Judicial factors: consultation

A consultation seeking views on the Scottish Law Commission's recommendations and draft bill to modernise judicial factors.

Part 1: Introduction

1.1 The purpose of this consultation is to seek views on some of the recommendations contained in the Scottish Law Commission’s Report on Judicial Factors[1] and the corresponding content of the draft Bill contained in that Report.

1.2 In addition views are sought on the approach to be taken on the estates of missing people and specific points to improve the safeguarding of children’s property under the Children (Scotland) Act 1995. 

1.3 The Report on Judicial Factors was published in 2013 by the Scottish Law Commission (“the Commission”) following a Discussion Paper of the same title in 2010.  It includes a proposed draft Bill (the draft Bill) on the issue, which is included as Annex A with some minor changes to bring it up to date.  As well as changes to reflect the outcome of this consultation some further minor changes to the draft Bill are likely.

1.4 The Report contained 113 recommendations and the draft Bill 61 sections and 3 schedules.


1.5 A judicial factor is an officer appointed by the court, supervised by the Accountant of Court, for the purpose of holding, managing, administering and protecting the property of another where the need arises.  

1.6 A judicial factor can be appointed in many different situations.  A common example today is those appointed at the instance of the Law Society of Scotland for firms of solicitors where there has been a breach of professional practice and the firm’s liabilities exceed, or appear likely to exceed, its assets.  Other examples include those appointed where a partnership is in dispute or where those running a charity appear to have been managing it inappropriately. Annex C includes an extract from the Scottish Courts and Tribunals Service website which describes the different types of judicial factor appointments and their prevalence.   

1.7 The office of judicial factor has a long history in Scots law and there is a continuing need for capable administrators to be appointed to manage the property of those who cannot, should not or will not manage it properly themselves.  

1.8 Although there is such a continuing need, judicial factory is now regarded by those who use it as a cumbersome procedure, sometimes involving disproportionate expense, which is no longer fit for purpose.  Since the Judicial Factors Acts of the 19th century there has been no new primary legislation pertaining specifically to the details of the procedure.

1.9 Furthermore, some powers of judicial factors are to be found in legislation relating to trusts.  In practice, it can be difficult for third parties dealing with judicial factors, and the judicial factors themselves, to know what such officers are or are not entitled to do.

1.10 The draft Bill sets out a comprehensive set of provisions governing all aspects of judicial factories, including appointment, powers, duties, remuneration, termination and the role of the Accountant of Court in relation to judicial factors.  It also sweeps away the outmoded 19th century legislation.

1.11 The Scottish Government agree with many of the recommendations contained in the Report and where we have not provided comments in this consultation then subject to the result of the consultation, the Government’s intention would be to implement the Commission’s policy intentions.  There are however some recommendations in the Report that we would like to test further and these are covered in Part 4.

1.12 In addition, there are some new and additional points covered by this consultation as set out at Part 2 and 3 of this paper.  Note any resultant measures are yet to be reflected in the draft Bill. 

1.13 The first is the importance of ensuring that appropriate measures are in place so that the estates of missing people can be properly managed.  The second point relates to the Children (Scotland) Act 1995 and proposals to improve and assist the Accountant of Court in administration in safeguarding children’s property.

Recommendations not being tested further

1.14 As already stated, the intention of the draft Bill is to update and modernise existing legislation and it sets out a comprehensive set of provisions governing all aspects of judicial factories, including appointment, powers, duties, remuneration and termination as well as the role of the Accountant of Court in relation to judicial factors.

Chapter 2 of the SLC Report

1.15 Chapter 2 of the Report examines the existing law as it relates to Judicial Factors.  As already mentioned the office of Judicial Factor is one long established in Scots Law.  As legislation has developed there has in some cases been no express revocation of some earlier legislation and we agree with the Commission that the legislative landscape could bear some tidying up.  We therefore agree with recommendation 1 that the Acts of Sederunt of 31 July 1690, 25 December 1708, 22 November 1711, 31 July 1717 and 13 February 1730 be expressly revoked. This is provided for in the draft Bill at schedule 3, Part 2.

