 Felly, wrth gŵr, mae gweithio i'r Cymru, gynhwys Cymru, 25 oes gyda 2017. Rwy'n gwybod yna o'r poliadau. Y rhagleniaid yma yn ystod o'r gweithio. Ie ddim bwysig i gweithio i'r Cymru, Moris Corry ac Liam Kerr. Felly, rwy'n dechrau moris i'n credu gwybod ddisgrifiadau. Rwy'n dechrau? Rwy'n dechrau. I have no interest to declare and refer members to my register of interests. That's fine, thank you. Agenda item number 2, decisions taken in private, which is 5, 6 and 7, item 5 and 6, are the consideration of the written evidence and potential witnesses for stage 1 scrutiny of the Civil Litigation etc. bill and the Offensive Behaviour Football etc. repeal bill. Item 7 is consideration of our forward work programme. Finally, under this item, we are being invited to take future consideration of the draft stage 1 report on the domestic abuse bill in private. Are we all agreed to take these items in private? Thank you. Moving straight on, the committee is agenda item 3, public petitions committee is asked to consider and agree what action, if any, it wishes to take in relation to the petitions. There are possible options, which are outlined in paragraph 5 of the clerk's paper. I refer members to paper 1, which is a note by the clerk. I remind members that if they do wish to keep a petition open, they should indicate how the committee should take it forward. If they wish to close the petition, they should give reasons. The first petition is the independent inquiry into McGrackie conviction petition. It is discussed on page 2 of the clerk's paper and I invite views from members on this petition. Liam? Yes, thanks. I think that it is consistent with the decision that we took last time. We have no option but to keep the petition open. Are we all agreed that we keep the petition open pending the completion of operation on petition 1501 and petition 1567, investigating unacertain death, suicides and fatal accidents. Those two petitions are discussed on pages 3 and 4 of the clerk's paper. I invite views from members on both of those petitions. I think that the content of both of those petitions has run its course now. I note the additional contribution that we have had at Annex C from James Jones. I am not inclined to regard that to my view that we have now reached the point where we should close those petitions, but it would be worth just saying why that is the case. It is basically because mandating something in the past, which is essentially what is being asked for, ought not to be necessary. It is possible for an FAI to be held in the circumstances that Mr Jones is addressing, but we do not need to take any action here for that to be the case. I think that the normal way in which assessments would be made would be entirely proper. I think that those two petitions, which I think would be perfectly proper to be brought here, have now run their course and we should now draw them to a conclusion. There has certainly been quite a lot of correspondence. Prinae, the current brokerator of FISCO and satisfactory answers seem to have been given to the petitioners. We have had no further communication from the petitioner. Only this third party, Mr Jones, who is maybe moving off the original petition ever so slightly. Is it the view of the committee that this is now the time to close that and has been satisfactorily dealt with? It is. Thank you very much for that. Moving on now to petitions, PE1510 and petition PE1511, police and fire control rooms. The two petitions are discussed on page 5 and 6 of the clerk's paper. Again, I invite views from members. John Finnie. Thank you, convener. I think that in respect of the letter dated 31 August, the author has strayed considerably from the original intention with some gratuitous comments in there. There is also some factual inaccuracy. For instance, in relation to paragraph 4, it is actually the case that there is more middle management in Highlands than there was previously. Excuse me, in relation to item 7, and I am always interested in how morale is gauged, because morale is a very personal thing rather than a collective thing. There are also comments about retirements. I think that that is entirely in line with the profile of the service and consistent across Scotland. Following on from paragraph 7, there is also enhanced training in the islands. What I would be happy to do is ask the Scottish Fire and Rescue Service for their views on that, but I think that it strays way beyond the initial lines of the petition. That is helpful, Liam. Following on from John Finnie's comment, I certainly agree with his point about asking the SFRS for a response to the points made. Perhaps it may want to limit themselves to the points relating to the petition, rather than specifically those in the letter, but we would leave that open to them. I think that the letter does raise issues that would be helpful to get a response from Scottish ministers to as well. I would be supportive of inviting them to do the same and on the same basis. There are certainly a lot of issues raised. I think that it is only fair that the service gets a chance to respond to those. Are we all of our mind then to keep those open? Is there added complication of the SPA still to look at the interim arrangements for Inverness? We all agreed that we keep both petitions open and ask for those responses. Thank you very much. I think that that moves us on to agenda item number four. Do we have— Can we suspend briefly? Suspend briefly till we get the witnesses in for item four. Agenda item four is an evidence session with the Scottish Government bill team for civil litigation expenses and group preceding Scotland bill. I welcome Hymish Goodall from the civil law and legal system division and Greg Walker, Solicitor, director for legal services. I refer members to paper two, which is a note by the clerk, and paper three, which is a private paper. I ask Hymish to make an opening statement, please. Thank you, convener. The bill will deliver a manifesto commitment and increase access to justice by creating a more accessible, affordable and equitable civil justice system for Scotland. It will make the cost of civil action more predictable. It will increase the funding options for pursuers of civil actions and it will introduce a greater level of equality to the funding relationship between pursuers and defenders in personal injury actions. The bill provides the legal framework to implement a number of key recommendations in Sheriff Principal James Taylor's 2013 review of expenses and funding of civil litigation in Scotland. Sheriff Principal Taylor made 85 recommendations, at least half of which will be taken forward in rules of court to be made by the Lord President on the recommendation of the Scottish Civil Justice Council. Some of Sheriff Principal Taylor's recommendations have already been implemented, such as those on sanction for counsel by the courts reform Scotland Act 2014. Some of his recommendations on claims management companies and referral fees will be