In this article, we consider what an action of accounting entails, who can raise such an action and why they can be a powerful remedy for dissatisfied beneficiaries.
Actions of count, reckoning and payment (also known as actions of accounting) are a particularly useful remedy for beneficiaries in cases where they consider that an executor has failed to provide them with sufficient information concerning the extent of the estate and/or where they consider the executor is unreasonably or unnecessarily delaying in paying them their entitlement to the estate.
In this article, we consider what an action of count, reckoning and payment entails, who can raise such an action and why they can be a powerful remedy for disgruntled beneficiaries.
What is an action of count, reckoning and payment?
An action of count, reckoning, and payment is a legal procedure that compels a party, typically one entrusted with managing funds, to account for their management, provide a reckoning (a detailed calculation of what is owed), and then make payment to the party entitled to the money. It is usually pursued when informal attempts to obtain the funds have failed.
Who can raise an action of count, reckoning and payment?
A legal duty to account between the parties must be established by anyone seeking to raise such an action.
These actions generally apply in situations where there is an established fiduciary relationship, and one party has a duty to account for sums of money received and spent.
Common examples include executors of estates, trustees, attorneys, business partners or agents who manage assets on behalf of another party.
It was held in the recent case of Currie v Blair 2023 SLT 113 that a beneficiary can compel an executor to obtain an accounting from himself for his intromissions with the executry estate as power of attorney as part of an action of count, reckoning and payment.
In which court can an action of count, reckoning and payment be raised?
An action of count, reckoning and payment can be raised in either the Sheriff Court or the Court of Session depending on the amount of money involved and the complexity of the case. It is initiated through a summons or writ, where the pursuer asks the court to compel the defender to account for funds under their control.
What is the process when an action of count, reckoning and payment is raised?
As the name suggests, there are three main parts of the process when an action of count, reckoning and payment is raised:
- Count – This obliges the defender to provide a detailed and accurate account of any financial dealings they have conducted on behalf of the pursuer. For instance, if an executor is managing the estate of a deceased person, they are required to show all the transactions they have made, including receipts of income and disbursements of funds. Once an account is produced by the defender, the pursuer is entitled to scrutinise the same and raise queries known as objections, with the whole process overseen and ultimately decided on by the court.
- Reckoning – This is the detailed calculation of what is owed to the pursuer and involves determining the balance between what has been received and what has been paid out, along with a consideration of the pursuer's entitlement. For example, if they are entitled to a certain percentage share of the estate.
- Payment - If the pursuer has been able to establish a duty to account and the court finds that there is a sum due to the pursuer as part of the count and reckoning process, it will order the defender to make payment of that sum to the pursuer. This can include payment of interest due, along with the pursuer's expenses in connection with the court action.
In some cases, executors may be ordered to be personally liable for expenses, rather than those being a deductible expense from the estate.
If the defender fails to make payment, then they could be liable to further enforcement action, including further expenses and interest accruing.
Are actions of count, reckoning and payment used and what alternatives are available?
Despite the availability of this powerful remedy, commentators and even the courts have noted that dissatisfied beneficiaries do not use it as often as they should. Instead, they commonly opt for other means of redress, such as the removal of executors. This can often be difficult to succeed in, for a variety of reasons, as discussed in our previous article.
In many cases, the need for any type of court action can be avoided through mediation or negotiation, particularly if the parties are willing to engage in an open and transparent accounting process.
In the vast majority of cases, we deal with, we can agree on a resolution on behalf of our client. However, where parties' positions become entrenched or there is a failure to engage, this legal procedure offers an effective means of resolving the issue.
In a recent case, we represented a client whose sibling, the executor of their father's estate, had refused to provide an accounting or pay our client their share of the estate for five years after their father's death. However, as soon as we raised an action of count, reckoning and payment against the executor, they quickly complied and we were able to pause the legal action for settlement.
How can we help?
Our expert cross-departmental contentious executries, trusts and tax team draw on the expertise of contentious and non-contentious specialists from across our firm and has a wealth of experience in this field.
We regularly advise clients relating to actions of count, reckoning and payment along with all manner of difficult private client questions and disputes. We advise clients on alternative remedies and resolutions which might assist in these situations, as well as alternative methods of dispute resolution such as mediation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.