 Welcome to the 28th meeting in 2023 of the Delegated Powers and Law Reform Committee. We have received apologies today from Mercedes-Benz Vialba MSP. Before we move to the first item on the agenda, I would like to remind everyone to please switch off or put to silent mobile phones and other electronic devices. The first item of business is to decide whether to take items 6, 7, 8 and 9 in private. Is the committee content to take these items in private? Under agenda item number 2, we are considering two instruments subject to the affirmative procedure. No points have been raised on the draft parking prohibitions, enforcement and accounts, Scotland regulations 2023 and the social security, residence and presence requirements, Israel, the west bank, the Gaza Strip, east Jerusalem, the Golan Heights and Lebanon Scotland regulations 2023. Is the committee content with these instruments? Under agenda item number 3, we are considering three instruments subject to the negative procedure. An issue has been raised on one of these instruments, SSI 2023 268, the council tax reduction, Scotland amendment number 3, regulations 2023. The instrument makes amendments to the council tax reduction state pension credit, Scotland regulations 2012 and the council tax reduction Scotland regulations 2021 to ensure that certain types of payments, largely based on compensation or redress schemes, are disregarded for the purposes of calculating entitlement to council tax reduction. The instrument also makes provision to ensure that the capital of a person liable to pay council tax has no impact on their entitlement to second adult rebate. In correspondence with the Scottish Government, the committee asked whether it considers it appropriate to insert a new paragraph 46 under part 5 or schedule 4 of the 2021 regulations under the heading payments, as this amendment does not concern a payment but the whole of a person's capital. The Scottish Government recognised that it would be helpful to the reader to insert a new part number and heading into the schedule 4 of the 2021 regulations at the next available opportunity, which it anticipates, being February 2024, when other substantive amendments to the 2021 regulations are expected to be made. The committee wished to draw the instrument to the attention of the Parliament on the general reporting ground in that it inserts under the heading payments a new paragraph that concerns the whole of a person's capital rather than a payment. The committee welcomed that the Scottish Government has undertaken to insert a new part number and heading into schedule 4 at the next available opportunity. Also, under the agenda item, no points have been raised on SSIs 2023, 278 and 281. Is the committee content with those instruments? Under agenda item number 4, we are considering an instrument not subject to any parliamentary procedure. No points have been raised on SSI 2023, 276. Is the committee content with this instrument? Moving to agenda item number 5, we are taking evidence on the Regulation of Legal Services at Scotland Bill. I welcome Esther Robertson, the author of Fit for the Future, report of the independent view of legal services regulation in Scotland. I will make colleagues aware that Esther and I will be sat on the Scottish Parliament's Futures Forum think tank together until I left the think tank ever on this year. I remind you not to worry about turning on the microphone during the session, as we have done by broadcasting. There is also no need to answer every question, and if you want to follow up on some questions afterwards, please do so in writing. I will open to the questions. Can you give the committee an overview of the work that you undertook in 2017-18 on the regulation of legal services and in your view the main points of your report? Thanks very much for the invitation. It is a bit strange to be here and not have been at the lead committee, but I am grateful for the opportunity to at least set some context. When we were chatting outside, I was saying to our colleagues from the Law Society, it is strange that it is exactly five years this week since the report was published. It does, as a caveat, mean that I am not over the detail perhaps as much as I was at the time. I am obviously a bit disappointed that it has taken quite so long, and that needless to say, I am disappointed that my main recommendation hasn't been accepted, but park that. The review was over 18 months. I was asked by the then Minister, Annabelle Ewing, as an individual to do the report, albeit that I was supported by an advisory panel, so the report is mine, it was not a committee report. Over that time, we did significant engagement both with consumers and with professional lawyers and advocates and others, as well as a significant amount of research, including looking at the international context. I was asked to come up with recommendations for a modern and principles-based form of regulation. The main key for me was that I was asked to find a way to balance the professional interest with the interests of the public and the consumer. To a certain extent, that is almost an irreconcilable interest, other than that we all want the best for Scotland. It is no surprise to me that then and as now, the consumer bodies were pretty much unanimous in supporting the competition and markets authority position, which is the position that I recommended in the report, which is that regulation should be independent of both Government and those that are regulated. We had significant discussions about that main headline, but also about the various details in the report. For me, I should say that, in terms of the detail, there was quite a lot of agreement between the consumer bodies and the professions about some of the other recommendations, including, not surprisingly, major reform of the complaints procedure, which was not meeting the needs of anyone, solicitors or the consumers of services. In fact, I heard some horror stories about the impact that the current complaints procedure was having on many solicitors who were involved in that process. However, I have remained of the view over the years, and I have watched developments with the interest that independent regulation is still the best approach. It is interesting that Professor Stephen Mason at UCL has since published a report on England and Wales, who were already in a position of further separation than in Scotland between the regulation and membership bodies, but he has now gone on to recommend total separation. More recently, we had a visit from Professor Ron Paterson of New Zealand, and he has been commissioned by the Law Society of New Zealand to look at all options up to and including independent regulation. He has, with his panel, recommended that it should be independent, and the Law Society of New Zealand has accepted that recommendation and has already published materials in preparation for becoming solely a membership body. For me, that principle recommendation was not just about being independent of the regulators. At that stage, I made the point. We, as a nation of 5.5 million people, have fewer than 15,000 legal professionals. We have 11,500 solicitors, 450 advocates—a small number of commercial attorneys, as they were there and where they have changed their name—and solicitor advocates. We had a minimum of five organisations involved in that regulatory process, which in itself complicated things. However, the process was also incredibly complex. Part of my recommendation was to say that new legislation should be drafted for an independent regulator that would be much more principles-based on high-level and allow the regulator to deal with the changes that are necessary over time, rather than to have to keep coming back to Government and Parliament. I would say that one of the areas that we agreed with, the Faculty and Law Society, was that not only should it be my view independent of the professions, but it should absolutely be independent of government, which makes today's session an interesting one. Someone said in responses to the consultation that one of the reasons for that is that we, as individuals, might one day want legal services to be supporting us in action against the Government, and that should not give the Government power to affect that regulatory process. However, for me, it is not that kind of negative argument. It is just that regulations should be completely independent of day-to-day intervention by Government. In conclusion, I do not think that the current model serves either the profession or the individual. I quote Lauren Creerra, my first public speaking engagement after publication, was at a conference with Harper Macleod. Lauren, who supports that recommendation—he is the chair and founder of the partnership, I should say, the firm—made the point that he wants a strong membership body to represent him, his profession, his firm and to represent Scott's law, but that he does not believe that he wants that same organisation to be prosecuting lawyers that may be guilty of misconduct. The point has been made by a range of people that, if you are a solicitor going through a complaints procedure, the society is part of the organisation involved in that process, and how can they then represent you if they are prosecuting you? For me, the current model does not serve the profession any better than it serves the public. I stand by my recommendation that it should be independent, and that means independent of government 2, which makes it an interesting discussion about delegated powers when I think that they should not have powers in the first place. Thank you very much for that, Esther. That is quite a comprehensive opening. I will hand it over to Bill Kidd. No, I saw it. It is Jeremy. It is Jeremy and then it is Bill. Thank you and good morning. I suppose that you have dealt with some of this already in your opening answer, but what is your view of the regulation of legal services bill that the Government has introduced? You have covered some of that, but perhaps particularly concentration around the delegated powers area. As I said at my opening remarks, the current model is incredibly complex, and I think that the solicitors and advocates would agree with that. Not just the complaints procedure but the broader regulatory procedure. My concern about the bill is that it does risk making that even more complex rather than simplifying it, which was one of the objectives that I had been given to achieve in my report. I have read it, but I have to say that I struggled with some of it. Besides complicating the process, it means that in future there would need to be Government and Parliament intervention at various stages, which I do not think is helpful to anybody. If it is not Parliament or the Government do it, I think that you outlined a wee bit in your answer to the first question, but perhaps you could explain who should have that power then. Sorry, I should be very clear. I do not believe that Government should have a role, I think that Parliament has to have a role. I think that Government's role should stop with legislation to establish a new regulator. My model is that Parliament should then appoint the chair and that chair should not be able to be removed without a two-thirds majority of Parliament so that it can never be any individual party that intervenes. One of the people on my advisory panel was Jim Martin, who had been the Ombudsman, went on to be the chair of the legal complaints commission and he explained to me, I should have known but did not, the process of the Parliament appointing the Ombudsman and what happens thereafter. As far as I am concerned, there is a role for Parliament, but it is a fairly hands-off role. I do believe that the regulator in the interests of transparency should be submitting a report to Parliament and I have recommended that Audit Scotland should have oversight as well because there is a lot of discussion both within the public and within the profession about the amount of money they pay both to the society, the faculty and to the SLCC without awful much clarity about how that