 Hello, and welcome to the 10th meeting of 2023 of the Delegated Powers and Law Reform Committee. Before we move to the first item on the agenda, I would like to make everyone present to switch the mobile phones to sound. Under agenda item number one, we are considering two instruments, not subject to any parliamentary procedure. An issue has been raised on one of the instruments, SSI 2023, 62, the act of cidderant, Summon applications, statutory applications and appeals etc. Rules 1999 amendment sexual harm prevention orders and sexual risk orders 2023. The instrument provides new court rules for handling applications into the court arising under the abusive behaviour and sexual harm Scotland Act 2016. The committee identified an incorrect cross-reference in paragraph 6 of rule 3.54.4 in that the reference to paragraph 4b should be to paragraph 4c. The Lord President's private office confirmed that the cross-reference is an error and proposes to rectify it in a forthcoming instrument to amend the summary application rules. Does the committee wish to draw this instrument to the attention of the Parliament on the general reporting ground in respect of a cross-referencing error in paragraph 6 of rule 3.54.4? Does the committee welcome that the Lord President intends to correct the error in a forthcoming amending instrument? Also, under this agenda item, no points have been raised on SSI 2023-72. Under agenda item number 2, we are considering the moveable transactions at Scotland Bill at stage 2. I ask members to refer to their copy of the bill, the marshaled list of amendments and the groupings of amendments. We are joined today by the Minister for Public Finance, Planning and Community Wealth, Tom Arthur MSP and Scottish Government officials. Welcome to you all. Can I mean the minister's officials that they cannot participate in any stage 2 proceedings but they can communicate to the minister directly? We have a large number of amendments to consider and dispose of for this bill. If the votes are required today, I will call for members to vote yes first, then to vote no and then for any abstentions. Members should do so by raising their hand and clerks will collate the vote and pass them to me to read out and confirm the result. I will take stage 2 slowly so that we can actually manage the time to and also process the proceedings properly. First of all, I will refer to the first of the amendments. First of all, it is in the content of documents, so I will call the amendments 54 in the name of Jeremy Balfour, grouped with amendments 67 and 74. Jeremy Balfour to move amendment 54 and speak to all amendments in the group. Thank you, and good morning. Can I also say good morning to the minister and to his team? Perhaps I can just set a slight context for the whole of the amendments that I'm bringing forward. Firstly, to say that clearly we are very supportive of the bill in principle and I welcome the comments that the Scottish Government have made. The amendments that I am seeking to bring forward this morning are there to, I think, hopefully just clarify some things and to make sure that in practice the bill works. I'm grateful to those groups who have been in touch with me and who have suggested amendments. I'm particularly grateful to the Law Society of Scotland who I've had a number of conversations with and who have helped me in regard to some of the amendments that I'm bringing forward today. I hope that this can be done in a constructive way and I look forward to hearing what the minister has to say in regard to that. If I can then move to amendments 54, 67 and 74, which are all in my name, firstly amendment number 54. This amendment would expressly allow the Assegnation document to refer to the claim by reference to another document or data which is not reproduced in the Assegnation document itself. The reason I think that this is important is that there are a number of invoice discounting systems used online portal-based invoice discounting systems and I think we need to ensure that they are able to utilise the register of Assegnations. Similarly, I'm sure we all want to avoid lengthy documents including customers lists needing to be uploaded to the register. I consider that this approach is coherent with and follows the approach taken for conditions to Assegnation in section 24 of the bill and I would ask for the committee's warning to accept this amendment. Moving on to amendment number 67, the effect of this past would expressly allow the constructive document in a pledge to refer to the property pledged by reference to another document or data which is not reproduced in the constructive document itself. The reason I'm moving this amendment to convener is that I think having spoken to a number of people in practice they generally consider that a number of pledges will be composite pledges referring to a large number of debtors assets and that having to upload such asset lists may be prejudicial to debtors. Again, I hope that this is a constructive amendment which the committee can support this morning. Finally, in this section, in regard to amendment number 74, this would have an effect in section 56, page 32, line 23 of the bill. The effect of this amendment expressly allows for an amendment document in respect of a pledge to refer to the property pledged by reference to another document or data which is not reproduced in the constructive document itself. Again, having spoken to those in practice, I consider that a number of pledges will be composite pledges referring to a large number of debtors assets and that having to upload such asset lists may be prejudicial to debtors. This could also apply in respect to the amendment of the pledge. Again, I think that this will make things clearer for those who are dealing with this day in, day out. I look forward to hearing the minister's response to these, but I will move these three amendments. Thank you, Jeremy. Do any other members want to come in for any comments? Thank you, minister. Thank you, convener, and good morning to the committee. Amendments 54, 67 and 74, all in the name of Mr Balfour, take forward a suggestion by the Law Society of Scotland that it would be helpful to replicate a provision-made section 24 of the bill in respect of the assignation of a claim that is subject to a condition, that provision that enables a condition to be specified by reference to another document. The amendments would add this provision in respect of assignation documents, constitutive documents for pledges and documents that amend pledges. We do not think that those amendments are strictly necessary in section 2, the bill talks about the requirement to specify information. In contrast, the section is now being amended to just talk about a requirement to identify something. That much more readily admits to the idea of doing so by reference to an external document. However, if stakeholders consider that this clarification would be helpful, we have no objections to making the necessary changes. We are some issues with the precise detail of the amendments. In particular, amendment 54 is technically defective. When read with section 12 of the bill, it provides that an assignation document must identify the claim, including by making reference to another document. That could be read as meaning that the assignation document must include reference to another document, which is not the intention. The other technical difficulties with the amendments, too, refer not just to documents but also to data. That is unnecessary due to the definition of a document in the Interpretation and Legislative Reform Scotland Act 2010. Including it here but not in section 2, 4, would also cost potential difficulties. I am therefore happy to commit to working with Mr Balfour to bring forward suitable amendments at stage 3, if he decides not to press his amendments today, alternatively, if he does wish to press them, I am happy to support them on the understanding that they will need to be adjusted at stage 3. Can I thank the minister for his helpful remarks and for his helpful explanation? I think it would be helpful if it is okay with the minister to have these three down at the moment and I would be welcome any working with him to then get them absolutely right for stage 3, but I think to have them ready for that would be helpful. It would be my intention convener to move amendment number 54 in my name. The question is that amendment 54 be agreed to. I will be all agreed. We move to the financial collateral arrangements and financial instruments. Amendment 55, in the name of Jeremy Balfour, grouped with amendments as shown in the groupings. I draw members' attention to the procedural information relating to this group that I have set out in the groupings. I point out that, if amendment 55 is agreed to, I cannot call amendment 56 due to a pre-emption. With that, I am Jeremy Balfour to move amendment 55 and speak to all the amendments in the group. Thank you again, convener. Can I first of all move amendment 55 in my name? This amendment deletes part of section 15 by ensuring that part 1 of the bill operates without prejudice to the rules relating to financial collateral arrangement. The reason for this is that section 1 deals with assignation or transfer of claims. As the explanatory notes state in paragraph 11, and I quote, subsection 5 provides that nothing in part 1 applies to the assignation of a claim as part of the financial collateral arrangement within the million of the financial collateral arrangements number 2 regulations 2003. Financial collateral arrangements are defined as a title transfer financial collateral arrangements or a security financial collateral arrangement, whether or not these are covered by a master agreement or a general terms of conditions. Financial collateral arrangements are a form of security arrangement designed to simplify the process of obtaining financial collateral financial collateral is also referred to and defined as either cash or financial arrangements. Again, having spoken to the law site and others in practice, I believe that the current terms of section 1 subsection 5 refer into a proposition that nothing in part 1 applies to the assignation of a claim as part of the financial collateral arrangement lacks clarity. Instead, we consider that the provisions of part 1 should be without prejudice to the rules for financial collateral arrangements. If I can now move on to speak to amendment 56 and the other amendments in this section, as the minister will be aware and the committee will be aware, out with the issue of individuals being included in this bill, this is perhaps the most interesting controversy of the legislation in that it does not include the provisions around stocks and sales, which were in the provisional draft bill by the law commission. We have debated this as a committee and I know that the minister has made the Scottish Government views very clear. I should say that it is not my intent in to move any of the amendments. They are very much probing amendments. I suppose that the two things that I am still looking for clarity from the Scottish Government on is why you think that it is not possible to do this in regard to this particular bill. Obviously, the law commission, when they drafted the original bill, thought that it was legally competent. Others have given legal advice to say that it is competent as well. I know that the minister said when he gave evidence to the committee previously that his legal advice was that it was incompetent to have it within this bill. I wonder whether he could expand on that slightly. Clearly, in practical terms, this is perhaps one of the most important parts of the bill. This will allow much greater freedom for business to take place, which is all what we want to see. If it could be included in this bill, it would seem to me sensible. I am just looking to see a bit more about legal advice. The second thing is that if the Government is off the view that it cannot be included because of whatever reason they give in a moment, can I just push the minister again? I appreciate his letter to us. He said that once the bill is passed and becomes an act, then there can be more engagement with the UK Government on this. I suppose that what I am hearing from boards again in practice is how long will this take. I appreciate that it is two Governments having to work together, but I wonder if they could give some kind of timescale as to when we would see the bill happening in practice. I will leave it there at the moment, if it is okay with you. The committee is aware that, when considering the draft bill that was attached to the Scottish Law Commission's report on movable transactions, the Scottish Government arrived at the view that the provisions relating to financial collateral arrangements and financial instruments were not within the legislative competence of the Scottish Parliament. For that reason, the bill was introduced to not include those provisions. Instead, we have always made it clear that our intention is to seek a section 104 order under the Scotland Act 1998 to effectively make the necessary provision. We recognise, stakeholders' view that it is important that the provisions in the bill apply to financial collateral and financial instruments, and we share that view. I know that you recently wrote to the Scotland Office in connection with progress in a section 104 order, and I have had the benefit of seeing that response. I hope that the committee will be assured that good progress is being made. As I have offered before, I will continue to keep the committee updated on further progress. I would like to reiterate that any eventual section 104 order will be capable of being made only once the bill has passed. With regard to timescales, it will be dictated by the parliamentary timetable. Our target for commencing this legislation is, of course, assuming that it has passed by the Scottish Parliament, has always been the spring summer of the next year, as that is when the registers and regulations should be in place. That should give us ample time to get the necessary agreements on the section 104 order, so that the provisions that are not in the bill are introduced through the 104 order will be able to commence at the same time as the registers commence. The bulk of amendments in this group are, in our view, outwith the legislative competence of the Scottish Parliament, so I am unable to support them as they would put the passing of this bill at risk, so I would therefore ask the member not to press them, and I appreciate the remarks that he made through the gastrodom being probing amendments. While most of the amendments in this group simply seek to reinsert the provisions that we removed prior to introduction because we considered them to be outwith competence, there are two amendments that are slightly different, albeit raising legislative competency concerns of their own. Amendment 56 attempts to change the