1.16 The second recommendation contained in Chapter 2 is that the now consolidated Bankruptcy legislation be amended to ensure that property held by a person as a Judicial Factor will not vest in the trustee in sequestration.  While this may be the position already, we agree with the Commission that providing for this would be a sensible clarification of a point of principle.  Schedule 2, at paragraph 9, gives effect to this change.

Chapter 3 of the SLC Report

1.17 Chapter 3 makes a series of recommendations about the process of appointment.

1.18 On the basis that the current method of bringing the matter before the court – the petition process – operates well and no concerns were raised by respondents to the Scottish Law Commission discussion paper about this issue, we are content with recommendation 3 that applications for the appointment of a Judicial Factor should continue to be made in this way and section 1(1) of the draft Bill gives effect to this recommendation.

1.19 In their report the Commission highlights that the Report of the Scottish Civil Courts Review by Lord Gill could bring an end to the petition procedure in the Court of Session and this could have consequences to judicial factors.  No such procedural changes have been made to date. However, this is still under consideration. 

1.20 The Commission also highlights the anomalous position whereby a Judicial Factor may be appointed in the course of other proceedings in the Court of Session but not in the Sheriff Court.  Their view was that the jurisdiction of the Court of Session and the Sheriff Court on this matter should be generally concurrent and they therefore recommended that the discretion to appoint a Judicial Factor in the course of other proceedings should be extended to the Sheriff Court.  Section 3 of the draft Bill gives effect to this recommendation with which we agree.

1.21 The Commission are of the view that the facility to appoint an interim Judicial Factor, particularly where speed of action is important, was both sensible and desirable.  They therefore recommend that such appointments should remain competent and that they should be kept under review by the Accountant of Court.  Again we agree with these recommendations as given effect to by sections 2(1) and 2(4) of the draft Bill.

1.22 The Commission also considered whether all of the powers available to a permanent appointment should be made available to an interim factor.  They thought that generally speaking they should be, but that the courts should have the ability to limit these as they consider appropriate.  Recommendation 11 gives effect to this policy and we agree that it is a sensible and measured approach.

1.23 Recommendations 12 and 13 deal with intimation and interest.  The Commission recommends that a petition must be intimated to anyone with an interest and also recommends that the definition of ‘interest’ should be sufficiently wide as to deal with circumstances where potentially a person may not have an interest in the property per se, if the courts consider it appropriate.  We agree with these recommendations.

1.24  The Commission examined the eligibility criteria for appointment as a Judicial Factor and concluded the current position should continue - any natural person of full legal capacity considered by the court to be a suitable person is eligible for appointment. A person may be eligible for appointment even if domiciled outside of Scotland and if such a person is appointed, they are deemed to prorogate the jurisdiction of the Scottish courts.

1.25 Chapter 3 also includes a short discussion about the reasons for a Judicial Factor being appointed.  The Commission considered various developments in the law which have essentially reduced the grounds for appointment of a Judicial Factor but they concluded the essential rationale remains the same and recommended:- 

“That the grounds for the appointment of a judicial factor should be that there is property which requires to be managed properly and: 

(a) that it appears to the court that it is not possible, or not practicable, or not sensible, for those responsible to manage it; or 

(b) that there would otherwise be benefit in having it managed by a judicial factor.” 

1.26 The final set of recommendations contained in Chapter 3 which we accept without further testing relates to the relationship between the appointment of a Judicial Factor and the extent to which they have control over the property they have been appointed to manage.

1.27 The Commission carried out a detailed analysis of case law in this area and recommend that the property which the Judicial Factor has been appointed to manage should vest in the appointee, in that capacity.  Consequential recommendations to give effect to this policy are also made and we agree with those recommendations (20 to 25).  Recommendation 25 relates specifically to the appointment of a Judicial Factor under the Solicitors (Scotland) Act 1980.

1.28 Chapter 3 also makes recommendations in relation to jurisdiction; caution; and the registration of appointments.  These are discussed further in Part 4 of this consultation paper. 

Chapter 4 of the SLC Report

1.29 This chapter of the Report recommends that the general duty – “to manage the estate for those who have an interest in it” be set out on the face of any legislation.  Alongside that duty, the Commission considered the nature of the duty and whether it should be capable of being supplanted and in terms of how the general duty should be carried out, whether it should be qualified in some way.

