Lenders could face compensation claims from Scottish homeowners who have been repossessed, following a landmark ruling in the Supreme Court last week.
The ruling will have implications for Scottish lenders and could lead to all Scottish repossessions being ground to a halt.
In the case, Royal Bank of Scotland v Wilson & others, judges ruled that all lenders must issue a calling-up notice before repossession in Scotland.
RBS tried to repossess the homes of brothers Francis and John Wilson without a calling-up notice after they built up debts of £50,000.
Lenders in Scotland normally start repossession proceedings if a borrower goes into arrears and does not issue a calling-up notice.
Rob Aberdein, partner of lending services at Aberdein Considine, says: “Our view is that all repossession cases in Scotland will be suspended. This decision will have serious time and cost implications for those lending in Scotland.”
The ruling means that all live cases, estimated to be between 2,000 and 3,000, may be delayed by up to six months.
In its preliminary opinion sent to lenders, the law firm states: “Technically any borrower ejected by a lender could, in theory, seek to rely upon the absence of a calling-up notice in order to seek to pursue a claim for compensation.”
Mike Dailly, principal solicitor of Govan Law Centre, says the move could send shock waves through the Scottish system.