considered by the review of regulation of legal services, which is being led by Esther Robertson, the head of NHS 24. Turning to the bill itself, part 1 of the bill includes legislative measures that will introduce sliding caps for success fee agreements. Success fee agreements are more commonly known as no win, no fee. There will be sliding caps for success fee agreements in personal injury and other civil actions in order to make the costs of civil litigation more predictable. Part 1 will also allow damages-based agreements to be enforceable by solicitors. Currently, damages-based agreements can only be used by claims management companies, but damages-based agreements will allow the solicitor's fee to be taken as a percentage of the damages awarded by the court or agreed between the parties. Section 8 of the bill introduces qualified one-way cost-shifting, otherwise known as coax. That is just for personal injury cases and appeals. I better explain what qualified one-way cost-shifting is, because it is not really an easy concept. It is proposed that this will only apply in personal injury cases. The parties to a personal injury action are usually the pursuer is a private individual and the defender is an insurance company. Sheriff Principal Taylor thought that there was an imbalance there, an inequality of arms between the pursuer and the defender. One of the problems is that, if the pursuer were to lose the action, they may become liable to pay the defender's expenses. In fact, Sheriff Principal Taylor pointed out that it only happens in England, it only happens in 0.1 per cent of cases that the defender, if they are successful, will pursue their expenses. He recommended that qualified one-way cost-shifting should be introduced, whereby, if the pursuer is unsuccessful, they will not become liable for the expenses of the defender. The defender, as I have said, is usually a large insurance company. We will no doubt return to the subject of qualified one-way cost-shifting later on. Other parts to the bill make the auditor of the court of session, the auditor of the sheriff appeal court and sheriff court auditors salaried posters within the Scottish courts and tribunal service under a new statutory governance framework. Finally, part 4 of the bill allows for the introduction, for the very first time in Scotland, of a class action procedure to be known as group procedure in Scotland. That is what is otherwise known as multi-party actions. In general terms, the bill is designed to balance the needs of both pursuers and defenders in personal injury actions. The potential costs involved in civil court action can deter many people from pursuing legal action, even where they have a meritorious claim. The proposals in the bill for sliding caps on the amount that can be taken from an award of damages under success fee agreements will mean that the cost of what the client has to pay his own lawyer is predictable. Success fee agreements, I should explain, include both speculative fee agreements and damages-based agreements. The proposals on coax qualified one-way cost-shifting in personal injury cases will protect the pursuer from paying the defenders' expenses if the case is lost. Defenders, as I have said, are almost invariably a well-resourced insurance company who rarely claim their expenses when they are successfully defending actions. However, the benefit of coax will be lost to the pursuer if there is fraudulent or unreasonable behaviour or any other behaviour amounting to an abusive process. We appreciate that this is not easy stuff and we would be very happy to answer questions. Thank you very much. That's helpful just to have that brief introduction. Can I ask you at the very beginning, two of the recommendations come from the Gail review, that was September 2009. The rest come from the Taylor review, which was published in September 2013. Isn't there a danger that this legislation is already, and these recommendations are already out of date? The proposals on auditors of court and group proceedings that were not included in the courts reform bill simply because that was already a huge bill. However, the recommendations, I mean, there have been proposals for group proceedings in Scotland for many, many years. The Scottish Law Commission, I think, looked at it about 20 years ago, so it's long overdue that there is now provision being made for group proceedings. It's simply been a case of finding the correct legislative vehicle to include these matters. As far as Sheriff Principal Taylor's review is concerned, I think that there have been quite a lot of intervening pieces of legislation such on the civil justice side, including the large courts reform bill and the bill on fatal accident inquiries, which you will remember, convener. It's not as if we've been doing nothing. There have been various pieces of legislation brought forward in the civil justice area. This is now Sheriff Principal Taylor's review's term. The question is, have you gone back, looked at that legislation and compared it with the recommendations to see if there is something that isn't out of culture now that new legislation is there and new procedures are in place? Do you mean the courts reform legislation? I think that it's happened in civil litigation or legislation since then that might have impacted on the recommendations that are in the courts. Sheriff Principal Taylor's review grew out of the Gill review and it was realised when the Gill review was on-going that the issue of expenses and funding of civil litigation was simply too big an issue to be dealt with in the Gill review, which is why it was dealt with separately by Sheriff Principal Taylor. That was a conscious decision to take the two matters separately. This is completely separate from the courts reform agenda. My point is more, the law evolves over the years. I'm just looking at the recommendations that have been taken and put into the bill and what cognisance has been taken of the changes that have happened during that interim period. The Government consulted on those proposals in 2015 and we have been meeting stakeholders since the beginning of the year. We think that we're fairly well in tune with what stakeholders believe. To give you a concrete example of something that we've added that goes beyond the Taylor review, there's nothing in the Gill report or Taylor report about auditors of the Sheriff Appeal Court because that court didn't exist at the time. There's something in the bill for that new office of auditor that has come in since the courts reform bill. Hopefully that's just an illustration that we are looking at these reports critically in 2017 to come up with a bill that's fit for the justice landscape now. In terms of access to judges, which is the main objective of the bill, the Scottish Government thinks the practical effects of the bill will be on lawyers and the court system, particularly in view of the criticism that it could lead to a compensation culture. As far as lawyers and the court