12 - Judicial Security: Diligence

Summary

INTRODUCTION

What is diligence?

Diligence is the term used in Scots law to describe attachment of the debtor's assets to force the debtor to provide security for, or to implement, a judgment or document of debt. A creditor will ‘do diligence’ in order to obtain repayment of an obligation by exercising particular remedies against the debtor's property. Imagine that Anna owes Brian £5,000. Despite his polite requests, she has refused to pay it back. If Anna had consented to grant Brian a right in security when they agreed the loan contract, Brian could now recover his money by exercising that right, sometimes known as a ‘conventional’ or ‘voluntary’ security, against Anna's property. However, in this example, imagine that no such voluntary security was granted. Instead, Brian can ask the court to create a right in security now without Anna's consent. This is sometimes referred to as a ‘judicial’ or ‘involuntary’ security. Brian will again recover his money by exercising that right against Anna's property. The process by which Brian asks the court for a judicial security, and the range of rights it is possible for the court to grant him, are known as diligence.

Which diligence?

There are a number of different types of diligence. Which diligence a creditor chooses will depend on the nature of the assets the debtor has in their patrimony. For example, where a debtor owns corporeal heritable property such as land or buildings, the creditor may use the diligence of inhibition or alternatively the diligence of adjudication. Where the debtor owns corporeal moveable property, the creditor may use attachment. The application of each type of diligence is explained below. The creditor must know or make an educated guess as to what property is within the debtor's patrimony in order to work out which diligence is likely to be effective. This will normally have been done before the creditor incurred the expense of litigation to obtain a decree. There is no point inhibiting a debtor who does not own heritable property, for example.

Diligences can also be divided into two categories – seize diligences and freeze diligences – based on their effect on the debtor's property. A seize diligence enables the creditor to transfer property out of the debtor's patrimony without the debtor's consent. The creditor may transfer the property into their own patrimony in satisfaction of the debt.