 Hi, wrth gwrs. Welcome to the 12th meeting in 2024 of the Delegated Powers and Law Reform Committee. We've received a apology today from Tim Eagle MSP, and in his place I welcome Alexander Stewart MSP. I'd like to remind everyone to please switch off or put to silent mobile phones and electronic devices. So the first item of business is a declaration of interests in accordance with section 3 of the code of conduct. Invite Alexander Stewart MSP to declare any interests relevant to the remit of the committee. Thank you and good morning, convener. Delighted to be here, but I have no relevant information to give the committee at this stage. Okay, thank you very much for that, Alexander, and welcome to the committee. The next item of business is to decide whether to take items 7 and 8 in private. Is the committee content to take these items in private? Under agenda item number 3, we're taking evidence on judicial factors at Scotland Bill. Can I welcome Patrick Layden Casey, TD, the former lead commissioner, and Charles Garland, the interim chief executive of the Scottish Law Commission. Welcome to the committee, Gents. Can I remind the attendees to, first of all, not to worry about turning on the microphones during the session as they are controlled by broadcasting? And also, if you'd like to come in on any question, please just raise your hand to catch my or indicate to the clerks and they'll bring you in. Before we move to questions, can I invite Patrick Layden to make some brief opening remarks? Thank you, Chairman. It's sometimes, since I retired from working as a Scottish Law Commissioner, and I'm privileged to be allowed to appear here today to represent the commission. We welcome the decision of the Scottish Government to bring forward legislation to implement the commission's report on judicial factors. The subject is one which exemplifies the rationale for the existence of the commission. It's an area of law of continuing value to the citizens of Scotland. It is in need of reform, and it is not politically sensitive. It is precisely the kind of topic which the commission is ideally placed to address. Judicial factors are a homegrown institution developed to deal with a continuing need, that is, the holding administration and protection of property where it is not possible, practical or sensible for those responsible for the property to carry out those functions. Before the union with England, appointments of judicial factors were made by legislation of the Scottish Parliament, the Scottish Privy Council and by the Court of Session. After the union, appointments were made by the Court of Session, which also made it acts of sederant to regulate the institution. Acts of sederant are a form of subordinate legislation, nowadays generally limited to regulating court procedure. Formerly, they had a wider remit. It is recorded that in the 1750s, the court made an act of sederant requiring striking Edinburgh brewers to return to work, demonstrating that then, as now, the court had its finger on the capital's pulse. The Scottish Law Commission did some work on judicial factors in the 1970s, culminating in a report on the powers of judicial factors, which was produced in 1980. The subject was put on the commission's agenda again in 1990, but work was interrupted by other projects, including references from the Government. The discussion paper was, however, published in 2010. In the light of the responses to the proposals and questions in that paper, the commission prepared a final report with a draft bill that was submitted to the Scottish Government in 2013. I should perhaps say that, as a rule, the Scottish Law Commission seeks to reflect consultee's knowledge and expertise in formulating its proposals. Where the views of those consulted tend in a particular direction, the commission itself will normally move in that direction in its report and any attached draft legislation. The current bill largely follows the commission's recommendations. Some changes have been made following the Scottish Government's separate consultation and developments in drafting practices have led to some stylistic alterations, but the general thrust and content of the legislation are as recommended by the commission. Broadly, the bill does not seek to regulate every aspect of the operation of judicial factories. Rather, it seeks to establish the parameters within which a well-established and successful institution can operate better at the present and to develop further in the future. It extends the jurisdiction of the sheriff court, so that the jurisdiction of that court and the court of session is broadly concurrent. It leaves in place the discretion of the court of session to take account of future contingencies, so that if circumstances arise which have not occurred previously, but would be appropriate to appoint a judicial factor, that can be done without difficulty. On behalf of the Scottish Law Commission, I have great pleasure in commending the bill to the committee. My opening question has already been answered. I will ask, as an opener for the committee, whether the bill—although, as you indicated, there are some changes in contrast to the draft bill from the Scottish Law Commission. Are you content that the bill still has the ethos and the wider considerations? Yes, it is very recognisable. It is the same piece of legislation. Two organisations that responded to the committee's consultation missing people in the law society have said that the bill could have done more to address the needs of families where people go missing. In what ways do you consider the group during the policy development of the proposals and can you highlight any parts of the bill that you think will improve the situation for those families? That is my first question. The bill, the legislation, will enable the appointment of a judicial factor wherever that is required. If somebody has gone missing and has enough property for anyone to require administration, it will be competent to apply to appoint a judicial factor to look after that property. The bill works and the family of somebody who has gone missing would be able to ask for a judicial factor to be appointed to look after that property. As I read the concerns from the missing person's written evidence, they are worried about the procedure that might have to be gone through, about the cost of going to court, about the technical requirements that might get in the way of ordinary folk just going along and getting somebody appointed. That is not something that can be addressed in the primary legislation. It can be addressed by the way in which the act, as it will then be, is advertised. It could be addressed in guidance, given to citizens advice bureaus, so that information about how to get to the court and appoint a judicial factor could be disseminated. It could be addressed by providing