system is concerned, the bill will permit solicitors to offer damages based agreements, so that will increase competition among solicitors. As far as the court system is concerned, the advent of group proceedings should have a beneficial effect because it will mean that, instead of a large number of similar cases being dealt with separately, there will be the possibility for them to be dealt with in one action, one group proceedings, so there should be economies for the court system in that. The thrust of the bill is more access to justice for people who have a claim and are concerned firstly about what it's going to cost them in terms of what they're going to have to pay their own lawyer, and secondly, if the case were to be lost, what they might have to pay to the other side if the other side wins. I think that there are more in-depth questions, which other members may want to pursue. Liam Ewing of supplementary. We are just following up the earlier point that you made about the time that's elapsed between the report and the recommendations from Sheriff Taylor and now in the presentation of the bill, as well as the point that Covene has just touched on in relation to compensation culture. I understand that Sheriff Taylor in making the recommendations drew on figures from DWP suggesting personal injuries claims in Scotland between 2008 and 11 had arisen by about 7 per cent. The figure south of the border was around 23 per cent, but between 2011 and 2016, the number of personal injury claims in Scotland has more than doubled to 16 per cent, while the figure south of the border has reduced to around about 4 per cent. I'm just wondering what assessments have been made. That, to me, doesn't suggest that an issue in relation to access to justice around personal injury claims. It also suggests that the legislation brought in south of the border under the legal aid, sentencing and punishment and offenders act may have had some bearing on the number of claims coming forward. I was wondering what assessment has been carried out by the Scottish Government into the way in which that legislation is impacting south of the border. The English system is completely different. We are implementing Sheriff Principal Taylor's recommendations. Data that seems to me to be rather out of date? Sheriff Principal Taylor didn't think that there was a compensation culture in Scotland as he thought existed in England. In 2015-16, there were 8,766 personal injury actions raised in Scotland. Only 99 of those were legally aided. The vast majority of the rest of them must have been funded by some kind of success fee agreement. We are just building on—this bill will build on the particularity of using that kind of funding mechanism to enable people to take forward cases. You may not be liable for legal aid, and therefore you need some other means to be able to take your case forward. Sheriff Principal Taylor thought that there was an excluded middle who might not be liable for legal aid and might therefore not be taking forward. As a result of that success that you just talked about in terms of success fees, it suggests that the figures that I quoted earlier on of a jumping from 7 per cent during the 2008-2011 period to 16 per cent between 2011-16, we suggest that that seems to be working relatively well. There is a question as to whether or not you want to accelerate that by making further changes. The evidence before Sheriff Taylor, I do not doubt, did not point to a compensation culture as appeared to exist south of the border. What I am saying is that since then there appears to have been a dramatic reduction in the rate of increase of cases south of the border, but a doubling of the increase in the number of cases in Scotland, which does beg the question is that do the recommendations still stand and what assessments the Scottish Government has made of the relevance of those recommendations now, as opposed to the point where they were made? As I said, we have spoken to various stakeholders and if there has been an increase in the number of claims, it is not something that has really been raised with us, has it? I may have picked you up wrong, Mr Goodall, and if I have, forgive me. You quoted some figures and you said that 99 per cent were legally aided. Can you tell me how you describe the others, please? On the basis that we assume very few people have the personal financial resources to be able to finance a case themselves, we assume that most of the other cases have been funded either by speculative fee agreements with solicitors or by damages-based agreements through claims management companies. Does that not discount the significant role that trade unions and staff associations play in relation to that? Yes, indeed. Some of them may have been assisted by trade unions as well. Liam Kerr? Does it not slightly concern you that, in the answers that you have just given to Mr MacArthur and Mr Finnie, you talked about the thought that there was an excluded middle? You talked about that they must be funded by that particular arrangement and you assume that there are very few people who can fund it and you assume that they were running under speculative fee agreements or others. Does it not concern you that you are not able to say that this is the situation and that this is the objective data upon which you have based the legislation? I may have used the wrong language there. These are the conclusions that Sheriff Principal Taylor came to in his review and his review took two and a half years. Based on data from about 10 years ago? Sheriff Principal Taylor, I am assuming, will be giving evidence to the committee. We are in front of the bill's team today. We will have the minister to account for why he still thinks that it is good to go ahead with the bill, but fear questions. Anything else you would like to ask, Mr Goodall? We have also produced a business and regulatory impact assessment for the bill. Can you ask about claims management companies and why the bill does not regulate them? That is simply because the review of regulation of legal services, which was announced in April, will be considering the regulation of claims management companies. It may be more policy again, but maybe you can provide some information. There is a real fear that, in the interim, when stricter regulation has been since 2007 in England and Wales, there might be a displacement of claims companies coming to Scotland. That is building into the claim culture type fears. Was that looked at at all as part of the bill? The review, as I understand it, is to report a year from now. The review will be followed by legislation. If there is a gap, I would hope that it would not be a very long gap. We have heard that some of the English claims management companies are moving to do business in Scotland because of the stricter financial regime south of the border, but they will still be subject to the UK regulation. There may be a gap, but I think that it will be a short one. I think that it is as much as