The Issue
In a previous e-update "DIY – Not in the Scottish Courts", dated 22 September 2010 we reported on the Court of Session decision in Secretary of State for Business Enterprise and Regulatory Reform, petitioner (The UK Bankruptcy case), 2010 SLT 1242. The effect of the decision in that case was to maintain the position in Scotland that a limited company could not be represented in proceedings before the court by anyone other than an advocate or solicitor possessing a right of audience.
The former case did leave open the possibility that a challenge to the status quo could be brought on the basis of Article 6 ("Right to a fair trial") of the European Convention on Human Rights (ECHR) in certain circumstances. Such a challenge has now been brought. In the case Apollo Engineering (in liquidation) v James Scott, a director of Apollo - a company whose liquidation has been sisted (suspended) pending determination of claims made in an arbitration - applied by motion to represent the company in Apollo's appeal by Stated Case arising from an arbitration, on the basis of the Article 6 right. The Inner House refused the director's motion to represent the company.
The Court's Reasoning
After careful consideration of Scots law relating to the representation of companies before the court, Lady Paton confirmed that the general rule is that Scots law does not permit a director to represent a company before the court. Lady Paton recognised the problem faced by an impecunious limited company. It cannot afford to instruct a lawyer to act on its behalf and it is not permitted to be represented by an employee or director. It is therefore prima facie denied access to the Court. A natural person, on the other hand can, in such circumstances, represent him or herself as a party litigant.
Standing the previous authorities, Lady Paton's view was that a departure from the general rule was permissible but that it would require "wholly exceptional circumstances". In the particular circumstances of this case, which are unusual, the director in question had not satisfied that test and, accordingly, the motion should be refused.
In considering the Article 6 point, Lady Paton noted that on the basis of the ECHR jurisprudence it was settled law that Article 6 rights were not absolute and thus certain restrictions could be imposed provided such restrictions (i) did not reduce access to the extent that the very essence of the right is impaired; (ii) pursue a legitimate aim; and (iii) are proportionate. In her view, the court had a discretionary power in certain circumstances to allow a motion such as that enrolled in the present case on certain terms and conditions.
However, in the circumstances of the present case, Lady Paton ruled that it was inappropriate for the Court to exercise its discretion to grant the motion for a number of reasons, including:
- Apollo had already had access to independent and impartial tribunals in the form of the arbitration proceedings;
- The dispute is complex and requires efficiency and expertise for presentation in the appeal Court;
- The director in question had close involvement with Apollo and a major interest in the outcome of the litigation, which personal interest might affect decisions taken.
Lord Reed, with whom Lord Bracadale agreed, also considered that the director's motion to represent the company must fail, albeit on narrower grounds. Having regard to ECHR jurisprudence, Lord Reed decided that Article 6 did not require that the motion should be granted. In his view, allowing the director in question to represent Apollo would not provide the appellants with an effective right of access to the court. This particular appeal by way of Stated Case was complex. The effective presentation of an appeal of the sort in question required substantial experience and expertise, which the director in this case did not have.
Comment
The judges took different approaches to answering the Article 6 question. However, the position is still that a company must be represented by an advocate or solicitor possessing rights of audience unless the company can show that the circumstances are wholly exceptional.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
