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Category: Scots law

The case for digital assets legislation in ScotlandHand with physical cryptocurrency.

The case for digital assets legislation in Scotland

Published 11th February 2024

by David Fox, Professor of Common Law, University of Edinburgh

The England and Wales Law Commission has recently published its final report on Digital Assets (Digital assets – Law Commission).[1]  The report comes after an exhaustive study of the way that existing principles of private law in England and Wales would apply to this emerging class of assets.  It is of great significance since digital assets are fast becoming mainstream vehicles for carrying out financial transactions as conventional forms of financial securities are adapted to work on blockchain technology.  The report acknowledges that private law is as relevant to digital assets as the specialist regimes of financial services regulation that were the main focus of attention in the early days of their development.

The Law Commission report is relevant to Scotland which has an important fintech industry of its own but where the application of fundamental principles of Scots private law to digital assets remains obscure.  Any new clarification of the legal rules in Scotland would need to allow for the subtle similarities and differences between English and Scots property law and for the divergent patterns of legal development in each jurisdiction.

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Whose pint is it anyway?pint of beer

Whose pint is it anyway?

Published 19th January 2024

by Susanna Macdonald-Mulvihill, Early Career Fellow, Edinburgh Law School

A woman walks into a bar. Her name is Janet. Janet tells the bartender, Luca, that she would like a dram for herself and to buy a drink for all the other customers currently in the pub. Luca duly pours the whisky and rings up the total for all the drinks. Janet pays, drinks her whisky, and leaves. Luca pours the drinks Janet has bought for the other customers and distributes them to the relevant people, who happily accept and enjoy their beverages.

Kevin, one of the regular customers, was in the toilets when Janet came in and does not know about the transaction. Luca had included a pint of beer for him along with the drinks for the other customers that Janet paid for. Luca had poured it and left it on the bar where Kevin was previously sitting. However, when Kevin, unaware of Janet’s generousity, left the toilet, he walked straight out of the bar to go home. He did not see the beer and the drink remains untouched. Whose pint is it? And why does it matter? 

What this scenario demonstrates is an instance of an indirect donation. An indirect donation is where a donor engages in a transaction with a third party who in turn passes the benefit on to the donee. This can occur in a number of ways. For instance, a donor can be a parent who pays the rent of a university student child. The parent and landlord are the parties who transact but the student child receives the benefit of the accommodation. Alternatively, the donor may be a person who waives a right they have against a third-party in favour of the donee. An example of this could be the renunciation of an inheritance right resulting in that right vesting in the donee. Key to an indirect donation is that the donee is not actively involved in the transaction that leads to the benefit passing to them.

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Kinghorn v Wood and the origins of trusts in ScotlandEdinburgh 1600

Kinghorn v Wood and the origins of trusts in Scotland

Published 9th October 2023

by León Carmona Fontaine, PhD Student at Edinburgh Law School*

If there was a Scottish case from the 1620s in which a Scottish court had decided that there was a sham trust, it would be surprising and significant for both historical and comparative reasons. For a start, Scots lawyers usually consider that a distinct institution known as a trust appeared in Scotland in the late 17th century, and more decisively in the 18th century.[1] Second, sham trusts are usually seen as a recent English legal development. The term ‘sham’ gained a defined legal meaning in England between the late 19th century and the second half of the 20th century (Snook v London and West Riding Investments Ltd [1967] 2 QB 786, 802),[2] and the first case in which an English court found a declaration of trust to be a sham dates from the last decade of the 20th century (Midland Bank plc v Wyatt [1997] 1 BCLC 242). Finally, Scottish courts have occasionally applied the doctrine of sham transactions, but usually by reference to modern English authorities rather than Scottish ones.

Yet, Kinghorn v Wood (1626) Mor. 5072 seems to suggest that both trusts and sham trusts existed in Scotland as early as the early 17th century. Naturally, the trust in question did not go by the name of ‘trust’, and the ‘sham’ was not yet named ‘sham’.  The word ‘trust’ started to be used in Scotland only in the course of the 17th century,[3] and the word ‘sham’ had not yet originated in the English-speaking world.[4] In substance, however, the court found an arrangement that we would nowadays call a trust to be a sham as that term has come to be understood.

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Scottish Trust Law Reform and the Role for the CourtsScottish Parliament

Scottish Trust Law Reform and the Role for the Courts

Published 26th September 2023

by Daniel J. Carr, Senior Lecturer in Private Law, Edinburgh Law School

A.  INTRODUCTION

Change is coming to trusts law in Scotland. November 2022 saw the introduction of the Trusts and Succession (Bill) (“the Bill”) in the Scottish Parliament, and on 15th September 2023 the Delegated Powers and Reform Committee (“the Committee”) published its broadly supportive Stage 1 Report on the Trusts and Succession (Scotland) Bill (“the S1 Report”). The Parliament is scheduled to hold the Stage 1 Debate on the Bill on 28th September 2023. It is, therefore, a good time to build upon several of the Committee’s recommendations to illustrate the potentially significant change in the role of the courts heralded by the Bill’s current form.[1] The cumulative effect of the Bill’s provisions[2] is to increase the scope for the courts’ involvement, potentially significantly altering the culture and approach to Scottish trusts by changing the courts’ terms of engagement with trusts and trustees. What happens in the evolution of that engagement will determine much of the substantive doctrine and practical content of trust law, and therefore the very nature of the Scottish trust as a legal institution.

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Child Marriage: Global trends and future prospects – Part 2Marry proposal written in ballon

Child Marriage: Global trends and future prospects – Part 2

Published 22nd August 2023

by Katy Macfarlane, Senior Lecturer in Child and Family Law, University of Edinburgh.

In Part 1 of this blog, I examined the work of UNICEF and the UNFPA to end the practice of child marriage by 2030. What has this got to do with Scotland? The majority of the consequences of child marriage that are highlighted in Part 1 do not apply in Scotland – do they? We live in a progressive, child-focussed, child-centred society. We care about children and child protection – don’t we? In Scotland, the average age of the parties to a marriage is mid-30s. The average age that a woman in Scotland gives birth is between the ages of 30 and 34.[1]

Scotland can ably demonstrate that, in setting the legal minimum age for marriage and civil partnership at 16, it has complied with the relevant international human rights conventions. For example, Article 2 of the UN Convention on Consent to Marriage, Minimum Age for Marriage and Registration of Marriages (which the UK ratified in 1970) states that, “States Parties […] shall take legislative action to specify a minimum age for marriage […]”.and it goes on to say that, “No marriage shall be legally entered into by a person under this age”.

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