 Good morning, and welcome to the 22nd meeting of 2023 of the Economy and Fair Work Committee. Our first item of business this morning is the declaration of interest by each of our four new committee members. First, I thank Jamie Halcro Johnston and Graham Simpson for their contribution to the committee and for their work on our inquiries. I wish them well in their new roles on their new committees. I am pleased to welcome this morning Murdoff Razer, Ashry and Cymysdure and Brian Whittle to the Economy and Fair Work Committee. I now invite Murdoff Razer to declare any relevant interests. Thank you, convener. In relation to my register of interests, there are three items that might be relevant to the work of this committee. I am a member of the Law Society of Scotland, albeit that I am not currently holding a practicing certificate. Secondly, I have an interest in two residential properties in Edinburgh that are let as long-term residential homes and for which I receive rental income. Thirdly, I receive occasional and usually very small amounts in royalties from a book that I wrote a number of years ago. I now invite Ashry again to declare any relevant interests. Thank you, convener. No interest to declare. Thank you. Cymysdure, do you have any declared interests? No relevant interests, thank you, convener. Thank you. Finally, Brian Whittle, I invite you to declare any relevant interests. In relation to my register of interests, I am the director of a small business consultancy that I have time to time to do a bit of work for outside of parliamentary time. Thank you. I appreciate all the comments. Our second item of business is a decision to take item 5 in private. Are members content to do so? Our next item of business is our stage 1 evidence session, considering the general principles of the bankruptcy and diligence of the Scotland Bill. The bill is aiming to make changes to the law around bankruptcy and diligence by implementing various stakeholder-led recommendations. I thank all those who replied to the committee's call for evidence. We are grateful for the submissions that will help to shape our considerations of the bill. I welcome this morning Dr Alasdair MacPherson, committee member of the banking company and insolvency law subcommittee of the Law Society of Scotland, Katie McLaughlin, licensed personal insolvency practitioner, Marathri insolvency, and Rheri Shruth. David Mendes is director of practice, the Institute of Chartered Accountants of Scotland, and Brian Malkin, board member, insolvency practitioners association. As always, members and witnesses can keep their questions and answers as concise as possible. That would be helpful. If I may be come to open up the questions, I will come to Alasdair first, but I will give everybody a chance to address the question. The Government is adopting a stage 3 approach to reforms in this area. I mentioned the responses that we have had to the bill. A lot of the responses talk about other areas that go beyond what is currently in the bill and other improvements that we would like to see in the skills of work. The Government has argued that they are trying to strike a balance between regulatory and statutory duties. Alasdair, does the Law Society have views on whether they have the balance right? Does the bill include areas that should be statutory and other areas that have been argued for? Do you agree that they are better suited within regulatory? Good morning, convener and committee members. Thank you very much for the invitation to speak to you all today. As you have noted, I am representing the Law Society of Scotland. You may also have noticed that I separately, along with Professor Donna Mackenzie-Skeen, submitted separate written evidence. Later on, if you wanted me to speak to that, I would be happy to do so. Overall, I think that the Scottish Government has got the balance right here. As you noted, we are in the process of reviewing the wider area of law, Scottish Government and stakeholders. I think that that is the culmination of stage 2 of the review, which is in combination with secondary legislation, which is proposed. If we look at that in conjunction with certain other measures that could be made by way of secondary legislation, then I think that the balance is right, but it will depend on those other measures being introduced, and hopefully around the same sort of time that this legislation is introduced. There are arguments that there should be a sense of urgency. We are in a cost of living crisis that has pressures on people's household incomes, and the Government could be doing more in that area. Although the statutory legislation will have before us, although it has the mental health moratorium, the other parts are fairly technical and minor adjustments that that could be seen as not taking strong enough action. When you talk about the regulations, do we have any confidence that they are going to be imminent and that there is an argument, because the argument is that that can happen quicker, but it looks like we are doing the statutory quicker. The areas that people want to see action on, that is what we are waiting on. In terms of the proposed possible secondary legislation, it would do things like increase certain monetary thresholds within the legislation to take account of inflationary pressures. That is my understanding of what is planned or proposed. To some extent, that will help to alleviate certain issues in the context of debt and bankruptcy matters. One of the major difficulties in that area is that it is incredibly complicated. By its nature, bankruptcy law and solvency law require difficult policy choices to be made, because there is just not enough to go around to please everyone. Certain parties have to, unfortunately, lose out in comparison to others. Because of the contentious nature of the area, it means that any reform that is proposed beyond mere technical amendments can lead to fair amount of controversy, pushback and conflict. To my mind, there are some advantages to making changes like that and the ones that are proposed or may take place in the context of secondary legislation where they are less likely to be controversial or to deal with certain immediate pressures. However, there is also value in taking a wider holistic view and looking at the area as a whole, because there are also negative consequences if you are adopting a more ad hoc approach for responding to immediate circumstances. Casey McLaughlin, do you want to comment on the balance of RIT statutory and regulation? Good morning. Thank you for having me along today. I am representing R3, so I am speaking on their behalf. Broadly, they are very much in support of the bill and the content that they are of, particularly the mental health moratorium. The stance that they are taking is that it is a positive step to support people who are suffering from mental health and debt problems. However, the regulations that underpin that and the mechanics of how it works are very important in the balancing of the debtor and creditor interests. The details behind that and how the moratorium will work are very important to them. David, do you have any views—as the argument is around whether there is a bill that lacks a sense of urgency to give them a cost-of-living crisis—that, as I said, many of the responses that we have had are pushing for more than what is offered by the bill? Do you think that that is a fair comment? Good morning, committee. Thank you for the opportunity to give evidence here. I think that, similar to Alistair, the bill broadly strikes the right balance. We, within ICAS, have long argued that there needs to be a fundamental review of bankruptcy law in Scotland. We are pleased to see that that has been committed to as part of the overall three-stage report. Taking that into account, we know that there needs to be a fundamental review of bankruptcy law in overall terms, but that is not going to be a quick process. As Alistair said, there will be a lot of hard thinking to be done and a lot of controversial decisions that may need to be made. I am thinking about things such as how the family homes dealt with and those sorts of areas that are difficult things to wrestle with from a policy position. Bankruptcy law does not just impact on bankruptcy law, it actually potentially impacts on housing policy, health policy and across a myriad of Government areas. That all takes time, but there are certain things that do need to be addressed just now. We have obviously, as you say, around the cost of living crisis. There has already been legislation put in place that addresses immediately some of those areas. I think that where the legislation goes now is around moving that to the next step to say that we have dealt with the real emergency stuff that we need to deal with as part of the cost of living crisis. That should just be a temporary position. The cost of living crisis should not be something that goes on for years and years to unwind that. The bill now is looking at the interim stage between what is absolutely necessary to be done as an urgency to address the cost of living matters and the longer term