The Doctrine of Simulation in Scotland.

Sham transactions, in common law jurisdictions, and simulated transactions, in civilian jurisdictions, are transactions in which the parties use a documentary form that deliberately conceals a different internal substance. While this area of Scots law is yet to be developed, Scottish courts and legal scholars often refer to English law as a key point of reference, either citing English decisions as persuasive authorities or arguing that English developments should not be adopted in Scotland. This article submits that Scots law has a rich history that should not be neglected when discussing and developing this area of law in Scotland. Long before English courts had elaborated a doctrine of sham transactions, the Court of Session, the Institutional Writers and the Scottish Parliament developed a doctrine of simulation that has role to play in modern Scots law. This is not to imply that English law should be neglected altogether, nor that centuries-old Scots law is immediately applicable nowadays. Rather the argument is that Scotland has a rich doctrinal history to draw from. The article begins by reconstructing for the first time what the doctrine of simulation was in Scotland in the 17th and 18th centuries, showing that in the sources simulation was always a type of fraud. It then goes on to show that from a comparative perspective the doctrine of simulation admits both unlawful and lawful forms of simulation, and that Scotland knew doctrinal developments that were functional equivalents to lawful forms of simulation. It concludes by observing that the Scottish doctrine of simulation illuminates three fundamental questions that modern Scots law needs to address in developing this area of law. [ABSTRACT FROM AUTHOR]