you can answer, but in 2007 we are now, and that is 10 years, they have had the opportunity to move to a much more relaxed regime, but again it is more policy. Finally, I just ask you from the questions that I wanted to pursue about successful fee agreements. They are based on fee uplift and are subject to general regulation under the bill provision when they appear to be operating satisfactorily and according to the market without the regulation. The thinking behind that? No, that is correct. Speculative fee agreements have been in place for just over 20 years. All that the bill is doing in relation to speculative fee agreements is that the success fee will be capped in the same way that a damages-based agreement success fee will be capped. Sherr Principle Taylor devoted separate chapters to speculative fee agreements and damages-based agreements in his review, but he came to the same conclusions in relation to both of them, which was that the success fee should be capped so that the cost of civil litigation should become more predictable to the clients. Oh sorry, Rona, you are doing this. If I could just follow up on what you were saying about capping of success fee agreements. Can you share with us at the moment any more details about when the full information on that will be available? I think it's set out in the policy memorandum that our current intention is that we will go with the levels of caps which Sherr Principle Taylor recommended, but those caps will be set out in regulations which will follow the bill. The idea of that is that if the caps are put into regulations, they can be amended up or down, depending on experience, so the regulations will follow the bill. Those would be affirmative regulations so that the committee would have the opportunity to debate about them. Can I also ask whether you think that there is a risk that the bill might make it un-economical for solicitors to offer some services on a no-win-no-fee basis? Would they back off from some cases? I'm not sure why that would be the case. In personal injury actions, under the provisions of the bill, the successful pursuer solicitor will be able to claim recover expenses from the losing side. They will also get the success fee, so they are getting two bits of payment. Balanced against that, however, is the fact that they will be liable for all the outlays that are paid out in the course of the action. If they have taken the decision to engage counsel, for example, they will have to pay for that. If they have had to get an expert opinion, that will also have to be paid as part of the outlays. We do not see that this is likely to make it less economical for solicitors. In fact, I think that Sheriff Principal Taylor, at some point in his review, said that he thought that they should still get a good return from raising these actions. On the risk factor, one of the submissions pointed to the fees far outweying the compensation and the expenses. Would that not be the element of risk that a solicitor would have? What had been incurred in the fees? We have raised that issue with various bodies. One of the comments that was made was that the solicitor is the gatekeeper to the system of personal injury litigation. As his or her professional judgment is that they need to employ counsel or get an expert opinion, that is what they will do. If, at the end of the day, something strange goes wrong in the case and, due to contributory negligence or perhaps it is discovered that there is a pre-existing condition and the damages awarded are not what was expected, I am afraid that someone said to us that that is just the fortunes of war. One big firm said that they would simply absorb that loss. It is just the fortunes of war and that is the professional risk. More policy once we get into that a little bit further. Can you ask if you think that damage-based agreements will become the norm if the bill is passed and whether you think that there will still be a role for other forms of success fee agreements? I suspect that damages-based agreements will become more and more popular simply because of their simplicity. However, some firms of solicitors will undoubtedly have a business model where they prefer to go with speculative fee agreements based on an uplist of fees, so that is a matter for them. Can I move on to the issue of compensation for future loss, where speculative has to care costs and lost earnings and things like that? Do you think that that compensation should be entirely excluded from the success fee calculation, given the importance of the award generally to the pursuers? That is what has happened in England, but Sheriff Principal Taylor specifically rejected that view. Under the provisions of the bill, if the future element of damages is to be paid as a periodical payment order, that will automatically be excluded from the calculation of the success fee. If the future element of the damages is to be paid in a lump sum, Sheriff Principal Taylor has got quite a lot to say on that. He thought that if the damages were under about half a million, he thought that it was unlikely that there would be intended to be a future element in the damages payment. If it is above half a million under the provisions on the cap on success fees, it would only be 2.5 per cent, which is payable as the success fee on that element of the award. However, there are further safeguards in sections 6, subsections 5 and 6, as to what happens when the future element is to be paid as a lump sum. The safeguards are that if it is being awarded by a court, the court must agree that it should be awarded as a lump sum rather than a periodical payment, or if it is part of a settlement, the matter should be referred to an actuary. Liam Kerr, supplementary in that point. Thank you, convener. Briefly, do you consider that there is a risk of inflation of court awards as a result of these sorts of funding arrangements, such that if a court knows that x-pound represents the appropriate level of damages to the pursuer, the court also knows that, say, 20 per cent is going to be taken away by the solicitor or the representative. Is there a risk that the court over awards such that the pursuer gets the full entitlement for their future loss and for their current loss? I do not think that that is a risk because, as I have said, if the award is over half a million, the cap will be 2.5 per cent, so it is not really a very big, it is a very small proportion. The court will award damages based on the law of damages, it will not be based on the law of expenses. The court will also know that a proportion of the appropriate damages will be taken off the pursuer, do not they? I do not think that a court would consider that. As my colleague said, the court is required to award damages based on the compensatory principle. As Hamish has said, success fee agreements in one form or another are not new, so if that is a risk, it is not a new risk. However, I do not think that Sheriff Principle Taylor identified any evidence or