for a court procedure that would enable folk who are not legally qualified to make the appropriate application. Nothing in the legislation will prevent that, but as the missing person's organisation says, one of the things that you have to take account of is that if somebody has gone missing and somebody else has appointed as his judicial factor, that is a risk that the property involved may not be used as it should be, and that is one of the things in which the legislation addresses. Following on from that, the Charity Law Association has also said that the bill pays little regard to the role of judicial factors in the charity sector. How would you respond to the policy concerns and can you highlight the parts of the bill that you think show that a child with a sector has not been overlooked in this process? There have not been overlooked in the sense that the Charities Act expressly provides for the appointment of a judicial factor to the affairs of a charity, but I am conscious that in the functions conferred on judicial factors, on the powers that they have and the duties that they have, which are all rolled up as functions in the Government's bill, there is nothing said about a continuing duty to distribute property. Of course, it may well be that a charity to which a judicial factor is appointed has enough money to carry on operating as a charity and a continuing duty or discretion to distribute money to the proposed beneficiaries of the charity. There is nothing expressly in the judicial factors legislation that deals with that, so it may be. There is one other difficulty, but there is one other difficulty about intimation to those interested in the estate. If it is a charity with a wide remit, then that might be quite a lot of people and intimation to each of them would be impossible. It may be that the particular requirements of a judicial factory in relation to a charity may justify the inclusion of specific provision in sections 3, 15, 27 and schedule 1. Charities people will no doubt make it themselves and at the end of the process the Government will be able to say what they are proposing to do about those concerns and what it is worth. They seem to me to be legitimate concerns and there would be a way of addressing them. In relation to information-gathering powers in both sections 12 and 39 of the bill, there is an exception for the requirements to comply. This is for the UK Government ministers, departments and bodies who exercise functions such as HMRC, and they can choose whether to comply. That might be one really for the Scottish Government to answer, but can you explain the rationale for those exceptions and, separately, what policy impact do you think the exceptions will have in practice? The rationale is that the Scottish Parliament cannot impose duties on UK Government departments. That is a matter of the Scotland Act. I myself would not have thought that it would make any practical difference to the operation of the legislation. There are court decrees and request for information and administrative co-operation going on at all levels between relevant authorities in Scotland and the rest of the UK. The provision of information to a judicial factor appointed by a share of court or the court of session in Scotland is not going to be met with any difficulties. I do not see it as a practical problem. It is one that has to be worked round because of the structure of the devolution settlement, but it is not something that will, in my view, cause any practical difficulties. Just before we move on, in this particular question, I hesitate to ask this question, would section 104 order be of use in this regard? Yes. You will find that it was covered in the commission's report, and we have put in a draft section 104 order that was prepared, and no doubt life will have moved on. What will eventually be produced will not be the same as what is at the tail end of the report, but something along those lines will be put in place. At least that was the Government's intention. I move on to section 4 of the bill. Under the section, the main qualification required to be appointed as a judicial factor is that the court considers a person suitable for that role. In response to the committee's call for views, some respondents such as missing people supported this approach. Others wanted the bill to be more prescriptive. Property Mark, for example, wanted professional qualifications to be specified. Did the commission consider an approach that would involve specifying in statute that professional qualifications are required for some circumstances where judicial factors are appointed, but not others? I think that we did, but I am thinking back 14 years now, so I am not going to swear to it. As I said in my opening statement, we are providing a general structure, a general framework for the appointment and operation of judicial factors. I think that it is a matter of horses for courses. If, as is normally the case, you are administering an estate with quite a lot of money in it, and quite a lot of legal ramifications, it would be appropriate to have us solicitor appointed. In other cases, perhaps if, as apparently frequently happens, you get a husband and wife who are partners in a farming business, they run a farm and they fall out and they cannot bring themselves to agree to even the sensible decisions to keep the farm going, then a judicial factor in a case like that would ideally be a farmer, somebody who could make those decisions and carry them out and make it work, and a legal qualification would be singularly out of place. The legislation enables the court to take account of the circumstances of the particular estate and to appoint an appropriate person to deal with it. I do not think that it would be sensible to go further than that. I know that the estate agents are putting in a plea specifically of estate agents, and we would not have done that. The court has the power to appoint the person who is best qualified and I think that it is sufficient to deal with it then. The other evidence that we did receive came in from the Faculty of Procurators of Caithness. In their submission, the court suggested that we are firmly of the view that whatever other provisions may be made, the judicial factor should be wholly independent of the Law Society of Scotland, and there should be explicit prohibition of any current officer or employee of the Law Society of Scotland being appointed as the judicial factor. Do you agree with their suggestion in the comments? No. The Law Society has a duty to make sure that solicitors act properly in the interests of their clients. As I understand it, it will be able to tell you when they come and give evidence, as I understand it. It is only where a solicitor's affairs are getting into such a state of confusion that they have fears for their clients' money that they will