Scottish courts not softening stance on 'best evidence' rule for digital age, expert says

In Scotland, the best evidence rule requires parties to litigation to produce the original document on which they rely, or, in terms of the 1988 Civil Evidence (Scotland) Act, a copy of it authenticated by the person making the copy. However, the foundations of this law stem from a time when reliable copies of signed documents could not be produced - and the law has not caught up with advances in technology in this respect.

While the need to produce original documents has disappeared, to a large extent, from most forms of procedure because of the widespread acceptance of copies, the Court of Session's recent decision in McLeod v Prestige Finance is a useful reminder that, when faced with a difficult opponent, compliance with the strict formalities of court procedure may be required to avoid pitfalls. Although finding in favour of Prestige, Lord Tyre did not do so without first expressing his "concern regarding the evidential basis" on which the decree was sought by the lender and originally granted by the sheriff.

As organisations seek to move away from paper transactions and increasingly record everything electronically, Lord Tyre's views must be borne in mind. It will be disappointing for some that the opportunity was not taken to haul the law of evidence into the 21st century with at least an acknowledgement that original paper records are no longer always the best or indeed most accurate: advances in technology mean that paper versions of documents are instead often of inferior quality and much more vulnerable to tampering, inaccuracies, damage and even destruction.

It can surely be only a matter of time before the matter is considered again - perhaps by the Scottish Law Commission - and a different conclusion reached. Until then, however, principal documents must be retained and produced, unless agreement can be reached that copies will suffice.

The case concerned the calling-up of a standard security, using the summary application procedure provided for in the 1970 Conveyancing and Feudal Reform (Scotland) Act (as amended).

Briefly, McLeod fell into arrears in relation to a loan provided by Morgan Stanley Bank International Ltd, and later assigned to Prestige. The loan was secured by a standard security over McLeod's property. The standard security and assignation were both registered with the Land Register. Prestige served a calling-up notice in relation to the security and, when unsuccessful, began an application using summary procedure to be allowed to take possession of and sell the property.

One of the oddities of the summary application procedure in Scotland is that it has few rules, especially when compared to ordinary procedure. In most of these cases there will be no dispute about the existence or calling-up of the debt, with the debtor instead seeking more time or raising a litany of complaints against the financial institution which may have little or nothing to do with the secured debt. The matter is generally then dealt with by legal submissions, without the need for evidence.

However, in this case, the hearing scheduled before the sheriff was described as an 'evidential hearing'. Despite this, although Prestige lodged copies of the documentation behind the case, they did not produce either the principal or a certified copy. Additionally, they chose not to lead any oral evidence. Nor was any evidence led by McLeod - indeed, he walked out of the court during submissions by Prestige's lawyer, offering nothing in response. Decree was granted in favour of Prestige.

Out of time for an appeal, and his application to appeal late rejected, McLeod then asked the Court of Session to 'reduce' the decree. Although Lord Tyre ultimately refused to do so, it was clear from his comments that he believed that the original sheriff should have thrown out Prestige's action against McLeod.

In his judgment, Lord Tyre pointed out that the summary procedure "contains no relaxation of the ordinary rules of evidence".

"Where a party comes to court founding upon a document as the basis of the right which it seeks to vindicate, the 'best evidence' rule requires production of the principal document. There is no relaxation of that rule to be found in procedure for summary applications," he said.

"In my opinion the sheriff erred in granting decree without sight of the principal or a certified copy of the calling-up notice bearing the extractor's receipt, and without any evidence in oral or affidavit form in support of Prestige's averments, none of which was a matter of admission by Mr McLeod. Had Mr McLeod remained in court to insist upon this point it would, in my view, have been difficult for Prestige to resist," he said.

In many cases where similar issues arise, it will become clear early in the hearing that none of the central facts are being disputed by the opposition. In that event, the need for what would otherwise be purely formal evidence may be avoided. However, the lesson of this case is that that cannot be taken for granted. Either the matter will have to be clarified in advance, which will be easily ascertainable from such paperwork as there is - or, if need be, evidence will need to be available at the hearing.

Laura Crilly is a dispute resolution expert at Pinsent Masons, the law firm behind Out-Law.com.