Nicola Ross

Spotlight on decisions of public bodies

There are several high profile judicial review cases currently before the Scottish courts. This includes a challenge to the removal of universal winter fuel benefit for all pensioners, the refusal of the chair of the Scottish Hospitals Public Inquiry to allow particular expert evidence regarding the risk of infection from ventilation systems at a particular hospital, and the attempt by environment groups Greenpeace and Uplift to prevent work being carried out at Rosebank oil field and the Jackdaw gas field until fuller and legally compliant environmental impact assessments are carried out. Each of these cases are of significant public interest and the decisions are likely to generate a lot of press. Watch this space!

Directors’ duties

Directors’ duties have been increasingly under the microscope. As well as tighter regulation through legislation (which came about as part of the economic fallout from the covid pandemic), there have been various cases in recent years which have clarified what is expected of company directors and when the duties owed by them extend to considering that the interests of creditors outweigh the interests of the shareholders. It is expected that this trend will continue in 2025 – directors will need to make sure that they fully understand what it means to be a director and take early advice if there is the chance of a problem.

More restructuring plans?

December 2024 saw the approval of the restructuring plan (under Part 26A of the Companies Act 2006) which had been proposed by Dobbies’ Garden Centres. This was the second ever Restructuring Plan considered by the Scottish courts and resulted in a very helpful opinion from the court setting out the way it will consider the question of whether to sanction a restructuring plan. However, restructuring plans are still likely to be reasonably rare in Scotland due to the simple reason that we do not have as many large companies registered in Scotland as there are in England. Yet, with the economic outlook still remaining challenging, it is likely that we will see more of these plans in future – if not being presented by Scottish companies, then having to be considered by Scottish companies in their capacity as creditors. 

Finance industry on tenterhooks

At the end of 2024 it was confirmed that Close Brothers, a major UK finance company, would appeal the landmark decision of Hopcraft concerning commissions paid by finance lenders to motor dealers meaning that the finance was mis-sold. The case has potentially far-reaching ramifications for not just motor finance involving consumers but also business to business lending in Scotland. The financial liabilities for lenders could run to billions of pounds. The case is scheduled to be heard in April and the outcome will be keenly awaited by finance providers and borrowers alike.

Class action litigation taking off

Last year saw class actions (known as “group proceedings” in Scotland) start to take off in Scotland. They were introduced four years ago and are starting to become more prevalent. To date, most of the discussion before the court has involved the deciding whether the claim can be certified as suitable for a class action. The court has shown itself to be fairly claimant friendly so far, with a low bar being set for certification and the court has also made it clear that it will not follow English class action procedure and will, instead, develop its own approach to class actions.

As things stand, Scottish class action proceedings operate on an “opt-in” basis, meaning that claimants need to pro-actively chose to be part of the case. With class actions gaining more prominence, there may be some debate this year on whether we should move to an “opt-out” approach. This would mean that all potential claimants with the same right of action would automatically be included in the claim, even if they have not said that they want to be part of it or even know of the existence of the claim. While that might seem unlikely for now, it should be remembered that the UK Competition Appeal Tribunal allows opt-out class actions and last year authorised a significant settlement in opt-out proceedings. Opt-out class actions in court might not arrive in 2025, but it is clear that class actions are not going away.

Given these varied and significant trends, stakeholders in the Scottish litigation world should prepare for a dynamic 2025. The spotlight on public body decisions, increasing scrutiny of directors’ duties, potential growth in restructuring plans, critical financial services litigation, and the rise of class action litigation all indicate that the Scottish legal landscape is becoming more complex. Legal professionals, companies, and public bodies alike will need to stay informed and adaptable to navigate the evolving legal challenges.

Nicola Ross is a partner at MFMac