1.30 On the basis of the rationale set out by the Commission on these matters, we agree with recommendations 28 to 32.

1.31 The Commission also recommends that duties of a more specific nature be placed on the Judicial Factor.  Some of these duties are informed by the fact that some Judicial Factors act for more than one estate.  They are:

  • that a judicial factor should be under a duty to ingather the whole of the judicial factory estate; 
  • that the judicial factor should ensure that all cash accounts, share certificates and other assets of a like nature, appertaining to the judicial factory, should be readily identifiable as such;
  • that the judicial factor should be under a duty to prepare an inventory of the estate, and send it to the Accountant of Court within 6 months of being appointed; and 
  • that the judicial factor should be under a duty to inform persons appearing to be creditors or debtors of the judicial factory estate of the fact of the appointment. 

1.32 We would agree that these recommendations are appropriate and in some instances, a sensible restatement of the law as it currently stands.

1.33 The Commission gave further consideration to appropriate duties in relation to the management of the estate.  We are satisfied that these are a pragmatic balance between enabling the Judicial Factor to carry out their role properly and ensuring that the necessary protections to the estate are in place. We therefore agree with recommendations 37 and 38.

1.34 The final issue examined by the Commission in this chapter was the role of the Judicial Factor in resolving disputes where they exist between those with an interest in the property and indeed where a Judicial Factor has been appointed because of a breakdown in the relationship of a business partnership.

1.35 They conclude that the Judicial Factor should be placed under a duty to seek a resolution and agreement between the parties through mediation or some other means.  They also recognise however that such differences may be irreconcilable.  In which case it is incumbent upon the Judicial Factor to prepare a scheme setting out a resolution.  These recommendations (39 and 40) are made with the intention of ensuring that a judicial factory does not continue indefinitely at the expense and therefore to the detriment of the estate being managed.  We would support these recommendations.

Chapter 5 of the SLC Report

1.36 There has been uncertainty about the extent of a Judicial Factor’s powers and in the past this has resulted in litigation.  In Chapter 5 the Commission examines the question of powers and makes a number of recommendations in order to address the issue of uncertainty.

1.37 The Commission recommend that the Judicial Factor should have “all the powers of a natural person beneficially entitled to the estate”. But the proposals also include the inclusion of a comprehensive list of powers on the face of the Bill which would be expressly included along with any powers applied by other legislation.

1.38 The list is non-exhaustive in so far as the courts would be given the power to add or exclude powers in any given case, at their discretion.  In addition the Judicial Factor themselves would be able to apply to the court for additional powers.  We agree that these are sensible provisions which enable the particular circumstances of any specific case to be properly addressed.

1.39 Finally, in relation to powers, the Commission helpfully recommends that Judicial Factors be given the power to require information in order to facilitate the management of the estate.  We would support this and the other recommendations contained in Chapter 5.

Chapter 6 of the SLC Report  

1.40 Chapter 6 of the Commission’s Report deals with 3 processes: the termination of a judicial factory; the recall of the appointment of a judicial factor; and the discharge of the judicial factor.  These processes often run consecutively but sometimes only one or two of the processes may be relevant in a given case.

1.41 A judicial factory is terminated when the purpose for which the appointment was made has been fulfilled or it is no longer possible to fulfil. Recall of the appointment would follow, but recall may occur other than when a judicial factory is terminated.  Discharge is the next step and if the formal acknowledgement that the Judicial Factor has properly satisfied all of their duties and that they have no further responsibilities to the estate.

1.42 Currently these 3 processes will occur in respect of the estate as a whole but the Commission provided examples of when it would be more appropriate for them to apply to only part of an estate and this forms one of their recommendations.

1.43 The Commission then went on to consider the current process for recall of appointment and discharge which is by petition to the court.   There are however rules of court which promote an administrative discharge in certain circumstances.  The obvious benefits of the administrative discharge is savings in costs and time.

1.44 The Commission therefore recommends that when there is no dispute over the disposal of the estate that the procedure for administrative discharge is extended to all judicial factories.  Recommendations 48 to 51 give effect to this view and we agree that these are sensible reforms for the majority of cases.