intervene. They have to do that, as they would say, regrettably often—not very often, but more than they would like. It seemed to me personally, when I was talking it over with the Law Society, because we had consultation and we had meetings with the Law Society in particular, that having a solicitor on staff who could act as a judicial factor in a range of cases was a very sensible way forward, unless I have the disadvantage of not having read anything more that the faculty of procurators of Caithness said they may have had a bad experience up in Caithness, I do not know. However, from my perspective, from the commission's perspective, the arrangements that the Law Society has put in place seem to be eminently sensible. I have one final question in this area. You will be aware of the situation that happened with McLeur's solicitors, I would imagine. No, they were a firm based in Greenock, out of 14 offices UK-wide and the firm into liquidation in 2021. Certainly, the discussions that I have had with a range of constituents and individuals from the legal fraternity who have reached out to me were one question that has been put consistently, and that was why the Law Society would not have instigated a judicial factor in the situation to deal with McLeur's. McLeur's had estimated 19,000 individuals with trusts, about 63,000 wills and around 20,000 powers of attorney. Certainly, McLeur had a lot of clients. The question has been put consistently, why was not a judicial factor introduced? I have met the Law Society and they have given me an explanation as to why one was not. I think that the explanation certainly seemed to be very fair and rational, but certainly in the circumstances that I have outlined, and in your past experience, would a judicial factor be something that would have been worth considering? It is certainly the kind of case where an application for the appointment of a judicial factor could competently be made, but I am not in a position to second guess the rationale or otherwise of what the Law Society decided. You have spoken to it and you are in a better position than I am to judge it. All I can do is to hope that we have set up a system that would enable the appointment to be made in appropriate cases. From what you say, that sounds like an appropriate case, but every case has its own features that make it difficult to advise about. No problem, no thank you. I just wanted to follow up on that. You said that it does not happen all the time, but regrettably often, the Law Society is in the position of having to step in or put a judicial factor in place. I wondered off the back of McLeures, but also other cases, whether there is a conflict between the Law Society regulating the work of solicitors and putting a factor in place to take over when something goes wrong and whether that was something that was considered in how the bill was drafted. Obviously, it seeks to consolidate the law, but there are still a number of other pieces of legislation on the statute book that give the power to appoint a judicial factor in specific circumstances. It is just whether there was a thought to bring it all into the legislation and why it did not. Secondly, whether there are still some situations as a result of that, where it is not as clear as it could be the exact responsibilities when it comes to appoint a judicial factor. There is always attention, speaking now about the practical business of setting out legislation. There is always attention about where is the best place to put a provision. This bill gives general provision about judicial factors. You are absolutely right that there are a number of other bits of the law where judicial factors are allowed to be appointed. We have talked about charities in the 2005 act. The Law Society has a power to do it under the 1980s Solicitor Scotland act. The reason we did not take them out of those provisions and bring them into our bill is because they are sufficiently separate that if you were trying to find out what happened when solicitors did not act properly, the place that you would look to find out is in the Solicitor Scotland act 1980. That is the code for solicitors. If you are looking for whether a judicial factor could be appointed to a charity, you would like to find it in the Charity and Trustees Investment act, Scotland act 2005. That is the logical place to look for it, so we left them there. I am sure that you know that, in relation to the proceeds of crime, there are people who are appointed to look after the estate and the property that has been confiscated pending a court decision. They look very alike, all but the name, judicial factors. The people who put that legislation together decided to put their administrator of property into their legislation rather than hark back to judicial factors. As a matter of legal policy, the Government will say that it is all in one place, and as a matter of drafting practice and drafting discretion, it will say that we will amend the Solicitor Scotland act to take account of that matter. However, we will not take the provisions out of there and put them in our bill, because that is the sensible place to leave them. I am not sure whether that answers your question. You know that it certainly starts to answer it, so I guess for clarity where you have left provisions untouched in other legislation and just made minor amendments to reference this legislation, the commission was broadly happy with how those provisions in other legislation operate at the moment, because there would have been a chance through this to potentially amend some of those, if there has been a policy reason for doing so. I apologise. I may have missed the first part of your question, which was that a possibility of a conflict of interest in the Solicitor Scotland act and the way in which solicitors are responsible for supervising the operation of individual solicitors and also appointing judicial factors to look after them. It may be that what was behind your question was that the solicitor's administrative body, whatever they call it at the moment, the council of the law society, was not keen on appointing judicial factors because it looks bad for the profession. I am totally making it a general kind of statement. I suppose that there is always a general feeling that the people who run a particular profession are perhaps not the best people to look into possible defects in the operation. The great safeguard that you have in relation to solicitors is that the law society has an interest in making sure that solicitors operate properly. It also has an interest in looking after the wider interests of the profession because, if a solicitor defaults and his clients lose money, all the other solicitors have to contribute to making that up. The existence of the solicitors guarantee fund, if you like, ensures that the appropriate bodies