 Gweldodd. Er mwynfodd ar gyfer y 14 ysgafodd y 223 ddewidyddfaolus i L November 11 yn gweithio i ddalfwng i gyda'i ei ffordd a chydgol oedd yn eich hyn o'r sweth gyda'i ddawol. Nomod 1 maen nhw eich cyfnodau a chyglir yng Nghymru i gynllun i ddiwedd y Cynullad Digital i ffarrasol Fialba, MSP i gilydd o gael'i ffordd i ddiwedd a'i ei ffordd ar lawer o'i ddawol. Fy enw i ddiwedd i gydigio eich rebynnings. Fel hynny, yn cymharn assistance wrth referred, rhywnes i mewn chym�ser i'r Йlraeth per приех a ddwylo'r r sake스 a hynny adminkwyr. ac wrth gwrs, rydyn ni'n gweithio i'r cyllidau gyda'r cyllidau newidol. Yr next item of business is to decide whether to take items 5 and 6 in private. Is the committee content to take these items in private? Moving to agenda item number three today, we are taking evidence on the trusts and succession at Scotland Bill. I welcome Lady Peyton, who is the chair of the Scottish Law Commission, and Lord Drummond Young, who is the lead commissioner and former chair of the Scottish Law Commission. Welcome to the committee. Can I remind all attendees to not to worry about turning on the microphones during the session as these are controlled by broadcasting? If you would like to come in on any question, please just raise your hand or indicate to the clerks. So before we move to the questions, can I first invite Lady Peyton to make some brief opening remarks? Thank you very much, convener, and good morning everybody. On behalf of the Scottish Law Commission, can I thank everyone for their contribution in bringing this legislation to the stage that it is at present? It has been quite a campaign, and we really appreciate it. The trusts and succession Scotland Bill is a very much needed bill, eagerly awaited by many not just lawyers, but members of the public. That is because people have to administer trusts throughout Scotland in many fields, and while I have reminded the committee of the various areas where trusts crop up, I will just run through one or two again, national health service, environmental trusts, pension administration, charitable trusts, common repairs involving tenement owners, property developers with funds reserved for snagging, business partnerships, church elders and individual people making provision for their death by setting up a trust. Those are only a few examples. Trusts permeate Scottish society. The current legislation governing trusts is more than 100 years old. The main statute was enacted in 1921, and society and business have changed considerably since then. In 1921 trusts were predominantly used for private states, landed estates and private funds, but now, in 21st century Scotland, trusts provide a useful tool for many public enterprises, business activities and communal activities that are set up for the benefit of society. Trusts are hugely important, and the bill seeks to modernise them. In addition to modernising trust law, the bill contains some provisions dealing with the disposal of an intestate person's estate on their death. They aim to reflect more the public's expectations of who should inherit in this particular area in 21st century Scotland. It is hoped that the bill will provide a major modernising boost to Scotland's society and economy as we emerge from the pandemic. The overall goal is to contribute towards an increasingly efficient, fair, productive and prosperous economy in society. We are fortunate to have Lord Drummond Young, who was the lead commissioner when all the trust work was done at the Scottish Law Commission. He was instrumental in bringing about the relevant report and draft bill, and we also have here, I believe, sitting behind me, although I haven't seen them yet, the bill team, I hope, from St Andrew's House, I believe, headed by Michael Paparakis. I hope that we can help you in any way that is necessary to advance the cause of this bill. Thank you very much, Lady Peyton. Lord Drummond Young, is there anything that you would like to say in the record? We have been provided with a list of topics that it has understood that the committee would like to be covered. I have got our treatment on each of those. I would propose simply going through those one by one. Obviously, I will say a little bit about it, but I am very happy to answer questions on any matter that occurs to anyone, whether it is in those topics or otherwise. Should I work my way through the list of topics in that case? No, it is okay. We will ask the questions and then we will make them. First of all, I will open before handing over to some colleagues. You said a few things earlier, Lady Peyton, regarding the current legislation, and the bill in front of the committee today. Can you explain why the commission chose a project aiming to reform the law of trusts? What genuinely were the key objectives that the commission was looking to achieve? I would like to give you my views on that, convener, but I feel perhaps Lord Drummond Young, who was taking over the project at a much earlier stage in 2004, is not that right? I started in 2010, I think. 2010 was aware of what driving forces were behind the project, but speaking for myself, what I have gathered is that, for example, the duties and obligations of trustees are not very clear from the bill. That is for the act 1921. Things have changed enormously, but things are vague about what you are supposed to be doing as a trustee. Someone like a church elder wants something as clear as possible. There was also some negativity about telling beneficiaries who were perhaps entitled to something under the trust. They did not have any provision for releasing information to a beneficiary, so those were two things that I picked up. However, I think that there were considerably more than that. I would invite Lord Drummond Young to come in on that. I was not a commissioner at the time when the project was initially adopted, but I became the lead commissioner for the latter stages of it. The main reason was that there is a recognition that trusts are a very important part of the law, not just in themselves, but in adjunct to many other things—the law relating to contracts, charities and property law, to some extent. The main statute governing the law is the Trust Act 1921. That, quite frankly, was out of date. It had been amended repeatedly. Many of the important sections were chaotic. It was extremely difficult to use. I can vouch this from my own experience at the bar and on the bench. I practised in this area a lot at the bar. I went on the bench in 2001 and, soon after that, became the designated trust judge dealing with trusts litigation in the Court of Session. The 1921 Act was extremely difficult to use and was extremely inaccessible. The law clearly needed reform. A major function of the Law Commission is, obviously, to keep the law up-to-date. It was thought that this was an area that was crying out for fairly major up-dating, and that is what has happened, not just by reference to Scotland, but by reference to practice throughout the rest of the world where trusts are in use. I know that that is helpful. Thank you very much. A key theme of the responses to the committee's call for views was that it is important that the legislation is accessible to trustees and beneficiaries without legal backgrounds. Lady Patan, you alluded to that in your opening remarks. Ideas that the committee received to enhance accessibility included drafting changes, Government guidance, a publicity campaign, and template legal documents that could appear in the bill itself. Could you comment on those ideas, especially the proposal to have style or template legal documents in the legislation? We deal with it expressly in the commission report. It is this fairly hefty volume here. We rejected that because there are actually very good style books available. There are a couple of these, one by Alan Barr, who teaches at Edinburgh University, and one by Kessler and Grant, who are practising—I think that one is an English barrister, the other is a Scottish solicitor in this field of law. The English style book was modified, but it is proper Scottish styles here. Both of those books provide styles for lawyers. There is perhaps scope for providing styles to let late people set up trusts. A good example of this is that if you are collecting money to carry out repairs on a common stare in a tenement, you may want to put those monies into a trust account. It would be helpful to have some sort of generally available style of trust for that, as well as instructions as to how to use it and what you have to do. This is far more detailed than could go in the Law Commission report. It is not really the sort of thing that should go in legislation, we thought. We thought that ancillary documents should be used for that purpose. I am planning to write a series of articles for the Scots law times or the law society journal or other legal periodicals about the main changes that are affected by the bill or things that may be perceived as changes even when they are not really. Those are, of course, for the legal profession. I agree entirely that it would help to bring this home to members of the public. Articles in the general press could help this, and it may be that the Scottish Government could ensure that documents are published that give guidance on how people can set up trusts for their own purposes. I would be very happy to co-operate with that if any help is required. We felt that this is more detailed than you require in the bill. If you put too much into the bill, you get the sort of problems that you had with the 1921 act that they get amended and amended and amended and become almost unusable after a time. It is better that we felt having these documents in separate sources, either style books or perhaps styles