1.45 In cases where there is a dispute over the disposal of the estate, the Commission recommend that the first part of the administrative procedure is followed and that only thereafter if the dispute remains, the Accountant of Court refers the matter to the court.  Recommendations 52 to 55 apply here. We agree with the Commission that these revised procedures should act as a deterrent to less substantive or even trivial disputes.

1.46 The revised procedures all assume that the Accountant of Court is in agreement with the Judicial Factor’s proposed distribution of the scheme.  This will not always be the case.  The Commission therefore recommend that where there is no such agreement either the Judicial Factor or someone with an interest in the settlement of the estate should be able to petition the court directly and in the case of the latter they should be required to find caution.  Recommendations 56 to 59 are relevant here.

1.47 In line with the aim of keeping costs down, the Commission also recommend that matters relating to the termination of: the judicial factory; the recall of the appointment; and discharge should all be dealt with administratively. Even where has been litigation over the scheme of distribution, once settled the other procedures should be dealt with administratively.

1.48 On other related matters, the Commission recommends no change to the current procedure of write off by the Accountant of Court or to the process whereby a Judicial Factor seeks recall in the course of a judicial factory by petition to the court.

1.49 Recommendations are also made to the effect that anyone with an interest in the estate may petition the court to recall the appointment of a Judicial Factor in the course of the judicial factory, but as in the case where such a person may petition the courts where the Accountant of Court does not agree with the proposed distribution, they must too obtain caution.

1.50 In this chapter the Commission also make a series of recommendations around the discharge of a Judicial Factor before the purposes of the judicial factory have been fulfilled and the appointment of a replacement Judicial Factor.  Recommendations 68 to 76 refer and are intended to ensure the continued maintenance of the proper management of the estate.

1.51 Finally in this chapter, the Commission make 2 further recommendations to the effect that a discharge should be registered in the Register of Inhibitions by the Accountant of Court and that once a discharge has been granted, save for where there are allegations of criminal conduct, the Judicial Factor should not be held to account for what has taken place during the course of the judicial factory.

Chapter 7 of the SLC Report

1.52 This chapter in the Commission’s Report deals with a number of miscellaneous matters which are described by the Commission as “small but significant matters”.

1.53 The recommendations in this chapter which relate to the remuneration of judicial factors is briefly discussed in Part 4 of this paper.

1.54 The Commission then make a range of recommendations which are intended to clarify the position of the judicial factor where a third party is involved.  These include that: liabilities should fall upon the estate and not the judicial factor; the expenses of the estate, if involved in litigation, fall upon the estate and not the judicial factor; where a liability of the judicial factory estate is as a result of a breach by the judicial factor the factor may be found personally liable; that the judicial factor stands in place of the estate and those who have an interest in it for the purposes of dealing with third parties; and that those who have an interest in the estate may only raise questions as to the judicial factor’s actings by making representations to the Accountant or by seeking the replacement of the judicial factor.  We support the view that these recommendations will bring clarity to the law on these issues.

1.55 In terms of protection for third parties, the Commission also recommends that where a person has obtained title in good faith and for value from a judicial factor,  it is not capable of challenge by reason of the appointment of the factor being subsequently recalled or because the transfer of title should not have been made.

1.56 On the law of prescription the recommendation is that the normal rules will apply and obligations owed by the judicial factor to the estate will not prescribe during the course of the judicial factory.

1.57 The Commission also recommends that it should no longer be competent to appoint a curator bonis to the estate in order to address the anomaly created by earlier legislation that curators bonis are not subject to oversight by either the Accountant of Court or the Public Guardian.

1.58 The final recommendations in this chapter relate to not re-enacting a couple of redundant provisions in earlier legislation.

Chapter 8 of the SLC Report

1.59 The final chapter in the Report is about the role of the Accountant of Court.  It makes a number of recommendations about the function, appointment, powers, duties and fee arrangements as they relate to the role.

1.60 The recommendations are a welcome package of sensible reforms.  They recognise that the status of the role has changed and is now one set out in the Judiciary and Courts (Scotland) Act 2008.  They will bring necessary clarity and certainty to the law.

Question 1 

Should the Scottish Government implement the Report by the Scottish Law Commission? 



Don’t know  

If you wish, please give reasons for your answer.


Email: Property_Law@gov.scot

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