position that would apply pending the passing of the section 104 order. I am aware that that was initially suggested by a number of academics as well as the Law Society of Scotland. However, we have engaged with the academics and practitioners on the SLC's working group on this point, and they are now content that matters should be left as they are pending the passing of a section 104 order. The Scottish Government believes at any attempt to say that the two regimes can coexist without making bespoke provision to reconciling any conflicting rules would be unclear, unhelpful and raise legislative competency issues. Amendment 84 imposes a reporting duty in relation to progress on the section 104 order. I think that it is clear to members. I certainly hope so from my correspondence with the committee today that there is no need for such a duty because I am fully committed to keeping the committee up to date on progress. Those updates will be provided as and when progress is made rather than being tied to an arbitrary date, which may not be a prob date. For these reasons, I would ask a member not to press any of the amendments. Can I just seek in regard to amendment 55 whether you believe that it is incompetent? Are you thinking that that is also incompetent in regard to the legislation? I think that it is simply seeking to amend something within the present legislation. I would leak clarification on that issue if possible, Minister. What I would say is that, given the progress that we are making with the section 104, which will ultimately be to ensure that the bill achieves the effects that the SLC intended for it to achieve, and given that we are looking for those provisions to come into effect at the time when the registers go live, I would say that the approach that we have set out in the legislation is sufficient to meet the objectives of the SLC objectives through the bill, as it has proposed. I recognise as a keen interest to ensure that those provisions do come online and that I can understand a desire to look for any compromise options. Given that those registers will commence, we hope that next summer, subject to the Parliament of Green at stage 3, we are making progress on the section 104 order, I would ask on that basis that the member does not press the amendments. I thank the minister for his helpful remarks. I am pleased that that timescale is still hopefully achievable by next summer. I will go and reflect on what he has said today before stage 3, but I will not be moving to section 55. Okay, thank you. The chairman will be withdrawing amendments 55. Let's see if there's any member object to that. Okay, thank you. Amendment 55 is withdrawn, and I remind members that, if amendment 55 is agreed to, I cannot call amendment 56. Okay, so, if, yeah, so, yeah, so, call amendment 56 in the name of Jeremy Balfour. Okay, already debated with amendment 55, not moved. Okay, so, does any member, I tell members agree to that or object? Okay, so, amendment 56 is withdrawn. So, it's not moved. So, the question is that section 1 be agreed to, are we all agreed? Okay, and the question is that section 2 be agreed to, are we all agreed? Okay, so, moved to the Asignations technical amendments and call amendment 1 in the name of the minister, grouped with amendments as shown in the groupings. Minister, to move amendment 1 this week to all members in the group. Thank you, convener. I move amendment 1, which is a technical amendment that relates to the possibility that they are competing asignation documents in relation to the same claim. In most cases, the claim will transfer to whichever assignee first benefited from intimation or registration of the asignation document, because that will usually be the final requirement to be made under section 3 2, and so will give rise to the transfer. However, in some cases it might not be the final requirement to be satisfied. This amendment deals with a scenario where the final requirement to be met is a claim becoming identifiable. This might happen if it is a future claim. Amendment 1 provides that if the final requirement for transfer is all met when the claim becomes identifiable as one that is covered by the asignation, the claim transfers to the person who first benefited from registration or intimation in their favour. While it should be very unusual for the same claim to be assigned by one person to different people, this ensures clarity by breaking what would otherwise have been a tie. It also ensures that section 3 5C deals and deals consistently with all the possible ways in which a tie could arise. Amendments 2 and 3 are technical amendments, which relate to the possibility that a claim may be assigned in whole or in part. Although asignation in part is likely to be rare, it is still important that suitable provision is made for it. The effect of amendment 2 is twofold. First, it provides that it is whether it is likely that asignation will make the obligation more burdensome on the debtor that matters. The question of whether the claim can be assigned in part will therefore be assessed when the asignation is made rather than it potentially appearing to be valid at the time but becoming challengeable when unforeseen events occur later. Second, at the moment section 5 provides that the requirement for a claim to be divisible in order to be partially assigned applies only where the debtor does not consent to partial asignation. However, a claim that is not divisible cannot be assigned in part. The amendment therefore makes it clear that the requirement for divisibility applies whether or not the debtor consents. Amendment 3 provides that an agreement about any expense which is attributable to the claim being assigned in part, rather than as a whole, may be made with the assigner or with the person who was a holder of the claim at the time of agreeing it. That simply recognises that an agreement with a previous holder is valid and matters do not have to be renegotiated every time the holder changes. In relation to amendment 9, it has been suggested that it should be competent to register an asignation document which assigns different claims to different people. The intention would be to restrict the associated application for registration to only the claims that are relevant to the particular assignee in question. Amendment 9, therefore, provides for this. Amendment 12 removes section 38, which supplies the transmission of movable properties, Scotland Act 1862, in relation to assignations to which part 1 applies from the bill. It replaces it with a section repealing the 1862 act in its entirety. This is because, even if assignations of financial collateral arrangements were not brought into the bill by a section 104 order, as we expect them to be, we have now satisfied ourselves following discussions with the SLC's advisory group that it is no purpose for which we would want to preserve the 1862 act. In relation to Mr Balfour's amendment 61, I understand that the Law Society of Scotland believes that the question of how long a notice it should take to be deemed to have arrived ought to be subject to a determination as to a method of service under section 86. Our understanding is that this amendment is intended to achieve that. However, unfortunately, it does not work and is unnecessary. If someone tries to intimate using a method of service that is not allowed under a determination entered into by the parties, that will not be a valid intimation as a result of section 86A. As such, it is irrelevant when the notice is taken to arrive under section 89 because it will not achieve anything. If someone tries to intimate by post in a case when a particular postal address has been agreed between the parties under the determination, intimation to a different address will be invalid as a result of section 85B. Again, it will therefore be irrelevant when the notice to the wrong address is taken to arrive because it will not achieve anything. If someone intimates by post to the address that has been agreed between the parties under the determination, the rule about when it is deemed to arrive under section 89 already applies. Indeed, section 89A includes an express reference to the fact that the relevant address may have been modified by the parties under section 6B. Amendment 61 is therefore unnecessary and will simply confuse matters. I would ask Mr Balfour not to move it. Mr Balfour's amendment 65 was also suggested by the Law Society and would mean that those acting in the place of assignees such as trustees and agents would be included in the definition of assignees. The Government does not believe that this is necessary. Legislation does not normally deal expressly with trustees and agents since the general law deals with this suitably, and it would be cumbersome to always have to mention every possible representative capacity in which a person could act. However, in this case, we actually already have a provision at section 162 that explicitly provides that someone who is required to do a thing can have someone else to do it for them. I therefore ask Mr Balfour not to press the amendment on the basis that it is unnecessary. Thank you minister and Jeremy Balfour to speak to amendment 61 and other amendments in the group. Thank you and if I can move firstly to amendment 61. As the minister has outlined, this amendment ensures that the time steered for valid intimation will also be subject to a determination as to the method of service. As he said, I think there has been some concern about rewarding in this bill as introduced that some of the detail in respect of intimation is slightly too prescriptive and more aspects of intimation, including how long after serving a notice should receipt of such notice be deemed, should also be subject to determination as to the method of the service. However, in the light of what the minister said, it would be my intention to reflect on his words and not move this today. However, I am still inclined to move amendment 65. Could this amendment change the definition of a tiny by including trustee or agent of a signeed? I accept what the minister said that there is provision for us later in the bill, but it is still my view that to have this in would be helpful going forward and again would give clarity going forward. I think the view simply in defining a signeed, the person to whom a claim is assigned does still lack clarity. Trustee or agent of a signeed can act on the signeed's behalf and it is possible for creditors to hold claims, pledges as trustees and or agents for themselves and other creditors. This amendment simply makes clear that those acting in replace of an signeed are included in the definition of a signeed. For that, I think clarity is always a good thing and I think it will just put on to the face of the bill something that people will be able to understand and refer to. In regard to the amendments moved by the minister, I will be supporting all of those. I will respond briefly to Mr Balfour's remarks on amendment 65 to reiterate the point that I made in my earlier remarks that I do not deem it to be necessary. Indeed, I would reiterate, as I previously stated, with regard to the provisions at section 116 of the bill, interpretation of the act, specifically 116 subsection 2, which states for the record where, under or by which, virtue of the provision of this act, however expressed, a person P is required or permitted to proceed in some way, the provision is to be construed as if any reference in it to P includes a reference to any person offered by P to proceed in such a way on P's behalf. I hope that that can provide assurance to Mr Balfour and the committee that the provisions within amendment 65 are not required. The question is that amendment 1 be agreed to or will be agreed to. The question is that section 3 be agreed to or will be agreed to. And call amendment 57, in the name of Jeremy Balfour, already debated with amendment 55. Jeremy Balfour to move or not moved? Not moved. Okay. The question is that amendment 57 be agreed to or will be agreed to. Amendment 58, in the name of Jeremy Balfour, grouped with amendments as shown in the groupings. Jeremy Balfour to move amendment 58, I speak to all amendments in the group. Thank you, Gwena. We're going to be bored of my voice by the end of this morning. All these amendments deal with the whole subject of insolvency. If I can just briefly take you through each one. Amendment 58, this amendment replaces an existing ground on which an individual will be considered to be insolvent. The reason for this is that section 4 for Bill provides for the legal effect of an assignation document in the event of the assailant's insolvency. Section 4 subsection 6 provides the circumstances where an assailant who is an individual or a state of which may be sequestered by the virtue of section 6 of the Bankruptcy Scotland Act 2016 becomes insolvent. Those circumstances are set out in section 4 subsection 6, 1, 2, 6. As initially drafted, they included the assigner, adrant and a trust deed for creditors or makes a composition or arrangement with creditors. Again, having spoken to those in practice, they considered and I consider that these are too vague. A trust deed could only include a privately agreed trust arrangement and, in particular, specified statutory protected trust deed. I consider that only the latter should apply. In respect of the compositions and arrangements with creditors, I note that composition was a specific technical term until 2014 when its technical use was repealed. I also note that the arrangement is a technical term in English law but not in Scottish law. I therefore consider that references to compositions and arrangements should be removed. This amendment clarifies that where the accountant in bankruptcy registers such a protected trust deed that it is a basis for recognition of his assigner's insolvency and removes reference to compositions historical technical term in Scotland with no continuing importance and arrangements a technical term in England but not in Scottish law. In regard to amendment number 59, this amendment ensures that a company voluntary arrangement, a CVA, only constitutes the insolvency of an assigner for the purpose of the assignation provisions in the bill if that affects the relevant claim in question. Again, that will prevent irrelevant CVA's from affecting assignations and reflect the position adopted in respect of administration receivers set out in section 4, subsection 6B3. Section amendment number 60, again, this amendment ensures that a restructuring plan which affects an assign claim under part 26A of the Companies Act 2006 constitutes insolvency of an assigner. Part 26A of the Companies Act 2006 deals with arrangements and reconstructions of companies in financial difficulty. Section 91A sets out the provisions of part 26A to apply to a company. That section applies where a company is encountering financial difficulties that may affect the company's ability