28 WWW.LAWYER-MONTHLY.COM | JAN 2022 2022 TRENDS OUTLOOK: LITIGATION IN SCOTLAND The legal market in Scotland has changed over the last year, although perhaps not to the extent that anyone would have predicted. Firms have, in general terms, coped well with remote working and are beginning to cope well with hybrid working too. Traditional streams of work have been maintained and while some practice areas, such as insolvency and restructuring, have been quieter than anticipated, that has not had a significant impact on the bottom line. So, what can we expect in 2022? 1. Insolvencies will rise – even if we do not experience the “tsunami” We can expect an increase in insolvencies. We have been warned for some time about a "tsunami" of insolvencies that is about to hit our shores. But the tsunami has not materialised and it is now doubtful that it ever will. There are several reasons for that. First, the protections put in place by the Corporate Insolvency and Governance Act 2020 were extended, and while they were relaxed in September there are still good protections in place for debtors, particularly in relation to commercial rent. The increase of the financial threshold for winding up to £10,000 is also prohibitive for a lot of creditors. Secondly, the downturn in the Scottish economy was, for the first time, supply- driven as a consequence of supply being forcibly cut off by government measures. Initial experience seems to be that the reintroduction of supply has been met with demand and the survival of companies that were perhaps expected to fold. However, if restrictions end as planned on 31 March 2022, then an economic shock is still possible in some sectors, particularly in retail, and companies who were on the brink before March 2019 may be the first to fail. 2. Directors’ duties will be put under the microscope The position of directors will be highlighted in 2022. While the wrongful trading suspension was looked at as an important measure, in practical terms, it is unlikely 2022 Trends Outlook: Litigation in Scotland Taking early advice will be crucial for corporate officers who are concerned about their position as companies and third parties will start to take action in 2022. If you have been reading through this section in order, you have likely already seen our broad predictions for how the UK and global legal profession will be shaped in the year to come. Below, we hear from Richard McMeeken, partner in Morton Fraser’s commercial litigation team, who takes a closer look at litigation in Scotland specifically and the trends we can expect to see play out in 2022.