issued by the Government. Unlike the commissioners draft bill, the bill does not include the pension trust in its definition of a trust. The Scottish Government intends to ask the UK Government to implement a section 104 order. It is something that we are very much aware of in this committee with the Moveable Transactions Bill, which reaches stage 3 on Thursday afternoon. In terms of yourselves, would you like to give a view on the Scottish Government's approach to the request for a section 104 order with regard to the pensions? I could perhaps just say before Lord Drummond Young contributes there that I am very much in favour of adopting that route. It is the safest route at present not to run into any legislative competence possible problems because there have been two very obvious difficulties in the past, one to do with children and one relating to trans. There is just doubt about the ledge comp if I could put it that way of the particular issue that we are referring to. I would encourage a request to Westminster, which I think could be dealt with by a statutory instrument which would disapply the exclusion of pensions and that would be very helpful. That would mean that the act would apply directly to pension funds. That is my view. Yes, I agree entirely with that. I think that it is of the utmost importance that pension trusts should be brought within the regime in the act using those powers that are available in the Scotland Act. There are actually very wide-ranging powers in the Scotland Act. I have had conversations with solicitors involved in pension schemes. Since I reached retirement age, I have been doing a certain amount of... I have returned to the bar to do a certain amount of advisory work, much of that in the field of trusts and pension trusts in particular. Solicitors dealing in this area have repeatedly emphasised to me that it is absolutely essential that pension trusts should be brought within the scope of this legislation. The reasons are very obvious. Pension schemes are invariably organised using the medium of a trust. There is no reason whatsoever for using any regime other than the general system of trust law. Otherwise, you have wholly unnecessary complexity. The lawyers in this area tend to move backwards and forwards between different types of trusts that lawyers in his firm are trust specialists. Pension trusts deal with other trusts, environmental trusts or trusts in commercial agreements. They need to be able to move backwards and forwards with the minimum of effort. Using one scheme for all trusts is the way to achieve that. In relation to pension funds, I think I may have mentioned this previously when we appeared last time, but the amount of money held in pension scheme trusts is enormous. I think I may have mentioned the plumbing pensions case in the court of session in the early part of last year. I wrote the report for that case in an advocate, not judge capacity. Plumbing pensions, the funds in our schemes set up for the plumbing industry throughout the UK, as it happens, amounted to about £2.3 billion. In terms of pension schemes, that is not a very big one. I was informed by a solicitor about our local authority pension scheme that at that time contained assets amounting to £39 billion, which gives you an idea of the very large amounts of money that are contained in these pension scheme trusts. With increased longevity, they are going to get increasingly important. We did consider it essential that, at least with Scottish employers and Scottish scheme providers, they should be governed by Scots law. With regard to the issue of the pension trusts and the potential section 104 order, have you had any dialogue with the Scottish Government on that particular matter? Well, there is dialogue proceeding. I understood it to be with Westminster. In fact, just give me a moment. Yes, I believe that the Government is communicating with Westminster, so we could send further details about who has been corresponding with whom, if that would assist. While we undertake to do that, but it is in the middle of negotiations just now. I wanted to ask about the codification of trust law. The Law Society and the Scottish Law Agency said that they supported the bill overall, but expressed a regret that it was not a complete codification of trust law. I was interested and I guess that the committee's benefit to understand what you saw is the drawbacks of attempting a full codification. Is this something that we obviously considered at the time when we were preparing the report and finalising the commission's draft bill? I mean, codification is a slightly ambiguous word. In a sense, the present bill is a codification, at least in the areas that have traditionally been regulated by statute with the addition of some others. But the Law Commission decided against legislation in some areas, in particular those relating to stating the underlying nature of a trust in Scots law. This is something that has attracted a bit of academic interest in recent years. It's an area where Scots law differs radically from English law. English law is in this area based on a dual system of law and equity. You've got the basic system of law, and starting in the middle ages, superimposed on that, is a system known as equity. Trusts are a product of equity, not of the basic common law. We don't have anything like that, I'm happy to say. It leads to really, I think, very considerable complexity and confusion in the system. But the trusts have existed in Scotland since the middle ages. They've worked well enough. No one really thought much about how you would underline the conceptual structure of them as a matter of theory. This changed in the 1990s with a series of articles starting with Professor George Gretten of Edinburgh University, who was a law commissioner for a time, and followed by Professor Kenneth Reid also at Edinburgh University, another law commissioner. They came up with what is generally known as the dual patrimony theory. This is the key to what a trust is. There is a trust patrimony, if you like to think of it as a ring-fenced fund, that's perhaps the best way of putting it, that is separate from the trustee's own patrimony. A trustee has his or her own private property, his or her own patrimony, and also controls the trust's patrimony, and these are separate. This is important because, for example, the trust becomes insolvent, the trustee is protected from liability for the insolvency. Likewise, if a trustee becomes insolvent, the trust patrimony is protected, the funds are ring-fenced. This is one of the reasons that they use so much in the pensions area, for example, so that the funds are ring-fenced and earmarked for the provision of employees' pensions and aren't going to be affected by any financial difficulties the employer might have. We decided that that basic theory had been quite well explained in academic articles and has been taken up in case law since. I've been the judge in some of those cases explaining how the dual patrimony theory works, and we didn't think it was necessary to put that into the bill. It's quite a difficult thing to put in the bill because it's a kind of abstract theoretical analysis of what a trust is. You will find the same thing in other systems. Generally, the underlying conceptual structure of the trust isn't the subject of legislation. In addition to that, not all trusts are express trusts. There are implied trusts, for example, that can come into existence with a partnership or sometimes in agency relationships. The court will hold that they are implied in particular circumstances. It's very difficult to put that sort of thing into legislation. There's yet a third type, the constructive trust, which is a non-express trust that is imposed by law by a court as a form of remedy following, say, a breach of trust. If a trustee commits a breach of trust and obtains some what should have been trust property as a result, the court may hold that he or she holds that property on a constructive trust for the same purposes as the original trust or for the partnership or whatever. We felt it was going to be too complicated to put all of these things into legislation. The walls, in addition to that, are quite a considerable academic debate about matters such as constructive trusts. The case law is still developing in that area. We felt it was just a bit too early to put it all into a code. In fact, there is not really any need to put it into a code. I think I'm right in saying that the codes that you find in other countries, the article 9 of the Uniform Commercial Code in the United States, which touches on this area, you won't find an absolutely comprehensive definition of what a trust is, so we didn't feel you had to go that far. Again, as I say, with implied and constructive trust, the law was still developing. It was very hard to encapsulate that in legislation that would be easy to apply. The concepts are there, they are used regularly. In a sense, it's common sense, but we thought it was better to leave matters as they are and let these areas develop as they are developing. It's really the areas that have traditionally been dealt with by legislation, which are very extensive. Some additions, for example, private purpose trusts or the power of the court to alter trust purposes, where we felt that what is effectively a code with some omissions was desirable. That's what we've tried to provide here. Hi. Is that a deliberate approach? It's a deliberate approach, yes. This is pretty much a code, but there are one or two bits left out, but for good reason, because the law was still developing in these areas and wasn't just as clear as it might be. Quite frankly, it works well enough in practice in these areas. It's the subject of legislation