in the law society are not over-influenced by the reputational damage that might be done to the profession if individuals are taken out of practice and the judicial factor is appointed. That is a very crude way of putting it, but… That is helpful. What I was really wondering is whether you have—where there are these provisions for appointing judicial factors in other legislation, you have looked at those as the commission has looked at those and you are broadly happy with them because, obviously, this bill would have been a chance to change them. Yes, it would. We could have taken them out and put them in our bill and changed them and modified them. No, we might not have modified them because the policy in the 1980 act is for the 1980 act. We would not have changed that without widening our scope quite a lot because that is a matter of the regulation of solicitors, not the regulation of judicial factors, but we could certainly have taken the provisions out of the 1980 act and put them into our bill. For the reasons that I have tried to explain, we did not do that. That is helpful, so you felt changing those policies in other legislations out of school for this bill. It would have widened it beyond your interest. We would have thought that that was beyond our scope, beyond the scope of the project. That is helpful. Thank you very much, convener. Thank you for your responses today. It has been very helpful. Can I ask that, in section 5 of the judicial factors bill, it would abolish the requirement to find cases to save in exceptional circumstances. One policy justification for that is that, when a professional is appointed as a judicial factor, they will have professional indemnity insurance. In response to your discussion paper in 2010, the accountant of court said that she thought that the scope of accountant's professional indemnity insurance might not be as broad as it is generally thought, and it might not cover embezzlement by accountants. Did the commission resolve that concern when it was raised when developing your policy on section 5? The change that section 5 makes is in relaxing the requirement to find cation. Previously, at present, it is a requirement, in every case, for the judicial factor to find cation. It is a guarantee that he or she will not—or if he or she does—default with the money, or that there will be somebody else to pick up the bill. I am told that cation is not difficult to get, but it costs money. The expense is something that you would try to avoid if it is at all possible. The absolute requirement has been changed into a discretionary matter for the court. I have absolutely no idea what the accountants' concerns about professional indemnity insurance for accountants has on the finding of cation in appropriate cases. I cannot help you with that. I know why section 5 says what it says, but it had nothing to do with my recollection. It had nothing to do with the profession of indemnity insurance for accountants. The accountant will not be able to tell you what her concerns were. That would be useful. Thank you very much. We can maybe delve a bit deeper on that basis. In response to the committee's call for views, the University of Aberdeen and R3 said that they thought that the threshold for requiring cation in section 5 is actually too high now. Do you have any comments on that? For example, does the phrase, exceptional circumstances fit with the general policy desire to make judicial factors a solution for the families with missing relatives? As the missing persons people said, it is possible that in a family situation you might feel that it was very desirable for whoever was appointed as the judicial factor to find cation because they may not be the professionals who are operating a judicial factory in a disinterested and arms-length manner. It is possible that they might have much more of an interest and so it is possible that those are the circumstances that might make it desirable to consider the requirement to find cation. I really cannot say. Every case will be different and the court appointing the judicial factor will have to take all the circumstances into account. However, the intention was to make it less routine to require judicial factors to find cation. Whether exceptional circumstances are the right test or a matter for judgment, the Government will be able to explain its thinking on the matter when it comes along to give evidence. Part 2 of the bill proposes various powers and duties for a judicial factor in response to the committee's call for views. The faculty of advocates said that it would be desirable to give the judicial factor additional powers to seek directions from the appointing court. I must be used, for example, in the event of a dispute or uncertainty about what steps the factor should take. Is that something that the commission would like to comment on as a policy idea? There is a power in section 11 that enables the court to withdraw or retain or keep back from a particular appointment some of the functions set out in the legislation. There is a power in section 11 for the person concerned, the factor concerned, to go to the court and ask for additional powers. I did not quite understand what point the faculty was making. I think from the submission that they are saying that there are circumstances in which someone could be appointed and then there could be a dispute about how they carry out their functions and that it may be helpful for that individual to be able to go back to the court. I seek clarification that what they were doing was in order and was consistent, I guess, with the powers that they had been appointed to use. I am still not entirely sure that I have grasped the essence of what the faculty's concern is. Is something that the committee can take up with the faculty when we are likely to hear from them? Perhaps we could send you further detail of that and then have the chance to comment on that. At the moment, the factor that is in some doubt about whether or not what he is doing, what she is doing, is within the functions that have been conferred would discuss the matter with the accountant of court. If it was some positive action that was in question, something that he was going to do, then he can go to the court and ask for an extra power to do that. But the aim of schedule 1 was to set out in very general terms a very wide range of powers. It has always been possible for judicial factors to go back to the court and say, does that mean that I can also do X? Indeed, one of the reasons for putting all the powers into schedule 1 was to stop people having to go back to the court and say, can I do X? X is now in schedule 1, but there may still be cases where things have to happen that are not envisaged in schedule 1. You can go back to the court and fix that. Otherwise, the factors are appointed to make decisions. The court