(1) This regulation applies to any legal proceedings brought by a company to which this Part applies to enforce a right arising out of a contract made in the course of a business in respect of which, at the time the contract was made, there was a failure to comply with the requirements of this Part.

(2) The proceedings must be dismissed if it is shown that the defendant (in Scotland, the defender) -

(a) has a claim against the claimant (pursuer) arising out of the contract and has been unable to pursue that claim by reason of the latter’s failure to comply with the requirements of this Part, or

(b) has suffered some financial loss in connection with the contract by reason of the claimant’s (pursuer’s) failure to comply with those requirements,

unless the court before which the proceedings are brought is satisfied that it is just and equitable to permit the proceedings to continue.

(3) This regulation does not affect the right of any person to enforce such rights as the person may have against another in any proceedings brought by the other.