where the big defects existed. I wanted to ask about the role of the court of session compared to local sheriff courts. I know that there are some expanded powers for sheriff courts, but I was really looking for you to explain the policy thinking around retaining the sheriff court as the main court for the bill. Given that it's traditionally more expensive and less geographically accessible? All courts obviously have their normal responsibility for interpreting and applying legislation, so that applies in cases about a range of subjects in court of session or sheriff courts, as the case may be. There are a number of specific powers in the bill. At a general level, those are divided into powers of an essentially administrative nature where jurisdiction is conferred, both in the court of session and the sheriff court, and more specialised powers, which usually involve considerable elements of judgment and discretion, which are conferred on the court of session alone. This was a deliberate policy choice. The reason for conferring the latter jurisdiction on the court of session is that the issues that are involved are generally rather technical and call for considerable expertise and experience in the law of trusts. In the court of session, a judge is designated as the trust judge—I was the trust judge for about 15 years—and it's likely that he or she will deal with the great majority of the more technical trust work. Under the bill, this will now be done in the outer house. Much trust work was previously done in the inner house, but most will now be done in the outer house by the designated trust judge and using procedures similar to those that have been developed in the commercial court. That involves a high level of case management, including in every case documents known as statements of issues that set out in detail the issues on which the court is expected to come to a decision. That procedure has been very successful in the commercial court, and in the course of that procedure it can be expected that the counsel and solicitors acting will be specialised in the field of trust law. That is just a recognition of the technical and often very complex nature of the issues that arise in many trust cases. As far as I can see, in nearly every jurisdiction where trusts are recognised, trusts are given to a limited number of courts and, ideally, to judges with expertise in trust law. There is a further problem that can arise in relation to the sheriff court, which is determining which particular court has jurisdiction. A trust does not have legal personality. The trustees may live in various parts of the country—that is commonplace—or they may live outside Scotland. If they live in several different sheriff court jurisdictions or some are outside Scotland, which is not unusual, there is a question as to which sheriff court would have jurisdiction. This problem is avoided by conferring jurisdiction on the trust judge in the court of session, which, as I say, accords with most of the present practice. As far as the sheriff court is concerned, there is a default provision that if there is no obvious sheriff court with jurisdiction over the trust, Edinburgh sheriff court is the default jurisdiction. That is no more accessible in the court of session. On the whole, we thought that the court of session was quite accessible in cases of this sort. One thing to bear in mind is that even if the beneficiaries of the trust are in, let's say, some part of the Highlands, very often you'll find that solicitors dealing with the affairs of the trust are based in Edinburgh. The accessibility problem I think can easily be exaggerated. I'm quite happy to go through the particular provisions dealing with the jurisdiction of the courts. There are about 15 or 20 sections where that happens, but the general division is between the ones conferring administrative powers. For example, section 1 dealing with the appointment of additional or new trustees by the court, where the sheriff court is given the power, or section 6, the removal of a trustee by the court for unfitness of various sorts, that, again, is the sheriff court. On the other hand, there are other powers that are more specialised where it's the court of session, ultimately the trust judge there, or trust judges it may be in future, who are given jurisdiction. Those involve things like orders relieving trustees of the consequences of ultraviries actings or actings in breach of fiduciary duty at sections 29 and 32. There it's a court of session because these are highly technical areas where a strong element of discretion and judgment is involved. Section 43 is another, an application for an order requiring the fulfilment of the purposes of a private purpose trust. Again, that's a specialised area. Section 44, an application to reform a private purpose trust, corresponds to the existing C-Pred jurisdiction in relation to public purpose trusts. That has nearly always been applied by judges of the court of session. That is where the trust judge can be expected to develop expertise and provide the sort of service to the public and the profession that one expects the courts to provide. I can go through all the sections. I've got a list of them here, but generally speaking, the division is between the ones that are of an essentially administrative nature, which are given to the sheriff courts and the ones that are more concerned with detailed provisions of the law of trusts and the way they operate and which involve very considerable discretionary elements, in which it was felt that those had to be handled with a degree of expertise and in a consistent manner throughout Scotland. I'll ask one supplementary question. If a trust is to be looked at, can you clarify what the process would be as to whether it would then be dealt with in the court of session as compared to what's proposed in the bill as to whether it would record to a sheriff court? The standard grounds of jurisdiction in the sheriff court would have to exist and there can be a problem here, as I say, if the trustees are spread about the country, because the trust is no separate legal personality with a company, you can always go to the jurisdiction where it's incorporated or where it has an actual place of business with a partnership. Similarly, with a trust, it's much more vague than that, and that's why there has to be one court dealing with it, hence the provision for the Edinburgh sheriff court as the default sheriff court, if you want to litigate that way. It is quite hard with a trust because of its basic nature. It's difficult to see you can do anything about that. We've dealt with it as well as we can. Quite frankly, we didn't feel that there was going to be any significant disadvantage in having the court of session deal with these matters. It's not actually more expensive than the sheriff court. It's a bit of a myth that the sheriff courts are much cheaper, especially in cases where the solicitors are in Edinburgh or Glasgow, where the majority of trust cases originate from solicitors in these cities. It's just as handy as the sheriff court. I wondered whether, as a result of the bill, you can expect that there will be more legal action or, if the bill's got the potential, to reduce litigation and just round capacity within the sheriff court to deal with cases? The answer to that is that there could well be an increase in litigation to begin with. That's pretty standard with most acts as any obscurity or ambiguity gets decided. On the whole, I think it gives greater certainty in most of the law. What it may do is to make Scotland a more attractive trust jurisdiction, which means that there may well be more trust business in Scotland. At present, there are stories that one hears that a certain amount of trust business originating in Scotland actually goes off to England because there's a perception that it's dealt with with greater expertise there. The legislation, as it's said, is kept up to date better. I'm not sure that that's right, but although there is likely to be a trust bill in Westminster dealing with English trusts in the fairly near future, I gather the English law commissions looking at this. There could well be an increase in overall trust business in Scotland, not just in court, but elsewhere. I have a question, but do you think that there's sufficient capacity and expertise to handle that? I think that there is, yes. There are plenty of experience trusts, solicitors and advocates who specialise in trusts. As far as the court of session is concerned, I'm well aware of judges with great expertise in trusts. Law and law are more tire, for example, who was actually the commissioner responsible for some of the earlier stages of this project. There are other judges that definitely have good expertise in trust law. Lord Docherty, who dealt with the plumbing pensions case, is another one. I don't think there's a shortage of ability there. No, thank you. Jeremy. Just following back further up, one of the responses that we received was the role of mediation, and there's nothing within the bill for that to happen. I wonder, did the commission consider formal role for mediation? If so, what policy considerations were given were not to include that into the bill. Rather than having to go to the court of sessioners of court to allow mediation to be a first step and so on? Yes, we didn't consider mediation, basically because we feel that it's a matter of procedure rather than a matter of trust law. Mediation is quite important. There's nothing to prevent people from adopting mediation procedures in relation to anything in the bill, but it's really a matter of the procedures you follow in litigation or prior to litigation. The legal advisers in a trust dispute can quite