has frequently emphasised that they are not going to authorise the factor to do this out of the other. They expect the factor to use its own discretion, and you might say, we are not going to stop you doing this whether you do it or not is your business. That is the point about judicial factors. That is what makes them a sort of unique office. It is the fact that they are being appointed to exercise a discretion, under control, under supervision but nevertheless to exercise a discretion. I think that that is helpful, and that probably speaks to the policy intent as things are currently drafted. I also wanted to ask about section 19 of the bill, which covers the investment power of a judicial factor in respect of the estate. Following the approach in the Trust and Succession Scotland Act 2014, I wondered if it should be made clear on the face of the legislation that a judicial factor could choose environmental, social and governance investments, even if those might not lead to maximum income for the estate. That was a change that the committee had recommended in our report on that legislation, reflecting, changing thinking on environmental, social and governance issues. Would that be an amendment to section 17 that you would be after then? That would probably be in section 19, but that would be up to drafting colleagues, and probably in section 17. 17 is about investment, and I apologise for the wrong section. The duty of the factor is not to give effect to the Government's views on appropriate investment. The duty of the factor is to maintain the estate for the ultimate benefit of those who are entitled to it. If I were a factor, I would be very cautious about taking into account considerations other than the general financial parameters within which investment takes place. I guess, for example, that factor was put in place, and they were thinking about the reputation of the organisation, and it might be that in strict financial terms you could get a better return on investment by going with option 1. Option 2 might produce a lower short-term return, but it would be more consistent with the organisation's values, wider public image. I guess, that was the scenario that we were thinking about in relation to the trust and succession. I think that the factor would be taking a risk. How much of a risk he is prepared to take is a matter for him, but at the end of the day, I do not see what answer he would have. If somebody said that option A would have produced a 10 per cent return and chose option B, which produces a 5 per cent return, you should account to us for the missing 5 per cent. I guess, that is why we were asking about whether it should be on the face of the bill. That is a matter of policy. At the moment, the object of appointing a factor is for him to maintain the estate and generally manage it properly in the interests of the ultimate beneficiary. If the policy were to require a factor to do something other than that, I think that it would have to be very clearly stated in the legislation. I am not for me to say whether it is appropriate in this case. I am not responsible for the policy. The bill is consistent with a duty on the factor to maintain the estate in financial real terms for the benefit of the ultimate beneficiary. That is the limit of the office at the present. If there is a policy that the factor should be doing something else, something more or something less, that would need to be very carefully thought through and drafted. However, whether it gets drafted is a matter of a Parliament. As somebody once said, bills are made to pass, and razors are made to sell. Thank you. So, Charles, did you want to come in? Thank you, Camilla. I will just add a small comment that judicial factor is, generally speaking, that will have a different timescale than trusts. Many trusts will be set up for the long term, at least for the medium term. The importance of the ESG option, if you like, might be more of an issue than in a judicial factory where the primary interest is in holding and administering and then giving back, if that can be possible, the estate. It might be that it takes slightly less of a focal position, although I know that some judicial factories end up staying in place for a very long time. That is helpful, thank you. I will just follow on from that point then, Charles. If there was a judicial factor in place for a long period of time, would the bill, as it currently stands, provide them with that flexibility? Notwithstanding the question that Oliver asked regarding the ESG, would the bill provide them with that flexibility to consider other investments or the way to invest, or should an amendment come forward to provide the ESG, would that then be helpful in that regard? As I understand it, the bill, as it stands, does not have the, certainly not the express powers that are now in the Trust and Succession Scotland Act. Whether they would be appropriate is another issue. Schedule 1 has a long list of different powers. It might be unusual, I suppose, for a judicial factory to be anticipated at the outset to last for a long time. The case that I have in mind was one that was submitted in evidence to the commission a number of years ago and was affirming judicial factory, which was still in place, I think, 25 years after it had first been put in, but there was no evidence that there was any intention that that was how it was going to go at the outset, in which case these ESG investment powers might be better suited for at least medium or longer term funds. I am certainly not an expert on that, but there may be that anticipated timescale of a judicial factory, as opposed to a trust, might be an issue, Mr The Relevance of that part. A final question on that. Out of interest, with that one example, 25 years, it clearly is a long period of time. I do not think that anyone would have anticipated that length of time, but do you have any figures to hand in terms of the average length of time that a judicial factory would be in place? I do not, I am afraid. No, I do not. The accountant of court would be able to tell you definitively what the average length was. I imagine. That would be very helpful, and we could consider that. Academics from the University of Aberdeen and Abertau University, as well as R3, have all said that the fiduciary nature of the judicial factors duties needs to be spelled out explicitly in legislation. Professor Greer also thought that there needs to be a clear statement as to the legal remedies if there is a breach of those duties. What does the commission have a view on that? We said very clearly in our report that the essence of the institution was that it was fiduciary. That was based on several court decisions. Of course, we considered it frequently. Initially, in relation to whether or not a factor could charge professional fees for doing legal work on behalf