review. Broadly, the balance of it is right. I think that there are some aspects and they are broadly technical aspects that could still be dealt with within the bill. We would suggest, for instance, that it is stage 2 of this bill. We would encourage the Government to consider looking at further amendments or further introductions to be put in place, particularly around insolvency practitioners who are stuck in a case. If a debtor is non-cooperative or simply cannot be traced, that is something that the IP cannot be in office in perpetuity. We think that there are things like that that could still be addressed as part of this bill, which is non-controversial and does not really need a stage 3 consideration of that. However, in broad terms, I think that the balance of the bill is probably right. I invite Kevin Stewart and for a supplementary, then I will come to Barry Mawrkin. Thank you very much, convener. Good morning to you all. You all seem to agree that the balance in the bill is about right, but you talked about that necessity for a fundamental review. Often politicians in this place and other places are keen on primary legislation and to have everything on the face of the bill. However, would it be better to look during the course of that fundamental review at what should be in primary legislation and what should be in regulation so that there can be a much easier way to change things—for example, the cost of living crisis that we are going through at this moment? During the course of that fundamental review, we should look at more flexibilities rather than setting things in stone in primary legislation. Mr Meng is first and maybe the others. We would like to comment as well, convener. Yes, certainly. I think that the stage 3 terms of reference are still to be looked at and drafted. I would agree that it would make sense to look at the underpinning structure of legislation and where the powers should be. It is always a difficult one to get right in terms of scrutiny of legislation and scrutiny of powers. Broadly, I would agree that that should be part of the terms of references to look at what should be contained in primary legislation and what is appropriate to be set within secondary legislation. I will bring in Mr Malkin. I think that Katie and Alistair have already addressed this area of subjects. I echo the views of Alistair, Katie and David. The IPA broadly supports the bill and where it is going to pick up on a point that you made, convener, regarding the urgency and the cost of living crisis. I think that that is correct. I think that there will be more and more people seeking financial help over the course of the next 12, 18 and 24 months. I am just conscious that I would like to get it right rather than bring something in quickly and then potentially have to then amend it accordingly. Broadly, the mental health section of it as well assists for the moratorium for individuals who really need that help quickly. Again, the IPA broadly supports the bill in relation to it. In terms of the timescales, because there seems to be support for, people are happy with, largely happy with the bill as it is, and if there is more significant work to be done, there needs to be time to do that work. However, you have recognised that people are living through a difficult situation. While we are waiting for the solutions to come, some people are having to live through the current situation. Are you confident that the timescales involved in this are going to benefit people enough, taking into account your saying that you want things to be surer and you want them to be the right kind of legislation? Is there a recognition that there is a need for effective change in this area to support people in very difficult situations? To be honest, in Scotland, the six-month moratorium has assisted greatly moving from six weeks to six months. It gives a chance to sit down and speak to individuals. In relation to the length of it, we discussed earlier just before we came in. How long is the piece of string? If we can move the timescales forward and get it correct, then great. However, there are attributes in the bill that the family home is one that I think would need to be further discussions on, but there may be others that we can then move forward quicker. I suppose that time will tell. I will now come to Colin Smyth. Can I kick off with some questions on the mental health moratorium, in particular the recommendations by the moratorium working group, starting with the eligibility criteria? The group has recommended that only those who are subject to compulsory mental health treatment should be eligible for a moratorium. That is a narrow definition, and it is narrower than the criteria in England and Wales, which obviously covers non-compulsory crisis treatment. Do you have a view on that recommendation by the working group? If you do not agree with them, what do you think the eligibility criteria should be? Kate, you mentioned that the moratorium when you were opening comments, so I do not know if you want to start the ball rolling. Of course. Where we obviously are slightly different, as Barry said, we have the six-month moratorium available already, which offers a long period of protection for people. When you are looking at the eligibility, it is such a sensitive area and it has to be handled with care, because mental health is such an important topic. Again, balancing the rights of the creditors and against the debtor and making sure that whatever is launched is not open to abuse or misappropriation. It is definitely something that needs to be very carefully considered. Although we have that six-month moratorium, people who are not eligible for the mental health moratorium could still benefit from that, so it is not that there is nothing there for those people. They still have something that they can rely on, but it is certainly a contentious area of something to be considered. Do you have a view on whether or not that criteria has been recommended by the working groups? To be honest, I think that it is probably the right recommendation. There is the non-mental health moratorium available that offers really good protection, so that should be targeted at those people who are in the most severe need of that sort of support. First of all, if I can clarify, you are talking about the mental health moratorium working group, as opposed to the stage 2 working group. There is a difference in approach. The stage 2 working group that looked at the mental health moratorium recommended a slightly wider scope than the mental health moratorium working group has come up with. I think that I can sympathise with both. It is a real difficult question. Some of that comes down to how the scheme itself is going to end up being designed in overall terms. Where the mental health moratorium working group has looked at it is on the basis of the standard moratorium that we currently have been in place, and that has been the six-month period. That six-month period was obviously brought in in relation to the temporary measures that you talk about in terms of the cost of living. I guess that there is always that question around, is it always going to be six months, or is there the possibility that there is going to be a review of that, and that will drop back to six weeks, 12 weeks, some other period. I think that where the mental health moratorium working group has landed currently is acceptable in terms of looking at it in severe mental crisis, because, as Katie said, anyone else has access to the wider moratorium for six months at the moment. I think that I would have concerns if it was that narrow in scope, and the standard moratorium was potentially a much shorter period, because we all know that people with mental illness and their vulnerabilities do not necessarily have that capacity to deal with debt issues and deal with them in a timely manner. That is part of the reason why they end up in the debt position as it is in the first place. I think that it is about striking that balance, and I think that it is about how confident you are that the standard moratorium, if you like, will remain at an acceptable period for people in that less-than-a-crisis situation to be able to access debt advice and to be able to work that through, because that takes a longer period than perhaps normal. You have strayed into my second question, so I will go for it now. That six-month period was extended from six weeks. Do you think that that should be changed now? Presumably, based on what you are saying, the two are connected. Should the mental health moratorium period be the same as the standard moratorium period? What should that be? The six-month period has been in place for some time, and a number of respondents to our call for evidence said that the mental health moratorium should be the same six-month. Others said that that was too long. Do you have a view on that? It is one of the thorny issues that goes back and forth. As Alasdair alluded to earlier on, there are two sides to every insolvency. There is the debtor that has the debt, and there are the creditors that are owed the money. It is trying to find that right balance, and