Thursday 18 September 2014 marked an historic day in UK domestic politics as the people of Scotland were given a chance to vote in a referendum which would have seen Scotland break away from the rest of the United Kingdom and become an independent country.
Scotland and England have been united under a single government since the Acts of Union in 1707 (Ireland came later, in 1801, and the province of Ulster remained after Irish independence in 1921). In 1997, the incoming Labour government honoured their election pledge and created devolved assemblies in Scotland and Wales. Holyrood, as the Scottish Parliament became colloquially known, was granted autonomy over what might be termed domestic matters, such as health, education and welfare, with certain tax varying powers and the ability to pass legislation. In many ways, this did not change matters much. Scotland had always maintained a separate legal system which has its origins in Civil Law (in contrast to the system in England and Wales, which is based on Common Law, and Northern Ireland also has its own legal system) and had also operated a different education system as well.
The principal difference was perceived to be that, after devolution, the Scottish-specific decisions would be made in a Parliament in Scotland made up only of Scottish politicians rather than by UK politicians as a whole, sitting in Westminster. This was a seismic shift in the way that the UK would be governed and how laws would be created. It may be hard for those in the US used to states legislatures which cede sovereignty to the US Government in certain limited matters to grasp this surrender of powers. Independence would have meant total secession of Scotland from the UK. A national sovereign legislature would have resulted from a Yes vote.
From a bankruptcy perspective, the legislative position across the UK has never been harmonised. Personal bankruptcy in Scotland has always operated in a very different manner to the regime in the rest of the UK and Holyrood has the ability to pass legislation permitting additional changes. Corporate bankruptcy operates largely in a similar manner across each of the three legal systems in terms of the available procedures (e.g. administration, liquidation) though Scotland has always had its own set of rules to govern these and which are distinct from the English rules. The implication of this is that it is not always possible in UK-wide restructurings to adopt a single approach – often, different processes will need to be utilised and different law firms instructed to advise on the different legal systems. John Verrill and I spent five years working at a firm which sought to address this by providing both English and Scots law expertise. To put it succinctly, there is no such thing as “UK law”.
The result of the referendum was that a majority opted to remain part of the United Kingdom and thus the prospect of further divergence between English law and Scots law has diminished. It is interesting to note that references to “UK Law” could encompass any one of three separate jurisdictions since the Welsh Assembly has limited law-making powers in Wales. In some ways the result has raised more questions than it answered, not least the perceived democratic deficit which remains at Westminster – the ability of Scottish and Welsh Members of Parliament to vote on matters which have been devolved and do not affect their electorate but which only affect England and with no corresponding vote the other way. The rumblings over the ten days since the result, however, suggest the issue is not settled except for the foreseeable future.