money is spent. I consulted Audit Scotland and they felt comfortable with the notion that, if it was a parliamentary appointment of the chair and then the regulator operated independently, they would be happy to provide scrutiny. That is very helpful. I suppose that it is to appreciate slightly on that. Do you think that we should be any delegated powers? I do not believe that they should have powers. Therefore, how can they have delegated powers? Thank you for your presentation. You are obviously aware and you have brought forward comments made by key legal stakeholders in response to your report and to the bill as introduced by the Government. The Government has indicated in response to some of the concerns that are expressed that it plans to bring forward amendments at stage 2. Do you have a response to what they have proposed and do you have any views specifically in relation to criticisms from legal stakeholders in relation to the delegation of powers of the bill? No, I have to say that that is an area that is more detailed than I am aware of. I know that the Government has said that it will bring forward amendments but I am not aware of the detail of those amendments. However, part of the difficulty that the Government has faced, and I absolutely acknowledge that it will have had a challenge, is that the profession is not unanimous in that. The Law Society has a lot of support among its members to retain the regulatory function, but there is a range of very senior solicitors such as Lorne Crerar, Brian Enxter and others who believe that it absolutely should be independent and would take the same view as me that therefore there should be no delegated powers. I think that the powers that I have read about are incredibly complex, and that would be my concern. Can you see some way of... I mean, maybe it's too much, because you haven't actually seen what the proposals are as yet. Can you see some way of a meeting of minds there? I think I was hinting at it earlier when I made the point about balancing the professional and the consumer interest. No, I don't think there is. One of the things that came to me when I was preparing for today, a very senior member of the Law Society came along to some of my engagement events, and I remember him saying to me, you've made me realise that if the perception of the public is that there is a conflict and that the society will always come down on the side of the lawyer, even if it's not true that that perception is bad for the profession. That is the public perception. What was interesting was that he followed up by saying, and on reflection I've realised it doesn't happen often, but the likelihood is it's not just perception, it's reality, that in the end it is a professional body which is there to support its members. There is an inherent conflict there. As I've said, it came to me fairly early on that the conflict isn't just between the public and the profession, it can sometimes be beside between the profession and their membership body in itself. Other professions have made the separations. In one of the responses to the original consultation, I saw reference to the architects. Of course, the person got it quite wrong because we now have, and I mention it in here, an architects registration board which handles registration and regulation of architects, and then you have REBA and the RIS that are the membership bodies. The GMC and the BMA are similar. They've already moved in that direction, so I can't comment on how, I don't believe the two can be reconciled, I think is my answer. People are getting excited here. On that basis, just to put some emphasis on things, in light of the Scottish Government's commitment to work with stakeholders, as you've heard of, and to bring forward amendments in relation to the delegated powers that are not so excited about, do you have any views on specifically what could or should change, and conversely, is there anything in the bill that you feel strongly you would like to keep? Yes, I think that there are things in the bill that I'd be keen to keep, but in that context that's very difficult when they're not going to be within the bigger picture, but things like the improvements to the Complaints Procedures and the like are very positive, but to me those were things that should not have been needed to be legislated for. In most organisations like that it would be for an independent regulator to develop a Complaints Procedure in partnership with the consumer bodies in the profession that met people's needs, that was much more risk-based, much more streamlined, saved the profession lots of money in court cases and the like. I think that there is merit there. I have to say that I haven't studied the detail of those to see how far it goes, but for me those bits of the bill. One of the things that I did find interesting was the debate, and I've gone back to study, and I don't have my copious notes, is a bit about lawyer and solicitor as title, and I realise that's one I would not die in a ditch for, in that there were balance views about whether the two titles should be regulated or only the one, and it was actually back to being risk-based. It came up at the time because there was a high profile case where someone had been struck off as a solicitor and became an independent practitioner and called himself a lawyer, and of course the public were confused by that, but we shouldn't legislate on the basis of one or two bad apples, and I think that's the sort of thing that I wouldn't lose sight of, I don't think. The point for me is that Government agreeing to work with stakeholders, the thing that I found the biggest learning for me was that the competition and markets authority are categoric, and I hadn't realised that their position was purely an advisory position, and they say, not just in this field but generally independent regulation is the right way, and it should be independent of those regulated. You're not going to get the CMA to change their mind on that, I don't think, they've been too explicit, so you're not going to be able to satisfy those consumer bodies that feel that is the right way forward, so I don't know, and I know that the civil servants have been working, which is why it's taken five years, to try and find some middle ground, but I don't think that middle ground can be found. Thank you very much for that, because that's exactly what I was just going to ask you, being five years since the report was initially produced, do you feel that everything that is in the report is as up to date as it could be? As you will to see, I've been back through it with some detail. To the best of my knowledge, things may have changed that I don't know about again in our discussions outside there, when we're talking about alternative business structures. That legislation is still to be fully enacted and that's 13 years on, and actually what's happened is people have found work arounds to make alternative arrangements. I have been struck at house desperately slowly, change happens in this sector, it is astonishing really, but no, I don't think that there's anything major that I would change, other than I think our profession, sorry professional reputations have taken a bit of a hit, I think businesses have taken a hit. Lauren Kerr made the point in 2017 that when he became chair of Harper Macleod there were 34 independent Scottish law firms operating, and I think it was down to six or eight, and our businesses are losing ground. New Zealand, as I've discovered, a smaller population than us has 16,000 legal professionals, we've got 12,000 now. Apollodys to the lawyers, I don't know if that's a good thing or not, but it is a statement. One of the arguments that I made was that if we had professional bodies that weren't involved in regulation they could focus their efforts on promoting Scottish law across the world, because there is scope for us. Somebody said, somebody quite senior who I wouldn't name said, we're a small jurisdiction, we'll not get a big slice of the cake, and the answer is no, but a very small slice of a very big cake could make a big difference to the Scottish economy, and that was another angle that I'd been asked to look at. I think there's scope for improvement, so I wouldn't think anything fundamental that's in the report has changed. Can I just ask it, looking on the basis of what happens in New Zealand where Scotland has links and all sorts of stuff, do you think that potentially there needs to be more learning as to what's going on over there and correspondence at least between conversations between Scotland and New Zealand to try and develop this, because maybe even working together we may be able to move things on better? Absolutely, and to be fair to the law society, I don't know about the faculty, but the law society does have very significant international links, and I make the point in the report, not just in legal services but in professional services generally, this is the direction of travel, and in my view this is where we will go. I don't normally admit to being competitive, but when I met Ron Patterson I did say I hoped we would get there first. It now looks like that won't be the case. As I say, I've seen a video and papers produced by the law society over there about the preparations they're already making, so I'm assuming they must think that their Government is going to legislate, albeit they have just had an election and that may change the legislative priorities of an incoming Government. I do think that they're working more closely. England and Wales as well, they're moving in this direction and have already made significantly more progress than we have here in Scotland. When you were talking about those numbers, I'm assuming that's about big whole-service law firms, because obviously there are hundreds of smaller independent law firms, and that's how I think of my own constituents. Most people are interacting probably with smaller independent firms, so I just wanted to... I think that it's an important point, because the conference that I spoke at the day after that was published was Harper Macleod's HM Connect, and that is a network of small law firms that they provide support to where a small local firm might be asked to do something for a local client that's out with their specialism. It's not to undo that, but those small firms are struggling to, and the complexity of the regulation is one of the things that doesn't help them either. I was just saying that it's important to clarify the fact that the sector is probably still a bit more diverse than just 16 firms. Those firms all disappear to be fair. They are here, merged or taken over by other companies. The main question is, in terms of the bill overall, you were saying that you don't feel that it's an improvement. You think that it might make things more complex. I think that there are areas where it improves, but overall, yes, I think that it's much more complex. On balance, you think that you're not in support of the legislation as proposed? In principle, no, not at all. I'm putting that to one side, because obviously we are focusing on the delegated powers, but within the model, I was asking you to step away from that position, but within the model that the Government have opted for, do you think that there's a problem with the specific delegated powers? As I said, I've read them, but I can't say that I understand them all, so I think that it's difficult, and to take it in isolation is almost impossible. So you don't have a firm view on the specific delegated powers? No. Some of them are definitely helpful. As I said, things like the complaints procedures and the like, I think, are helpful. For me, things like having category 1 and category 2, I can't quite understand the logic between different categories of regulator. For me, it was all about moving to the words, the modern principles-based, risk-based, and to put, especially since I've got the law society sitting in the gallery here, I make the point in my report. There is no evidence of huge wrongdoing, not at all. There is a perception sometimes that there is, but it