it comes back to the same with that moratorium. What is the right balance in period between somebody being allowed to try and recover their debt as opposed to those being able to try and fix it? The very nature of debt and insolvency is that you are never going to get all your money back, but it is about maximising that in that instance. In some ways, I think that six months is potentially too long, but it is where we are at the moment because the debt advice sector, particularly the free debt advice sector, is backed up. It is very difficult for people to get appointments, so we can reduce that six months, but that means more resources going into debt advice. Realising that it is not just the free debt advice sector, but that the insolvency profession as a commercial entity still gives free debt advice. Again, some of the messaging from Government in Scotland and UK-wide is that free debt advice is the best advice from the charity sector, the free debt advice sector. That is not necessarily conducive to people accessing debt advice at the right time. There needs to be a much more collaborative approach across the debt advice sector from both the commercial insolvency practitioners and the charities to just give debt advice and the right debt advice at the right time. That is very helpful. Barry, you mentioned that six month period in your previous comments. Do you have a view on what that period should be for the mental health moratorium and the eligibility criteria? Does a working group recommendation should only be subject to compulsory mental health treatment? Is that the right criteria? In all fairness, I would agree with David a little bit, and it might skew from the IPA's view. At the time when they increased it to six months, I was not sure if that was too long or not. What we have is a number of individuals who are coming in for advice and help. Sometimes it is harder to get the information out of some than others. A lot of people go into the six month one and actually will deal with the problem in the period, so they do not actually utilise the full six months. In relation to dealing with an individual who comes to the door looking for advice and at somebody with potentially mental health, I would maybe think that they would be a longer moratorium for them potentially to get to grips with what is going on. Should the two run parallel, I really do not know. To be honest, if you need to take guidance from somebody who deals with the mental health of individuals on a daily basis to see what they believe would be a good timescale for them to be able to get to the root of the problem, some people come in and they may not, as David said, understand the depth position they are in due to the circumstances. I do believe that the six month one is working well just now, but you could argue that it might be slightly too long. In terms of the criteria for the mental health moratorium, do you have a particular view on that at all? The working group has recommended that it should be only those subject to compulsory mental health treatment. Do you think that that is too narrow? In a personal view, it might be too narrow, depending on who comes in and who you are looking to help. However, I think that we need to take guidance on it in relation to what would you increase the scope to. Katie spoke on potential misuse of it and how long it was for and who would then access it. Based on that, there is a chance that, if you leave it at that, it might be too constrictive, but I think that we would need to discuss it. In terms of the standard moratorium time period, I think that for now, six months is a suitable length. Obviously, it was mentioned earlier that we are in the midst of a cost of living crisis, there are inflationary pressures, people's household finances are under a lot of pressure, so I think that for now, six months is suitable for that. That can obviously be revisited later down the line when the economic situation has improved somewhat, hopefully. In terms of the scope of the proposed mental health moratorium, I can see arguments in both directions. Having a narrow scope obviously gives more certainty. You are referring to existing pieces of legislation and you have a narrow set of circumstances that are clearly identifiable. However, there are other parties who you may think are worthy of equivalent support, who are somehow left out. Of course, for them, as for everyone else, the standard moratorium is available and it is a lengthy period of time. If you do not have this narrowly confined definition of who you would qualify for the mental health moratorium, it will leave open questions about what exactly is a serious mental illness or condition. Do you know the criteria in England that is slightly wider than that? Does that suggest that that does not work? In England, I think that it is only marginally so. It is essentially mental health crisis care. I think that one of the issues that has existed so far in terms of this legislation is, on the surface, we do not know what exactly is proposed. We obviously have a bit more detail about that now, but I think that there is going to be a large level, or to tell what is proposed, there is a large level of alignment with what exists in England. On the surface, when you look at the proposed section 1 and you have the second clause, debtors who have a mental illness, in the heading, that suggests that it could potentially be very wide and that comes with its own difficulties in definitional terms. Obviously, as David was mentioning and as I mentioned earlier, it is a question of balancing the interests of different parties because one person's creditors and another person's debtors can have an awkward implication if someone is trying to recover money. If you make it very broad, there is the potential for misuse. Of course, what we want to do is to make sure that those who are deserving of support actually get it. The law society very much supports the notion of giving regard to those who are suffering mental health crisis episodes. To some extent, what is proposed will address that. However, I can see arguments in both directions. The real focus should be not on particular types of mental health condition. It should be on what exactly is the purpose of it, such as what is trying to be achieved here. If you are focusing on those who are receiving some sort of compulsory care, they are obviously incapacitated in such a way that they cannot make decisions. They should not be subject to debt enforcement action by creditors and so on. Of course, it raises questions about others who have certain incapabilities, whether or not there should be enforcement action against them, but that is possibly a side issue. I am sure that my colleagues will have questions on those issues. What we are looking at in the bill is just to agree on a principle of a mental health moratorium. We are not agreeing the detail of it. Some of the correspondence said that it was difficult to give an authoritative view on the bill because they do not know what the scheme actually looks like. You have mentioned that it is a scheme in England and Wales, the breeding space scheme. The working group seems to be heading towards a model that is very similar to the breeding space scheme. Why do not we just introduce the breeding space scheme and then we all know what it is that we are actually going to be voting on in terms of the bill? Is there any problems with that scheme? Alasdair, you seem to be more familiar with that. Is there problems with the way and is there likely to be any changes to what we have in Scotland because it seems that we are holding up progress here? I am not really sure what the point is. I suppose that this is one of the situations where one jurisdiction is copying from the other because the breeding space scheme, the standard one in England and Wales, is something of an equivalent of the moratorium that has existed here for a longer period of time. When that was being introduced in England, it introduced also the mental health breeding space scheme. We are now, in a sense, playing catch-up with that. You can view it as a positive way. We are learning from one another. While learning lessons from how things are there, we need to divide something that is suitable for our circumstances. It has been mentioned already that our moratorium period is different, including in terms of the length. The introduction of a mental health moratorium here would be placed within a different landscape, a different setting, and I think that regard has to be had to that. From what I understand in terms of England and Wales, the mental health breeding space scheme has not been used as much as it would if it were anticipating. I have not heard particular complaints about it. There is at least one case now dealing with it to some extent. We should definitely have regard to what is going on in England and Wales, but, at the same time, we should be devising a solution that is appropriate for the circumstances here. David, if you want to comment, I will bring in Maggie Chapman before Brian Brown. I think that the fundamental difference between the England and