readily go to a mediator, and nothing we put in the bill could really change that. To the extent that there's legislation on mediation, it's on procedure rather than on the substantive law of trust. We didn't want to overcomplicate the bill unduly by taking in stuff from other parts of the law. On the whole, for example, there's not very much on court procedure in this. We leave that to the basic statutes and statutory instruments dealing with procedure. The term incapable is defined in section 75 of the bill, and it's similar to the one used in the Adults with Incapacity Scotland Act. In response to the committee's call for views, the law society noted that the Scottish mental health review has recommended significant changes to capacity law in Scotland. That would include removing the term mental disorder and moving from a capacity test to one of an ability to make an autonomous decision. The law society suggested to the committee that the trust and succession bill needs to be future-proofed in case any changes to incapacity law later occur related to that Scottish mental health review. We'd be interested to hear your comments on the need for future-proofing if it's something that you think needs to be done, and if so, what your thoughts are on how that future-proofing could be achieved? Future-proofing is always difficult because it's so hard to make predictions about the future. I don't know what for example to amend the definition in section 75 of the Act, but it's difficult to know how we could do that now because we don't know what the future legislation is likely to say. In future it should be possible to make provision for amendment of this, but quite frankly we had to go on the best definition that we had available to us. That's what we have in the bill. I think future-proofing really requires further legislation. There are legislative techniques that you can use for that, but it's very difficult for me to comment on this because the commission was not asked to do that kind of thing. As a supplementary to that, could a short amendment be added to that particular section so that at some point in the future it could be amended via a statutory instrument in terms of all the definition? There would be no problem at all with that. That would be the obvious way to deal with that. Thank you. Trustees can remove a fellow trustee under section 7 on the basis that such a trustee is incapable and has become so. A trustee doesn't then get to participate in trust decisions under section 12 where they are incapable and maybe more understandably if they are untraceable. The possible risk of abuse of those provisions by trustees has been highlighted by some of the responding to the call for views such as Gillespie McAndrew. Can you highlight any safeguards in the bill as it stands or elsewhere in trust law already, which would guard against this risk? Do you still see some merit in those concerns? I can see that there is some merit in the concerns. In a case where trustees abuse the power in section 7 to remove one of their number, the person who is removed can challenge their decision in court. There is no difficulty about that. Any decision can be challenged in court. I emphasize the generality of that right to go to court. This really is why we didn't see there was any need for particular protections here. There is, in addition to that, there is, of course, power in sections 1 and 2 of the act that allows incapable untraceable trustees to be removed by the court in a doubtful case. That is the procedure you would use. I mean, there are cases where the reasons are very, very obvious, but that, these may be the more common ones, but I think most of the grounds for removal are fairly clear. Incapable is the one that the doubt is about, the other is convicted of an offence involving dishonesty is perhaps fairly obvious and the ones that follow that. If there is a mental incapacity here then, I suppose, is it? Mental incapacity incapable is defined in section 75. That is what we have just been discussing. That may require to be amended. I would agree that if the general legislation in this area is amended then this bill should be amended accordingly, but until we know what these amendments are going to be, it is very difficult to amend the bill, a statutory instrument to allow that to take place immediately, it would be the ideal way of doing that. I was wondering within the structure of the bill as presented, whether a trustee would find it possible without having to reach the stage where going to court was necessitated, whether there would be challenges built in to anyone being dealt with in such a manner? If there is a challenge, the way to do it is to make an application to the court. That is why you want easy procedures for that to enable the court to come to a decision fairly quickly. Right. That makes sense. Thank you very much. The Law Society and the academic lawyer Yvonne Evans have suggested that, in view of Scotland's increasing emphasis on net zero goals, that section 16 and 17, in relation to trustee's powers of investment, that that could be amended to allow trusts to adopt environmentally friendly investment policies, particularly when these might underperform compared to other investments. Does the commission have a view on that suggested amendment? The commission did not have any particular view. I have dealt with this sort of issue in our talk that I gave at a conference on this area. I do not think that there is any particular bar present to taking environmental considerations into account in investment. As I say, I think that I have got the text of the talk that I delivered on this. I think that it is possible to, given the existing powers, to take environmental considerations properly into account as part of the general power of investment. I do not think that it is to be construed as a power to maximise returns at all costs. It requires the trustees to take proper professional advice, of course, and to take due care in considering their investments, but there is nothing in that to prevent environmental considerations from being taken into account. In addition to that, in relation to the decision to purchase any particular investment, it would be very hard to show that an investment was unprofitable just because it was made on environmental grounds. Usually, you have a choice of possible investments, and choosing the one that is best environmentally is often a sensible thing to do. You cannot show that it is wrong, that is the important point. Beyond that, I would not have any particular objection to including a provision about this, but there is a danger that trustees can sometimes go a bit too far about this. I am a trustee of a large charitable trust. This is my experience as a trustee, where a body on which the trustees were not represented but which has a certain jurisdiction over the charitable trust decided that a group of trusts should get rid of all their investments in companies interested in oil and other fossil fuels. That was done in an unthinking way without any phasing out. This has produced a very bad investment return in that year. Had I been asked about it, I would have said, by all means move to that, but do it in a sensible manner and phase out the investments properly. There is really no absolute right and wrong in this. Yes, the general policy of phasing out fossil fuels to take that as an example is, I think, quite compatible with existing trustees duties, but it should be done in a sensible way so that a shock is not delivered to the trust. Although there is nothing to prevent environmental investments, would it be possible to have a clarifying amendment just to make clear that maximising financial returns is not the only permissible criterion? Something of that sort could be inserted into section 17, which deals with the exercise of the power of investment. That does refer expressly, for example, in 171A. 1 is the suitability to the trust of the proposed investment. That means, for example, that let's say the trust fund of a charity to set up to achieve a particular purpose, because they can avoid investing in a company that is antithetical to that. The classical example of this is in trustees set up for the purpose of the Catholic Church. They don't invest in companies that have an interest in abortion and other procedures that are forbidden by Catholic canon law. That's just one example. There are many others like that that supplies, I think, to nearly all charities. The suitability to the trust of the proposed investment does permit that sort of decision to be made. A2 deals with the need for diversification. That's a general investment point. 