Cooper v Bank of Scotland: inter-spouse guarantees revisited
By Andrew Foyle
After a lengthy period of silence, a new case in the court of session reminds lenders that a high degree of care is required where a wife is granting a security on account of her husband’s debts. Shoosmiths examines what lessons might be learned.
In the case of Smith v Bank of Scotland 1997 SC (HL) 111, the courts extended the English legal position that they had formulated in the case of Barclays Bank plc v O’Brien into Scotland. Thus, where a spouse was granting a security for his or her spouse’s business debts, the court imposed a duty on creditors to warn a potential cautioner (the Scottish term for a person granting a guarantee or security on another’s debts) of the consequences of entering into the proposed arrangements and to advise him or her to take independent advice.
Following Smith, there was a series of cases litigated in the court of session that further defined the parameters of the principle…
If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.
News from Shoosmiths
News from The Lawyer
Briefings from Shoosmiths
Shoosmiths’ Kath Livingston, who joined 36,000 others pounding the streets in the London Marathon on Sunday, ponders whether litigation is a marathon or a sprint.
The Court of Appeal has found in favour of a business tenant and decided that a periodic tenancy had not been created in the intervening period.
Analysis from The Lawyer
Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future
There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…