Wales mental health breeding space and the mental health moratorium working group is that time difference. In England and Wales, there is a 30-day period, which can be extended by another 30 days, whereas what the mental health moratorium working group is looking at is, again, similar to a two-stage, but that first stage is timeless in some ways. It lasts as long as it needs to while the person is in that mental crisis treatment. That, to me, seems a much more sensible approach to take with it. It certainly gets around the issue that had to then go to court in England and Wales. I do not think that it is simply a case of lift and shift. We should learn from the experiences down south and make some of those tweaks. Maggie Chapman, thank you for being here and for your evidence so far. Following on from Colin MacDonald's questioning around the mental health moratorium, I suppose that one of the questions that has come out of some of the responses is gradation of levels of protection and, obviously, the initial freeze of any action in that initial period, whether it is the six months or under the mental health moratorium, do you have a view of, should there be gradations? David, you were just talking there of that initial period being indefinite, potentially. What would that look like in the second or further stages? As I understand it, I guess that the mental health moratorium working group has suggested that that second period be aligned with the standard moratorium. Conceptually wise, I guess that somebody has the mental health moratorium while they are in the crisis period and then, to a large extent, they just move into the standard moratorium. That goes back, I guess, to that question mark over. It depends how settled we are with that second period being six months or is there a possibility of that being less. I think that, certainly, if it was to go back to the original moratorium period, which was six weeks set in legislation, it would be difficult for people still with mental illness but just not in crisis care. It would still be difficult for them to get an access, proper debt advice. The first part, the unlimited time period, is just saying that there is a freeze on that. The second part is then saying, how do you now progress to make a decision on how to deal with that? I think that it is very much about that period and goes back to that standard moratorium question. I suppose that there is that balance. If the six months does change, we probably need the flexibility to be able to adapt the mental health moratorium so that that comes to the question around primary versus secondary legislation. I know that Brian wants to come in on support, but one of the other elements of the mental health moratorium recommendations from the working group is applications having to be made through a money advisor. I am wondering what you think about that in terms of capacity, in terms of gatekeeping and I suppose in terms of that balance of being a when I say capacity as meaning capacity of advisors, but there is also a question about capacity of somebody who is suffering from mental health issues being able to navigate that process. Alistair, do you want to kick off with that? Just to add to Maggie's question that, as Maggie Chapman has mentioned, the advisor, there is also a recommendation that there should be a form for mental health professional that should be signed by an advisor. We are talking about capacity, the recommendations are quite intense in terms of who needs to support that application. Yes, I think that is right and I can see justification for it because if you are receiving this separate entitlement on the basis of your particular status as someone who is receiving some form of crisis treatment, I can see in order to uphold the integrity of the system, then you may need to have that third party verification from a mental health professional and indeed because of your incapacity in the relevant scenario then you would ordinarily need someone like a money advisor to make the application on your behalf because you will not be in a position to do that yourself. Of course, that comes with consequences for the advice sector, which is already significantly burdened, arguably overburdened as things stand. I suspect that you may hear evidence from one or more people working in that sector and they will be far better placed than I am to say what capacity they have to take on those sorts of functions. There may also be difficulties where someone is receiving this crisis treatment and they have not had any contact with a money advisor. How in that scenario will an application be made? This is a potential difficulty and indeed if someone goes into such crisis treatment and there is no application for a mental health moratorium and a creditor takes action to enforce debts and it later transpires so that someone has been in crisis treatment at that point in time, is that enforcement action unwound somehow or is there a retrospective effect? It is a bit unclear at the moment how precisely that would work. What would be your recommendation for clearing that up and making sure that people who maybe do not know that they can or are not signposted to money advisors to actually get that? That is one of the wider issues here because we are obviously focusing on the possibility of a mental health moratorium and I think that it is right that we have more regard and more attention in this specific context to those with mental health conditions but also more broadly this is obviously not the answer to everything this is not the panacea and often this will come very late in the process. By this point people may have incurred lots of debt possibly in part because of mental health difficulties that they suffer from so I think that there should definitely be a wider process of education with maybe interventions at an earlier stage somehow. In terms of the precise details of that, it is difficult for me to say and certainly on behalf of the lost society it is tricky for me to come up with a formal answer. It is clear recommendation. I get that. Katie, your reflections or thoughts on capacity issues for both the debtor and the system but that kind of I called it gatekeeping maybe that's not an appropriate language. As everybody's touched on unfortunately cost of living crisis debt is quite a problem across the country and the free sector and the advice sector are very busy with that so capacity on their behalf needs to be considered. I think it's useful to reflect on the uptake in England I think you know their moratorium is newer than ours we've had it in place for a number of years but I think the stats where it's about 2% of the entire moratorium applications in England were mental health moratoriums so it is a relatively small percentage and you know it's not to say that that will be the same in Scotland but you would think you know it would be there or thereabouts it shouldn't be too drastically different so you know the numbers you wouldn't expect them to be huge certainly to begin with. I think education is going to be a real important point here I think people who are in mental health crisis and experiencing debt probably aren't keeping up to date with the latest bankruptcy legislation and probably don't know that we're here discussing a mental health moratorium and you would hope that perhaps mental health advisors and professionals are a little bit more kind of abreast of that but that's not to say that every mental health advisor will know that this is an option for people and what you don't know you can't benefit from so I think it's important that mental health advisors are educated include up that this is something that they can discuss with patients that they're seeing and signpost them to money advisors who can give them you know tailored advice because you know then the most people can benefit from this as is possible okay thanks David if I can ask for your views on those issues as well but that point that Katie was talking about the education and awareness in terms of the commercial insolvency sector what are the things that that the sector needs to be doing to to ensure that actually that they are aware of of these processes and and they actually can raise them if somebody does come to them sure and so I think first of all if you deal with the the access in the gatekeeping part of it I think this is a tricky one you know because actually fundamentally that you will have two options is there's either a gatekeeping process that needs some form of application or alternatively it just becomes part of the mental health crisis that we say that you know as part of that there is a moratorium automatically put on these these people in that situation and I don't know enough I guess in terms of you know whether that infringes too much on people's human rights or you know the situations where somebody might not have debt issues in that situation but there's a mark put against their credit file or something like that so I think issues with that which perhaps suggests that an application process is the right route to go down however you know I think is everyone has said you know how