likelihood of risk that that would happen. Just two short questions left for me. You talked about the half a million. Do you ever see that being expanded, protection being expanded to above half a million? We would be very interested to hear what evidence is given to the committee, particularly by Sheriff Principle Taylor. We are quite open to that. I was just going to add that in section 6, the figures in there can be amended by a firm to regulations, so in the years ahead it would be something that is not set in stone. You mentioned the actuary. Can you give me an indication on who would pay for that advice from the actuary? Sheriff Principle Taylor recommended that it would be the solicitor paid for the actuary, so that would be one of the outlays. John Finnie. I do not know if I can get used to this coax at all, but the qualified one-way cost-shifting, Mr Goodall, when it was introduced in England, it was accompanied by measures to discourage spurious claims. Is there any intention to the similar arrangement in Scotland? There are four factors that we think will mitigate against spurious claims in Scotland. The first is that, as Sheriff Principle Taylor has pointed out in his review, it is not worth a solicitor running a case on a no-win, no-fee basis if there is not a good chance that it is actually going to win. If it is an unmeritorious case, it is not going to run with that because it is simply not going to get paid. The second thing is that, as I mentioned already, claims management companies are to be the subject of consideration by the review of regulation of legal services, so we suspect that they are likely to become regulated in the future. Therefore, there will be some provision that will say that they should not run actions that have little chance of success. The third factor is that there was a new compulsory pre-action protocol introduced into the Sheriff Court last November for personal injury actions of less than £25,000. The effect of a pre-action protocol is that it frontloads the whole process, so it should become apparent at a very early stage if a case does not actually have merit. The fourth and last factor is what is in section 8.4 of the bill, which is the circumstances in which the benefit of quarks may be lost, and it is basically if there is fraudulent or unreasonable behaviour, otherwise which amounts to an abusive process. I ask Mr Goodall about the term unreasonable, because one of the submissions that we have received in response to the consultation suggests that the level of unreasonableness that is described in section 8, section 4 and section B is less than the Wettonsbury unreasonable test that is recommended by Sheriff Principal Taylor. We think what is in the bill is tantamount to or analogous to the Wettonsbury test. We have had a lot of discussions with stakeholders about this provision. You possibly won't be surprised to hear that those who represent insurers think that the test is already too high and those who represent pursuers think that the test isn't high enough. Therefore, we think that it maybe is about right, but we certainly think that there is possibly some clarification needed around section 8.4. We will be listening with interest to what stakeholders and witnesses say to the committee. The Scottish Government considered limiting the benefit of quarks to situations in which the defender is insured or a public body. I think that the Faculty of Advocates has given evidence to that. That is something that we can have a look at and again listen to what evidence is, because it would be quite harsh if an uninsured person who does not have the benefit of an insurance company behind them, if they would mean that they would not have the benefit of the quarks. We can look at that in the future. The final question that I have is whether the Scottish Government intends to implement the changes to the tender process that was recommended by Sheriff and Svotella. I would defer to my legal friend here, but I understand that most of the law of tendering is in the common law. What is not in the common law is in subordinate legislation. It is not in primary legislation, so that is why it is not in the bill. Is that right? Yes, absolutely. The language is quite confusing here, but tender is really an offer in the course of proceedings to settle a formal offer. As Hamish has said, it is largely common law, but it is possible for acts of sedrant rules of court to modify the process, and that can be done by the Scottish Civil Justice Council. A recent example of that is pursuer's offers, which were reintroduced to Scottish practice by act of sedrant. The general principle is that this sort of thing would be for rules. We have in section 8.6 that quarks, qualified one-way cost shifting, is subject to any further found details that might be in rules. We are essentially proposing that the key policy things are in section 8.4 that you have mentioned, unreasonable behaviour, fraudulent behaviour. However, the fine detail of interaction with other rules of court, and tenders in particular, would be in rules of court under section 8.6. As I think we may have put in the policy memorandum, it was certainly in the spice briefing. It is the cost and funding committee of the Scottish Civil Justice Council that is looking at this field. Many thanks indeed. There were a number of members who indicated their supplementaries, Liam Cather, Stuart Stevenson and then Liam Cire. Thanks very much. Following up John Finnie's line of questioning in terms of the safeguard that you were outlining there, again we return to the point around the lack of regulation of claims management companies that exist in this bill. However, I think that I heard you rightly suggesting that you were anticipating this coming through the review that is under way. That to me rather suggests that there is a recognition that that sort of regulation is needed, which I think begs the question why, given the time that is a lapse in Chef Taylor's report, steps weren't taken to include this in the bill, will go out to consultation as appropriate and include provisions of that nature in the bill. Would you not accept that that's a reasonable conclusion to draw from what you've said? The starting point is that Chef Principal Taylor didn't actually think that the claims management companies in Scotland caused the difficulty at the time of his review. Why it's not in the bill is because the matter is being considered. The whole range of regulation of legal services in Scotland is being considered in the review being taken forward by Esther Robertson, so it seems more appropriate that it should be considered in that context. That's probably something that is a policy decision for the minister. I appreciate that. I think that we may need to come back to it with the minister, because I think that early indication of the Government's likely intentions there may stave off some of the concerns that have been coming through in the written submissions, but I appreciate that