to carry on business as not on-going concern and that a compromise or arrangement is proposed between the company, its creditors or shareholders with a view to eliminate, reduce, prevent or mitigate the financial difficulties that the company is experiencing. In other context, for example, section 233B of the Insolvency Act 1986, part 26A arrangements are recognised as being relevant insolvency procedures. The bill makes no reference to such arrangements under the Companies Act 2006 and I consider that it should do so to ensure consistency with a wider insolvency law. In line with the approach taken in respect of administrative procedures, it should only apply to the extent that it affects the claim. If I can move now to amendment number 70, which is still within this grouping, this amendment again ensures that a reconstruction plan under part 26A of the Companies Act 2006, which affects the incumbent property constitutive insolvency of an assigner. Part 26A of the Companies Act 2006 deals with arrangements and reconstruction of companies in financial difficulty. Section 91A sets out the provisions for part 26A to apply to a company. This section applies where a company is encountering financial difficulties that may affect the company's ability to carry on business as an on-going concern and that a compromise or arrangement is proposed between the company and its creditors or shareholders with a view to eliminate, reduce, prevent or mitigate the financial difficulties with the company's experience. In other context, for example, in section 233B of the Insolvency Act 1986, part 26A arrangements are recognised as being relevant insolvency procedures. The bill again makes no reference to such arrangements under the Companies Act 2006 and I consider that it should do so to ensure consistency with wider insolvency law. In line with its approach taking respect of administrative receiverships, this should only apply to the extent that it affects the incumbent property. If I can now move to section 71, again, this amendment provides and replaces an existing ground on which a provider who is an individual will be considered to be insolvent. Section 47 of the bill provides for the legal effect of the creation of a pledge in the event of a provider's insolvency. Section 473 provides the circumstances where, and I quote, provider who is an individual or the estate of which may be secreted by virtue of section 6 of the Bankruptcy Scotland Act 2016 becomes insolvent. These circumstances are set out in section 47 subsection 3, 1 to 6, as initially drafted, included, where provider granted a trust deed for creditors or makes a composition or arrangement with creditors. Having again spoken to Rose with him a profession, it is my view that we should consider that these are too vague. A trust deed could only include a privately agreed trust arrangement and also a particular specified statutory protected trust deed. We consider that, I consider and we also consider that the latter should apply. In respect of the compositions and arrangements with creditors, I note that the composition was a specific technical term until 2014 and when its technical use was appealed. As I said previously, it is a technical term used within English law, but not, as I understand, within Scots law. I therefore consider that reference to compositions and arrangements should be removed for clarification. The amendment would then clarify where they counted in Bankruptcy registries such a protected trust deed is the basis for recognition of the provider's insolvency and remove references again to compositions and a historical term and arrangements that are technical term in England, but not in Scotland. Finally, you will be glad to hear, convener, in regard to these particular amendments. I move to amendment 72. Again, this amendment ensures that a company voluntary arrangements CVA only constitutes the insolvency of a provider for the purpose of applied provision immobil, if it affects the relevant incumbent property in question. This prevents irrelevant CVA's from affecting statutory pledges and reflects the position adopted in respect of administrative receivers set out in section 47 3b3. I appreciate that these are fairly technical amendments, which no doubt lawyers will have years of discussion to come forth, if accepted. However, it is important to have these amendments down, because we need clarification in regard to insolvency and how the bill relates to other acts already in place. For that reason, I hope that the committee will accept them this morning. Thank you, convener. Just for confirmation, are you moving amendment 58? I am, convener. So any other colleagues? Any questions or any points? Convener, I note these amendments form part of the Law Society of Scotland response to the committee's call for written evidence at stage 1. I understand that the Law Society consider amendments 58 and 17 necessary, because it thinks that the existing references are too vague and consider that only a statutory protected trust deed should be in scope. We tend to think that the wording that is introduced in the bill is amply flexible to cover a number of situations, whereas to remove and replace with what these amendments proposed is to only allow for when a protected trust deed is registered by the accountant and bankruptcy at which point it becomes protected. It is therefore, in our view, too restrictive. The more flexible wording as drafted would include the granting of a voluntary trust deed, as well as a protected trust deed. However, Law Society consider amendments 59 and 72 are necessary to ensure that what they consider irrelevant company voluntary arrangements are prevented from affecting assignations and statutory pledges. Our view is that this is not necessary. The relevant subsections are for ascertaining if an assignor or provider is insolvent. Whether any voluntary arrangements include this claim or property is unimportant to that consideration. Finally, amendments 60 and 71 are considered necessary by the Law Society. On the basis that the bill makes no reference to such arrangements under the Companies Act 2006, they consider that it should do so to ensure consistency with wider insolvency law. Those amendments seek to add a further catch to the corporate insolvency net. Part 26A of the Companies Act 2006 enables companies to apply to the court for an order sanctioning arrangement or reconstruction agreed with a majority of members or creditors should they find themselves in financial difficulty. Section 901F of the Companies Act 2006 refers to the process of the court sanctioning any such agreement. We have considered this issue previously and the view taken was that provisions under part 26A mainly refer to companies in difficulty as opposed to those that are insolvent. We tend to think that this amendment has no utility in expanding the corporate insolvency provisions in the bill as introduced. The Scottish Law Commission recognised that the law on insolvency as it related to assignations and pledges was complex. It was partly for that reason that the included a power to adjust the definition of insolvency if necessary. While we should not defer this matter to regulations if we are convinced that a change is appropriate now, we are not convinced that it has been shown that this is indeed the case. I am concerned that the group of changes that are being proposed may not be sufficiently cohesive, for example. The suggestion seems to be that voluntary trustees should not be included, but that voluntary restructuring plans should be. In addition, the amendments did not seem to have been as fully considered as they need to be. Given that amendment 71 erroneously changes the definition of when an individual is insolvent when the item in question is about being subject to a company restructuring plan. My preference would therefore be that we do not rush into any changes just now, and instead we take the time that is needed to consult with relevant academics and the accountant in bankruptcy, safe in the knowledge that we will be able to adjust this at a later stage if it is agreed that any changes are appropriate. For those reasons, I would ask the member not to press the amendments. Jeremy Balford to wind up and to press or withdraw the amendment. Silver just 30 years ago that I sweated blood and tears when I was trying to do company law and I was pleased to say that I never practised it in my life. However, I have really looked at these amendments and I have had conversations and I do actually slightly disagree at this time with the minister's position. My own view is that we do need some more clarity around this whole area of insolvency. It is as the law commission and as the minister said this morning very technical, but if we can bring any more clarity to a very technical area, then I under review that these should be on the face of the bill unless we should become an act. If we do not achieve what I think we achieve, as the minister has said, there is room to bring forward in a later stage a change to that. However, I think that that clarifies the situation and so it would be my intention, convener, to move amendment 58 in my name. The question is that amendment 58 be agreed to or we all agreed. We will be a division. Can I follow those who agree with amendment 58? The result of the division is three, four and two against, so the amendment is agreed. I call amendment 59, in the name of Jeremy Balfour. Already debated with amendment 58, Jeremy Balfour to move or not to move. So the question is that amendment 59 be agreed to or we all agreed? No, there will be a division. All those who agree with amendment 59, please raise your hands. All those who are against. So the result is three, four and two against, so amendment 59 is agreed to. I call amendment 60, in the name of Jeremy Balfour. Already debated with amendment 58, Jeremy Balfour to move or not to move. So all those who agree with amendment 60, please raise your hands. Oh sorry, oh sorry, oh yeah. So the question is that amendment 60 be agreed to or we all agreed? Yes. No, okay. So all those who agree, please raise your hands. All those who are against. So the vote is three, four and two against for amendment 60. So it's agreed. So the question is that section 4 be agreed to or we all agreed? Agreed. So I call amendment 2, in the name of the minister. Already debated with amendment 1, the minister to move or not to move. Moved. Okay. And so the question, oh sorry, yeah. Yeah, yeah. Now the question is that amendment 2 be agreed to or we all agreed? Yeah, yeah. So that's it. The amendment 2 is agreed. I call amendment 3, in the name of the minister. Already debated with amendment 1, the minister to move or not to move. Moved. And the question is that amendment 3 be agreed to or we all agreed? Yeah. So amendment 3 is agreed. The question is that section 5 be agreed to or we all agreed? Yeah. The question is that sections 6 and 7 be agreed or we all agreed? I call amendment 61, in the name of Jeremy Balfour. Already debated with amendment 1, Jeremy Balfour to move or not to move. Not moved, convener. Okay, thank you. So the question is that section 8 be agreed to or we all agreed? Agreed. The question is that section 9 be agreed to or we all agreed? Yeah. So move on to assignations, the debt or protections. I call amendment 62, in the name of Jeremy Balfour. Grouped with amendments 63, 4 and 8. So Jeremy Balfour to move amendment 62 and speak to all the amendments in the group. Thank you. If I can move, initially, amendment 62, in my name, Mr Amendment, delete section 10, 3b and c off the bill. Section 10, sorry, section 10 subsection 1, states that a debtor will satisfy the debt if a debtor in good faith paid the last person who they knew held the debt. And section 10 subsection 3 includes provisions that a debtor will not be considered to have performed other than in good faith just because the debtor is deemed to have received notice of assignation of the debt. I consider that if your signee can demonstrate that the processes for intimation have been completed with, then the onus should be on the debtor to demonstrate that they were in good faith. In regard to amendment 63, the bill states that the debtor will satisfy the debt if they, in good faith, pay the last person who they knew held the debt. The bill currently states that the debtor will not be considered, so it will not be in good faith just because they have received an intimation of the assignation of the debt. This amendment removes that provision and should be read in conjunction with the previous amendment. The reason for that is that I consider that if your signee can again demonstrate that the processes for intimation have been complied with, then your onus should be on the debtor to demonstrate that they were in good faith. I look forward to hearing the minister's reaction to these two amendments and I look forward to hearing the explanation for the amendments 4 and 8 in his name. I invite the minister to speak to amendment 4 and other amendments in the group. Amendments 62 and 63 in the name of Jeremy Balfour, where I know included in the Law Society of Scotland written evidence to the committee at stage 1 of the bill. I understand that the Law Society's view is that if your signee can demonstrate that the processes for intimation have been complied with, then the onus should be on the debtor to demonstrate that they were in good faith. Those amendments remove a protection for a debtor who would have been able to rely on the provisions in section 10. Under the current law, a claim would only transfer if the assignation was intimated to the debtor. However, the effect of the changes in the bill is to extend the scope of intimation and to enable registration as a method of effecting transfer of a claim. As such, the debtor may not know that a claim has been assigned and may in good faith pay an assigner who is no longer the creditor. The onus is placed on the person making the assertion that a debtor has performed other than in good faith. Whether or not a debtor has performed in good faith will depend on the facts of the case. My view is that those amendments do not take into account the extension to the scope of intimation and that, in reverse in the burden of proof, they would be unfair to the debtor. How could a debtor prove a negative? That is effectively what they would be required to do if they have not in fact received notification even though they may be deemed to have done so. The person intimating the assignation could choose to do so in a way that allows for delivery to be recorded, so they could choose to do so in a way that would give evidence of delivery, whereas the debtor has no control over that. For that reason, I would ask that the member withdraws or does not move those amendments. The new section provided by amendment 4 would provide a debtor performing in good faith with further protection, both where the debtor is