does somebody who is in a mental crisis they don't have the capacity to you know and their top priority is not actually their debt so how do they navigate to to the to the debt advisor system I don't know quite how you square that circle in many ways in terms of the commercial side of things and people are insolvency practitioners being able to work with vulnerable people we put a lot of effort into that and you know iCAS have actually just recently launched a vulnerable persons toolkit which is a set of resources and guidance which is available not only to our insolvency practitioners but actually our wider accountancy membership to help them identify people with vulnerabilities now some of that might be mental illness but some of it might be a whole range of other vulnerabilities so I think there is an acute awareness of vulnerabilities in general mental illness you know in particular and as a sector we are taking real steps to help our IPs work with those people and help them access the the right advice and that they are able to understand and and access that at the right time okay thanks thanks David Barry your views on on the sort of capacity gatekeeping issues as well I think it's a hard one to make a recommendation on it in relation to as David said is it a broad brush report to anybody who is in that crisis do we automatically put it on but that could then impact the credit rating so that would be a worry and then the only other way to do it is with a gatekeeper but then you look at the local citizens advice bureaus welfare rights and the local free sector to see have they the capacity to actually deal with it I think Katie touched on I don't think it would be an influx but potentially you never know what the capacity is there so it's a hard one to to sort of join the dots for and to be honest probably needs further discussion in relation to the best approach for the client what is the best for them is it best that we we take that somebody in the mental health profession takes the decision to do it or do we put it back to the money advice and give them the opportunity to be the gatekeeper and put the application in for them okay that's interesting I'll leave it there thank you give you a good morning to the panel a couple of things could I pop out from the discussion that we've had with the with Maggie Callum the other thing the process that leads to this kind of action tends to be rather protracted it tends to deliver a an increasing level of urgency if we want to call it call it that in terms of the interaction between credit and debt or which in and of itself you know is a stress probably for both parties but certainly for the person who's who's in the debt and I'm wondering here whether or not you know I was listening again to that this idea of a gatekeeper this idea of how do we assess those in debt should we be looking at or should the bill at all be looking at how potential potential debtors potentially receive financial advice and at what stage do they receive advanced advice and should we be better at making sure that they understand the advice that's available to them I don't know who don't want to start with Barry if we could so in relation to when they get the financial advice I think that's really tricky I suppose they have to reach out for the advice initially I'm not too sure when you would see them prior to requiring the moratorium if that makes sense I think it was Maggie that touched on the education potentially that's one of the issues is potentially in relation to the individual within the mental health who are providing the care could the IPA, ICAS etc provide further education for them to potentially spot and then signpost if there is debt problems I'm not too sure how we would catch it that that is a worry the worry is in relation to the moratorium if it's put on and it creates a black mark against their name and the credit I'm not saying it would have affected the future but it's how you get them in to and signpost them in to get them that advice I mean in relation to we spoke about the six month moratorium and individuals requiring time to sort of find exactly where they are with the debt and what they need in relation to the information that I require as an insolvency practitioner to put forward for a solution you're looking for that individual to come up with three month bank statements three month pay slips council tax letter pay slips sorry creditor level etc etc it's quite a lot of information and if somebody is in that crisis care it might be harder for them to obtain and get within a period I'm not too sure how you would get them to the financial education quicker the reality of people on the ground there's so many people who find themselves in this situation hunkered down you know and don't go looking for advice so how is there is a room in this legislation in this bill maybe to address that it's a real hole I think in in the process and potentially why the uptake rates in England are fairly low because people who are in a mental health crisis it's not the top of their priority there'll be buddy in their head in the sand they're probably not even opening the creditor letters at this point they're probably not addressing the demands for payment and things and I think if we can put something into legislation to try and fill that hole that gap as best as we can where people are being led to the solution rather than them having to lead themselves to it and that's going to be all the better I think people and this especially this very small group that we're potentially talking about where they're receiving crisis treatment you know that that what we talked about earlier you know who's going to be eligible and the kind of distinct groups there if it is this very small kind of the most at risk sector here and the more that we can do for them the better because they're not in a position to do it for themselves so I think it is hugely about educating the people who are dealing with their mental health issues to help them get the financial advice that they need I think that's a really important part of it I'm broadening it out just just a little bit here you know maybe to bring it into the legal capacity we've talked about you know those under compulsory orders but those under legal capacity particularly around power of attorney which one is difficult to identify and can be quite tricky to obtain in of itself and it strikes me that you know mental health such a slaving scale but what we focused on is things that we can definitely black and white identify here you know those under a compulsory order those who are under power of attorney we can identify that but mental health such a slaving scale how how does the bill address address that I'll come to that I think that's exactly right this was a point I was seeking to make earlier on in terms of the definitional question I think you're right we're essentially adopting the approach where we're able to say that these particular people fall into the category without any doubt about it whatsoever but the further you move along the spectrum the more difficult it becomes to say well this is the point at which this entitlement to moratorium should end because it is a pretty vast spectrum I mean in terms of the question about advice and education I suppose you can look at it in two categories there's the matter of general financial or debt advice or education for the kind of wider population so that people have a basic and a standard level of knowledge about what they're able to access and what they can do to manage death and so on and then you have the more targeted bespoke education or advice for someone who is entering into difficult territory when it comes to death and so on and I think in an ideal world we would have a heavy focus on on both of those and a lot of money and resources would be dedicated to it but the circumstances are such at the moment that I perfectly understand that it's very difficult to devote a lot of funding and finance to this sort of education and in terms of the targeted advice I didn't find the precise point at which that should be provided or which you're essentially starting to mandate that someone should receive that it's very tricky to achieve so in in practical terms I'm not sure how that would look in the context of of this legislation I appreciate the sentiment but it's very difficult in practice to achieve it I think I've come to you daily that when you just throw something else into the mix as we can try to complicate this as much as we possibly can you know one of the things that concerns me here you know in terms of some of the responses we've had here is that we seem to be almost driven by the fact that the advice sector you know is stretched and therefore you know we have to we need to put something on a bill we need to put something in legislation where's the balance to be struck here because obviously you know I think we'd all agree in here the best scenario here is earlier intervention that prevents people getting to that position but that's not we're discussing this in a bill so that's obviously not the case so you know what's your opinion then you know