1b deals with taking proper advice. Nothing in this prevents taking environmental considerations into account. If you want to add something specific, I think you would add it as part of section 17. You'd have to be careful about how it was framed, as I say, the trust reported on this matter, I think, eight years ago before people became so concerned with environmental issues. As I say, I have delivered a talk on the environmental issues since then. I have the text of that talk. If you were interested in receiving that, I could make it available. Yes, please. I'll do that. As I say, I don't think it's a serious problem at present, but you could put something in, expressly authorising this. I might add a covering note there. Thank you very much. Thank you. Jeremy. I want to follow up that point slightly with you. That is about the trust getting best financial benefit for the trust. If it is meeting our charitable needs, is that enough? Is that to be expressed more clearly in the bill so that if a charitable trust, but it always feels it's going to get the best value in regard to investment or property sales, doesn't that need to be clarified slightly? Well, this is the topic that I considered to some extent in the talk that I'm talking about. It was a conference last year, I think, which strangely enough was organised by the Swedish Embassy here in Edinburgh. It's certainly not Swedish, the Swiss Embassy, but here in Edinburgh. I think the law is reasonably clear at present, but a provision could be put into the bill there. I'd be very happy to cooperate in devising some sort of amendment to it that permits this, that the bill team would have to do it initially. It is very important to have careful instructions about exactly what you would want to be added to the bill, what topics you would want to be covered there. That's helpful and thank you for your kind offer. If I can move your on now in regard to an issue that's been raised by one of the legal firms, and it's concerned 69 of the bill on nominees as county drafted, they think it may not go far enough. Specificly, if a firm has said, without a domain, I think that the trustees can use a nominee custody structure or a sub custodians. Again, it has been tested to get your view on this both on the scope of 69 and any potential risks identified in relation to it. Well, session 19 is really a default provision. You can provide to the contrary and the trust deed quite easily, but it's a default power on trustees to make use of nominees for the purpose of exercising any of their powers. This is basically designed to provide the trustees with flexibility and administration. The general policy is discussed in chapter 8 of the Law Commission report at paragraph 8.11 onwards. As a matter of law, a nominee will normally be classified as a fiduciary, like a trustee. The power to appoint a nominee is constrained in section 19. Subsection 3 imposes a trust on determined assets held by a nominee irrespective of any purported agreement to the contrary, and any appointment is to be in the manner specified in subsection 7. So, this provision is quite prescriptive, but do bear in mind it's a default provision. A solicitor can, in a standard trust deed, change this. If a nominee is acting, the trustees must keep the relative arrangement under review, that's subsection 10, and there has been a bit of discussion about the position of client money, which is normally held, regarded as held on trust. I had a dispute with Lord Hope, who expressed some views on Scott's law in an English layman brother's litigation some years ago, and I published an article in a collection of academic essays in honour of Professor George Gretan disputing Lord Hope's interpretation of this. I think it is very important that things like client money should be held on trust by a nominee or however you designate the person. A nominee is basically a kind of trustee, that's the central point of trying to make here. To the extent that it's proposed that there could be changes to this legislation, which was discussed very extensively by the Law Commission, following consultation with members of the legal profession, I'd be quite happy to look at proposals for amendment of it. Consider whether they would be suitable. I think that we seem to have lost Jeremy. We can come back to Jeremy if he wants to come back in this point. No, I've just changed. Thank you for the kind offer, and we may well come back to you on that offer. Thank you. I'm going to move on to sections 25 and 26. We have received a variety of responses with regard to the issue of the provision of information under these sections. Certainly there was especially some concern regarding the level of information that could be provided. With some comments from Anderson Struthern, they expressed concerns, and I quote, to be feel that they have been drawn too widely in place to owner of the duty of trustees to provide information. Also, Gillespie McAndrew LLP thought that the provisions could open the door to increased litigation by disappointed potential beneficiaries for whom to seek the information on the existence of the trust might lead to an expectation of a benefit they're under. In the view of the comments that I've just read out to others that we have received, does the commission wish to offer any reflections on the policy underpinning these provisions at this stage? Yes, the policy underpinning these decisions is discussed at some length, I may say, in chapter 11 of the commission's report, which is headed information duties. The particular problem was that there were really no express information duties in Scott's law. We followed what you might call the usual law reform technique of looking at all and following what they do. We did that quite extensively. It was obvious that, in those other jurisdictions, there were competing theories at paragraphs 11.8 onwards. Those are discussed. The duties are quite complicated. We did seek views of members of the profession on these matters and took those comments into account. In the end of the day, there is a conflict between, I suppose, the trustee's interest in just getting on with the administration without being bothered. At the same time, the interest that a beneficiary has to be told of his or her rights in the trust, this is an attempt at a compromise between these. On the whole, respondents were fairly content, I think, with what we proposed. The consultation responses are referred to at length in chapter 11 of the report. It is quite a substantial chapter. I am not sure that I can really summarise what it says here. It is always possible to... I think this is in section 26 of the bill for the trustee by express provision in the trust deed to limit or expand the trustee's statutory duty to provide information. I emphasise that this is a default provision. It is not difficult for a solicitor to devise a form of trustee that alters those duties in some way or other. I am sorry, but I am trying to look at the text of the bill here. On the issue of the information sharing with the bill that we have in front of us, do you think that that is as fine as is proposed or the concerns that have been raised by others? Do you think that those concerns are warranted? Sorry, I am just trying to look at the actual terms of the bill that is introduced here. Quite frankly, the basic duty to provide information is if the trustee has become aware that a person is a beneficiary to inform that person that they are a beneficiary. I really do not see what the problem is with that. I do not see how you can avoid doing that. To do otherwise is simply to deny the fundamental right of the beneficiary to know that he or she is a beneficiary. That is what section 25 does. There is a duty to identify and trace beneficiaries. Again, that is fairly obvious. I was suggesting that. That is probably helpful for the moment. Yes. 26 confers a certain degree of discretion on the trustee. This is 25 deals with the fact that a person is a beneficiary. 26 is the wider point about the terms of the trust. It is subsection 2 there. Subsection 1 is subject to the express provision of the trust deed and the rest of the section. It is possible that solicitors are complaining about this. When they draft a trust deed, they can easily exclude the duty in section 26. They cannot exclude the duty in section 25, but that is the fundamental policy decision that a person who is a beneficiary should be informed that they are a beneficiary. I think that that is self-evident. If you did have any further considerations on section 25 and 26, if you wanted to provide that in writing afterwards, that would be very helpful. Y Llywydd, y cwestiynau 12 yma. Y Llywydd, can you explain why the commission decided to make the role of a supervisor optional in chapter 6, one to mandatory in many legal systems which permit private purpose trust? We didn't think it was necessary, basically. This was the contribution that is mentioned in the report from Dr Patrick Ford of Dundee University, who is an expert on trust law. There is legislation permitting private purpose trust in a number of jurisdictions. The one that we use as a kind of paradigm here is the so-called star trust legislation of the Cayman Islands. The Cayman Islands, although they are an offshore jurisdiction, they are a reputable offshore jurisdiction, if I can put it that way. Judges and lawyers are frequently scots who have gone out there. I have known one or two people who have gone there or have been there, and it is not one of the more dubious jurisdictions. The star legislation provides for a supervisor under the name of an enforcer. The word enforcer attracted critical comment for reasons that are fairly obvious if you know about the criminal underworld and the west of Scotland in particular, but we changed it to supervisor, which we think is what the person does. The private purpose trusts aren't recognised in English law. There's a case of 1800 and four Morris against the Bishop of Durham, which held that the only trust recognised in English law are trusts of benefit named or identified persons, or trusts that are charitable in the technical sense of that word. The concept of charity in those days was under an English statute of 1600, so there's that sort of area that moved on very well. Purpose trusts are generally not used in English law, and any system based on English law or English equity had to provide express legislation. It was felt that enforcement was a problem and the enforcer, the equivalent of the supervisor, was considered to be essential to make sure that trust could be enforced. What Patrick Ford pointed out to us is that in Scots law there's a well-established concept of interest to sue in order to raise an action in court. You have to have title to sue in the sense of a legal title, and you must also establish that you