that's not something for officials to address. Again, earlier on you were talking about the number of cases where defenders would pursue their pursuer for legal costs. It was a fraction of 1 per cent, I think that I heard you saying. Does that not open up the question as to why there seems to be a problem that needs to be addressed here? If those are the figures, then as a disincentive in pursuing a valid case or claim, there doesn't seem to be evidence to suggest that because of that threat that you're going to be pursued for the defender's legal costs you'd hold off making a claim? The pursuer may not know that. The claims management companies would, and the solicitors that act in that area would certainly know those figures or have a general sense of those sorts of figures. The coax has been in place in England and Wales for some time, so I share a principle of Taylor's recommendation that we should also have it in Scotland. Finally, in relation to the financial memorandum, you were talking about, again in relation to the safeguards running alongside coax. You were talking about the unlikely hood of exacious speculative cases being brought or being triaged out at an early stage. I note from the financial memorandum in paragraph 59 that defenders will have to balance the cost. They're going to quote with the risk of losing a case. For example, if expenses in a case exceed the expected payout, insurers may settle rather than go to court even if they consider it likely that they will be successful in the case. It seems to go against what you've said and goes against what's then set out in paragraph 50, which suggests that pursuers are unlikely to raise actions with little prospect of success and the bill provides protections for defenders where the pursuers have acted inappropriately. I'm finding it difficult to square those two statements right next to each other within the financial memorandum. Paragraph 59 in the financial memorandum, paragraph 60. It doesn't quantify what the likelihood is of those numbers of cases where defenders may just decide to pay out, but it does suggest as a recognition that that risk certainly exists and that even where defenders are confident of being successful in the case, they will choose to pay out rather than to proceed through a court process. I think that this is a matter that you would really need to raise with the minister, but I'm sure that you'll be taking evidence from representatives of pursuers and defenders to see what they see. I take that point, although this is the Government's financial memorandum for its bill. It's the Government that's stating this rather than those acting for pursuers or defenders. I think that the only point that I would add is that there are weak cases and there are very strong cases and there are the ones in the middle. Perhaps that's how paragraph 59 is to be read. It's not about defenders feeling boxed into settling what they think is a very weak case. There are those ones in the middle. Where's the definition for what is personal injury? I don't see it in the bill, so I assume it's elsewhere. It is in here, if you give me a second. Section 6, 9. That's fine. If it's there, that's fine. I think that we've put in the expansion notes that it's the same definition that applies to personal injury courts, so we're not creating a new definition. Move on to something a bit more substantial. The assumption is that coax is about rebalancing power between a well-endowed defender and a relatively impoverished pursuer. Let me just posit an example. There is a cyclist in a cycle lane. To the left of the cycle lane is a wall, which the lane is against. A Rolls Royce draws up. The passenger who's a half billionaire opens the rear door into the path of the cyclist. The cyclist has no option but to hit the door and in the process to injure the half billionaire. The cyclist is a professional person, aged 55, with a house worth £3.25 million in Edinburgh. They've not paid off their mortgage. They're running down their careers so they're working part-time. They have an income of £40,000 a year. They're in that middle ground. Each, it would seem, may have a case against each other. There may be two cases, because the multi-billionaire may have experienced permanent physical damage as a result of the cyclist and the cyclist may have similarly. Do each have the ability to benefit from quacks? Given that, in the case of the multi-millionaire, they have, for legal purposes, unlimited resources to pursue a case and recover their legal costs if they win, which they might do. The cyclist is uninsured. Who is the pursuer with being a cyclist? There are two cases. The cyclist is suing the multi-billionaire for opening the door and injuring him. The multi-billionaire is suing the cyclist because the design of the cycle created particular injuries of the multi-billionaire that were not reasonable. It sounds a rather fanciful example, I would have to say, but the way the bill is stated is that the pursuer will have the benefit of quacks unless they have behaved inappropriately. Fraudulent, unreasonable or abusive court, which I'm assuming would not apply in either of these cases. It depends on the facts and circumstances. I think that it's very difficult for us to address such a detailed scenario. I'm making the general point. Let's not labour it because we're merely looking at the construction of the bill. The general point is that the assumption that the defender will be the wealthy one and the pursuer will be the impoverished one is surely one that is not sustainable in all circumstances. It may be the opposite. Is that a fair comment that you've considered in constructing the bill? In trying to understand this, is it a case that there's a pursuer in the person that brings the claim first and they would be the beneficiary, the person that was the counterclaim would have the same rights? Is that the case? To the narrow point about rich pursuer, poor defender, I think that that's linked to the point that's already been made about, is the bill team going to consider the application of quacks to uninsured persons? The answer is yes. As I said earlier, the very fine detail can be left to rules of court. If the Parliament, if the committee believes the finest detail needs in the face of the bill, then that's something we'll consider. To close it off without going too far, it is reasonable for us to consider that that particular case can be dealt with under rules of court. That's what you were saying in terms of how things can work. Absolutely. That sort of case where the detailed counterclaims and so on, we're legislating for the standard pursuer defence case. I think that it's a bit more complex than I should. The basic point is that there's a wealthy pursuer and an impoverished and uninsured defender, but who's asset rich and therefore worth pursuing. That's on the officials' radar. That's the point that the faculty of advocates— Incompoor but asset rich is really but uninsured. That's the point that