unaware of a condition pertaining to the assignation of a claim or where the debtor is aware of the condition but mistakenly thinks that it has been met and performs to the assignee. The claim will not have transferred because the condition has not been satisfied, but in the circumstances that I have described, which mean that the debtor performs to the assignee, the debtor will be discharged from the claim to the extent of that performance because they have acted in good faith. Section 14 applies where notice of an assignation document has been given to a debtor by the assignee rather than the assignor. It has the effect that the debtor may request from the assignee reasonable evidence of the assignation document having been granted. Where an assignation document has been granted, the debtor will be entitled to withhold performance from each of the assigner and the assignee until the evidence is provided by the assignee. Where an assignation document has not been granted, the debtor will be entitled to withhold performance until either the purported assignee or the purported assignee confirms in writing that an asignation document has not been granted in respect of the claim. Section 14 also allows a debtor who has not received the intimation of an asignation but becomes aware that an asignation document may have been granted to ask a purported assigner to confirm whether that is the case and to walk with full performance until they receive that confirmation. Amendment 8 makes it clear that if a debtor is a co-debtor and only one co-debtor makes a request for information, the protection of section 14 to withhold information until the evidence is provided is available only to the co-debtor who made the request and not other co-debtors. The other co-debtors are likely to be unaware of the request for information and it follows that their obligation should not also be suspended. Thank you. First of all, any other colleagues want to come in? So, Jeremy Balford to wind up and press overdraw. Thank you. In regard to the two amendments moved by the Government for Amendment 8, I do support those. I think it is a balancing act between getting the right for a debtor and a creditor right, but I do accept what the minister has said this morning and I would like to go away and reflect further on what his comments have made and for that reason I seek your permission to withdraw amendment 62. Okay, thank you. So, Jeremy Balford seeks to withdraw amendment 62, does any member object? Okay, thank you. So, amendment 62 is moved and drawn. So, I call amendment 63, any member, Jeremy Balford, already debated with amendment 62. Jeremy Balford to move on. I would seek to withdraw that one as well, not moved. Okay, not moved. Okay. So, the question is that section 10 be agreed to or we all agreed. Yes. The question is that sections 11 and 12 be agreed to or we all agreed. So, I call amendment 4, any member with the minister, already debated with amendment 62. Minister to move or not move. Moved. Okay, thank you. So, the question is that amendment 4 be agreed to or we all agreed. So, we move to assignations, a certain defence or right of compensation. So, I call amendment 47, a name of the Colonel Mawrhan, grouped with amendments as shown in the groupings. So, I call Mawrhan to move amendment 47 and speak to all the amendments in the group. Thank you, convener. Good morning. I start by saying that we, you know, as I've spoke to the minister, I'm very broadly supportive of the bill and I really thank the minister and the team for the discussions that we've had. I know that the direction we want to go in is to get this bill right for people. So, it's much appreciated and as I go through, I hope it's shown that I have listened to the discussions with the minister and to the sector, particularly around consumer protection. So, I move amendment 47 and speak to my other amendments in this group. In moving amendment 47, I seek to make it clear that the possibility of waving of defence being removed based on agreement between a signer and debtor is removed. Amendment 48 is simply consequential of amendment 47, as there would be no agreement to prevent or restrict. I am grateful, as I said to the minister, for considering such amendments, and if he can set out clearly how the Government can provide assurances to small businesses and others that wave of defence is protected, I would not be inclined to press those amendments. Convener, in bringing forward amendment 49, I have similar intentions to that in amendment 47, and it's my hope that we will provide the maximum level of support to sole traders and to individual consumers. Therefore, again, I look to the minister and his remarks to highlight how he will ensure that the bill will offer the protections that this amendment would otherwise provide. The aforementioned points remains applicable to my moving of amendment 50 also. As for amendment 51, I consider it appropriate that there are adequate and sound reporting mechanisms in place to ensure that the impact of the wave of defence clause is given consideration. Indeed, steps are in place to ensure that MSPs can question Government over the impact of the clause should any negative impacts be identified and require mitigation. It may be worthwhile for the minister to confirm whether he is content that Parliament can request a review at any time, and indeed that he can see with a strong degree of certainty that such calls for a review would be accepted if challenges were to arise. It is my view that having reporting expectations set out within the legislation removes those challenges. We may face further down the line if ministers find themselves unwilling to review legislation that is having unintended negative consequences. Carol Mawkins' amendments would remove the ability of debtors and signers to agree to wave defences that, in relation to a claim that the debtor might have against the assignee. The amendments seek to remove that right as a whole, but also alternatively to remove specifically the right of individuals who are not acting in the course of a business and sole traders to make such an agreement. I know that the committee said in its stage 1 report that it had considered whether the option to wave defence clauses should be removed for all, but it was mindful of the potential impact of this on business freedom and on small businesses who may wish to retain this possibility. I recognise that Ms Mawkins asked for reassurance, so I would like to stick to the record that I had met with Colin Borland, the policy lead for the Federation of Small Businesses in Scotland, and asked if they had any concerns about waiver of defence clauses. The FSB indicated that this was not a subject in which they received any representations from their members, and it was not one in which they held strong views. The Scottish Government has also not received any representations from members of the public about the practice of waiver of defence clauses. It would therefore seem that this is not an issue of concern to stakeholders, and it would be unfortunate if business freedom to make such agreements were to be removed in the absence of any harm being identified. Amendment 51 would place a duty on Scottish ministers to prepare and publish a report setting out the impact of the waiver of defence clause in section 13.1. We will want to continue dialogue with organisations such as the Federation of Small Businesses to gauge how the legislation is helping them or possibly hindering them, and we will learn from that engagement. A formal review after a prescribed period of time seems unnecessary, given the lack of any indication of current problems. It would be dictating now the use of future resources when there may never be any issue with this provision, and attention might be better used elsewhere. I appreciate what the minister is saying, but if everything is fine, the review can be a very quick process, but around this area there is concern that we don't know how this will work in practice. I would have thought to have that more formal opportunity to carry out a review would give stakeholders that opportunity to do it, because if they don't, how do stakeholders then go about having that input into how it's actually working in practice? I recognise at the point that Mr Balfour is making and indeed what the original intention is behind Ms Malkin's amendment. The Government has regular dialogue with a range of business representative organisations. Indeed, there is regular dialogue and engagement at ministerial level as well, so should any issues arise, there would be an opportunity in the first instance for that direct communication to a Government where a Government could consider as a consequence of that direct engagement whether or not any review or further action was required. Beyond that, of course, Parliament has a very important role to play. All ministers are accountable to Parliament, all ministers are subject to questions by other Parliamentarians and indeed by committees. There are avenues available whereby concerns should arise, either through direct engagement with the Government from representative organisations or through the activities of Parliamentarians within Parliament holding the Government to account. There is that opportunity for concerns to be flagged and for any review to be undertaken, and I should add that it would not just be for Government to have that particular opportunity, should it be required, but Parliament at any time in any capacity, be it committees, it otherwise can choose to instigate a review of any particular piece of legislation. Indeed, it is something that is routine and good practice. Given the continued close engagement that takes place between Government and business and the fact that ministers and Government are held to account from Parliament, which would provide an opportunity for questions and updates on how the provisions of the bill are operating in practice, Ms Mocken would consent to not pressing her amendments. As for the Government amendments, convener, those are intended to respond to criticism of the effect of section 13, which was made by stakeholders and practitioners in the field in relation to rights of compensation and other similar rights that the debtor may have against to assign her. Amendment 5, 6 and 7 respond to concerns of members of the Scottish Law Commission's advisory group on movable transactions, which related more to the impact of the provision on compensation, set-off, retention, balancing of accounts or counterclaims rather than on defences. Amendment 5 and 6 remove wording that was considered might not exactly replicate the existing common law rule, whereby a debtor can, after the claim is assigned, assert a right of compensation, set-off and so on, which the debtor had against the assigner against the assignee. Those provisions are replaced by amendment 7, which is intended to preserve the current position of where notice of the assignation is intimated, but has the effect of ensuring that the registration of an assignation is not to be treated in the same way as intimation, whereas giving notice of intimation of the assignation would have the effect that subsequent dealings between the assigner and the debtor were not being included in any calculation of compensation, etc., that the debtor could not assert against the assignee. Registration is not to have that effect, unless accompanied by other actings that would be treated as notice to the debtor that the claim had been assigned. I appreciate the minister's comments on how seriously they have taken the matter, so I am not going to press 47. The question is that amendment 5 be agreed to or will be agreed to. Amendment 58, in the name of Carl Mawkin, is already debated with amendment 47. Amendment 49, in the name of Carl Mawkin, is already debated with amendment 47. Amendment 50, in the name of Carl Mawkin, is already debated with amendment 47. Amendment 6, in the name of the minister, is already debated with amendment 47. The question is that amendment 6 be agreed to or will be agreed to. Amendment 6, in the name of the minister, is already debated with amendment 47, minister to move or not move. The question is that amendment 7 be agreed to or will be agreed to. The question is that section 13 be agreed to or will be agreed to. Amendment 51, in the name of Carl Mawkin, is already debated with amendment 47, Carl Mawkin, to move or not move. Mi rydw i'n arharfonu'r mynd i gyd. Ie ddim yn adael ar gyfer y dyfodol. Mae'r ddeifasio, ein dweud i'r ddysgu. Ariadau yn ddedeithio eich ddysgu. Mae'n ddysgu i'r ddysgu i'r ddysgu i'r ddysgu i'r ddysgu. Mae'n adael ar gyfer y dyfodol. Dim enw i'r ddysgu i'r ddysgu, ond mae'n adael ar gyfer y ddysgu i'r ddysgu. Hysul rai imoedd fawr,aur dמ׷ngwm? Mewn fynd yn gwaith rai àps amreiau Eggsford. Felly mae'r eu rai llinwDI yn gafoedd y FF44. Mae ymgynghwmtaeth yn fawr, er ôl o rai你知道 pwysgleddau llinwDI yn gafod. Edyd hyn y cwm업au llinw di nhw'n digwydd yr pwysel oedd, o saff pob hi'l newid hi. The question is that amendment 9 be agreed to or will be agreed. The question is that sections 23 to 30 be agreed to or will be agreed. We then move to fees. Amendment 64, in the name of Jeremy Balfour, group with amendment 81. Jeremy Balfour to move amendment 64 and speak to both amendments in the group. Thank you, convener. This is really an amendment for future proofing the bill, which will hopefully become an act in regard to the fees for third sector organisations. There was a helpful evidence session that we held with a number of groups and also have received written evidence around this as well. I am asking in regard to, if a third sector organisation is having to go to the register, then the fee would not have to be paid by them for that service. I know that the minister helped to vote to the committee either this week or the end of last week to say that the Government was not persuaded in regard to that. I would be interested to know a wee bit more about why the Government has gone down this road. I accept two things. I accept firstly that we do want the register to be not a lost leader, if I can put it that way, but to break even. We also need to protect some of the most vulnerable people in our society from having an expense that may stop them being able to go forward. Secondly, I accept that the fee, as is imagined by the Government, which will come into force next year, is not a large fee comparatively, but we do not know where that fee will go in future. There is an opportunity for that fee to stop people who are vulnerable in our society being able to get access to the register that others who can financially afford it to be able to do that. It is not my expectation that people from third sector organisations will be using this on a frequent basis, but I do think that where it is necessary for a third sector organisation to do it, that fee should be waived. I look forward to hearing what the minister has