is about saying, we've got a hugely complex regulatory system to address problems that mostly don't exist, and that if we could streamline that and deal with the rare cases that are, either of bad practice or of complaints or whatever, that would be much better. So there are some powers in here, I think, that would streamline that bit, but within a system that is still incredibly complex. I think that Oliver actually picked up most of the question. I suppose, Mike, when I'm just trying to grasp it, quite a number of years ago, my father was a prosecutor for the law society, and so he was instructed by the law society to prosecute a case. He got on and did it completely independently, without any interference from... How is that different from having a whole bureaucracy of an independent person doing it? Is it purely, as you say, a perception issue? Because if it is, it seems a lot of money to spend purely on perception, or did you get evidence that actually there were incidents, I'm trying to say anything in one of your own statements, where lawyers were able to look after lawyers? Is there evidence of that, or is it just a perception? The bit about lawyers looking after lawyers and the main is a perception, and that perception in itself is quite dangerous, but you're absolutely right. Lawyers are involved in that prosecution process, and in actual fact, my understanding is that they still would be under an independent regulator. The difference is that the framework would be different, and part of the problem is that those lawyers, many of whom give their time almost voluntarily, are caught up in inquiries that come last four years. I had people come to me with leverarch files of cases against solicitors who turned out to be innocent, who had had that hanging over their head for several years because of the complexity of the process, and that's not a criticism of those lawyers like your father or of the society. It's a criticism of the system being so complex that it's been amended so often over the years since the law society was founded, without that kind of comprehensive overhaul. I think that the one thing that I would take issue with, and this is where the law society and I did disagree, is that it would be more expensive. If you were to look at the SLCC as just one part of the process, the money that costs lawyers, because that's how they're funded, is spent fighting battles in the courts and regular appeals and the like, where a normal complaints procedure in any other area would have a resolution process built in at a much earlier stage. I think that the SLCC, the chief executive, Neil Stevenson and the most recent chair, Jim Martin, both felt they, if they had a streamline process, could reduce the levy that they charged to the law firms and the individuals for complaints handling, but that at the moment there are huge amounts of money spent on court cases unnecessarily. I would like to go into policy so I won't. Stay away from policy and not agree more questions. I don't know if I have any questions. Certainly with what you've put on the table so far, I think that it's been extremely enlightening to say the least. Are there any other questions from colleagues? With that, Esther, thank you very much for your evidence this morning. The committee may follow-up by letter with any additional questions stemming from the meeting, and I want to suspend the meeting briefly to allow for the change of the panel. For our second panel, I welcome Richard Wood, the executive director of regulation at the Law Society of Scotland, and Morag Ross, KC, from the Faculty of Advocates. Morag Ross is online today. I remind the panel not to worry about turning on the microphones during the session, as he is controlled by broadcasting. If you would like to come in on a question, please raise your hand or catch the clerk's eye. Finally, there is no need to answer every question. Simply indicate that this is not for you to respond. However, please feel free to follow-up in writing to any question later on in writing after the meeting, if you so wish. Section 5 gives the Scottish Minister's power to allow him to modify the regulatory objectives and professional principles for legal services set out in sections 2 to 4 of the bill. What is your view on the delegation of that power and its scope? Do you think that it is reasonably foreseeable that the objectives and professional principles set out in the face of the bill will require to be amended to, amended or removed over time? If so, is it your view that this should be done by primary legislation? Thank you to the committee for inviting me today. I appreciate that we are going straight into questions. I will very briefly say that there are many things that we do not agree with on policy with Esther Robertson, but I am grateful to her for pointing out that there is no great mischief in the regulatory system. In my view, the key is to move forward with how we regulate and improving that, where it needs to be improved, particularly in relation to complaints, rather than continuing to argue entrenched arguments about who the regulator should be. As Esther Robertson has just said, that is something on which there may never be common ground. We are keen to move forward with making the bill as good as it can be in order to improve the system for everybody involved. Thank you for allowing me to digress briefly. In relation to section 5, this is a new power entirely. Many of the delegated powers in this bill have been lifted from the Legal Services Scotland Act 2010. This one was not. This is an entirely new power that allows ministers to add, amend or remove the regulatory objectives or professional principles. There has never been a suggestion until the publication of the bill. This provision was a surprise to us. There has never been a suggestion that those provisions should be changed at all. There were changes made in the bill to the regulatory objectives, not to the professional principles but to the regulatory objectives. The regulatory objectives are those objectives by which regulators are bound to regulate. The professional principles are those principles that underpin the ethics, as they were, and the delivery of legal services by the profession. Our view is that regulatory objectives and professional principles are far too important to be left to delegated powers. They are both the foundation and the overarching principles of the entire regulatory system and, as I say, the delivery of legal services. A sandwich, if you like, the bread in the sandwich of legal services and regulation. Allowing change to delegated powers first of all seems that it is something that is too important for that and that it should be subject to the fullest parliamentary scrutiny if there are to be changes. As I say, there was no suggestion by anybody that changes were needed and I would not anticipate it being something that should be where change would need to be done quickly in the future. The other concern aside from that is that allowing change to delegated powers would give the ministers direct control over the legal profession and the regulators. It is potentially open to abuse. For example, the professional principles could be amended in a way that limits the ability of the profession to challenge the state. Section 5 is one of the sections that goes to the heart of the threat to the rule of law and the independence of the profession. That is so important because, as has already been mentioned, the role that the legal profession plays, whether it is solicitors or advocates, is that sometimes we are protecting citizens from overreach by the state. Sometimes we are challenging the state. That is why it is so important that there is independence of regulation and independence of the profession. Perhaps, unlike some other professions, the role that the legal profession plays is so different and crucial to protecting civic society. Therefore, having regulatory objectives and professional principles as delegated powers to us is unacceptable. We wonder in what circumstances Scottish ministers might contemplate using those powers. Given that, as I said, there was no suggestion that changes were needed and that there has not been any criticism over the last 13 years since those principles came into place and objectives came into place, some of them would be quite concerning. When, for example, might Scottish ministers wish to remove the regulatory objective to support the constitutional principles of the rule of law and the interests of justice, one would hope never, but it is concerning to see delegated powers in relation to those principles. If the power were retained, we recognise that the affirmative procedure and requiring consultation provides some checks and balances, but there are no caveats as to how or why the ministers could alter those principles and objectives. There is simply the power to do so. There is a requirement to consult, but there are no requirements to publish the consultation or give reasons for accepting or rejecting views expressed during the consultation, and there is no requirement for consent by the Lord President. Even if additional checks and balances were introduced, if that power remained, our view is simply that the provisions of sections 2 to 4 are too important to be subject to modification under delegated powers, and we will seek amendments to those at stage 2 if the minister does not bring forward what we consider to not delete those provisions from the bill. Thank you very much. I begin by extending my thanks for the invitation to participate in the discussion and my apologies that I am not able to join you in person today. If I may begin, as Rachel Wood did, with a couple of observations about what we have already heard, and I have listened with interest to the evidence that has been provided by Esther Robertson, I do not propose to say very much more about that. In fact, probably nothing. That primarily dealt with the principal recommendation from her report, and faculty has made its position plain in relation to that in its written submission to the committee. I do not understand that to be the primary focus of this committee's work, and I would intend to confine my observations to the really important delegated powers issues. Of course, faculty will be happy to engage with questions about the general principles, either in writing or with the lead committee, if that has felt to be important. I am happy, obviously, to answer more questions about that, but I just wanted to make that clear at the outset. Excuse me. Beg your pardon. Earning, if I may, then to section 5. This ought to be removed, and that is the faculty's primary position. I agree entirely with the explanation that has been provided on the part of the law society. It is a surprise that it is there at all. It is, frankly, mystifying as to why it is justified. It is, in the view of the faculty, wholly unwarranted. I think that it, perhaps in looking at what is happening or what is proposed, should happen in section 5. We see some of the concerns that emerge subsequently in the later part of the bill, chiefly in sections 19 and 20 of the bill, but perhaps one sees it quite crisply in this introductory form in section 5. What we have here is a power to the Scottish ministers to use delegated powers to amend fundamental principles. It is completely unexplained as to why that should be thought to be necessary. As has already been said, as Rachel has already drawn attention to the fundamental nature of what the objectives are, the first is listed in section 2 to support the constitutional principles of the rule of law and the interests of justice. In what possible circumstances could that be thought that that might be subject to amendment using powers exercised in the way that is suggested? If that ought to be changed, that absolutely ought to be the subject of primary legislation. One can anticipate that, if it were suggested that lawyers ought not to act in accordance with those principles, faculty and the law society, and I am sure that many others would have strong things to say about