the faculty of advocates has raised about where the defender may be uninsured and may not be a public body, so we can consider. The bottom line is that there is a way forward in the legislative process in the round, not just the bill, that deals with that. I think that Stuart Stevenson makes a good point. As always, when we're passing legislation, it's never totally satisfactory that so many questions are left to other guidelines. Some bad cases make bad law. Liam Kerr. Thank you, convener. Just very briefly, Mr Goodall, you said there were four reasons why there wouldn't be a rise in unmeritorious claims. The first of which you said that the solicitor operating under a no-window fee agreement has no incentive to take forward an unmeritorious claim because they're unlikely to get paid at the end. I accept the point, but isn't it open for the no-window fee solicitor to ensure against that loss such that the solicitor gets paid anyway? There are questions that you can put to the representatives that come before you. None of the claims management companies or funding companies, as they sometimes describe, work in exactly the same way. They are private business arrangements. The full details haven't been put to us because they're commercially confidential, but you can ask these questions of the other witnesses. That might be more appropriate, but it just feels like that's something that the legislation ought to have taken account of because the point was put that there could well be a rise in unmeritorious claims. I would suggest that a funding arrangement like that, which does go on, means that the reason that you gave Mr Goodall for no increase in unmeritorious claims might not be entirely valid. There are professional ethics as well, which come into play. Quite apart from the economic arguments, solicitors are bound by their professional rules. I don't know exactly what the professional rules would say. One of the possible impacts of the bill is that firms that have a claims management company or funding company will feel that they no longer need it. They can fold all those activities within the firm, which is under law society regulation. The law society can always promulgate new practice notes and guidelines as no-window fee agreements become more of a thing in Scotland. That suggests more, as Mr Stevenson suggested, after the event. I may have missed something—it's a very brief question for me—but what estimates or modelling has been done on the impact of the number of claims of the bill? It's impossible to make that estimate. We simply do not know. Those who wish to offer their services under those success fee agreements, they may have some estimate, but it's impossible to say. We don't know the impact of the bill on the number of claims. There's no modelling being done. You cannot know how many... Best Fsummit is in the financial memorandum. Can I ask you about third-party funding now? In England, there's an emerging market for investors with no direct interest to fund a claim for a share of the compensation. Sheriff Principal Taylor has argued that this should be an additional option. This bill would enable a third-party funder with a financial interest in the outcome of the proceedings to be found liable for the winners' expenses if the case was lost. The policy memorandum for the bill refers to commercial third parties being perhaps caught up in the provision. The financial memorandum suggests that claims management companies operating no-win, no-fee arrangements could be caught. Some of the evidence that we have received has suggested that trade unions could be caught up in this or insurers or solicitors who pay an initial fee to get a claim going. Could you perhaps clarify the situation for us? Section 10 on third-party funding is intended to only catch commercial third-party funders. It is not intended to catch trade unions or trade associations. We are aware that there has been some confusion about whether section 10 should apply to lawyers and we are intending to clarify the section to make it clear. This is completely separate from qualified one-way cost shifting. The two things are completely separate. It will be made clear later that it is only commercial organisations that will be liable and no-win else will be liable. Does the bill not conflate two separate tailor recommendations on liability for expenses and on transparency of funding arrangements? How qualified one-way cost shifting and third-party funding will sit together? We will amend section 10 to separate the two issues on disclosure and liability for expenses to make that clear. As I have said, in relation to third-party funding, that is only intended to be commercial third-party funders and not the lawyers under success fee agreements. We will need to clarify that. Liam Kerr I just want to briefly look at the auditors of the court. There is a process in place or there is a proposal to change the employment status of the auditors of the court. Why does the Scottish Government consider that having the auditors employed by the Scottish Courts Tribunal Service is a better guarantor of independence than the self-employment model? The auditor of the court of session was salaried until around 1997 or 1998 and the arrangements were changed at that point. The proposal in the bill is that the auditor of the court of session and all other auditors should become salaried members of staff of the Scottish Courts and Tribunal Service. The Gill review recommended that the auditor should all become salaried officials and that is basically what the bill will do. The argument about self-employment of the auditor of the court of session relates to his independence. We think that there is no question that in future, even if the auditor of the court of session is a member of staff of SCTS, he or she will be independent because, first of all, the SCTS is completely independent of the Scottish Government following the judiciary and courts Act 2008. Therefore, the question of independence would only arise in relation to any cases that involved SCTS itself. We understand that they are only involved in one or two cases per annum, which need not necessarily go through the process of taxation of accounts. There is precedent for people who are members of staff of bodies taking decisions that affect those bodies. For example, planning reporters are employed by the Scottish Government and yet they take decisions that affect the Scottish Government all the time. There is also legal precedent on the independence. Do you want to say something about that? The other relevant precedent is all the other officers of court, the clerks and the maesers and so on, who are all now employed by the SCTS at arms length from the Scottish Government. They are all employees. They are subject to freedom of information, ethical standards, state of protection, complaints procedures that are standard for civil servants. There are also officers in the Scottish Administration, which brings in another layer of