to say in regard to those two particular amendments. I note that amendments 64 and 81, in the name of Jeremy Balfour, will exempt not-for-profit money advisers from the fee structure, which will apply to searches of the Assygnation Record and the statutory pledges record in cases where those advisers do not charge individuals for their services. I appreciate that this takes forward a recommendation to that effect in the committee's stage 1 report, although, of course, that was written at a time when the bill would have allowed individual consumers to grant a pledge. The committee will be aware that I have set out the Scottish Government's position in two separate letters to the committee, and I am happy to reiterate that position now. The Scottish ministers are, in consultation with the Keeper of the Registers of Scotland, empowered by section 110 of the Land Registration Act 2012, to set the level of fees that apply to cover the costs of maintaining and operating the registers under the Keeper's Control. Any proposal to exempt any class or group of persons from the fee structure will mean that the costs will need to be found elsewhere, either by passing them on to other users of the registers at one moment please, which I think we can all agree would be unfair, or by those costs being met from the public parts. That needs very careful consideration given the current budget pressures that we are facing. I am happy to give way. I thank the minister for giving way. I question whether we think that it is all fair. The argument that I would put back in response to that is that business and commercial users of this legislation are getting a serious benefit from it passing. In that, should the fees that they pay to access the register not be used to help protect the most disadvantaged in our society? I am about to come on to a couple of practical points, Mr Mundell. You will be aware that I have brought forward amendments today to remove individuals from being able to grant a statutory pledge under part 2 of the bill. If this change is made, it is unclear to me why not-for-profit and money advisers would be routinely searching the register of statutory pledges on behalf of their clients. As I indicated in my recent letter, there is also some doubt over whether searches of the register of assignations would be of much assistance to not-for-profit money advisers as where debts have been assigned in a bulk assignation transaction. It is highly unlikely that the debtor's name will be on the register and because the register can only be searched by reference to the assigner of the debt, not the debtor. In addition, the system has been designed so that the debtor is not expected to search the register. That is why the bill provides that a simple failure to search the register does not mean that the debtor is acting in bad faith if they make payment to the original creditor. It is also important to recognise that the fees that will apply for registration events and searches in the two new registers will be the subject of consultation before the fee structure is established in regulations under the bill. That consultation is, in my view, the best vehicle for a proper examination of all the issues, and I am happy to reassure members of the committee that the consultation will explode the issue of the exemptions. I therefore think that it would be inappropriate to bring forward any part of the fee structure for the two new registers in advance of that consultation. It is for reasons that I would ask the member not to press these amendments. Jeremy Balfour to round up and press or withdraw amendment 64. I think that I said in my opening remarks around these two amendments, but I did not think that that would happen on a frequent basis. The minister said routinely, and I agree with him. I hope that, if we get this legislation right, it will be the exception rather than the rule, which I think then leads to a slight contradiction in regard to his argument, saying that this is going to put such an extra cost on others to meet because they are going to be using it so often. I think that this is something that will only be used irregularly, but it may well be required from time to time as the bill and as the act develops. I think that it is an important method for the Scottish Government to set out where we think we should end up. We do not think that the referred sector should be involved in having to pay the fee. I accept that the minister said that there is going to be consultation around this once the bill becomes an act, but I do still think that, certainly from this committee, we are of a view in our report that this should not happen for non-for-profit third sector organisations. I think that it is quite a clear message that we want to give both to the public and to the Scottish Government, but this is not our role. We want to go down. For that reason, I seek to move amendment 11 in my name. The question is that amendment 64 be agreed to. Are we all agreed? Yes, he is. There will be a division. All those in favour of amendment 64, please raise your hands. All those against. The result of division 64 is 3, 4 and 2 against. Amendment 64 is agreed. The question is that section 31 be agreed. Are we all agreed? The question is that sections 32 and 33 be agreed. Are we all agreed? Yes. We move to the response to information request. Amendment 10, in the name of the minister, is grouped with amendments 31, 32, 33 and 34. Amendment 10, in the name of the minister, is grouped with amendments 31, 32, 33 and 34. Section 105 makes it clear that a person entered on the register as of a secured creditor in respect of a statutory pledge should be obliged to respond to a request for certain information about that pledge. Subsection 1A sets out that the information to be provided in response to a request will vary depending on the facts. If the person is a secured creditor, they can be asked to specify first whether property specified in the request is encumbered property and second to describe the secured obligation. If the person registered as a creditor is no longer a secured creditor or has never been a secured creditor, they must provide information to that effect and if relevant details of the person to whom the assigned pledge and any further known details of subsequent assignees. Section 105A 2 provides that a secured creditor should also provide a description of the secured obligation. The committee has, however, received representations to the effect, which is not clear why a secured creditor should disclose the nature or extent of a secured obligation to anyone other than the provider of the pledge, who will have this information anyway. We understand that this disclosure requirement does not arise in relation to other types of security interests. It is therefore felt that there ought to be a limit to what information an entitled person should be permitted to obtain pursuant to section 105, given that they will obtain confirmation of whether or not their relevant property comprises encumbered property under section 105A 1, which is what should be important. The deletion of section 105A 2 will remove the requirement to provide details of the secured obligation and amendment 32 provides for this. Amendment 31 and 33 are consequential on this change. Amendment 10 and 34 deal with a different aspect of information requests. If an entitled person does not receive a response to a request for information about a statutory pledge, they can apply to the court in respect of that failure under section 156. Amendment 34 simply permits a court to stipulate a period other than 14 days to require a secured creditor to respond to requests for information under a court order, although 14 days will remain the default period. Amendment 10 makes a similar change in relation to section 34, under which an entitled person may ask a person identified in the assignations record as the assignee for information about whether a claim has been assigned or whether a condition has been satisfied, and the request is not complied with the court may order a response. Amendment 10. Amendment 10 be agreed to. Amendment 11, in the name of the minister, is grouped with amendment 35. Amendment 11 speaks to both amendments in the group. Amendment 11 remains section 35 of the bill so that failure of the keeper's search system in relation to the assignations record and the register of assignations will be added to the list of scenarios where the keeper will be liable to pay compensation for any loss suffered as a result of the failure to identify the assigner correctly. The issue applies equally to the register of statutory pledges as to the register of assignations, and so amendment 35 makes similar provision to section 107 of the bill for the statutory pledges record where a search fails to correctly disclose the provider of a statutory pledge. To be clearer, those amendments are not about wrong information being submitted by the applicant or entered into the register by the register of Scotland. Rather, they cover the situation where the register itself is correct, but the search engine could malfunction and does not disclose the information sought correctly, in which case the keeper should be liable if the searcher suffers loss as a result of that failure. The question is that amendment 12 be agreed to or agreed to, and the question is that section 38 be agreed to or agreed to. We move to the report on assignations. I call on amendment 52, in the name of Karol Mawrchan, in a group on its own Karol Mawrchan to move and speak to amendment 52. I move amendment 52. I do not wish to repeat myself as this amendment serves as a similar purpose to that of amendment 51. Similarly, at the end of section 38, I wish to make it incumbent upon government to report on the assignation of consumer credit debts within three years, considering in particular the impact the removal of the need for intimation has had on debtors. Again, I consider it important that we monitor impacts and produce relevant reports to ensure that we are constantly developing the bill and ensuring that it is continuing to meet its intended needs. As the committee is aware, the legislation makes it possible for intimation by means of registration of the assignation document in a new register of assignations. This is intended to address concerns about the current system being expensive and cumbersome due to the need to intimate to all debtors, as well as the inability to deal with future claims and future debtors. There is a misconception that currently in a bulk assignation of consumer debt, assignations are intimated to debtors and that the legislation will remove the need to intimate to such debtors. In fact, the committee has heard evidence that due to the various workarounds, such as using English law, put in place to effectively circumvent the difficulties with the current system, debtors are currently not being notified. That is not problematic because either that the parties are actually happy for the debtor to continue to pay the original person, or there is a protection for debtors who do not know to pay the new person in those cases where the payment right ought to have transferred across. It is therefore difficult to see how amendment 52 would work in practice, as it is based on a misunderstanding that such intimation is currently routinely taking place. In particular, subsection 2 refers to the removal of the need to intimate to debtors, which, as I have just mentioned, ignores the fact that debtors are most commonly not being notified at present and a bulk assignation of consumer debt, because those are done via one of the various workarounds. I accept what the minister said there, but it is not part of the reason for this piece of legislation to encourage intimation now to take place on a more regular basis. I accept that because people have been using the English law to make this work that intimation has not been happening, but surely if we now have this in place, intimation will be more common. The provision is to introduce a new register of assignations, which is about simplifying the existing process. We have a defactal process at the moment where intimation is not taking place, which requires these complex workarounds. The introduction of the register of assignations will mean that these complex workarounds are no longer required. As such, intimation will still be an option that will be available, but it is not, as is suggested by the amendment, something that is being removed. It is not the reality at the moment. I think that the amendment reflects, in my view, a misunderstanding of what the reality of the current situation is, which is that these workarounds are being used regularly. As such, what the bill is seeking to do, among other things, is to ensure that, rather than having to use these complex workarounds in Scotland, we will have access to the new register of assignations, which will help to simplify that process. I want to add that, as I said in my letter to the committee earlier this month, when I met with a range of consumer and money advice representatives to discuss stage 2 amendments, their view was that nothing more was needed in relation to consumers and assignation of debt. In the event that their view on this were to change in the future, we would of course engage with them at the time that happened. However, the prescriptive nature of a predetermined review would not lend itself well to that. I hope that, with reassurance to the committee age and understanding that this amendment is not needed, it is not pressed. I appreciate the minister's remarks in that regard. Given the discussion that has happened, I will not press 52 at this stage. I call amendment 65, in the name of Jeremy Balfour. I have already debated with amendment 1. Jeremy Balfour to move or not move. I call amendment 65, in the name of Jeremy Balfour. I call amendment 66, in the name of Jeremy Balfour. I have already debated with amendment 55. Jeremy Balfour to move or not move. I call amendment 64, in the name of Jeremy Balfour. I have already debated with amendment 64, in the name of Jeremy Balfour. I have already debated with amendment 64, in the name of Jeremy Balfour. Amendment 13 relates to section 42 of the bill, which reforms and codifies the law on delivery of property to a secured creditor for the purpose of creating a possessory pledge. In relation to the subsection 1C, it had been thought that it was necessary to provide that a person holding property on behalf of a creditor should be a fully independent third party. Representations were, however, made to the committee that they mentioned that this may not always be possible or desirable. We understand that delivery of warehouse goods is sometimes affected for the purposes of creating a pledge by instructing the custodian to hold the goods for the pledge when the custodian is a sister company of the pledger. On the basis that the pledge does not control the