that, but that absolutely should be within primary legislation. That is a fundamental objection, but even taking issues at a different level, this would give ministers the power to introduce perhaps new criteria, new principles, new objectives, and that represents the potential to give government direct control over the ethical and professional standards of the profession. It is the nature of that direct control by government over how lawyers do their job and what standards they should be expected to maintain that runs the risk of interference with independent regulation, and it is completely unwarranted. That explains faculty's position, but that should not be here. Certainly with the delegated powers memorandum that the Scottish Government has produced, it states that the powers required to enable Scottish ministers to respond strategically in light of changing circumstances and that regulations would be the most efficient way of achieving that in comparison to primary legislation. In terms of the consultation elements that Rachel Wood touched upon, there is a wide variety of individuals and organisations that would need to be consulted on. The Lord President, the Scottish Legal Services Commission, the independent advisory panel of the commission, the competition and markets authority, and each category 1 and category 2 regulator and each approved regulator of licensed providers. With the aspect of consultation that was touched upon, it seems that, with what has been proposed by or set in the bill, there seems to be a detailed level of consultation that would take place. Would you consider that all those relevant organisations and individuals that they would certainly put forward proposals and suggestions that I would imagine would aid and assist the legal profession in comparison to potentially having the opposite effect? One has to ask what is the strategy. The explanation is given in the memorandum that it would enable the Scottish ministers to respond strategically, but to what end? What strategy is the strategy? That does not really mean much with respect. In response to the specific question about consultation, one would expect that it is good practice to consult relevant bodies. There is a long list of those who should be consulted, but you would certainly want to do that if you were introducing primary legislation, but I come back to the prior question, which is why would you be wanting to do this at all? What circumstances would change that would make it so important that you would have to adjust fundamental principles and objectives by using the speedier mechanism of exercising power under regulations than under primary legislation? That is the bit that is unexplained. It is not clear what the Government's strategy would be. Yes, I agree with Morag's comments on that. I do not think that an adequate explanation has been given in what circumstances or why changes should be delivered on such important principles and objectives under delegated powers. As I said earlier, there was initially no suggestion that there was an issue with those. Historically, there has been no criticism of the existing objectives and principles that have been in place for 13 years, but even if there had been, I think that the Government has, understandably, taken the opportunity with this bill to make some changes now through primary legislation, and that is how it should be done in the future. I want to understand what the evolution of regulatory and professional principles has been, because the Government is saying that it is needed because it would be more efficient if there were changes needed. Over what timescale have the current principles emerged and how quick is the change at that strategic level? Very slow is the short answer. The professional principles and regulatory objectives—I will clarify this and come back to the committee in writing, so I caveat that. However, I do not think that they were set out in statute before 2010, under the Legal Services Scotland Act 2010. There have been principles set out in the Law Society's practice rules. Before that, there are regulatory objectives and professional principles that exist through administrative and regulatory law, if we can call that the law of discipline and compliance of professionals. Those ones have been in place for 13 years, and there are now some modifications suggested. I do not think that they were in statute before that, but I would have to check that for you. If I may, on behalf of faculty, I am also happy to provide further information about the history, if that would assist and certainly would be content to do that in writing. I think that I want to expand a little. I agree with Rachel's analysis. If the evolution is slow, that should not be seen as a bad thing. Those are really important. Faculty, in its own guide to professional conduct, sets out considerations that are relevant to professional ethics. Those are not things that you can go chopping and changing at will. Those are things that are really important. For example, when you are training entrants who come into faculty to learn to become advocates and explain the importance of rules of professional ethics, you need to be very clear what those are. Those have gone back over decades and centuries. Of course, they evolve through time. Of course, it is necessary to express them in a modern way, but those are not things that you can tweak here and there and adjust and modify an update in a way that is perhaps intended to be responsive and strategic. They have to be considered with care so that everybody understands the basis on which they are acting. There is nothing fundamentally wrong with having sets of objectives and principles, but there needs to be transparency, clarity and reliability about those over time. That is helpful. I was trying to understand, because the memorandum talks about changing circumstances. When we are looking over that longer period, there have obviously been lots of changing circumstances. If the principles are generally remained constant, it is just trying to understand what the need for efficiency in changing them would be, but that is more of a comment. If I may and forgive me for interrupting, that is the important thing about principles, is that they are capable of being applied in changing circumstances over time. Just because circumstances change and you get new types of cases does not mean that you change your principles. If anything, that illustrates the problem with the sort of intention to be agile and responsive. Yes, you are agile and responsive in applying fundamental principles, but those should not change. Yes, I was going to make much the same point. The evolution of principles should be very slow and considered. As principles and high-level objectives, they should be capable of working for a very long time without needing to change. I appreciate that this is not a policy committee, so I will not go into huge detail, but we understand why the Government has chosen to change the regulatory objectives to bring in some consumer principles. However, we have some questions about those as well, because there are things in there that we think are perhaps not in the spirit of principles and perhaps are very detailed and of the time now. That might be right that there should be some consideration in bringing in certainly something in relation to consumer principles, which stem from the United Nations principles, but some of what is in there in itself is quite detailed. It has to stand the test of time, so not only should it be something—as Morag says, some of these have been around for centuries. It is not just a case of taking time to think about them when they change, but ensuring that they are fit for purpose for a very, very long time. Thank you. Before I move on to Bill, there is just one final question from myself in this area. On the Lord President's consent requirement in relation to section 5, would the Lord President's consent requirement be of any assurance to you both? I will take that first. It would certainly be an improvement on what is there, but our fundamental view is that the state should not have these delegated powers. Parliament is free to change the objectives and the principles as they are doing this time, but the state should not have this power. I agree that it would represent an improvement, but that does not go far enough. One sees, in the judiciary's own response, the unanimous view of the senior members of the judiciary their own fundamental concerns about the impact of government interference with the independent regulation of the legal profession. That is a long way of saying that I agree. Thank you for your responses so far. Section 8 and 8.5 in particular talks about regulatory categories. Section 8 sets out that regulator of legal services providers is subject to different requirements according to whether it is assigned as a category 1 or category 2. It assigns the Law Society of Scotland's category 1 regulator and the Faculty of Advocates and the Association of Commercial Attorneys as category 2 regulators. As you have already been speaking about, Section 8 gives power to Scottish ministers that should enable them to reassign legal regulators between category 1 and category 2, and that would change those requirements that legal services regulators are subject to. The Scottish Government is stating that this regulation making power is required in order that ministers can respond to any fundamental changes undergone by regulators. Can you imagine what those fundamental changes would be at all? No, we can't. If I could back up slightly, and again I stray potentially into policy here, we are not clear on the justification and necessity of different categories of regulator. I will just leave it at that, that we have not received a good explanation that is persuasive from Government on why there should be different categories. However, if there are going to be different categories of regulator, we could see merit in some regulation making power, and I can go if you allow me a minute to go through some of the detail on that, but with amendments, significant amendments to the process, because as you say, we are not sure, we can't think of a scenario where you would want to change the category of a regulator, and if there were a change to the category of a regulator, then it would need to be done very carefully, very mindfully. If you go to the day-to-day mundane, it would mean huge amounts of change in policy and process within the regulator itself, potentially bringing a great deal of cost and resource requirement and taking time to work through how that might actually happen in practice on the ground. I think that it would be something extremely rare. As I say, if the bill does pass with provisions regarding different categories, then we recognise that there is some requirement for consultation, but we certainly think that Scottish ministers should be under an obligation to report the outcome of any consultation to Parliament and explain the reasons for their decision as to why regulations should be made. If we break down section 5, section 5A and 5B, our A is reassigning a body and B is adding a body, we wonder whether both of those, in fact, should be subject to the consent of the Lord President, given that he is in effect the head of the regulatory system and the justice system. Also on subsection B, adding a body, we would simply, I suppose, put a note of caution across. There is a salutary tale in England and Wales, which has been referred to a few times, where there are now 13 legal regulators. That is a much bigger jurisdiction, but England and Wales themselves are looking and thinking about whether that is the best way to progress with the regulation of the legal profession. In Scotland, where we have just above 13,000 solicitors and around 450 advocates, and I think that it is six to eight commercial attorneys, do we really need to be adding other bodies, other regulators, to that system? Those are our points in relation to A and B. We have no views on subsection D about updating the name of a regulator. I