have an interest to sue in the sense of some sort of pecuniary or proprietary interest in the outcome of the action. It must make a difference to you. You can't raise abstract points, and we felt that ultimately this was the answer, that the concept of interest to sue allowed a range of people to enforce a purpose trust. If you don't have an interest to sue, of course, you can't go to court to enforce the trust, but there will be people with that interest. There are quite a lot of public purpose trusts at present. An example that I think I mentioned on the previous occasion was the Nuclear Liabilities Fund, which is a purpose trust that covers the decommissioning of nuclear power stations throughout the United Kingdom. Scots law was chosen because Scots law permits purpose trusts. Scots law was chosen in that case. There are a number of other public purpose trusts in Scotland that are not unusual at all, and they have been recognised for a very long time. The law commission took the view that these purpose trusts were full important functions in modern practice because the trust is the standard method of ring fencing funds for any particular purpose. That includes environmental purposes, which you get with the Nuclear Liabilities Fund. It can be a fund to identify a use to identify a fund for a specific purpose in a commercial transaction, for example snagging work in a construction contract, or providing a fund to make good the liabilities in a commercial development such as a shopping centre. These can be extremely complex in their operation and having a ring fenced fund to pay for future liabilities can be very useful. Purpose trusts can be used to isolate and hold electronic material. Many of these are really public rather than private purpose trusts, but we couldn't see any real distinction between public trusts and private trusts in this respect. For example, the fund to meet environmental liabilities in a commercial development is technically a private trust, but it's a purpose trust and it functions much the same way as the Nuclear Liabilities Fund. It's a way of meeting your environmental liabilities and making sure that there are funds actually available to let you do that, because having funds readily available can be very important. Many of these so-called public purpose trusts were actually private in nature because they were set up by private parties to fulfil their own purposes. It was decided that following the discussions with Dr Ford that we should make use of the concept of interest to sue and that is how we thought we should proceed. We thought that private purpose trusts are almost certainly permitted under the existing Scots laws. I say it's a very vague distinction between private and public purpose trusts, but the commission was slightly concerned because a private purpose trust, a purpose trust of any sort other than a charitable trust, is something that's not recognised by English law. It has to be said that some English judges in the UK Supreme Court have a rather bad record of failing to give effect to institutions that are distinctive in Scots law. We were concerned that something might be done to stop the creation of purpose trusts and we were very concerned not to allow that to happen because these are used so extensively in Scots law at present. I hope that it explains why we thought we needed to authorise by legislation the use of private purpose trusts. We think that it's probably strictly not necessary, but it's safer to do it. Yes, that's absolutely right. Thank you for that explanation, helpful. Jeremy, I think that you wanted to come in on... Yes, and just to further on a mark, in regard to chapter 7, extended charitable trusts, a charitable trust that will be a protector, can you explain how there are powers and duties which sit alongside Austria's powers to regulate charitable trusts? In charitable trusts, the primary regulation is going to be done by Ofsted. Sorry, it'll be done by... Yes, the protector is optional. The reason for permitting a protector is... Well, we think that the existing ready in Scots law, we think that this is not innovating at all. We actually came across, as we prepared the report, one of the commissioners, Professor Hector McQueen, pointed out that George Harriet's trust, by which the school of that name was established, in a trust in 1624 provided for a group of overseers who appeared to have functioned in exactly the same way as a modern protector. So you can use the protector if you want to. I would have thought in charitable trusts it may not be a good idea. It's more in non charitable trusts that you would want to use the protector, but we couldn't see any reason for excluding them from charitable trusts. In the end of the day, it's going to be the charity's regulator who does most of the regulation there, but purpose trusts extend to many non charitable purposes. I've given the nuclear liabilities fund as one example. That's not charitable, but it is an important trust for filling very important public purposes. Okay, that's very helpful. I wonder if I can just go, we have a separate issue. I should be aware there is, as well as this bill, there is a charity bill going through the Scottish Parliament at the moment. I wonder, perhaps if you're not, then perhaps you could write to us. I wonder how you envisage Oscar's administration power to appoint interim trustees to charitable trusts on Oscar's own initiative under section 8 of the charity bill. We'll work with the courts power to appoint trustees under chapter 1 of this bill. I wonder if an interaction on the face of these two bills, or is there something that will cause some contradiction there? I would be surprised if there were anything. Are you referring here particularly to the institution of the protector or to the bill more generally? I don't think there's anything in the bill more generally. Oscar is concerned primarily with the application and enforcement of charity law, which is really a distinct area from trust's law. Nearly all charities are constituted as trusts, and this bill is, as it were, the sort of ground on which the charities rest. I would be surprised if there were any real conflict. This is concerned with the basic legal structures that are used. Oscar is concerned with the application of charitable purposes, so there is a difference there, I think, to be conflict. There hasn't been in the past, but I will look at section 8 in particular of the charities bill. Thank you, convener, and thank you very much. Section 61 of the bill proposes that once a private trust has been in existence for 25 years, it can have its trust purposes altered on application to the court of session. Half of those whom the committee has asked for views, including the faculty of advocates, believe that this period of time is longer than necessary and that there should be a short or minimum time period, or indeed in some cases, some people say no time period at all before a court application could be made. Do you have any reflections on responses that the committee has received in this regard? Yes. The commission consulted in some detail on this matter. We were conscious of the fact that what is now section 61 was novel, worldwide novel. We thought that it deals with, in a sense, the problem of time and the law. You can't predict the future, as a wise person once said, never make predictions, especially about the future. That's supposed to have originated with the Danish physicist Niels Bohr, but he may have been quoting a Danish folk saying that it is difficult to predict the future, and that's what this is designed to do. To some extent, it corresponds to the CPRA jurisdiction that you get with public trusts, which is designed to deal with just this, changes of circumstances that haven't been foreseen. It became particularly acute with private trusts because the law commission decided that the existing limitations on the duration of private trusts should go. This is our movement that has been taking place in quite a number of jurisdictions throughout the world. Scotland was almost fairly limited in the restrictions that it placed on the duration of trusts, so it perhaps made less of a change here than it did in some other jurisdictions in the United States, for example, or in New Zealand. The result of this is that trusts could last for a very long period and things can change and it may be necessary to change the trust's purposes accordingly, to deal with the current situation of the family, if you take the case of a family trust. The general theory, which is expressed in the commission's report, is the so-called dead hand argument. Members of the present generation shouldn't deprive succeeding generations of the power to do what they wish with trust property. It's socially desirable that the wealth of the world should be controlled by its living members and not by the dead, those of the words of an American academic in this area, Professor Lewis M. Simes, writing I think in the 1950s. In the light of this, we thought that provision should be made for changes in circumstances analogous to the existing sea-pread jurisdiction. Examples of these are changes in the family itself. The commission's report would give the examples of a disabled child as born, or some of the members of the family have become mentally incapable, or the family needs funds to provide, for example, for our daughter's university education. That's an example that's given. There can be changes in the trust's financial circumstances. An allergy that I drew here was a case that I dealt with as the trust judge in the court of session, RS McDonald's charitable trust. This is a charitable trust set up to provide for certain, quite closely-defined purposes many years before. Its main