custodian. Reference to such custodians has been independent of the pledge provider appears to eliminate this current option and may require increased custody costs to be incurred by the pledge provider. Amendment 13 therefore simply removes the requirement for the holder of the property to be fully independent. Amendment 21 makes a minor change to the position where a secured creditor wishes to purchase all or any of the property, which is the subject of a pledge enforcement notice. That already has to happen by means of a public option. However, instead of the price having to be one that bears a reasonable relationship to market value, it would now have to be that price or more. That would allow a secured creditor to purchase something at above market value if they wanted to do so. Amendment 27 tweaks the effect of section 92-6 of the bill, which deals with whether an entry in the statutory pledges record will be considered to be seriously misleading in relation to the description of property, which is encumbered by a statutory pledge. The amendment is technical and intended to remove any doubt that, if it is not quite clear whether property is of one type or another, it may be described as being two different types of property. At the moment, the registration would be ineffective if a view was taken that one of those descriptions was erroneous. The amendment will ensure that the registration would be effective so long as it was described as being of the type that it actually is. A search of either type would disclose the property. Amendment 29 relates to the procedures around correction of the register of statutory pledges in a case where the registered creditor has failed to comply with a demand for correction from a person with an interest in the pledge. The amendment relates to the right of a secured creditor to object to a proposed correction under section 97-4. It may be that, in some rare cases, the party who is the registered secured creditor may not actually be the secured creditor due to an error or an off-register assignation. It would seem appropriate that the true secured creditor should be entitled to object to the proposed correction. The right to apply to the court to oppose the making of a correction is therefore broadened out by the amendment to the actual secured creditor as well as the registered secured creditor. The amendment also makes provision for the registered creditor to pass on the notice of the proposed correction but subject, of course, to the registered creditor being able to do so. Amendment 39 and 41 respond to the committee's comments on the Delegated Powers memorandum and its recommendation in its stage 1 report that the Government amend the bill at stage 2 to make regulations under section 5038 subject to the affirmative resolution in all cases so that there could be enhanced scrutiny of any proposed correction. The committee has proposed to specify the classes of motor vehicle that certain protections should not apply to. The committee recommended that the powers should be amended to be subject to affirmative procedure in all cases and I am happy to comply with that request. Turning to Mr Balfour's amendments, I understand that amendment 79 is intended to clarify that only prior ranking diligence can extinguish a pledge. However, the section amended by this amendment is not concerned with the ranking of such things. Section 76 is only concerned with when an application for correction must be made. However, the level of description that is used here will have no effect on the law of the interaction of pledges and diligence. Indeed, I am concerned that this amendment could have the opposite effect from that which is intended because it could be read as implying that only a particular type of diligence is to result in a correction but all diligence would extinguish the pledge. Therefore, I ask Mr Balfour not to press this amendment and if he has particular concerns about the general law in this area, I am happy to put those concerns to the SLC's advisory group on his behalf. Amendment 83 would add in trustees and agents to the definition of secured creditor on the bill. However, that definition already includes any successor and title or representative of a secured creditor. There is also further provision made about representatives at section 162. As a result, we believe that this amendment is unnecessary and potentially confusing. I would ask Mr Balfour not to press it on the basis that the policy that I believe these amendments are designed to achieve is already provided for. I move amendment 13. I thank the minister for his comments so far. He is right that amendment 79 does seek to clarify that only the execution of prior bank diligence will extinguish a statutory pledge. However, in the light of his comments that he made earlier, I will not be moving this. I will go away and seek to reflect on it in regard to stage 3. In regard to amendment 83, this goes back to a previous debate that we had earlier this morning because, again, this amendment is to extend the interpretation of the secured creditor. I note that the minister believes that this is already in the bill and I accept it, but I do still think that this gives greater clarity and perhaps I can explain briefly why. The bill does not include a trustee or agent with the interpretation of a secured creditor. This amendment provides a full definition of the parties to find a secured creditor. In corporate finance transactions, it is likely that a club or syndicate of lenders jointly lend to a corporate debtor. Here, one more takes security in their own name as security agent or security trustee to hold the security for the benefit of all lenders. Thus, we could have, for example, HSBC, Bank of Scotland, Royal Bank of Scotland jointly agreeing to advance our loan to an ABC Ltd in various proportions of one of them, say the Bank of Scotland, holding our security granted in respect of the aggregate amount of the loan owned to our lenders. While Bank of Scotland would be the benefit of the security, it would be misleading to think of them as the sole beneficiary of the security, as they are holding the security as trustee or agent for all other lenders. I think that this will bring a bit of clarity. Again, in practical terms, it will be helpful for business and I will seek to move that into your course. The question is at amendment 13, and be agreed to, are we all agreed? The question is at section 42, be agreed to, are we all agreed? Amendment 14, in the name of the minister, is grouped with amendments as shown in the groupings, and the minister to move amendment 14 and speak to all the amendments in the group. Thank you, convener. My amendments in this group give effect to the undertaking that is given by the Scottish Government to remove the ability of individual consumers to grant a statutory pledge. Amendment 17 removes section 48 from the bill, the provision that allowed the provider of a statutory pledge to be an individual as long as the pledge met certain criteria. Amendment 16 is the most important amendment in the group. It provides that it will not be competent for individuals to grant a statutory pledge unless the individual falls within a specified exception. The primary exception is where the individual is acting in the course of their own business and the encumbered property is a permitted asset, which will be used wholly or mainly for the purposes of the individual's business. The amendment will also permit individuals to grant a pledge if they are acting as a trustee of a charity or a member of an unincorporated association. In such cases, a permitted asset would have to be an asset of the charity or owned on behalf of the unincorporated organisation. Can I first of all thank the minister for these amendments? I think they are really helpful and I think he gets us to where the committee wants to get to. I am really looking for clarification. Clearly there is a balance between an individual and a sole trader and he is getting that balance right. We started with the bill at a moment saying that if it was £1,000, if there are any advances looking at stage 3 to absolutely clarify the situation to have that figure increased to say £5,000 or £10,000, would that give absolute clarity to individuals or would that not bring any benefit towards the individual? I am generally seeking clarification so that we keep the balance between sole traders and individuals on this point. I am going to come to that further on my remarks but what we are proposing through amendments is to increase that to £3,000 and there would be regulation making powers allowing for that figure to be increased subsequently in the future. To pick up on where I was prior to taking intervention with regard to charities and unincorporated organisations, we think that it is important that bodies such as charities and unincorporated organisations such as sporting clubs should be able to finance on the strength of their own assets. I just wanted to make sure that that was on the record. For a corporeal asset to be pledged by an relevant individual, that asset will also need to be worth a certain amount. That is a rule that previously applied only to individual consumers but it will now be a rule for sole traders and the other narrow categories of individuals who are to be allowed to grant a statutory pledge. That provides added protection on top of the rule that assets need to be of a certain type of asset, essentially a business asset. The Government has also accepted the committee's recommendation that the threshold should be raised to £3,000. It can also be raised in future by regulations to confirm. That coupled with the rule about how the asset is owned or used effectively means that household goods cannot be pledged. However, as we did previously with consumers, we have taken the power to specify particular assets that cannot be pledged. While we do not expect to need to use that, it would allow us to plug any gaps worthy to arise. The committee recommended in its stage 1 report that the Government should consider creating more protections in the bill for sole traders, since it will in many cases be in a similar position to individual consumers. I consulted with the Federation of Small Businesses on this point and their view is that no specific protections were required for sole traders who should be treated as adults in the business world. The Government has, however, brought forward amendment 20, which provides that a court order will now be required if a pledge is to be enforced against a sole trader. The FSB has indicated that they think that that is a useful protection. Sole traders are, of course, protected by amendment 16 in that they are not allowed to pledge assets that are unrelated to their business or fall beneath the £3,000 threshold, so they will not be able to pledge essential items in their home. Amendments 14, 15, 18, 19, 22 and 38 are consequential amendments that reflect the removal of section 48 and the removal of the ability of individual consumers to grant a statutory pledge. Amendment 37 adds the new regulation making power added by amendment 16 to the list of dedicated powers that will be subject to the affirmative procedure. I now turn to Carol Mocken's amendments. Amendment 16A would have the effect that permitted assets exclude household goods that are essential for heating, cooking or laundry purposes, so that it would not be possible to use such items as collateral for a loan under a statutory pledge. That will, of course, only apply to those such as sole traders who are able to grant a statutory pledge under amendment 16 and not the general population. It is our view that the monetary threshold of £3,000 now proposed would cover all goods that are used for heating, cooking or laundry purposes within a home and is therefore unnecessary to make special provision for those. It also seems very unlikely that any prospective creditor would lend on the basis of such collateral or that assets worths are used for those purposes within a home would meet the business purposes element of their permitted assets test. The tests that are already applied are designed precisely to exclude ordinary household goods. However, adding further on, having a further rule on this may result in complexity and unintended consequences. For example, this might prevent a sole trader who provides quicker installations from granting a pledge over their business stock. We have the power to carve out further things from the definition of permitted assets if we were to need to do so in the future, but we do not want to overcomplicate matters unnecessarily and potentially create situations where unintended consequences could arise. In relation to amendment 16b, I appreciate that it may seem a good idea to provide at the monetary limit for the value of property to be pledged to be subject to annual update in line with the retail prices index, but we think that this is unnecessary. Inflation in the past few years prior to the recent surge has been relatively low and the current figure is expected to fall. The threshold is already being increased to £3,000. We believe that this is ampulent in terms of excluding household quite goods and similar, but there is a power allowing the threshold to be increased further as and when it is appropriate. However, it is worth bearing in mind that this figure is also not the only means of ensuring that ordinary household items are not pledged. A sole trader would have to be acting in the course of their business and the asset would have to be one that was used wholly or mainly for the business purpose. The threshold is therefore less critical than it was when it was applicable to and only to ordinary consumers. Amendment 16b does not actually provide for the threshold to be changed on the face of the act, which we believe would lead to significant confusion. However, to amend the figure in the act would remain that the regulations would have to be brought before Parliament annually. Since any rise is likely to be of a negligible order, we do not believe that this is the best use of parliamentary time on an annual basis. We think that it would be more efficient to simply update the figure every few years, taking into account the level of inflation prevalent at the time. Depending on that rate of inflation, the figure in the act may have to be amended more often if inflation is higher but less often if it is lower. Therefore, a set period for amendments does not seem appropriate. For all those reasons, I ask Carol Mawchen not to press her amendments and I move amendment 14. Thank you minister. Carol Mawchen to speak to amendment 16a and the other amendments in the group. As I speak to my amendments in this group, the minister has spoken to his amendment 16 and I am really pleased with his points on this matter about being one of the most important amendments and that he clearly listened to the committee on this point. I am content with the points