in terms of what how we deal with that on this bill or should we deal with that in this bill so I think it's perhaps just reflective worth reflecting first of all that in terms of personal insolvencies in scotland the vast majority of the debt is either consumer debt so in terms of credit cards bank loans store cards that that side of things or government or quasi-government debt so in terms of the hmrc or local authority and council tax debt that makes up the bulk of debt in personal insolvency and I think in terms of that education process it's about how we look at each of those constituent parts and what they are doing in terms of education and signposting to to debt advice now the consumer debt side of things most of that is again covered by fca and there's quite a lot of already legislation I guess in in that field and that's been strengthened recently I think with the fca's consumer duty so there within that sector actually there is already quite a lot of advice given early warning attempts to resolve the debt position at that side I think where I have the concerns is more in the hmrc local authority side of things and I think there needs to be some work done at how they look at vulnerable individuals and how they signpost things I think alongside that obviously within currently or within current legislation everyone is required to be provided with the debt advice and information pack before an enforcement action is taken we have long argued that actually you know just providing somebody with a leaflet doesn't help them I think you know we need to look much more particularly in this day and age about how people communicate and receive information and just simply as a given a leaflet we need to look at alternative communication channels for that so I think there's lots of things that could be done without legislative intervention and my encouragement I guess would be to focus on that rather than just simply putting more and more into legislation which might not actually just achieve what it needs to do so I think alongside that actually there's a wider position which is you know some people particularly within the mental health crisis situation you know will they ever get out of that debt situation so should there actually just be an automatic debt right off in some of those situations again based on the advisers advice so when you look at the position there you can just say this isn't you know it's never going to be written off other than through an insolvency there's no prospect of income coming in assets being realised or whatever can we just take that decision within legislation that they get an automatic right off in those situations and I think that there's things like that that could be used in legislation I think that that would require legislation to take those sorts of steps so I think it's getting that balance right between what can be done voluntarily within within society and what needs that legislative provision to do so. Well before I get into lender responsibility I'll handle working. Kevin Stewart, did you wish to supplementary on this issue? I do and I come back to Colin Smith as well because both ICAS and the Law Society have said that they thought that limiting access to the mental health moratorium to those in crisis treatment might be unduly narrow. Mr Smith mentioned non-statutory crisis treatment. I think I will ask the panellists from ICAS and the Law Society that question but I think convener may well be a question that we may also wish to pose to the minister for mental wellbeing and social care. How would the panellists Dr McPherson, Mr Mingus, how would you define non-statutory crisis treatment? Could you do so? Would you attempt so? Very short answer, no. We are not experts in that which I think was why the stage 2 working group which I was, so the wider stage 2 working group that looked at the mental health moratorium, I was part of that group and I think that we recognise very much so that we are not the experts in that. I think that the moratorium working group is convenient to tag on to, as you say, well-defined pieces that are in other legislation. I think that that wider piece is more difficult to define in legislation and therefore there is a challenge with that but certainly we are not the people to attempt to make that definition. Dr McPherson? Yes, I concur. I should say that, as you will appreciate, when the Law Society provides written responses, it is often the product of the views of a number of different representatives. In fact, on this particular topic, we had been only from the sub-committee that I am part of the Banking Company and Solvent Law sub-committee, but the Mental Health and Disability Committee raised some of the issues that you are mentioning in terms of the scope and the spectrum of conditions that should be covered. Going back to what we were discussing earlier, in part it is because of the uncertainty that existed on the face of the bill regarding how wide or narrow it would be and there are certainly advantages to tying into existing definitions in terms of the particular scope. As I said earlier, I can see arguments in the other direction as well. Convener, I have to say that I am not surprised by those answers, which I think is even more the reason why we should go to the Minister for Mental Well-being and Social Care to see if they could come up with a definition for non-statutory mental health crisis. Sorry, Mr. That might be something that we will discuss in private once we get to that session and I suppose the issue that we are facing at the moment is whether the bill is including the principle of mental health moratorium. We do not yet know the detail, that is one of the issues that we have. Will there be any merit at this stage right into the mental health minister because it is unclear whether the Government intends to include anything beyond what is statutory, but we can discuss that when we come to the session in private. Murdo Fraser, to be followed by Colin Beattie. Thank you, convener. Good morning, panel. I wonder if I can move the discussion on a little bit from mental health moratorium to look at some broader issues that are also addressed in the bill. As you mentioned in passing earlier on this issue of allowing the trustee and bankruptcy to be discharged in circumstances where the debt cannot be found or is uncooperative, I wonder if you could just say a little bit more about that particular issue and why you think that that is an important reform. Absolutely. First of all, it is not about the accountant and bankruptcy being the trustee in those situations. It is about the private trustees in those situations. Currently, for the trustee who is not the accountant and bankruptcy to obtain their discharge, they need to go through a process and administer the case and such like that. As you correctly say, there are situations where the debtor just simply has disappeared off the face of the earth. We are not able to trace them in those circumstances or, alternatively, you cannot identify where they are, but they are just completely uncooperative and will not provide any information and such like. In those circumstances, currently, the way that legislation is drafted, is that the trustee must then remain in place until the debtor obtains their discharge, but the debtor cannot obtain their discharge if they are not able to be traced or are uncooperative. We end up in a situation where the trustee is in place in perpetuity, which comes at a cost. As a regulator, I still expect the IP to be doing regular case reviews, still attempting to trace the debtor and such like that. There does become a point where that is just futile. Currently, there is no avenue for that IP to get their discharge. I think that it is widely being identified and accepted that the trustee should obtain their discharge in those situations, and perhaps there should be a safe haven scheme in some ways. Perhaps it goes back to the accountant and bankruptcy to act as trustee and just be that keeper of the case in that situation. We are not anticipating that the accountant and bankruptcy is not under the same regulatory expectations as our private trustees, so they can put the case on the shelf, if you like, and not incur any additional costs. We think that that is a sensible thing to perhaps include at this stage in the bill and in legislation to address that particular issue. That is very helpful. I am seeing some nods from the other witnesses. Do we take it that the other witnesses are generally in agreement with that view? Everybody is nodding, so we will take that. We can move on. The second thing that I wanted to ask about was this issue. It was raised in written evidence by Money Advice Scotland around the fact that there is currently a rule that debtors can only access a minimal asset process bankruptcy once every 10 years. Money Advice Scotland has suggested that that rule should be relaxed. Does it have a view on that particular issue? I think that this has been a long, outstanding debate. It is coming back to balancing things. We can accept that some people will get into debt. I think that people are seeing