am not quite sure why we need to have ministerial approval for doing so, but we have no comment on that. That leaves us with subsection C, removing a body that is ceased to be a regulator, which we do not really understand that provision, because this is not a power to remove the body. We do not think that it is a power to remove a body that has ceased to be a regulator. To us, the two parts are nonsensical. There are other provisions that will come on to that give the ministers the power to remove some or all of a regulator's powers or to essentially shut down that regulator altogether. We do not really understand what the point of C is at all, so I hope that answers the questions. I do not propose to say very much at all about the general policy, other than that faculty considers that, if there is to be of this proposed division of regulators and that is a policy aim for that, with which faculty agrees, then faculty should be a category to regulator and is content with the policy objective and what is intended there. However, faculty does not consider that the ministers should have the power to make regulations reassigning regulators to a different regulatory category. If you are in category 1 or category 2, that is really quite a significant matter. It determines the extent of the obligations to which a regulator is subject and the regulator should be able to know where it stands having regard to the terms of the act, so the criteria should be clear and specific on the face of the act. Faculty's position is that it does not agree that there should be a power to reassign from one category to another by making regulations. I would simply add my agreement to express at least some puzzlement about the remaining sub-paragraphs in subsection 5. In particular, the updating, the name or description of a regulator is hard to see what the justification for that is. If I can move into perhaps a little bit more detail in relation to subsection 6, it suggests that the criteria are given that should be taken into account if there is to be a reassignation. That covers the type and range of legal services that are to be regulated, whether they are provided directly to members of the public. Those are already established—it has been explained in the written submission to the lead committee—that faculty do not provide services in the way that solicitors do, subject to faculty's own direct access rules. It is hard to see circumstances in which that would change to the point where you would need to have that power exercised. In short, it is not clear why it is necessary. It is an important matter, and it should not be done by regulation. On that basis, we know the answer, but I will ask the question anyway. Do you consider that there are amendments that could and indeed should be made to the power, as suggested, in order to limit its scope? Do you have any views on the requirements currently attached to the proposed power and that ministers must consult affected bodies and key stakeholders as set out in the bill before the power could be used? Yes, I will take that first. We differ slightly from the fact that, if the categorisation remains in the bill, we struggle to see where we would reassign a body. We have concerns about adding a body, but we think that we can see why we would want those powers. We would be content to leave them as delegated powers as long as Scottish ministers were under an obligation to report the outcome of their consultation and provide reasons to Parliament and explain their reasons for it. In terms of reassigning or adding a body, we would go further and say that that should also be subject to the consent of the Lord President. As I say, we just don't understand the circumstances in which subsection C would be used, so I can't comment any further on that without understanding what that's intended to achieve. Subsection D, we don't really agree with, but equally, it's not one that we are going to be making a fuss about. I think that there is a bit of a risk in general in terms of looking at consultation as the thing that cures or removes doubt or concern about the exercise of powers using delegated legislation. Of course, those bodies should be consulted, but consultation on its own doesn't solve the problem. If the powers are to be exercised, I would agree with Rachael that consent, in particular consent of the Lord President, ought to be required. It ought to be stronger than what is provided for at the moment, but that doesn't change the fundamental position that this categorisation is important. It should be subject to primary legislation if that's to change. Good morning to you both. I wonder if I can move us on to section 20, subsection 6 of the bill. As you'll be aware, this confers power to the Scottish ministers to make regulations specifying other measures that they may take in relation to a legal regulator following a view of their regulatory performance. I don't know when you have concerns regarding the delegation and scope of this power. Yes, significant concerns. We are completely opposed to this section and the related section 19, and we think that both sections should be removed in their entirety and the consequential parts of schedule 2 from this bill. Those sections go to the heart of the provisions that threaten the rule of law and the independence of the legal profession. We note that there may be amendments brought forward by the minister in relation to the sections, but those amendments should extend to the removal or urge the minister that those amendments should extend to the removal of the delegated regulation powers under subsection 6. Diving slightly into the detail, the regulation making power under subsection is astonishingly broad. There's been no explanation or justification given for what these other measures are that are set out in 6A, where the Scottish ministers may by regulations specify other measures that may be taken by them in relation to category 1 and category 2 regulators, aside from already setting performance targets, directing actions, censuring, penalising financially, changing, removing all or some of the regulatory function. This is big stuff and this is direct control of the regulation of the legal profession, but what other measures would Scottish ministers have in contemplation, aside from the very long list of measures that they could take? It is interesting that the delegated powers memorandum states that the powers intended to be used should be discovered in practice and that further additional measures would be helpful tools. The existing suite of powers are found to be insufficiently robust, though I cannot imagine what would not be robust about what is already proposed, or at the other extreme are disproportionately severe. That covers everything and I do not know whether that is an acknowledgement that what is there may be overkill in the first place, but it is a very wide spectrum of potential use and it is unclear and inconsistent. It also is a, essentially, I would argue, a marking their own homework that Scottish ministers are saying, well, we've put all these powers in place, we've given all these powers to ourselves, but we might like to change them because they might not be enough or they might be too much. So it is just something that we are completely astonished to see, and I am in no way suggesting that this Government would, in any way, not use these powers in a way that they did not think was right to use. Of course, laws outlast Governments, and we have seen that challenges to the rule of law, which once would have been perhaps unheard of in the United Kingdom, have been very real instances of that. We would argue that section 26 should be removed entirely. Before more of what comes in, the wage for caveat I miss that the Lord President has to give consent, does that not give you any comfort? No, because this, together with section 5, is such fundamental—we will come on to some of the other sections—threats to the rule of law, to the independence. If it is intended to be part of oversight and intended to be partly because, as some sort of compromise in terms of who the regulator is, I would like to remind the committee that there is quite a lot of oversight already of the regulation of legal services. Much of that will be strengthened again—that is not for discussion with this committee today—but the SLCC, when it becomes a newly named commission, will have extensive additional oversight powers. The Financial Conduct Authority already has oversight over much of the regulation that the law society does. The Office of Immigration Services Commissioner has oversight over what the law society of Scotland does as a regulator. The Lord President has oversight of what the law society does. As I say, the commission already has oversight and will have increased oversight powers. We fundamentally think, as a point of principle, that the ministers should not have these powers at all. Again, just a piece of the ministers, they only have a power if the Parliament approves these regulations and then the Lord President signs them off. Is that not too safe? It is not a Government saying that we are going to do that with no backstop. We have two backstops of the Parliament has to approve these and the Lord President has to approve these. If I will have those two don't, they don't happen. Does that not give you the safeguard and the backstop that we will give the judiciary a role within this and Parliament within this? If it is always open to Parliament through primary legislation, if they wished, we are a statutory body to make those changes. Experience has shown that primary legislation receives far more scrutiny at Parliament than delegated legislation. Thank you for the questions. The provisions in section 19, in particular, for today's purposes in section 20, because we are looking at delegated powers, opened the door to what could or at least could be political regulation of the legal profession. And there are no circumstances in which that's appropriate. Perhaps to come direct to the most recent question asked by Mr Balfour, in some ways the exercise of this is a delegated power falls away. This would be opposed, this ought not to be introduced in any circumstances. It is particularly concerning that the ministers in this proposed legislation are seeking to do this exercising delegated powers. With the greatest respect, the measures that you are suggesting, the use of the affirmative procedure and the consent of the Lord President, are not sufficient safeguards in these circumstances. The objection is more fundamental than looking at mitigating measures or ways in which there might be protections put in place. This proposal, as I say, opens the door to the exercise of power by government to regulate directly how the professions work. That threatens the independence of the legal profession and that in turn threatens the independence of the judiciary. Lawyers and judges, and I'm speaking only for lawyers and only for those who are members of the Faculty of Advocates, but if I may extend that to all lawyers, play a vital role in a democratic society. The independence of the legal profession is a fundamental principle. Lawyers represent citizens and organisations who seek to challenge the exercise of power by the executive, the exercise of government power. That might involve challenging government policy, whether that policy relates to planning decisions or in cases involving high constitutional principles. There are all sorts of cases in which the independence of lawyers is vital. It is essential that lawyers are able to practice free from the fear—it's using a strong word—but free from the fear of government-mandated regulatory sanction. That's also true for the same considerations apply for lawyers who are defending accused persons in criminal prosecutions that are brought by the state. Their ability to exercise their professional responsibilities independently is a core principle. The suggestion that there might be moves taken to allow government to determine how those professional responsibilities should be exercised