centre's www.bankcharges.info for more information on how to challenge penalty charges.
If you are subject to an EAO you should consult a solicitor experienced in the field of debt recovery law. The Law Society of Scotland may be able to provide details of firms who can undertake this field of work.
Please note that Govan Law Centre can only act for clients within Glasgow; and in practice due to our limited resources that often means clients within the South West of Glasgow only.