this more and more when their income is not enough to cover their basic cost of living. I can see in the current status, particularly in the cost of living crisis, that people will perpetuate and get into debt in those situations. I can see why you are saying that we do not want them to continually go into bankruptcy and out the other side. I think that there is also a safeguard to say that, in certain situations, you need to take some responsibility. You cannot just run up debt willy nilly and expect that to be written off. It is there as a safeguard. It is important to recognise that it does not prevent them from accessing bankruptcy at all. It just means that they go into full bankruptcy, for want of a better word, rather than the minimal asset process bankruptcy. Broadly, that is an appropriate safeguard that they can still access, but there is a safeguard in there in place. Anybody else have a different view or is that general view? I do not have a particularly strong view on that particular point. I can see arguments on both sides. As David was saying, there is the standard bankruptcy sequestration available for someone who re-encounters debt difficulties following the minimal asset process bankruptcy. It would depend on what the precise justification was for changing that 10-year time period and what it was to be changed to. Presumably, the suggestion is that it would be changed to five years to align it with the standard periods. Do you understand that? I would have to check exactly what my name and my Scotland were saying, but they were just talking about relaxation of the 10-year period. I have some sympathy for the position. Obviously, in the midst of the circumstances in recent years, it is understandable that people who have gone through a minimal asset process may have found themselves in debt problems once again. I could see the attraction of having that more streamlined procedure being used again when people are perhaps not at fault in any way for the circumstances in which they find themselves. However, I can see on the basis of what David has said that that could be contested and that it might therefore be worth waiting to stage 3 perhaps. Just one more question for me, convener. Is there anything else that is not covered in the bill in terms of bankruptcy reform? We are talking about minor adjustments. Is there anything else that you think would be helpful for this bill to cover? If I can come in again, something that was mentioned in the Law Society of Scotland response and one that I also referred to in the response that I provided with Professor MacKenzie Skeen, and I think that is maybe in one or two others by other bodies as well, is in relation to recall of sequestrations, a recall of bankruptcy. There is relatively recent case law that provides that, essentially, if someone is seeking recall on the basis of having paid off their debts in full, that does not include statutory interest from the start of sequestration to the point of recall. That has been relatively controversial, perhaps slightly unexpected in some quarters. I think that our position would be that if a change along those lines was to be made in the context of this bill, it would have to be in a relatively non-controversial way. To some extent, I am solidifying that case law, but I am giving some regard to creditors. The problem would be that, if the recall comes significantly later than the start of sequestration, creditors could essentially be losing out by not having interest, so they would lose the opportunity cost and so on that would come with the charge of that on their relevant debts. One possibility would be to say that, for the first six months of a sequestration, someone can pay their debts in full without interest being charged, but thereafter, interest would have to be paid in order for the recall to apply. I think that that would reach quite a nice compromise position and would be in line with the existing case law. I will not go into the precise details of it further than that unless you would like me to do so. It is an addition to that question. The change from the current situation—you said that it has been confused by a recent case. Yes. The current situation is that the statutory interest is not chargeable on debts. If, at any time after the sequestration has commenced, a debtor seeks to have it recalled on the basis of having paid their debts in full, interest is not included in that. They do not have to have paid interest on the amount that had applied from the commencement of sequestration onwards. However, at the first instance in the case, I think that it was Sheriff Hulligan had said that he realises that this may be particularly unfair to creditors if the sequestration has gone on for a long period of time. I think that to give a bit more of a kind of concrete answer, having something specifically in legislation saying, let's say after six months interest would have to be paid in order for the debts to be considered paid off in full to therefore have the sequestration recalled, that would achieve quite a nice balance between debtors and creditors. You obviously want the debtor to have the ability to take themselves out of the process. Just because they can't pay interest in the initial period would perhaps seem a bit unfair to them. However, I think that if it goes on for a long period of time, the creditors start to feel unfairly treated, perhaps. However, I don't know if others have views of that. I would say that, as a private trustee, I have dealt with quite a few debtors who have been in a position where there could be a recall after three or four years. It would be great to have some clarity on that because, as the trustee, our primary duty is to the creditors to maximise their returns. Payment interest maximises their return, but we have a duty of care to the debtor and recall for them is probably a better outcome. Some actual guidance and some legislation to have a definitive what you should do in that situation would be useful. It is something that should be looked at. Brian Whittle, do you want a supplementary question? Just to follow on from Mordor Fraser's question around potentially what could be on the build in your response, it leads me to this idea of getting back to those who lack legal capacity and how they are currently treated in law and should they be liable for interest in charges on loan payments in those particular set of circumstances? Is that something that potentially this bill could deal with? I do not know who wants to ask them with potential. The interest that I was referring to is probably a bit different from the one that you are making reference to here, because you might have in mind in the context of a moratorium. I agree that in the context of a mental health moratorium there should be no interest or charges on the debt. I do not think that the level of debt should increase in that way while someone is going through mental health crisis treatment. I think that there was previously a suggestion that the standard moratorium such charges and interests should not apply either, but my understanding is that it was rejected by the Scottish Government. If someone can correct me if I am wrong on that particular point, because it would add greater complexity into the process. I would perhaps have some sympathy for stopping interest in charges in that situation, but I think that our argument would be strengthened if the standard moratorium was a shorter period. If it is six months again, you are starting to get into the territory of possible unfairness to creditors in that scenario. Good morning. I have a couple of areas that I would like to explore. The first is about the arrestee duty of disclosure. The bill would require a person or a body who receives an arrestment request to inform the creditor where it is unsuccessful. That adds on the existing process where it is successful. There is information disclosure there. A number of respondents raised concerns about the increased burdens and costs on arrestees. I was particularly struck with Nat West, who said that they receive about 70,000 arrestment requests every year, the vast majority of whom fail. If we look across the whole field, that is just one business. All the banks and other institutions and so on that would be involved, the amount of paper that would be flying back and forward would create a burden not just for the arrestees but possibly also for the creditors who would receive all the responses. Two questions here. One, would you agree about the concerns about the extra burden that is going to come into the system? The second question has been suggested that requiring arrestees only to respond to proactive requests for information from creditors would be a more proportionate way forward. Maybe I can ask Barry to comment on that. To be honest, I would actually want to say that I would need to pass this to the other guys. On the basis that I was throwing the deep end on last week, and to be honest, I have not discussed that element of it with the IPA, so I would need to come back to that when I apologise. In that case, we will pass it across to David. Sorry, David. It