Devolved Social Security benefits - debt recovery - transfer of jurisdiction: consultation

3. Processes in the sheriff court

3.1 As detailed in sections 2.4 and 2.7 above, where an individual has no recurring entitlement to a devolved benefit, where an affordability assessment has been made and where a mutually acceptable agreement for repayment is not reached, or where the individual fails to repay, then the only recourse for Social Security Scotland is recovery through the civil courts.

3.2 Social Security Scotland will initiate the case with the sheriff court. If the debt is less than £5,000 then it will follow simple procedure but if it is in excess of £5,000 then it will follow ordinary cause procedure. As many of the one-off benefits are less than £5,000, these cases would be brought through simple procedure.

Simple Procedure

3.3 Under the simple procedure, a Claim Form is formally served on the individual and if they respond it must be within a certain time-scale. The individual may:

• admit the claim and settle it before the last date for a response;
• admit the claim and ask the court for time to pay; or
• dispute the claim or part of the claim (such as the amount of debt).

3.4 If the individual disputes the claim, the sheriff will consider the case and decide whether to:

• refer parties to alternative dispute resolution;
• arrange a case management discussion;
• arrange a hearing;
• make a decision without a hearing;
• dismiss the claim or make a decision because the claim is unlikely to be successful.

It is at this stage that the liability for the debt is considered.

3.5 The sheriff may make any decision which resolves the dispute, including a decision which:

• orders the individual to pay Social Security Scotland a sum of money;
• dismisses the claim (or part of the claim) made by Social Security Scotland;
• absolves the individual of the claim (or part of the claim) made by Social Security Scotland.

3.6 If the court has decided the individual is liable for the debt then the sheriff court issues a decision (a formal order from the court saying the individual must pay money to a creditor) and the individual must repay Social Security Scotland.

3.7 Once a claim has been decided, the sheriff must make an order about expenses. This may be that no expenses are awarded to either party or that an award of expenses is made in favour of one party which is normally the party who succeeds in the claim. These expenses must then be paid by the unsuccessful party.

3.8 There is normally a limit on the amount of expenses which can apply for claims below £3000. For example, if the value is between £1500 and £3000 - the maximum amount of expenses which can normally be awarded by the court to the successful party is 10% of the value of the claim.

Ordinary Cause Procedure

3.9 Ordinary cause procedure is used in the sheriff court where the value of the claim is over £5,000. A debt in excess of £5,000 may occur e.g. where an individual was in receipt of a recurring benefit, but due to client error it was found that they were not entitled to the benefit and an overpayment debt had built up over a period of time. As the benefit was stopped the debt could not be recovered from future payments.

3.10 There is not an application form to be completed when applying using the ordinary cause procedure; instead it is raised using an initial writ. It is usually advisable for parties to seek legal advice when raising an action by ordinary cause procedure.

3.11 As of 1 September 2021, there had been no cases heard in the sheriff court relating to debt recovery of devolved social security benefits. Prior to the devolution of these benefits, appeals would have been heard through the UK Social Security and Child Support First-tier Tribunal. If an individual lost their appeal in that tribunal, the DWP would use the powers they have available to recover the debt. Therefore, debt recovery cases in relation to devolved social security benefits are a new responsibility for the sheriff court.

Registry Trust

3.12 Details of Scottish decisions are supplied by the sheriff courts to the Registry Trust. The Registry Trust maintain a public register containing all simple procedure money decisions granted in the sheriff courts during the preceding six years. The Scottish Register also contains details of ordinary cause decrees dated 1 January 2010 onwards.

3.13 The Registry Trust notifies credit reference agencies of all decisions, recalls and dismissals on a regular basis and the credit reference agencies update an individual's credit file accordingly. Therefore a decision made by the sheriff courts may impact on an individual's credit history.

Sheriff Officers

3.14 Sheriff Officers have legal powers to enforce court orders and can be instructed by Social Security Scotland to assist in recovering a debt. A sheriff officer will serve the individual with a charge for payment which is a formal document informing the individual that unless they pay the debt or apply for time to pay, then Social Security Scotland is entitled to enforce payment. The individual will usually have 14 days to make the payment.

3.15 If the debt is not paid, then enforcement of the debt called diligence can take a number of forms including:

• earnings arrestment – regular deductions from wages at source;
• bank arrestment – the freezing of funds in a bank account;
• attachment – a sheriff officer can 'attach' certain items kept outside an individual's home, for example in a garage or shed and in some cases 'exceptional attachments' inside the home.

Disadvantage with debt recovery at sheriff court

• The sheriff court may be perceived as a daunting environment;
• Individuals may choose to make the repayment rather than go through a sheriff court procedure;
• A decision made by the sheriff court in relation to a debt may impact on an individual's credit history;
• The Registry Trust maintain a public register of certain sheriff court decrees;
• The sheriff court expertise is not Social Security benefit eligibility;
• The sheriff court can award expenses to either party.