that he made with regard to amendment 16a around household goods that are goods that I explicitly am keen to make sure that people would not lose around heating, cooking and laundry purposes. However, I would be great for just in reply for further reassurance that you might be able to produce some guidance notes or points so that this legislation makes it clear. However, I do appreciate that the minister has that on the record so that it might not be necessary. In relation to amendment 16b, the amendment is pretty self-explanatory, as you have said, but it is very much as per the committee report recommendations and it is important that the figure provided in subsection 2b of the minister's amendment 16 is automatically updated annually on an agreed date by reference to the retail price index that was in the committee's report. The amendment seeks to ensure that such assurances are written explicitly into the bill. There would be an expectation that the ability to increase the figure would remain within the delegated powers of the Scottish Government should it be necessary. My amendment is a procedural and an attempt to ensure that we are clear that the RPI must be referred to annually in relation to the figure. I do appreciate that the minister may consider an annual review to be overkill, but I do believe that it would be a helpful step and would provide Parliament with the reassurance that we are regularly reviewing this legislation in relation to the RPI. I would like to conclude by reiterating my sincere thanks to the committee for its input on this particular issue. I also put on the record my sincere thanks to those money advice organisations and those within the small business community who have engaged in this because clearly the key challenge has been to get the balance right. I believe that, with the suite of amendments that the Government has brought forward, we have achieved that balance while protecting individual consumers but not denying small businesses and sole traders the opportunity to utilise the provisions within the legislation, which I know will be warmly welcomed. I recognise the well-intentioned nature of Carole Mocken's amendments. However, I do not think that they are required with regard to the risk around household goods that has been touched on. The existing provisions within the amendments effectively mean that they would not fall under the category of goods that could be used as collateral for a statutory pledge, on to the fact that household goods are not predominantly used for business and that they would fall under the £3,000 monetary threshold. With regard to the second amendment, I am pertaining to an annual increase on the monetary threshold. Again, I recognise the intent there but I think that it would be a better approach to have greater flexibility, recognising as well as the way in which amendment is drafted would mean that there would be no change on the face of the bill, which would necessitate complex calculations unless ministers were to bring forward annual updates, which I outlined in my early remarks, could be negligible, particularly as we look towards moving to a period of lower inflation. On that basis, I ask that Carole Mocken not move her amendments and the committees to support my amendments. The question is that amendment 14 be agreed to and will be agreed to. Amendment 15, in the name of the minister, is already debated with amendment 14. The minister to move or not move. The question is that amendment 15 be agreed to or will be agreed to. Amendment 67, in the name of Jeremy Balfour, is already debated with amendment 54. Jeremy Balfour to move or not move. The question is that amendment 67 be agreed to or will be agreed to. The question is that amendment 43 be agreed to or will be agreed to. Amendment 16, in the name of the minister, is already debated with amendment 14. The minister to move or not move. Amendment 16A, in the name of Carole Mocken, is already debated with amendment 14. Carole Mocken to move or not move. Amendment 16B, in the name of Carole Mocken, is already debated with amendment 14. Carole Mocken to move or not move. The question is that amendment 16 be agreed to or will be agreed to. There will be a division. All those in favour of amendment 16 be agreed to, please raise your hands. All those against. The result of division 16B is 3, 4 and 2 against, so the amendment is agreed. The minister to press or withdraw amendment 16 as amended. The question is that amendment 16 as amended be agreed to or will be agreed to. I call amendment 68 in the name of Jeremy Balfour. Amendment 65, in the name of Carole Mocken, is already debated with amendment 55. The question is that section 44 be agreed to or will be agreed to. The question is that sections 45 and 46 be agreed to or will be agreed to. Amendment 69, in the name of Jeremy Balfour, is already debated with amendment 55. Amendment 70, in the name of Jeremy Balfour, is already debated with amendment 58. The question is that amendment 70 be agreed to or will be agreed to. There will be a division. All those in favour of amendment 70, please raise your hands. All those against. The result of division is 3, 4 and 2 against, so the amendment is agreed. I call amendment 71 in the name of Jeremy Balfour. Already debated with amendment 58, Jeremy Balfour to move or not move. The question is that amendment 71, in the name of Jeremy Balfour, is already debated with amendment 58, Jeremy Balfour to move or not move. The question is that amendment 71 be agreed to or will be agreed to. There will be a division. All those in favour of amendment 71, please raise your hands. All those against. The result of division 71 is 3, 4 and 2 against, so the amendment is agreed. I call amendment 72 in the name of Jeremy Balfour. Already debated with amendment 58, Jeremy Balfour to move or not move. The question is that amendment 72 be agreed to or will be agreed to. There will be a division. All those in favour of amendment 72, please raise your hands. All those against. The result of division 72 is 3, 4 and 2 against, so amendment 72 is agreed. The question is that section 47 be agreed to or will be agreed to. I call amendment 17, in the name of the minister. Already debated with amendment 14, in the name of the minister to move or not move. The question is that amendment 17 be agreed to or will be agreed to. The question is that sections 49 to 53 be agreed to or will be agreed to. I call amendment 73, in the name of Jeremy Balfour. Already debated with amendment 55, Jeremy Balfour to move or not to move. Not to move. The question is that sections 54 and 55 be agreed to or will be agreed to. I call amendment 18, in the name of the minister. Already debated with amendment 14, the minister to move or not move. Moved. The question is that amendment 18 be agreed to or will be agreed to. I call amendment 19, in the name of the minister. Already debated with amendment 14, the minister to move or not move. Moved. The question is that amendment 19 be agreed to or will be agreed to. I call amendment 74, in the name of Jeremy Balfour. Already debated with amendment 54, Jeremy Balfour to move or not to move. Move, convener. The question is that amendment 74 be agreed to or will be agreed to. The question is that section 56 be agreed to or will be agreed to. The question is that section 57 be agreed to or will be agreed to. I call amendment 75, in the name of Jeremy Balfour. Already debated with amendment 55, Jeremy Balfour to move or not to move. Not to move. The question is that sections 58 to 63 be agreed to or will be agreed to. I call amendment 20, in the name of the minister. frein간 cael ei ddwg ar y lleiw gaerwg? Mae'r d ONG wedi wneud yn fwy인 mewn byw complexa glori. Rwy'n i'n ei chwysdyngu ddiogποι grinding shrinking envelope taarts oial ac comed o énام er armoo enwod. Y cwestiynau yw 365 yn ymgyrchu i gael i'w gweld. Mae'r cwestiynau yn ymgyrchu'r 76 ac mae'r gennymu Balford a'r gweithgau cymrydau'r 55 yn ymgyrch a'r gweithgau'r 56 roi yn rhan o'r morth? Mae'r gweithgai'r 76 roi yn rhan o'r morth. Mae'r gweithgai'r 76 roi yn rhan o'r morth. Mae'r gweithgai'r 76 roi yn rhan o'r morth. Oh, no, sorry. I love my little paper. No, well, yeah. So, I call amendment 21 in the name of the Minister. Already debated with amendment 13. Is the Minister to move or not move? Moved. So, the question is, that amendment 21 be agreed to or will be agreed to. The question is that section 66 be agreed to or will be agreed to. The question is that section 67 to 69 be agreed to or will be agreed. Y Caerdydd просiwn Iepwasdol Metwaith i Ludfahrg theatr myfydlu a Fawr yn llwyfodd yn sir 뿌�ra differently nhw. Gweldwch chi'r ddiwedd fel ffer Yukar Feidleidgad Sklynllud Cymullертвbau ond mae wedi annibwyd â Chardydd Fyrin. ysgol ymyd mewn eistedd eu cyfarwyr yma? Felly, dyma'r llyfr ddweud am y cyfrifyr gondol iawn. 9. Arlauthoddi cwrs. 9. Arlauthoddi cwrs. 9. Arlauthoddi cwrs. It is not moved. The question is, that section at 76 be agreed to or will agreed. I call amendment 80 in the name of Jeremy Balfour. Already debated with amendment 55. Jeremy Balfour to move or not move? Not moved. The question is, that sections at 77 to 90 be agreed to or will agreed? Yes. With that, I will take a five minute comfort break. I will suspend for five minutes. Mae wir yn cael ei gwaith o'u newid, ac mae byw'r rhaid i Gymdeithasol, mae'r orange, i'r un oherwydd i gael ei gwrthfaith, ac yn ni'n gweithio ar gyfer gweithio a'i gweithio gyda'r un oherwydd i gefnogaeth yn eu gweithio. Oherwydd yn gweithio mae'r un oherwydd i gweithio yr un oherwydd i gweithio ar gyfer gweithio fel y bydd erbyn. Yn hyn o sicr cyffinion ar gyfer cyffinio o ddrwyngau oherwydd, mae'n gyfan gweithio gan gweithio ond rydych chi'n d anglesu oedd leir gyda llwyddoedd yn rhoi'r digon, oedd mae'n dnghysdaf, ond mae'n d sailw yllwyr yn ddweud. Mae'n ddysgu'n gwyll sympathywno'r prwy alloc i gyddyn nhw, ond rhai a'r ddechrau sy'n gweithgol a'r hyn o brosyn ymgylchedd. Bydd ar gyfer y prwy oedd yn fanffrwm o'r pleidi ac yn rhan o rhan o'r cyfaint. fel y ddysgu'r prwy oedd oedd y prwy oedd yn ceisio ar gyfer y pleidi ac yn yr anhygoel that the pledge is recorded at the time of acquisition has not come to include either an inaccuracy in the entry that is seriously misleading or an inaccuracy by reason of the removal of an entry from the record. Amendment 23 can be taken in two parts, but the change is both related to encumbered property that has an identifying number, for example a vehicle identification number. First, the effect of amendment 23 is that in relation to an entry where the property has an identifying number, the purchaser will only receive the property free from the pledge in the circumstances that I have just mentioned. If that identifying number is wrong or absent and it was a requirement under the register's rules to include that number, so if there was no such requirement but the person registering the statutory pledge included the number voluntarily, the property would be immune from the reach of section 91. This reflects the fact that people should not be penalised for including additional information, and it brings the section into line with the rules that apply under section 92 at the time that the pledge is created. Secondly, it is possible that an identifying number, which is correctly included at the time of registration, could later be removed by some malfunction or mistake. The entire entry could also be removed in error, meaning that the fact that the entry previously had a readily searchable identifying number will be of no help. Even though that would appear likely to be a very rare occurrence, it could have significant consequences for those involved. Amendment 23 provides that in such circumstances that the good faith buyer will be protected and will acquire the property free from the pledge. Amendment 30 adjusts the rules about what register search facilities must be provided to take account of the fact that, in light of amendment 23, there will now be no significance to an identifying number for property being wrong in cases where that information was not mandatory. Amendments 24, 25, 26 and 28 are consequential to amendment 23 and simply update cross references. Amendment 23, 25, 27, 28, 28 and 28 are consequential to amendment 23 and by agreeing to, or polite? I assure you that the memorandum section board ddull ddifw intricoedd? Cysilwyr â Br USDA wir yn nll스럽id teimlo yn sangor, a'r ddull hyn yn yn diwylliadol yn unrhyw ddaeth. Di Milo manifest i f intermediate fears beleza demonstrating ond ers i dderwyng agnod i drafod o hwn comparenturau nad lyw wedi fel'r llhaelusedd Y Llyfrgell y Mwyfodd yn Ymgynysig yn llawer o carlyfeddol yn ymgynnessiadol. Y Llyfrgell y Mwyfodd yn ymgynnaid yn y cyfnod, yn y boblog yn ei addysgol fel nhw aen nhw. Y Llyfrgell y Mwyfodd yn y clywedään'r cyfnod. Y Llyfrgell y Mwyfodd yn y cyfnod, yn y clywedродdol yn y modgylchol. Y Llyfrgell y Mwyfodd yn y clywedään'mu yn y clywedään'u. The question is that sections 93, 26 be agreed to are well agreed. I call amendment 29, in the name of the minister, already debated with amendment 13. The minister to move or not move. Moved. The question is that amendment 29 be agreed to are well agreed. The question is that section 97 be agreed to are well agreed. The question is that sections 98 to 101 be agreed to are well agreed. I call amendment 30, in the name of the minister, already debated with amendment 23. The minister to move or not move. Moved. The question is that section 30 be agreed to are well agreed. I call amendment 81, in the name of Jeremy Balfour, already debated with amendment 64. Jeremy Balfour to move or not to move. I can't see clearly, I didn't quite hear that one. The question is that section 102 be agreed to are well agreed. There will be division. All those in favour of amendment 81, please raise your hands. All those against. The result of division 81 is 3, 4 and 2 against, so the amendment is agreed. The question is that section 102 be agreed to are well agreed. The question is that section 103 and 104 be agreed to are well agreed. I call amendments 31, 32, 33 and 34, all in the name of the minister and all previously debated with amendment 10. I invite the minister to move amendments 31 to 34 on block. Does any member object to a single question that we put on amendments 31 to 34? The question is that amendments 31 to 34 are agreed to are well agreed. The question is that section 105 be agreed to are well agreed. The question is that section 106 be agreed to are well agreed. I call amendment 35, in the name of the minister. Anodyd, debate, be agreed to or well agreed. I call amendment 35, be agreed to or well agreed. The question is that section 107 be agreed to are well agreed. A das goswchdis'nau dda ni wedi gweithio gael eu hunain ar ôl yn Gordon Bay. to move or not to move? Not moved. I call amendment 83 in the name of Jeremy Balfour. Already debated with amendment 13. Jeremy