is going to be a similar answer, I am afraid. That particular area of law is much more legal than insolvency, which is what I specialise in. Unfortunately, I am not in a position to give any insight in that particular instance, I am afraid. I would like to note that I would not particularly comment on the diligence sections. Can we focus on Katie and Alistair? Well, let's move it on to Katie then. Our three stances are the same. It's out with the scope of their members and their specialism, so no comment from me is out there. No pressure here. Can I pass this to Murdo perhaps? I have a view on that on behalf of the law society. We support the proposal in terms of the duty of disclosure. If you are an enforcing creditor and you have a schedule arrestment served and you have no response, you don't necessarily know because that's been lost in the system somehow or because there's actually nothing to arrest or it falls below the relevant protected amount, so I think it is helpful to have that information. I do understand the concerns of banks and other bodies who receive lots of the many thousands of requests and schedule arrestment being served on them. In any event, the banks will be doing the search. They will be trying to identify whether the person does hold a bank account—they are going through that process anyway—and they will have access to the relevant forms. The key thing to achieve here is to enable that information to be disclosed to creditors who are enforcing, but in the least onerous way to the banks possible. If it is by way of some simple electronic communication, then I don't think that that should be too much of an issue beyond the work that they are doing already. I appreciate that there may be some risk if there is significant cost here of banks not taking it upon themselves but essentially passing it on to others. On behalf of the law society, I support the change that's proposed, but I think that it's about achieving it in the least onerous way possible to address those concerns that you mentioned. Do you think that it would add to the burden on the creditor's side, because they're going to be receiving all those pieces of paper, whether it's electronic or actual pieces of paper, back from the banks and so on? It's going to add considerably to their admin. I think that from the enforcing creditors point of view, they essentially want the information to know how they should proceed in order to make decisions, because if it's then disclosed to them that the party has no account with that bank, they can go ahead to another bank or seek to enforce it in another way, or if they find out that the bank account balance is below the protected amount, they may just decide to write off the debt and not proceed any further because the person doesn't have enough assets to pay off the debt. If you receive nothing back from the bank, there's just an assumption that either there's not enough money, but there's no confirmation that that is the situation. Is that how it operates? Indeed, so there's the assumption that either there's not enough money in the account or indeed that they don't have an account with that particular bank. Of course, this isn't just about arrestment in relation to bank accounts, but that's the most common type of property or asset that's arrested. You don't necessarily know whether, like I say, it's just been lost somewhere or there's been another problem communicating the information to the creditor. From the creditors point of view, they would want to know this information. It's not going to be a huge amount more paperwork for them because the enforcement process for them will still be the same. It's just what they're getting back in return will be enhanced because if it was successful in the first place, they'd get this information back in a form and now, or on the basis of this being introduced, they would get back information given them more details about what's happened in the event that property is not arrested. At the moment, even if the amount in the account was very small, wouldn't they advise the creditors about the account anyway? Well, they could do so, but there wouldn't be a requirement upon them to do so. In terms of the forms and what's required to be reported, they wouldn't have to report if it was unsuccessful to do so. In fact, they might be reluctant to do so because it would give a creditor information about their client that they would not be required to give. Let me move on to another area that is about information disclosure orders. The power to make regulations in relation to information disclosure orders is legislated for already in the bankruptcy due diligence act 2007. However, the power has not been utilised. Now, the Scottish Government is proposing to take it forward and the intention would be that creditors would be able to seek information about a debtor's assets from third parties. It's argued, of course, that this will improve transparency so that it can identify who can pay and so forth. There are recommendations about how information disclosure orders could work in practice, and there would be a requirement for the creditor to use some sort of agent, maybe the solicitor or sheriff officer. However, the debtor wouldn't be informed of this action in case they move assets, so it would be done in the background. Initially, disclosure orders would only cover private bodies rather than public sector bodies. It seems strange to me that it doesn't include public sector bodies. It seems that that's quite a wide area that's not being tapped into. Can I ask, just for your views on that, about including public sector bodies and the appropriateness of implementing this power? I'll give Barry another chance here to come in. I think I'll go back to my last answer again and apologise again and pass it on to the panel. Apologies. David? It's got the same afraid. The whole area of diligence, I'm afraid, is out with our scope of knowledge. Katie, any chance with you? Likewise, R3 did not provide a cut when. Alasdair, welcome back. Thank you. I could see where that one was going. We support the introduction of information disclosure orders. As you said, they've been sitting on the statute book under the Bankruptcy and Dilligence etc. of Scotland Act 2007, so for a long period of time now, without being brought into force by way of regulations. I would agree with you that I don't quite understand why public bodies should be exempt from those. I suspect that there is some reasoning or justification for it, but from our perspective, we support the introduction of information disclosure orders to as wide an extent as possible. I think that there can be various safeguards put in place in terms of accessing the right type of information. That is all part of a kind of transparency and information-driven approach to diligence, to better enable parties to make accurate decisions and to help both the debtor on the one side in terms of certain types of disclosure as regards things like the debt advice information pack, but on this side, helping the creditors to enforce debts that are due to them, so we support it. Maybe transparency is not so much for the debtor in this particular case. No, I would agree with that. You are trying to reach your balance. In some areas, you are more focused on giving more information to the debtor to enable them to access the best possible solution, but it is always a bit of a balancing act. You also have to focus on enabling the creditor to enforce where it is reasonable for them to do so, and I think that that would achieve it, so we are fully supportive. I will add a final question to that on inhibition. The proposal in the bill is that inhibition gets added to the somebody warrant, so it is linked. The Scottish Government plans to lay regulations to add inhibition to the options that are available for enforcement after somebody warrant. The example that we have is around local authorities and council tax debt. Is that something that you would welcome being added to the options or the list of... I do not have a particularly strong view on that. I think that there is some justification for enhancing the tools that are available to a creditor when enforcing. Somebody warrant, as you note, is a procedure that is utilised by local authorities in order to enforce debts that are payable, including council tax arrears. Inhibition is a type of diligence, which is what is known as a freeze diligence that places restrictions on a party's ability to transfer land and buildings to what is known as the Scottish heritage property. I think that in lots of cases it may not have much of an impact if parties do not have that type of an asset, if they do not own a house, then it would be quite limited in terms of its application, but I do not have particularly strong views on it. I think that that brings us to the end of this morning's session. Thank you for participating in our first evidence-taking session on this bill. If there was anything further you want to contact the committee about following this session, please feel free to contact the clerk. Thank you to all the witnesses and we now move on to private session.