of the estate, and the answer was no, he couldn't, because it would give him a conflict of interest between his duty as a factor and his professional position. It was, to our mind, a self-evident feature of the institution that it is fiduciary, so it wasn't necessary to say precisely what that meant in the legislation. It would be easy to set out what that meant in legislation, or would that be a difficult task? It would be very easy to say that this is fiduciary, but what does fiduciary mean in particular cases is more difficult. Unless you have a clear idea of where it is going to lead you, it is, in my view, better to leave it as a general understood principle, but without trying to tease out exactly what it might mean in individual cases. If you tease out what it means in five or six individual cases, some intelligent person will come along and say, but what about case seven? You haven't covered that, and therefore perhaps it doesn't extend to case seven. If you leave it as a general principle, the courts know what they think it means at present, and if they decide to change that in the future in light of further change in circumstances, they will be able to do that without having to wrestle their way around an unfortunate phrase in an act of Parliament. In response to the committee's call for views of the Law Society in relation to section 15, the duty to make a management plan and section 16, the duty to submit accounts to accounting of court, it thought that the requirements of the bill were more prescriptive, so the opposite challenge than in relation to the commission's draft bill. Do you think that the bill that we see now is more prescriptive than what the commission had in mind? I haven't looked at that particular aspect. If there are changes between what we suggested and what the Government has decided to implement, those changes will have been informed by considerations within Government, and you will have to ask them what effect they thought they were having and what the policy was for making those changes. Okay, thank you. Thank you, and if I switch over. Thank you, convener. I've got a couple of questions for you. The faculty of advocates and the sheriffs and summary sheriffs association have both said that section 23 of the bill could be modified. This would be to deal with exceptional circumstances when a judicial factor had acted unreasonably but not negligently in relation to the litigation and so could be found personally liable for legal cost. Does the commission have any comments on the current policy and drafting of section 23? Before a judicial factor started or became involved in litigation, he would certainly consult the accountant of court and he would certainly take separate professional legal advice as to the prospects of winning or losing or the decidability of fighting the case. It is still possible that having taken that advice and acted in accordance with it, he might be found at the end of the day or he might be thought at the end of the day to have acted unreasonably. I imagine that very many people who get involved in litigation and lose wonder why they did it and whether it was actually worth it. It is the decision that you make when you start. Whether or not it is desirable to make a factor personally liable for a decision at the end of the day that he has acted unreasonably, even though he went through all the correct advice-taking procedures, is a matter of policy, but it would have the effect that a judicial factor might be more reluctant than is desirable to defend the interests of the factory estate in litigation because he is too concerned and legitimately concerned about his personal liabilities if the litigation turns out badly. If you are subsequently found to have acted unreasonably, we are going to make you personally liable for the costs of the litigation, but it would be a great disincentive to the factor to start the process. Whether or not you want to impose that disincentive is a matter of policy. I think that we thought at the time that the balance we had here was correct. If a factor acts improperly, then the court can make him find the money out of his own resources, but a factor who is acting in good faith and taking the proper advice and doing what he thinks is best in the interests of the estate ought not, according to this legislation, ought not to be penalised if somebody says at the end of the day why we think that that was unreasonable. It is reasonable to consider litigation, it is reasonable to consult the accountant, it is reasonable to take outside advice, and if the outside advice and the accountant's advice are all that this is a reasonable thing to do, it is quite difficult to say well, but we are going to come along later and do you for the expenses if you get it wrong, if the court decides the litigation against you, which is what it comes to and people who try and predict what courts are going to decide are intense with crystal balls. Thank you. My next question is section 34 of the bill sets out the rule that discharges usually frees the judicial factor from liability as a factor under civil law. Section 38 of the bill requires the accountant of court to report the court where serious misconduct or other material failures are found. The court then has discretion to dispose of the matter as it considers appropriate for the benefit of the committee. What is the commission's understanding of the interrelationships between the two provisions? Does the commission think that any drafting changes are required to improve clarity? The deal with different things, in terms of timing, it may be that section 38 would come into play before section 34. If the accountant thinks that a factor is doing something that is seriously wrong, misconduct, the accountant will report to the court and the court will take such action as it thinks appropriate. If the accountant thought that a factor had been engaging in that sort of action, there would be no question of her granting a discharge to the factor. The misconduct and the consequences of it would be an open question that would have to be resolved before you could consider granting the factor a discharge. That is an entirely separate exercise from saying that where the accountant has considered the factor's final accounts and final report, and has discharged the factor, that that should be the end of the matter. The factor must have finality. The finality comes from the accountant's inspection of his proceedings during the factory, and the accountant's acceptance after audit of the final accounts and the accountant's decision that the factor can be legitimately discharged. Once that has happened, there has been an adequate process to sort out the rights and wrongs or any questions about how the factor has acted and he has been discharged. He should then be able to say, right, that's all behind