Balfour to move or not to move? Move, convener, please. The question is that amendment 83 be agreed to. Are we all agreed? Yes, we are all agreed. There will be a division. All those in favour of amendment 83, please raise your hands. All those against. The result of division 83 is 3, 4 and 2 against, so the amendment is agreed. The question is that section 111 be agreed to. Are we all agreed? Yes. The question is that section 112 be agreed to. Are we all agreed? Yes. We move to electronic documents. I call amendment 36 in the name of the minister. A grouped with amendments as shown in the groupings of minister to move amendment 36 and speak to all the amendments in the group. The group of amendments is about electronic signatures that respond to the committee's recommendation that the bill be amended to require only simple electronic signatures since advanced electronic signatures or qualified electronic signatures can create barriers to conducting business for most users. The matter was originally raised by Jeremy Balfour during stage 1 evidence and I am grateful to him for raising the issue. Section 116 of the bill currently defines authenticated by reference to section 9b2 of the requirements of writing Scotland Act 1995. Section 9b2 provides that an electronic document is authenticated if the electronic signature of the person who is authenticating it is incorporated into or logically associated with the electronic document was created by the person by whom it purports to have been created and is of such type and satisfies such requirements if any as may be prescribed by the Scottish ministers by regulations. Regulation 2 of the electronic documents Scotland Regulations 2014 requires the signature to be an advanced electronic signature. Section 9g1d of the 1995 act further provides that it is not competent to record or register an electronic document in any register under the management and control of the keeper of the registers of Scotland unless section 9g2 and 3 both apply to the document. That means that the document must be presumed under section 9c or 9d or by virtue of section 9e to have been authenticated by the grantor and the document, electronic signature and any certification must be in such form and of such type as are prescribed by the Scottish ministers in regulations. Regulation 3 of the 2014 regulations provides that for a document to be presumed authenticated under section 9c the signature must be an advanced electronic signature and certified by a qualified certificate for signature. That means that both assignation documents under part 1 of the bill and constitutive documents for statutory pledges under part 2 must be signed using an advanced electronic signature and for that to be registered it must also be certified by a qualified certificate. The first consulted stakeholders about this issue including the Federation of Small Businesses and the Registers of Scotland. The FSB indicated that they thought that the forms of authentication beyond simple electronic signature were costly to small businesses. It is understood that the jump in cost and complexity between each level of signature is likely to be significant. I therefore believe that in order to encourage the use of the new registers and to avoid unnecessary costs with smaller start-up businesses in mind, simple electronic signatures would offer the best option. Amendment 45 is the critical amendment in this grouping as it removes the requirement for electronic signatures to be authenticated using advanced or qualified electronic signature. It will therefore be possible to use a simple electronic signature. It will, however, still be possible to use advanced or qualified electronic signatures if parties wish. The current definitions of authenticated and executed are removed from the bill by amendments 42 and 44. While amendment 45 replaces the definition of authenticated with rules for the authentication of a document, it retains a substantive definition of execution of a document. The new subsection 1b in amendment 45 allows ministers to modify subsection 1a, a and b in place of subsection 3, which is omitted by amendment 46. Amendment 40 amends section 114 to replace the reference to section 116b with 1, 2, and section 116b. That ensures that regulations under section 116b will be subject to the affirmative procedure. Amendment 43 consequentially defines electronic signature in section 116b for the purposes of the bill because the definition in section 121 of the 1995 act is no longer imported into the meaning of authenticated as a cross reference to section 9b2 of the 1995 act is removed by amendment 42. Section 9g1d of the 1995 act stipulates that it is not competent to record a register of document in any register under the management and control of the keeper of the registers of Scotland unless it includes a qualified electronic signature. Amendment 36 makes it clear that section 9g1d will not apply to the registration of documents under the bill and so a simple electronic signature will suffice for authentication, though there is nothing to stop parties using advanced electronic signatures or qualified electronic signatures if required. I move amendment 36. Thank you, minister. Members have any comments? No. Okay, so ministers to wind up. Nothing further to ask, convener. Okay. So the question is that amendment 36 be agreed to or will be agreed. The question is that section 113 be agreed to or will be agreed. I call amendment 84, and the name of Jeremy Balfour already debated with amendment 55. Jeremy Balfour to move or not move? Not move, convener. I move to the review of act. I call amendment 53, and the name of Carol Mawchen, grouped with amendment 85. Carol Mawchen to move amendment 53 and speak to both amendments in the group. Thank you, convener. I move amendment 53. This is a very similar amendment as I've gone through the document similar to 51 and 52 in terms of the review, but in this case, of course, the wider legislation and implementation of the bill. Part of my amendment in this circumstance looks to provide further protection to sole traders and small businesses, making it incumbent upon Government to consider the operation of provision related to statutory pledge on sole traders and small businesses. I believe it is important that we do this as soon as it is practical upon the review period, which for the purposes of this would end three years to the day after royal assent. Indeed, such a review and report would be laid before Parliament to ensure MSPs are able to hold Government to account on the implementation of this legislation. I hope that the minister, obviously we've had discussions, can see this amendment for how it is intended, which is to ensure Parliament is able to effectively scrutinise and hold to account based on the findings of a three-year review. Thank you, convener. Thank you, Carol. Can I thank the minister for his previous amendments around electronic documents? I think that that has really helped for me when I do work on them completely. My amendment 85 is almost identical to amendment 53, which has already been moved. I've nothing further to add and if amendment 53 is accepted, then I won't be moving amendment 85. Thank you. To any members who have any comments. Minister. Amendment 53 in the name of Carol Walken and amendment 85 in the name of Jeremy Balfour are, as Mr Balfour has acknowledged, almost identical in terms and will place a requirement in the Scottish ministers to undertake a review of the act and report on that review after the end of the review period three years after the legislation receives royal assent. In addition, amendment 53 requires that the review places a particular emphasis on the impact of the statutory pledge provisions on sole traders and small businesses. I appreciate that these are based on a recommendation contained in the committee's stage 1 report, though they have been modified slightly from the report proposal in order to reflect the removal of individual consumers from the statutory pledge provisions. I responded to the committee in writing back in December about this recommendation and it may be helpful if I restate my concerns about including such a requirement in the bill. As I have referred to earlier in relation to other amendments, there is nothing to stop either the Scottish Government or the Scottish Parliament from carrying out a review of any aspect of a piece of legislation at any time and this is, of course, a good thing. Undertaking such reviews as and when the need for them becomes apparent is, in my view, a more flexible and responsive approach. Yes, certainly. I am grateful to the minister for giving way. My question would be that this piece of legislation has been kicking around for a number of years. It took a long time to get to the Parliament, a long time for the Government and Parliament to give it the priority that those in the legal and business community felt it deserved. Does it not therefore seem unlikely that, if there are small issues or tweaks that need to be made to this legislation, that the Parliament is going to find time to look at that without a clause like this being in place? I appreciate the comments that Mr Mundell makes, but my view is that there is nothing within legislation that precludes the possibility of a review. My concern is primarily about having it to a fixed timescale, for example three years from royal assent. The registers will not come online at the earliest until next summer, so that is already a year lost. We are not looking at a three-year period of the act being in operation, but a two-year period of the act being in operation. It is important that there is flexibility there. I recognise Parliament's interest in this and why it wants to nail something down in statute to ensure that a review takes place. It is incumbent upon Government and Parliament more widely to keep all legislation under review and to respond to issues as and when they arise. I take the view that a more flexible approach will allow us to respond at a more opportune time and is such not find ourselves in a situation where we could be undertaking a review prematurely. In my just to go on with my what I was intending to say in my response yes certainly. If this clause was tweaked or this amendment was tweaked at stage 3 to give an option to delay the review by a further year or two years would that make it more flexible and more in line with the minister's thinking? I am not going to give any commitments on that right here other than to say that I would be more unhappy to engage with any members to discuss that ahead of stage 3. I would want to consider the proposals in the round and exactly what was being proposed but if there is an opportunity for compromise to recognise a need for flexibility I am happy to have that discussion and I would hope that the committee would appreciate that as a approach of flexibility and pragmatism I have started to demonstrate throughout the work that we have undertaken on this legislation so if that is something that members of the committee would wish to discuss of indeed any members in Parliament ahead of stage 3 my door is always open and I would very much value the opportunity to have that discussion. I would want to say though that in my response to the committee the following example if this legislation had been enforced earlier and it had included such a review provision the disruption to businesses caused by the coronavirus pandemic would likely have rendered any review premature because any relevant business activities would have been quite different from normal but a substantial amount of the period under review but it would nonetheless have been necessary for the review to proceed and conversely if we felt that it was appropriate to carry out a review of the legislation sooner and wanted to do so after two and a half years meet amendments would still cause difficulties because they would require us to carry out yet another review just six months later the amendments provide that the review cannot be undertaken until after the end of the review period and these are just some of the difficulties with trying to second guess in advance when will be the most appropriate time to review legislation but I would want to assure the committee that we will still want to work close as the Federation of Small Businesses to gauge how this legislation is helping them or possibly hindering them and we will learn from that engagement it's my view that this would be a more dynamic responsive and proportionate approach as opposed to the more prescriptive method provided for by this amendments committee members will be aware too that the legislation contains a range of ministerial powers which will enable us with the Parliament's approval to modify the legislation in the light of that engagement so for these reasons and for my openness to engage in further dialogue ahead of stage 3 around the perhaps a more flexible approach I would ask that the respective amendments are not pressed OK, thank you minister and Carol Morgan to wind up and to press or withdraw amendment 53 Thank you, convener I'd absolutely take note of the minister's you know position of engaging and I don't doubt it for one minute the scrutiny within the Parliament is something that we do need to push and so therefore at this stage I would press a 53 OK, thank you so the question is that amendment 53 be agreed to or we all agreed yes although in favour of amendment 53 please raise your hands all those against so amendment 53 the result is 34 and 2 so the amendment is agreed I call amendment 85 in the name of Jeremy Balfour already debated with amendment 53 Jeremy Balfour to move or not move not move, convener OK so I call amendments 37, 38, 39, 40 and 41 all in the name of the minister and previously debated invite the minister to move amendments 37 to 41 on block does any member object to a single question being put to amendments 37 to 41 so the question is that amendments 37 to 41 are agreed or we all agreed the question is at section 114 be agreed to or we all agreed the question is at section 115 be agreed to or we all agreed I call amendments 42, 43, 44, 45 and 46 all in the name of the minister and previously debated with amendment 36 invite the minister to move amendments 42 to 46 on block moved on block does any member object to a single question being put to amendments 42 to 46 the question is that amendments 42 to 46 are agreed or we all agreed the question is at section 116 be agreed to or we all agreed the question is at section 117 and 118 be agreed to or we all agreed the question is that the long title would be agreed to are we all agreed and that ends stage 2 consideration of the bill so thank the minister and his officials for their attendance to the committee this morning and and that also concludes our meeting today so thank you and the next meeting of the committee will take place on Tuesday 28 March so with that I'll close the meeting