governance, including that funds must be paid into the consolidated fund, which is ultimately the Parliament's money. To amplify our legal position, we start in the policy memorandum with paragraphs 58 and 59, where the aim is to increase transparency and consistency because Lord Gill identified that there were some concerns there that still persist to this day. Although we want to preserve the fair and adversarial character of the process and the integrity of the process, there is no intention to depart from the rules of natural justice that are there currently. We recognise that the auditors perform important functions in resolving disputes about expenses in which considerable amounts of money are at stake. Not often, but from time to time, the amount of money involved in expenses is more than the sum in disputes. The key legal arguments that we have set out in the policy memorandum towards the end, from paragraph 108 to 110, are recognising that not only common law and natural justice but the European Convention of Human Rights article 6 applies to auditing disputes. Where the principal disputes say about damages engages article 6, and we've set out there the case law, European and Scottish case law, where we think we're really quite confident that independence can continue to be secured and seem to be secured under the arrangements for the bill. For those tiny number of cases where the SCTS is a party to taxation, to abandon all of the reforms and leave the self-employment outside of the Scottish administration, I mean ultimately it's a policy matter for the minister, but that would be a departure, we think, from the Gill recommendation. Briefly, the policy memorandum at paragraph 70 says that transitional arrangements will enable current auditors to continue self-employed until their retirement. Do you have any detail yet on what transitional arrangements you intend to put in place to deal with the current sheriff court auditors? Basically they will continue in place for the time being until such time as SCTS has sufficient numbers of trained auditors to be able to do all of the work, and of course it will be open to existing sheriff court auditors to apply for posts in SCTS to move over to work for them. Is that set down anywhere that people can go and look to get that clarity? To get what clarity? Well, they just effectively assure themselves on what you've just said. Is that a written... Well, this will be provided for in transitional arrangements made under section 19. One of the quirks about the existing system of auditors is that there's not much in the way of a statutory basis for it, so for the sheriff court auditors they get commissions from the sheriff principles which are only relevant to one sheriffdom. So I'm afraid we can't point you to any legislation for that arrangement, that custom and practice, but the aim in the bill is to produce a new, modern, future-proof, transparent regime. In the particular case of the Auditor of the Court of Session, under section 26 of the Administration of Justice Scotland at 1933, he has the right to stay in office till he's 65, and we propose to honour that. So the transitional arrangement for the Auditor of the Court of Session is that he enjoys his current statutory rights and lessen until he retires or resigns, only then would the new system come in. Moris. That's been awesome. Thanks, convener. Thank you. Moving on now, Ben. Thank you, convener. Good morning. I want to focus on part 4 around the group proceedings. The bill, as you know, doesn't give any detail about how the group proceedings should operate and instead gives the Court of Session the power to make the rules covering the issue. And that the Scottish Civil Justice Council will consult with stakeholders how to develop these. It's also notable that the bill doesn't require a person to opt in to any procedure. Given that some countries allow an opt-out procedure, I'd be interested if you could detail and explain why the Scottish Government has excluded the possibility of developing an opt-out procedure. In all of the discussions that we've had with stakeholders since the beginning of this year, all of them have favoured the opt-in procedure because it's thought to be much more straightforward. And since this will be the first time that group proceedings are going to be permitted in Scotland, we thought that we should go for a more straightforward model. The opt-out procedure would be much more complicated because what it involves is that the Court itself has to decide what the group is going to be, define the boundaries of the group. And inevitably that means that there are going to be some people who would be included within the group who actually have not taken any decision and may be completely ignorant of the fact that they are now part of group proceedings. It seems much fairer if you require people to opt in to the procedure. And as I say, all of the stakeholders who have spoken to this year have agreed with that view. I would just add that the Law Commission, which did detailed work in the 1990s, the culmination of that was a draft set of court rules which provided for opt-in procedure. OK, thank you for that. It's purely in a practical basis and I can think of a group in my constituency who are interested in this legislation and certainly know that they would want to opt in so that that's interesting to get that clarity. Is there any specific plans to revisit this in the future or the issue of opt-out or are we on a course of just opt-in as things stand? Never say never, but I think that the intention would be that we would have the opt-in procedure bedded in and let it operate for a few years before there would be any consideration of trying the other system. OK, thank you and just a number of other practical points particularly on this section of legislation. Are you able to explain how the Scottish Government expects that group proceedings will be funded? Group proceedings could be funded under success fee agreements or they could be legally aided, although the regulations I think will need to be amended. The legal aid regulations. Could you explain whether the Scottish Government has considered issues such as how an adverse award of expenses might be enforced against the group and how disputes about the distribution of compensation between group members might be dealt with? I think that those would all be issues for rules of court although some of those issues may be things that would be considered in the document which sets up the scheme which is the group proceedings. So there would be something in that agreement between the parties as to how the damages will be distributed. So it would be for private decisions between the parties involved. OK, thank you for that insight. That concludes our question, that has been very helpful in detail session and I hope you find it helpful as well. We are now to suspend to allow the officials to leave and move into private session. Our next meeting will be on Tuesday 12 September 2017.