me, I've done that. I will carry on with life without people coming along later and saying, ah, but we don't think you should have done this three years ago. That's how I read the relationship between the two sections and that's what we were intending to do, and I think it's what we've achieved. Anything needs to be done to find the clarity or just to clarify things? I don't, but I'm always willing to be persuaded if somebody out there, if these gentlemen and ladies from Aberdeen think that there's clarification required, then they should say so, and I'm sure that the Government will always be willing to listen to ways of clarifying the legislation, but I mean that either of the sections may not be perfectly drafted in itself, although I haven't heard of any suggested defects, but that's always an open question for the draftsmen. Could I have got it better? Thank you very much, convener. This is a question about a role that you've covered not by yourself, but you've covered speaking here quite a wee bit this morning in the accountant of court, and there seems to be differentiation between not quite so much the role but who and how qualified those people are, that person is. In relation to sections 35 and 36 of the Bill of Law Society, it's commented on what it regards as a significant departure from the commission's draft bill and considered a watering down of the level of legal and accountancy knowledge required for the roles of the accountant and the deputy accountant. In the SLC's draft bill there were to be knowledgeable in matters of law and accounting, however in the current draft they must be in the opinion of the Scottish Courts and Tribunals Service appropriately qualified or experienced in law and accounting, and the policy memorandum to the bill makes it clear that formal qualifications are not necessarily required. So what's the commission think about that sort of approach to sections 35 and 36 and do you share the law society's concerns over these differentiations? The provision that we produced required the accountant to be qualified, as you say. The position in the bill is a lower qualification in formal terms and I think you would have to ask the Government why they had changed that and what their thinking was. Our thinking is in the report and the draft bill that we produced and I would say that was the appropriate thing to do because that's what we said in the report. If the Government wants to change it then that is a question for them and you would have to take it up with them. Do you think that the Government when it's formulating this approach may well look at what you've said but do you think they might approach you to get further clarification on what you're looking for because there does seem to be a bit of a differentiation there shall we say at least? I think our approach and our views are sufficiently set out in our report and I would not expect them to come back and say do you really mean that? No that's fair enough it's just that because there is such an element of divergence there I just wasn't 100 per cent sure and maybe it's not as as wide or anything as has been presented but there will be discussion over that. Somebody who is appropriately qualified or experienced in law and accounting would cover somebody who has all the qualifications that anyone might want but he might also be a person who without those formal qualifications is also suddenly up to speed on the various practical requirements of the position. I think that that's quite clear then actually but I just am reading it. No it's certainly a difference if this is the law society's point in terms of the formal qualification whether that is absolutely critical is a matter of judgment in this case the judgment of the Scottish Court of Tribunal service. Thank you very much for that thank you. Normally the Scottish Legal Compliance Commission the SLCC acts as a gatekeeper for all complaints about the solicitors in Scotland although a complaint about conduct may be referred back to the law society to determine office substance. With section 38 of the bill which places a duty of the accountants to report misconduct or failure of a judicial factor to their professional body is there a potential policy issue with A by passing the usual role of the SLCC and B applying different thresholds for referral to the law society than the SLCC is required to apply? The short answer is that I don't know. The provision says what it does the professional body is the if the judicial factor is a solicitor the professional body is the law society. I don't think we had any intention of bypassing any other disciplinary or investigative body if that's it would be I cannot see that there would be any particular problem in doing that you could say body includes any other body appointed to investigate professional failures or what have you but professional body in this case would cover the case where the judicial factor was an accountant it would cover the case where the judicial factor was an estate agent if the estate agents get their way it would cover a professional body of any sort if the judicial factor was a member of that body and it was a relevant consideration if you're asking whether body should be extended in another provision to include any separate disciplinary mechanism then yes obviously it could happen it's not in the bill at present but it could very easily I imagine be added. In response to the committee's call for views the faculty of procurators of Keith Ness said it thought there should be a specific procedure for an interested person or organisation to his concerns about the judicial factors management of the estate this if proposed would first be to the accountant and if unsatisfies with outcome there would then be a role for the court what does the commission think of this as a policy proposal and for the benefit of the committee could you identify any benefits and drawbacks of this proposal? The major difference between judicial factors and ordinary trustees and in very many ways a judicial factor is a trustee but the major difference between a judicial factor and a trustee is that the factor is closely and consistently monitored by the accountant of court the court appoints a factor to look after the estate that's what makes him a judicial factor but that is done under the supervision of the accountant and so you have a clear responsibility on the accountant to make sure that the factor is operating correctly I would want this is pure legal policy you know if you want to have a situation in which somebody who complains to the accountant doesn't like the answer and then go to the court and so on up the deal system you can do that I personally would want to see evidence that the present system was not working that there was a case where the accountant had had demonstrably failed to take account of some obvious