The Arrestment of Benefits: McKenzie v City of Edinburgh Council

As individuals become more indebted and fall behind with repayments, there is pressure on the Scottish Government to strengthen protections against debt enforcement procedures. The most common diligence used to enforce debts is arrestment, which can capture sums of money from a debtor’s bank account. Yet despite the impact arrestment can have on a debtor, only minor reform of it is currently planned. In this context, Sheriff Corke’s judgment in McKenzie v City of Edinburgh Council is a timely reminder that courts can also have a role in protecting debtors. Although the protection of benefits paid into a bank account granted by McKenzie is undoubtedly welcome to debtors, and can be justified in policy terms, the way in which this was achieved may have stretched the interpretation of section 187 of the Social Security Administration Act 1992 (“1992 Act”) beyond what was intended when it was enacted. The preferable approach for protecting a debtor is instead to use the statutory protection against unduly harsh arrestments. This mechanism was noted by the sheriff and counsel in McKenzie but, as no competent application had been submitted, the sheriff was unable to make any finding under the relevant provision. This is unfortunate, as it provides a wider and more flexible mechanism to prevent a creditor arresting sums intended to provide the debtor with a minimum standard of living. In addition to setting out why it is the correct route for protecting a debtor in receipt of benefits, this article will also raise some practical issues where sums received by way of benefits are protected from arrestment.