and to place limits on them is frankly unthinkable. We are not in the territory of looking at minor or mitigating measures or protections. That is a root and branch objection to those proposed powers. While I am making it clear, I am speaking on behalf of faculty. I have already referred to the views that have been set forward by the judiciary in their response to the lead committee. It is important for the committee to be aware of those views and of the strength of opposition from there as well. To get into a little bit more detail, one of the—if I may pick up on precisely the point about the consent of the Lord President, that runs the risk of—whilst the consent of the Lord President would be, of course, a good thing—in fact, what is happening here, if those powers were to be exercised, would undermine the role of the Lord President, who ultimately is the regulator. There is an existing and working set of relationships, and I am here speaking about the regulation of advocates who are subject to regulation by the Lord President, delegated to faculty in its exercise. What is proposed here would cut through that and undermine it in a way that is dangerous. Like Rachael, I would acknowledge that one would not expect to see those powers exercised in a way that gave rise to the more extreme difficulties, but the fact that they are on the statute book at all is extremely worrying. That would risk putting Scotland in a position that is highly unusual, would undermine confidence in our systems. Esther Robertson, in her remarks earlier, made reference to the size of the Scottish jurisdiction and to the carrying out of legal business in the jurisdiction and how other people see us is also really important, whether that is in a pragmatic, practical way that people are willing to do business or whether it is in a different way, people looking at Scotland and considering what it means for Government to be allowed to interfere in regulation of the professions in this way. It would be unfortunate in the extreme where it is to be taken from this sort of move that this is in any way acceptable. I will come back briefly. If I can be devil's advocate just for a moment on that, because what we are looking at is in regard to how this happens. As Rachael said, Government could bring forward primary legislation to do that, which would have no safeguard of the Lord President, it would simply be for Parliament to decide. Is your concern—I understand the principle—that you do not want it to happen, but from a delegated perspective, you would want it, if it was to happen, it should happen through primary legislation rather than delegated legislation because of a scrutiny issue. Is that right? Fundamental principles are for Parliament to decide on the laws that are enforced in this country, where there to be a bill brought forward that said that the Government should regulate the legal profession and that the legal profession should be subject to the will of Government and that it should be up to Government to decide who is allowed to become a lawyer and who isn't, and that it's for Government to decide what the rules are and how lawyers should behave, then, of course, that would be opposed on all of the same bases. If Parliament nevertheless decided to implement that, that would take us into some fairly interesting constitutional discussions, but you can take it from that that it is not the case that the faculty would say, well, that's okay if it's all done by primary legislation, it wouldn't be. It is an extra concern that this is something that the ministers are seeking to take upon themselves by regulation making power, so if I can perhaps put that more briefly, it's not acceptable in any circumstances. My concern here would be that you could end up in a situation where the Parliament says, yes, this is okay to proceed, and the Lord President says, no, and it would just be to get a sense from you how big a problem you think that would be, because my fear would be the politicisation of the Lord President's role, and in terms of that wider sense that, as you say, Parliament's here to make the law, so the Parliament would be saying, we think that this should be the law of the land, and effectively the judiciary would be blocking it. It's whether there are other examples of where the Lord President does have that kind of role in other areas of the law and just how you think a kind of impasse like that would affect the legal profession. The concerns that you express are serious ones and have to be considered with the greatest caution. We have a system which works. We have a system whereby the Lord President has an important role exercised with care. There are, and there have in the past, in the recent past, when I say recent, over recent decades, been changes to that. We have the Scottish Legal Compliance Commission and so forth. It is possible to make adjustments of those kinds, but none of those legislative changes have gone the distance of interfering and risking cutting across the role of the Lord President in the way that you, with the potential consequences that you describe. The risk of politicisation in relation to the judiciary is a very serious risk. The separation of powers within our system functions as it should, and taking steps that might serve to collapse distinctions or create circumstances where the risk of collisions is something that must be avoided. Moreover, there is no need for it. It is not as if there is a great benefit to be gained by ministerial intervention of this kind or regulatory intervention of this kind. It is only because of the sorts of risks that you are describing that it should be avoided. This is unwarranted, it is unnecessary and, moreover, the risks that you describe are serious. I echo what Morag says. I would like to pick up on her last point about the reason and the justification for this. That is a question that we have asked Scottish Government several times. Is there a circumstance in the recent history—as Morag says, we are talking decades—where ministers might have felt the need to use any of those powers set out in 1920? I would add to section 49 as well. There has not been an example. There has not even been a hypothetical scenario presented to us as to why those powers would be necessary. We also fundamentally disagree with them in any shape or form to be very clear on that and echo that it would be—yes, you have identified exactly that bearing in mind that we object altogether to this, that there would be potentially a real mess if those remained and leaving aside all the other difficulties with them and there was a disagreement between ministers and the Lord President. This, together with section 49, is something that, as the committee will know, the International Bar Association, the Commonwealth Lawyers Association, have spoken out against this. Many stakeholders who perhaps were not in favour of the model of regulation that has been brought forward by Government have also been deeply concerned about those particular sections. In addition to that, why are they so concerned? It is unheard of in a Western democracy that powers such that should exist. People around the world are very worried about that happening. In addition to that, there are commercial considerations. Esther referred to the consolidation and the change within the legal profession. As I think that Mr Mundell himself pointed out, there are in excess still of 1,000 law firms in Scotland, but there is no doubt that there is a small handful of very large law firms that, at the top of that, are international firms. The world is a global world at the risk of stating the obvious, but trade is global. The clients of those international law firms have the ability, like it or not, to be able to shop jurisdiction, forum and, to some extent, choice of law. If they think that the state in Scotland could interfere in the regulation of legal services, they will choose to take their business elsewhere. Again, there have been responses to the call for evidence from the main committee on this bill, from business organisations, stating very clearly that there is great concern about that. City UK, which represents the city of London, has responded to saying that not only do they and their members object to the principle of this erosion of the separation between the state and the justice arm, but they have deep concerns that it will affect the competitiveness within the legal and the reference of the financial services sector of Scotland, of which we are rightly so proud. I was going to move on and ask about section 463, which allows Scottish ministers to make regulations, to make further provision about reconciling regulatory conflicts with a requirement again to get the Lord President's consent before doing so. We are aware that you have also questioned the need for this section. Do you have any further comments on this part of the bill? Thank you. This is a section that puzzles us and we are really struggling to think of a circumstance or situation in which there could be a regulatory conflict that could be resolved by Scottish legislation. The provision appears in the 2010 act and, perhaps to be clear and explain and apologies if the committee is aware of that. The 2010 act had minor amending provisions in it. It then set out in legislation for the first time the regulatory objectives and the professional principles. However, in the main, what it did was to bring in the possibility in Scotland of having what is called under that act, licensed legal service providers or, as more colloquially known, as ABS or alternative business structures. That is structures and organisations that deliver legal services that are owned not just by solicitors but by non-solicitors as well. If you think about ABS and the 2010 act, there is logic and you can see why there could potentially be a regulatory conflict for an ABS because it is more than likely that an alternative business structure, an organisation delivering legal services under that, licensed under that act, would also be delivering other professional services. It is quite likely that they would be regulated, for example, by the Law Society of Scotland and also by ICAS, who are the regulator of the accounting profession in Scotland. There is logic, as I say, under that to the potential for a regulatory conflict and, second of all, the need to resolve that in some way. Through legislation, whether that is primary or secondary. Under this bill, we cannot think of any situation where the Law Society would be regulating an entity. This bill brings in entity regulation for law firms. Currently, we only regulate individual solicitors. We will be regulating entities but we cannot think of any situation where it would be possible to have another regulator, because you would not have ICAS, you would not have the actuaries, you would not have the architects, you would not have any of those organisations, other regulators. Under this bill or the legislative matrix that sits behind it, such as the Solicitor's Scotland Act 1980, what you might have or what you will have is cross-border and international law firms, which I have already mentioned, who will be regulated by multiple legal regulators, and that is already the case anyway. Our multinational practices are already regulated by us, by the Solicitor's Regulation Authority in England and Wales, by a host of legal regulators around the world. However, Scottish legislation would not be able to compel the SRA or the A French Bar Association or the legal regulator in Dubai to reconcile any regulatory conflicts. Already, the system of reconciling those works very well, so we already work together with other regulators and we reconcile those differences. We are puzzled just generally, so that explains why we raise concerns about this. Have you asked for any more information from the Government? We have not had an answer on that. No answer at all? We have not had that answer yet. I do not have anything to add to that. I recognise the concerns that have been expressed by Rachael. Those are probably more matters for the Solicitor's branch of