Execution in Counterpart Bill Passed by Scottish Parliament

The Legal Writings (Counterparts and Delivery) (Scotland) Bill, which allows the execution in counterpart of formal documents and contracts in Scotland to become legally effective by electronic delivery, has now been passed. Shepherd and Wedderburn welcomes its introduction.

24 February 2015

On 24 February, the Scottish Parliament passed the Legal Writings (Counterparts and Delivery) (Scotland) Bill, which will allow execution in counterpart of formal documents and contracts in Scotland, and enable those documents and contracts to become legally effective by electronic delivery (such as by email).

This puts the Scots law rules on execution and delivery of documents on a par with England and Wales and many other jurisdictions across the world.

The passage of the Bill is a welcome development for Scots law and follows a legislative process in which Shepherd and Wedderburn was closely involved.  Our Chairman, Paul Hally’s recommendation to the Scottish Law Commission, that counterpart execution be recognisable as legally competent under Scots law resonated with SLC and has resulted in this transformation of the legal landscape.

Paul Hally and Dr Hamish Patrick, both partners in the firm’s Finance & Restructuring team, were among those who gave evidence to the Scottish Parliament on the positive impact that the Bill would have on the conduct of business in Scotland. They pointed out the existing difficulties that the lack of execution in counterpart posed for transaction completions, particularly cross-border transactions with a Scottish element, noting that quite often lawyers in Scotland were forced into creating unsatisfactory workarounds or solutions to the lack of execution in counterpart.  The Bill removes the need for these workarounds.

In allowing formal documents to become legally binding through electronic, as opposed to actual physical delivery, the Bill provides a welcome layer of clarity and certainty to commercial and domestic practice in Scotland.

Now that the Bill has been passed we eagerly await confirmation of Royal Assent and the date of commencement of the legislation.

Should you have any queries about the effect of the new execution and delivery rules, particularly in the context of cross-border transactions, please get in touch with your usual Shepherd and Wedderburn contact.

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