asset was the Glen Moranje distillery. In the 1990s, the trustees sold the Glen Moranje distillery for a vast sum of money. It was one of the last privately-owned moll distilleries. They received a vast increase in their funds, and something had to be done about this. That was what was at issue there, to provide for suitable disposal of the funds. The financial circumstances of the family may change in respect of needs or resources. A breadwinner may lose his or her job. I've mentioned the need to send a daughter or son through university. A great number of things can change, and this is designed to provide that flexibility. It's under the control of the court because it doesn't fall for very radical change in the trust. As to the duration, sorry, the commission consulted on this. One thing I was very conscious of was that this was a novel jurisdiction. I didn't know how it was going to go down. I was very pleasantly surprised by the favourable response. But 25 years really reflected our fairly lengthy default provision. You can always change that in a trust deed. You can make it—if you like the policy in this section, you can provide for 10 years, 5 years, whatever you like. It will always be under the control of a judge, so you have to persuade the judge that there has actually been a change of circumstances. Do you mind if I send it? That means that although section 61's proposal for 25 years is there, before you could apply to the court of session, that that wouldn't necessarily be the case in real? Yes, I think I'm just trying to look through the section here. Yes, it's subsection 4B, paragraph C of subsection 3, that's the 25-year provision. Paragraph C is to apply with the substitution for the reference to 25 years of a reference to a shorter period of time being a period specified in the deed, so the trust deed can quite readily provide for less than 25 years. That's really helpful. Thank you very much indeed. As I said, there was an element of compromise here, and we didn't want the default period to be too short, because some people like the idea of continuing certainty in trust. We felt that 25 was a reasonable compromise here, and you can always change it in a particular trust. Thank you very much. I wanted to ask about litigation expenses, and in particular the law society's concerns about section 65. The law society is quite outspoken on this, citing a severe danger of a conflict of interest, and they describe it as quite a radical provision, basically suggesting that it made deter people from becoming trustees or led them to unfavourable settle or abandon legal proceedings for fear of personal liability. Do you have any comments and response? We looked at this as discussed in detail in chapter 16 of the commission's report, paragraphs 1622 to 1637. I may say that these particular provisions followed two earlier discussion papers, one on liability of trustees to third parties and a second on supplementary and miscellaneous issues relating to trust law. There is a certain analogy with companies here, but the trouble is that with a company, you know what its financial position is to some degree by looking at the company's register. The central point here is that normally the expenses will be recoverable from the trust property without liability on the part of the trustee. If the trust property is insufficient, the trustees will be personally liable from their own property, but this is subject to a provision in subsection 6. The court may, if it considers that it would be unfair not to do so, relieve a trustee of personal liability for certain expenses. This was thought to strike a fair balance among the competing interests, in particular those of the trustees and those of a party engaged in litigation with the trust. In these matters, inevitably, there is a degree of compromise and uncertainty. You can't avoid that. The issues that I say are discussed in that passage in the commission's report, paragraph 1622 onwards. Can I use the risk for Parliamentarians in the Parliament in seeking to proceed with legislation where the law society's submission as a whole is generally quite discursive, but when I see severe danger of a conflict of interest, radical provision and real issues, it starts to worry me on an individual level that the balance might not be quite right. It also points out that non-recoveries are standard risks of litigation. I'm thinking of examples where people take on roles within charitable trusts and other things, not really expecting that their own personal property is going to become at risk if they proceed with litigation. I hear what you're saying that the court may, but if you're taking any kind of legal advice, there's always going to be a risk with that. I'm just trying to satisfy myself that it is the right balance. I haven't, as far as I'm aware, seen what the law society actually wrote on this. What they say suggests to me that it sounds rather exaggerated because expenses are always ultimately under the control of the court. This is one of the reasons, of course, for trying to focus trust litigation on the trust judges, because they are aware of all of these matters and they need to strike a balance here. In the end of the day, you have to strike a balance. The balance is very specific to the individual case. There are cases where trustees behave unreasonably. Normally, they won't have the act in accordance with proper legal advice, but the risk of that is pretty minimal. They suggest that the starting point of the principle should be that trustees should not have any personal liability unless it can be shown that it's fair for them to be liable. I guess that they're suggesting flipping it, almost flipping that point around. Without unfairly summarising their position, from my reading of it, it seems that they're suggesting that the principle is wrong, that personal liability should be introduced. If you look at subsection 1 of section 65, the basic rule is, subject to the following provisions, a trustee does not incur personal liability for the expenses of civil litigation to which the trust is party. The principle is exactly what the law society are wanting. Subsection 2 deals with the position where trust property is insufficient to meet the expenses, then the excess is recoverable from the personal property of the trustees. Well, quite frankly, if trustees are getting engaged in complicated litigation when there's hardly any trust property, that's what we're talking about here, then they ought to draw that to people's attention and possibly drop out of the litigation at that point. Subsection 3 deals with litigation, which is, in the opinion of the court, unnecessary. Certain specialised areas involving a judicial factor, a trustee is opposing the reduction of the trustee, and the trustee is unsuccessful. Ultimately, of course, there is a discretion. There's always a discretion in the court in litigation expenses. The trustee has, by breach of duty, brought about the litigation. That's liable to be negligent as a trustee. That's what the breach of duty means there. And E deals with a rather specialised case where there's a minority that litigates against the wish of the majority and do so unsuccessfully. Well, again, that's one where there are very special circumstances. Likewise, F, that's where a minority of trustees don't consult the other trustees, and without the defence being of any benefit to the trust, a trustee who takes proper legal advice and behaves in a responsible manner shouldn't be under any difficulty from that. I'm slightly surprised at the Law Society's response here. If I could be sent a copy of that, I'd be very happy to respond to it in detail. As I say, that is dealt with at some length in chapter 16, paragraph 1622, onwards of the Law Commission report. The submission is on the Parliament website. I'm sure that the committee clerks would be happy to send it to you. I'd certainly be interested. I'm sure that the committee as a whole would be if you wanted to review those specific points. Having seen lots of their submissions on various legislation, the comments in this session seemed to be quite strong. Any feedback you had would be greatly appreciated. I should say that paragraph 1632 of the commission's report, on the result of the consultation, which I think was in, I think this may have been a separate consultation paper, respondents including the Faculty of Advocates and the judges of the Court of Session agreed with the general structure of our proposals. The Law Society was concerned that imposing personal liability on trustees, in the first instance, would mean in practice that trustees would hardly ever dare to litigate. They thought that exclusion of personal liability should be the norm. The advisory group indicated that it should be made clear that, currently, trustees normally have a right of relief against the Justice State if they're found liable for litigation expenses, that they should be made clear in the report. 