the profession, but I share the concerns that have been expressed. In which case I move on to ask about section 49, which I know has already been touched on at least in passing, providing that Scottish ministers may establish by regulations a body with a view to becoming a category 1 regulator and specific circumstances under which the Scottish ministers may directly authorise and regulate legal businesses. The bill states that ministers must obtain consent of the Lord President before making such regulations, and even then only make them if they believe it to be necessary as a last resort. Again, I am interested in your reflections on that delegated power and any other concerns that you have with it that have not already been stated. Do you consider that it is effectively hemmed in? Sorry, I did not kiss that last bit. Do you think that it is effectively hemmed in? Yes, thank you. As I said together with sections 20 and section 5, our ones that we completely object to and think should be removed in their entirety. I do not wish to choose between the sections that give us concern, but I think that in some ways this one gives me the most concern. If you could see my handwritten notes on my copy of the bill, I have simply written no, no, no against it. Let me explain why this is of a special concern. This allows Scottish ministers to establish a new body themselves under section A. Then, and this is simply astonishing, in section 1A, it says that Scottish ministers may directly authorise and regulate legal businesses. This is absolutely stepping in to the shoes of the regulator and directly regulating the legal profession of Scotland. No filters, no appointing a head of an independent regulator, nothing like that. This is directly the Government regulating and state directly regulating the legal profession. It absolutely threatens the independence of the legal profession, contravenes the rule of law and, as I say, this is one that has been highly criticised by, I think, most stakeholders, including the IBA, the Commonwealth Lawyers Association, business organisations. It could have a seriously detrimental impact on the reputation of Scotland and the competitiveness of Scotland as well as, as I say, contravening the principles. Just one other small point, which is under subsection 2, which I did not actually spot initially, but in reading it many times I noticed that 49.2 allows ministers to make any modifications to part 1 of the bill that it wishes to do by regulation. Of course, just as a reminder, part 1 of the bill sets out the regulatory objectives, the professional principles, who the regulators will be, the categorisation, the requirements in relation to what regulators should be doing in terms of how they regulate the transparency of regulations. 49.2 is an equally astonishing provision to be subject to delegated powers. You have made strong representations today, strong representations throughout the process so far. Do you get any sense from the Government that they are listening to that feedback? Is there a sense that that is being listened to? To some extent, yes. We are encouraged by the fact that the minister has written to say, as was referenced earlier, that she would be bringing forward amendments to certain delegated powers sections, and that was one of the sections that is mentioned in her letter. However, we have not had any, we have asked, but we have not seen, we have no addition, I do not think that anybody has received additional detail on what those amendments might look like. We would again be looking for section 49 to be removed in its entirety. I think that it is a particular overreach section 49, so we have not had. So there is small encouragement because of the minister's letter, but we do not know what detail and what that actually means in practice. Just for absolute clarity, there is nothing that could be done to this section as it stands, although then remove it, that would satisfy your consideration. Absolutely nothing. The concept of, to be very clear, even if it were primary legislation, the concept of the state directly regulating the legal profession, saying who can and cannot be in that profession, how people would operate, it just goes to the heart of the necessary constitutional principle of the separation of the Government from the legal profession and the judiciary. If I may come in on that, just on the final point, of course, faculty is aware of the Government's stated intention in correspondence to bring forward amendments, but like the law of society, I am not aware of the content of what is proposed. It would be very helpful to know what the Government's position is on those, but I have no further information about that. On one view, it looks as if section 49 might not affect faculty. It extends to category 1 regulation, but, of course, as we have already seen, the ministers are seeking to take to themselves the power to move categories, so it is conceivable that, in the future, if that were to happen, the position of faculty would be affected by that as well. For all the reasons that have already been given, it is opposed at a fundamental level. It is not a matter of adjusting it to bring in improvements through forms of consent or so forth. It is already subject to the agreement of the Lord President, but, for all the reasons that were previously given in relation to section 20, it is far too far. It is quite extraordinary that we should be in a position where we are looking at legislation whereby the Government seeks to, by regulations, make provision to establish a body with a view to it becoming a category 1 regulator and circumstances where the ministers may directly authorise and regulate legal business. That is an astonishing proposition to find on the face of legislation. There is no warrant for it whatsoever. There is no justification and it represents an intrusion on the independence of the legal profession and a threat to the rule of law, and it is opposed for those reasons. I want to ask about the guarantee fund. Paragraph 6 of schedule 1 makes further provision about the guarantee fund. Commenting on that power, the law society has noted that this has the potential for significant change to be made, which may adversely impact the fund. I also note that there is no requirement for the Lord President's consent. I wondered if you were able to elaborate further and give your view on that power and the consultation requirements associated with it. To be very clear, we asked the Government for some powers to be delegated through regulation in relation to the guarantee fund. The amendments that we are looking for have been made through section 43A, but they are also future proofing. Those are very minor points in relation to, for example, a statutory limit on the maximum amount of an award under the guarantee fund, and that has not kept pace with time. If there is to be a maximum limit in the statute, then there should be delegated powers to adjust that, and we are happy with that. We have concerns about the more blanket provision, so it is 43A subsection 1, which says that it allows Scottish ministers to make provisions in relation to the guarantee fund of any sort. Then it goes on to list some particular points, as I say, that the maximum amount of an individual grant is something that we have asked for. However, it is that broader application of changing anything and everything under the guarantee fund that gives us concern that it should be done as it is. Again, we might be comfortable with it being still under delegated power, but those general provisions of any change at all would at least need to be an amendment to the process that is the affirmative already, but we would need to ensure that there was consultation, which there is, but we think that there would have to be reasons given for the regulations for any changes, any broader changes. We think that there should be reasons given, an explanation given to Parliament before it votes on those regulations. That is because, to explain the guarantee fund, it is a precious thing. It is a real jewel in the crown of the regulation in Scotland and protection for the consumers of legal services. The guarantee fund is there in the very rare cases when a solicitor has defrauded their client of money through dishonesty or fraud, and it ensures that we protect clients in that regard and make payments out in those very limited circumstances. It is something that has worked very well. There have been no problems or issues with that guarantee fund in the long history that it has been running other than, as I say, things like the maximum amount of award has not kept pace with inflation and with time, so there needs to be some tweaking. It is really important that not only is there consultation with the people who have the evidence for how the fund works in practice, which is set out here, but reasons are presented for any change to something that works so well and is something that is really precious. It is so precious that the bill states that if a new category, one regulator, were to come into being, it should have a compensation fund, as it is called in the bill, that is the same as the Law Society's Guarantee Fund, so it is just to add that extra protection to the broader potential of changes other than the small tweaks that we had asked Government for. Paul, would that look like in terms of a process, I guess? As you are saying, it is a sort of statement of reasons, but I do not understand where that would fit in, because obviously all secondary legislation that comes to the Parliament comes with an explanation from the Government or they set out the need for it at the time? I might suggest that those general provisions, not some of the particular specific ones, but those general provisions would be done under what I think is referred elsewhere in some other sections as the superaffirmative procedure, where it is not just about consultation, but the regulator has been given a decision notice. Consultees have been provided with draft regulations because, as we know, the devil is always in the detail, particularly there are technicalities around the guarantee fund. Provided with draft regulations, and those draft regulations and an explanatory document are laid before Scottish Parliament, before being approved. I do not seek to make any comment in relation to the Law Society of the Guarantee Fund. I can take us to section 41, subsection 2 and subsection 6, which gives Scottish ministers regulations to allow category 1 regulators to scan the scope of the ALB rules. I wonder what your reflections are on the scope of those powers, including whether they should be necessary in practice? Thank you. I am grateful for the opportunity to address section 41, which sometimes is overlooked with all the noise around 20 and 49. There are two parts to section 41. There is section 41 subsection 2, which talks about—subsection 2 includes a provision saying that rules should deal with such other regulatory matters, as Scottish ministers may by regulations specify, and in such manner as the regulations may specify. We take the view that, again, this is a very broad provision, that it is an unwarranted extension of ministerial powers into the authorisation and practice rules for legal businesses. This is, again, wording that exists in the 2010 act, which, if we remember, is about licensed providers or alternative business services. We have been asked by the Scottish Government, well, you did not object under the 2010 act. My response to that is, I think, now we would. The 2010 act is, again, a piece of legislation of its time. The whole notion of alternative business structure was very new and untested in 2008-2009, when the 2010 act was being implemented. Now it has been up and running in England and Wales, and other jurisdictions—Australia, certain US states—in excess of 10 years. I think that, generally, people have moved on on that. However, this is not about ABS. This is not about legal services organisations that are not owned by solicitors. This is about the practice units, the existing law firms that we have regulated for nearly 75 years now. We have had in place for all of those years the very effective system of practice rules that are approved by the Lord President, and the Lord President sometimes chooses to consult with external stakeholders as well. Sometimes we choose voluntarily to consult with external stakeholders on practice rule changes. To now say that ministers or parliaments should have any rule at all in the actual practice rules and authorisation rules for the profession is something that we are deeply concerned about. Again, this is something that threatens the independence of the legal profession. 