Legal Definitions - right of division

The right of division, a principle primarily found in Scots law, refers to the entitlement of a co-debtor (an individual who shares a debt with others) to insist that a creditor (the person or entity owed money) divide their claim among all solvent co-debtors. This means that if a creditor attempts to demand the entire amount of a shared debt from just one of the debtors, that debtor can invoke the right of division to limit their liability to only their proportionate share, provided the other co-debtors are also capable of paying their respective portions. It prevents one individual from bearing the full burden of a collective obligation when others are equally responsible and able to contribute.

Here are some examples to illustrate this concept:

• Business Loan Guarantee: Imagine three business partners, Sarah, Tom, and Uma, who jointly and severally guarantee a £600,000 loan for their new company. This means each partner is individually responsible for the entire £600,000, but collectively they owe £600,000. If the business struggles and the bank (the creditor) decides to pursue Sarah for the full £600,000, Sarah can invoke the right of division. She can argue to the bank that since Tom and Uma are also solvent and equally liable for the loan, the bank should divide the claim. If successful, Sarah would only be required to pay her proportionate share (e.g., £200,000), and the bank would then have to pursue Tom and Uma for their respective shares.

• Shared Property Maintenance Debt: Consider two siblings, Mark and Lisa, who jointly own a holiday cottage and incur a £20,000 debt for essential roof repairs. The repair company's contract specifies that Mark and Lisa are jointly and severally liable for the payment. If the repair company (the creditor) later demands the full £20,000 from Mark alone because he has a more stable income, Mark can exercise his right of division. He can demonstrate that Lisa, as a co-owner and co-debtor, is also solvent and equally responsible for the repair costs. By invoking this right, Mark could limit his immediate liability to his proportionate share (e.g., £10,000), compelling the repair company to seek the remaining amount from Lisa.

• Co-Signed Rental Agreement: Suppose four university students, Alex, Ben, Chloe, and David, co-sign a rental agreement for an apartment, making them jointly and severally liable for the rent. If they fall behind on rent by £4,000, and the landlord (the creditor) decides to sue Alex, who is the only one with a steady part-time job, for the entire £4,000, Alex can assert his right of division. He can point out that Ben, Chloe, and David are also co-tenants and co-debtors who are solvent. This right would allow Alex to pay only his share of the arrears (e.g., £1,000), requiring the landlord to pursue the other three students for their portions of the outstanding debt.