defect in the way the factor was operating before I looked for other solutions to it it is very easy to say oh well you must have a way of fixing this and so on it it has serious resource implications and serious implications for the judgments which factors and accountants have to take if you import a new way of attempting to second guess what the system operates the way the system operates you could do it but you'd want evidence one of the things I used to do before I was a law commissioner was get involved in judicial review and judicial review is essentially where our public body is said not to be operating properly and not not acting reasonably or what have you and you used to find that in many areas of the law a person in a particular position a judge or a lord advocate or a minister or what have you had a discretion which the courts had always recognised and which they wouldn't interfere with if x says this is the right thing to do then we are not going to try and second guess that and that only lasts until x does something which is so off the wall that something really needs to be done about it and that has happened in a number of areas of government and local authority operation that yes x has the discretion it says so in the statute and we must let him mustn't interfere with that until he does something which is so bad that you really have to find a remedy in this case I would as a matter of legal policy as a matter of legal policy I would want to be persuaded that the accountant had gone so far wrong that we really needed a separate way of approaching the matter and short of that and there are other ways of raising these things if if the accountant were at where in fact being unreasonable and disregarding the serious and genuine complaints a way would be fine of drawing that to the attention of the court I don't think barring examples of the accountant not operating properly I don't think it would be a sensible way to go but like everything else it's a matter of policy if you if you did it you could but you would find yourself with the disgruntled character who would never give up who would go to the accountant be dissatisfied go to the court appeal and so on and we've seen a number of examples of that in recent years okay yes nothing else to say on that it's uh don't go down that road is would be my instinct okay no thank you and certainly a final question from just in terms of you've said quite a number of things today with regards to the to the bill as it stands and also some differences between the bill and the slc report do you have any final comments or considerations on the views expressed by some by the stakeholders in relation to the bill in front of us no i think that we were we were finished with it we were functus our role had come to an end when we produced the report and the draft bill we have always accepted that the actual content of a draft bill was for the government because they are responsible for promoting the legislation and they will make changes for reasons which were not open to us to consider and they are perfectly well able to explain those reasons and defend them when they produce the bill to parliament it's then for parliament to decide and they have a separate view on the matter what they are prepared to pass as i said earlier bills are made to pass as razors are made to sell if the bill doesn't doesn't do the things that you want it to do or it does things you don't want it to do you have the ultimate voice in the matter the law commission is very far back than the food chain and we are satisfied with the the preparation work that we did and we're very grateful that the government has chosen to put the bill before parliament and we're grateful that parliament is taking the time to consider it and we earnestly hope that it will be passed in more or less its current shape because we think that will produce a better institution to serve the people of Scotland okay well thank you for that patrick colleagues do you have any further questions okay patrick and charles do you have any final comments you'd like to make i don't thank you committee don't okay so first of all thank you very much i can i thank both patrick and charles for their helpful evidence this morning the committee may follow up by letter with any additional questions that's standing for on the meeting and of course if you wish to add anything after the meeting you are most welcome to do so please do so in writing so with that thank you very much once again and with that i'll now suspend the meeting briefly to allow witnesses to leave the room thank you under agenda item number four we're considering instruments subject to the affirmative procedure no points have been raised on the draft sea fisheries remote electronic monitoring and regulation of scallop fishing scotland regulations 2024 and the draft transport partnerships transfer functions scotland order 2024 is the committee content with these instruments under agenda item number five we're considering an instrument subject to the negative procedure an issue has been raised on ssi 2024 101 the scottish local government elections amendment denmark regulations 2024 the instrument amends the local government scotland act 1973 to add denmark to the list of countries whose citizens are eligible to stand for elections as members of a local authority in scotland if they have leave or to enter or remain in the UK under section 282 of the interpretation and legislative reform scotland act 2010 instruments that subject to the negative procedure must be laid at least 28 days before they come into force not counting recess periods of more than four days the instrument breaches this requirement as it was laid on the 26 of march 2024 and comes into force on the 7 of may 2024 in correspondence with the presenting officer the scottish government explained that this breach had occurred as it could not lawfully make regulations to implement the treaty until after the UK parliament completed its scotland process which ended on the 25 of march the treaty is expected to come into force on the 7 of may at which point the provision in the instrument must be in place to comply with the UK's international obligations as the instrument has not been laid at least 28 counting days before they come into force as required by section 282 of the 2010 act does the committee wish to draw this instrument to the attention of the parliament under reporting ground to jay for failure to comply with lane requirements does the committee content with the scottish government's explanation provided for this breach of the lane requirements under agenda item number six we're considering instruments not subject to any parliamentary procedure no points are raised on SSIs 2024, 84 and 87 as a committee content with these instruments thank you and with that i'll move the committee into private