1633, in the light of those comments, the scheme was revised so that a trustee does not normally incur personal liability for the expenses of litigation to which the trust is a party. That's what Subsection 1 says. We consider that the following recommendations deal with the concern expressed by our advisory group that a trustee should normally have a right of relief against the Justice State if he or she is found liable for litigation expenses. The normal position is that the trustee doesn't incur personal liability, but will only do so if a court order is made to that effect. In the latter situation, following a court order to that effect, it will normally be inappropriate for the trustee to have any right of recourse against the Justice State, but express power is given by a recommendation to allow the trustee relief against the trust property in some circumstances if the court agrees. The court is given a residual power, that I think is Subsection 5, to relieve a trustee of personal liability for expenses, so there are a considerable number of safeguards built in here. The danger is, on one hand, you have to trustee who litigates it responsibly. It's not common, but it does happen occasionally. On the other hand, the commission was quite clear that the norm should be that a trustee doesn't incur personal liability, and that's precisely what the bill does. It is important to read these sections carefully and to see what the norm is and what provisions deal with exceptional situations. Part of the policy concerns stems from the fact that there are lots of people interacting with trusts who are maybe not as familiar with the law and not as familiar with court proceedings. If you are looking at taking on responsibilities on behalf of a small charitable trust or people who interact with trusts that will be relatively modest, the concept or the fact that you may become personally liable is something that might put people off with me. I guess that's the point that's been made. If you know about the law, it shouldn't be a problem for you. I'm a trustee of charitable trusts. I'm aware of the problem that you mentioned. I'm on occasion drafted on to the trust because they want someone with a bit of legal knowledge on the trust. If trustees behave responsibly and take proper advice, it shouldn't be a problem. I accept that with very small trusts there may be our reluctance to take elaborate legal advice. There could be problems there. Again, the norm is that the trustee doesn't incur personal liability. That's section 65. I think that the law society has rather lost sight of that central point. In addition to that, litigation expenses are under the control of the court. I'm just thinking as you've been answering the questions whether there's going to be any merit in something further on the face of the bill for smaller trusts or trusts that are charitable in terms of some sort of exemption from personal liability where people are acting in a charitable capacity or where the trust is relatively modest. The danger with that is that it gives the trustees carte blanche to do what they want. If there is no liability, the trustee can really do what he or she wants. There is the danger that someone behaves in a completely irresponsible fashion. It is open to trustees—this is somewhere else in the bill—to relieve trustees of liability for negligence but not gross negligence. There is a division that has traditionally been drawn in Scott's law between ordinary negligence and gross negligence. This has been the subject of repeated criticism by English judges because English law doesn't recognise that distinction. For example, in a recent case involving I think it was Jersey, it might have been Guernsey, the law there did have provisions dealing with gross negligence. English judges sitting in the privy council were very critical of the notion of gross negligence and they didn't see any difference from ordinary negligence. The difference is a very clear one. Gross negligence is a situation where the trustee just doesn't do anything about their duties as trustee and it doesn't bother me particularly that you shouldn't be able to exempt people from that liability. In some cases it's getting close to fraud and clearly you can't exempt a trustee from liability for fraud. As always it's a question of drawing a line. We felt at the commission that what we provided here gives trustees fair and reasonable protection and shouldn't serve as a disincentive. I would like to read what the law society says and reconsider matters in the light of that. I'm sure that certainly this particular aspect of the bill will come back to that in further questioning and also Lord Roman Youngan once you've heard a look at the law society submission. If you want to provide some further comments to the committee in writing, that would be very helpful. I'd like to move us on to the part of the bill that deals with succession, section 72. In policy terms the definition of spouse or civil partner includes a spouse or civil partner that the deceased person was separated from but where no divorce or dissolution of the civil partnership had taken place. This means that a spouse or civil partner in that circumstance could benefit from section 72 of the bill on the right to inherit. The law society and various other respondents to the committee's call for views have said that they would like to see a distinction drawn between spouses or civil partners who were living with the deceased person at the time of their death and those spouses or civil partners who had previously separated from the deceased person but had not divorced or had the partnership dissolved. We'd be keen to hear the commission's response to that suggestion. I'll suspend the session just for a few moments. We want to apologise for being unable to give you any views about the succession sections in the act. What has happened is that I believe that the Scottish Law Commission produced a succession report some years ago, but it is the Scottish Government that has grappled with this difficult question that has just been put where the essence is an undivorced spouse who hasn't been living with the other spouse for, say, 20 years. What's the position there, especially if there's a cohabitant? I'm afraid that the commission hasn't looked into this recently. It is a purely Scottish Government consultation. We understand and possibly run by Jill Clark and Alison Mason, and it drew very polarised views and strong responses. So it hasn't been discussed this difficult issue at the commission recently at all, in fact not at all. Would you agree with that, Lord German? Yes. The commission report on which these sections are based predates my time as chairman of the commission. It's quite a long time ago. It may be that the people who were commissioners then have all changed since can help on this, but I would find it very difficult to contribute anything significant. I can understand what the concern is. I think it's something we'll need to further consideration. Thank you very much, convener. If you thought that that was controversial, then this last one might possibly be. Part 2 of the bill doesn't contain a blanket ban on unlawful killer from being an executor. As the law is not clear in this area, two academics lawyers, Dr Alastair MacPherson and Professor Roddie Paisley of the University of Aberdeen have suggested that part 2 of the bill could be used to clarify the law in this area. That could include that the unlawful killer is the partner or husband or wife of the deceased and then would become the executor in the will. That has raised a lot of concerns. I wonder what you've got to say about that. I personally share the concerns. Again, from the point of view of the Scottish Law Commission, it's not been discussed there because it hasn't been part of any project. It could be referred, I suppose, to the commission, but I agree that there are serious concerns arising out of the scenario that you've hinted. I agree with that. It's something that the courts probably wouldn't have very much difficulty with. There are strong public policy arguments here for restricting the rights of people convicted of unlawful killing. For example, a beneficiary under a will could never benefit if they had unlawfully killed the testator. You've got to be slightly careful about unlawful killing because it goes down, I suppose, in some respects to causing death by careless driving. You can imagine where a wife is killed through her husband's careless driving, a tragic situation where it clearly wasn't intended. That's a totally different thing from the unlawful killing that you're talking about here. It's really murder-culp homicide and that sort of thing that you're concerned about. If I were sitting in court, I wouldn't have very much difficulty dealing with this if it were brought before me, but that won't happen now. It may be that something could be put in. I agree with that, but I'm not prepared for it just now. Do we have any further questions for the panel? I thank Lady Peyton and Lord Drummond Young for their extremely helpful evidence this morning. The committee may follow-up by letter with any additional questions stemming from today's meeting, but I also know that there are a couple of action points for ourselves to come back to the committee on. Can I just check? I have noted down one or two points. What we would like to know is should we await your request or further questions, or should we, for example, fulfil an undertaking? There is certainly one undertaking that we are going to send you the correspondence and dialogue between the Scottish Government and Westminster about the section 104 request. I take it that you would like that followed up without a further question from yourself, or are you going to send us, perhaps, a letter with five requests in it? Yes, we will set the right to yourself to confirm. Oh, that would be very helpful. Thank you very much. It would be helpful if it would be comprehensive. I am conscious that, for example, I have undertaken to make available the text of the talk that I gave on green investment, if I can put it that way. It is fairly short, I am happy to say, but it does explain how it is possible to even work around in the existing legislation. I will await a letter requesting. It has been a pleasure to discuss trust with you. I take it that that is the end of the proceedings. Once again, I thank the both of you for coming along. I will now suspend the meeting briefly to allow our witnesses to leave the room.