41.6, if I could move on to that, is slightly different. It provides that, by regulation, the ministers could allow the ALB rules—that is the practice rules for law firms going forward—to deal with provision to allow law firms to deliver other services in addition to legal services. We are puzzled by this, because we do not know what other services the ministers might have in mind that are not already covered by the definition of legal services. If they are not legal services, then that entity should be a licensed legal provider or ABS under the 2010 act, rather than a regulated entity under this bill. We do not quite understand where that is going. Our concern is that 41.6 is potentially allowing Scottish ministers to change the definition of legal services, set out in sections 6 and 7, by a backdoor. We contend that the definition of legal services is far too important to be changed by delegated powers and should be subject to any changes to that, should be subject to full parliamentary scrutiny. There are two slightly different provisions in this section, but we have issues with both. I can answer that briefly. Section 41, and the references to the regulation of legal business, do not have the same direct and immediate impact on faculty, subject to the possible moves in categorisation. However, that does not have an immediate impact on faculty's interests, but it is important, nevertheless, to register concern about the direction of what is intended here, and I would share the concerns and reservations that have been expressed by Rachael. Can I clarify with you 41.6, if it goes ahead? I think that you said that it should be primary legislation. I think that I might have missed. In regard to section 41.2, I appreciate that you do not want it there at all, but if it was to be there, should that also be within primary or should that be regularity, or should we know where we can make 41.2 acceptable to the law society? The latter. We do not think that there is any justification or need for 41.2, and again, we think that it fundamentally goes to the independence of the profession. It is not about the high-level professional principles or regulatory objectives that are rightly set out in primary legislation. They are about the detailed practice rules where the regulator with the evidence and experience that it has makes in order to implement the good and ethical provision of legal services. That should not be something that is subject to Parliament or ministers. I would add that it is something that concerns us from a slightly different point of principle, which is part of the point of the bill, which, if we remember, has come about not because of any scandal or market failure, but because we and the SLCC and the faculty said that there are things that need to be modernised in the regulation of legal services. We asked for those things, mainly around the complaint system, but we also suggested that the existing legislative matrix, again underpinned by the 1980 act, but also some other existing pieces of legislation, was too prescriptive and too complicated. There should be a more principles-based approach with leaving the regulators to then independently deal with much of the detail. That is part of the trend in good modern regulatory practice across all professions. That seems counterintuitive, as well as being a threat to the rule of law and the independence of the profession. It seems counterintuitive that a system that has worked extremely well, where the law society brings in rules and they are approved by the Lord President, should now also require all of that oversight and interference from the state as well. Bill Kidd. Thank you very much. Of course, we are talking about regulations in the legal system. Schedule 2, paragraph 23, is about making changes to regulatory functions. Schedule 2, paragraph 23, is intended to provide that where a regulator has acted or failed to act in a way that has had or maybe could have an adverse impact on observance of regulatory objectives. Such setting of performance targets or imposing of financial penalties are to be brought forward in. Scottish ministers may make regulations to change or remove some of those functions of that regulator. The idea behind that is that there would have to be additional requirements taken, including sharing with consultees or laying in draft before the Scottish Parliament. Do you have any reflections on the delegation of this power and concerns that you have with it? To come back to what was mentioned earlier about the superaffirmative procedure, how do you see that working or not working in relation to the exercise of this power? Thank you. Schedule 2, particularly paragraph 23, is intricately entwined with section 20. You will appreciate that our starting point is that, in fact, much of Schedule 2 should be removed as well. On this particular one, changing or removing some or all of the regulatory functions of a regulator is significant. It really matters. It is right, and we accept that the primary legislation should set out what are those regulatory functions that Parliament has gifted to us. However, we do not think that it is right that Parliament should then gift further delegated powers to change those regulatory functions in any way, even in the superaffirmative procedure. Given the fullest parliamentary scrutiny, if regulatory functions were to be changed, it should be done by primary legislation only. On that basis, you would agree that such regulations have additional requirements. Therefore, they would have to be laid in draft before the Scottish Parliament, before anything could take forward. I agree that that is what is proposed at the moment, but we do not agree with that being delegated power. I can reply briefly. This is clearly of a piece with section 20. For the same reasons, the concerns expressed here are again serious. I am not sure that it is possible to expand on that or that it is necessary to expand on that further. I do not see that it is properly within the scope of delegated powers. Beyond that, there are, I think, quite serious issues about intervention of this kind at all. The bill, as introduced, has got 21 delegated powers. We certainly question today, but we have focused on eight of them, which appear to have been the focus of comments that you have made in responses to the lead committee's calls for views. However, as a committee, we will report on all 21 of the delegated powers that are as proposed when we do a report to the lead committee. Do you have any comments on any of the other delegated powers contained in the bill? Thank you. We do, and if it would help the committee, we intend to put something forward in writing. As you say, there are 21 delegated powers and there are some little bits and pieces on many, not all of those, but on many of those. We will put something forward in writing, but I think that the one that we have not discussed today is also one that gives us great concern is section 35. So, 35.1, and let me just turn my pages, excuse me, one second. So again, now there is 35.1 allows ministers by regulation to make provisions for new regulators, for alternative regulators to amend the regulatory functions of another regulator. Now, I recognise that section 35 is only in relation to what is called a discontinuing regulator, so that would be a regulator where either Scottish Government has stripped that regulator of all of its powers or some of its powers, or a regulator itself has decided for whatever reason not to continue to be a regulator and is requested to stand back. Nonetheless, there are some concerns with very limited circumstances, some concerns and some questions, and we just wanted to highlight, if I may, a few points in there. So, the powers under subsection 1c again give Scottish ministers direct authority to regulate themselves, which is something that we would object to. That is taken with subsection 2, which allows ministers to make any modification at all to part 1, which we think is extraordinarily broad, are things that concern us. As I say, we have already been through the objections and the reasons for our objections to Scottish ministers appointing themselves as the regulator of the legal profession without at all, so I do not intend to rehearse those again. The powers under subsection 2, as I say, allow Scottish ministers, if you look at them, to make any changes that they wish. Again, we have been through that in a previous conversation. Those include the definition of legal services, the functions of the regulatory committee, the regulatory objectives, the professional principles. Again, that is something that we would like to see removed. Finally, if we turn to subsection 5, which, together with subsection 6 through 8, permits made-afarmative regulations. As the committee will be extremely aware, already made-afarmative regulations are problematic just by their very nature. We would argue that they would be particularly inappropriate in the circumstances envisaged in this bill. We cannot imagine a situation where it would be appropriate for ministers to exercise the power of creating a new regulator or stepping in to regulate directly themselves on a made-afarmative basis, where they would do so, where those regulations would be laid before Parliament, and with a short time period of 40 days. Again, it is an astonishing proposal to us that this would be permitted. Now, if a regulator were, for any reason, choosing to discontinue being a regulator or being discontinued, then clearly there would be necessary steps that would need to be taken. We would suggest that it would be in the most limited of circumstances that those things would ever happen. It cannot think of a circumstance where it would be something that would just happen overnight. I suppose that, even if it did, it would still be open to Parliament if it had to to take emergency primary legislation measures if it needed to. I am conscious that we have gone over time, but we have deep concerns with section 35 for those reasons. I have to say that, on the face of it, it is a little puzzling that section 35 is where it is at all. It bears to be within the provisions applicable to new regulators, but its scope may be intended to go beyond those. That is something that I may say that there may be a good answer to that, but it is not entirely clear how that is all supposed to fit together. Beyond that, I think that I would simply be repeating myself and repeating the observations that have already been made with which I concur by Rachel. I am happy to take further questions on that, but it looks like it is, again, overreach for a couple of reasons. It appears to go beyond new regulators of legal services, but, moreover, and perhaps more importantly, it appears to again seek to give the ministers powers to regulate in a way that does not fit with the normal and proper structures that we have. I would like to thank both Morog, Ross, KC, and also Rachel Wood for her evidence. The committee will look forward to receiving that. I would like to thank Morog, Ross, KC and also Rachel Wood for her evidence. The information evidence has been extremely useful and helpful, so I thank you very much for that. We may, as a committee, write to you afterwards if we do any further questions, but I thank you very much. With that, I would like to thank the panel for their evidence, and the committee will certainly fall up in writing later. I will move the committee into private and thank you very much.