 We have one apology, and that's Alison Harris, MSP. We welcome John Paul Sheridan and Robert Howey to the meeting to give their evidence on the prescription Scotland bill. Before we start, it's one business we must decide, and that's a decision on taking business in private. As proposed, the committee has taken item 4, consideration the Delegated Powers provision in the Social Security Scotland Bill, as amended at stage 2 in private. Does the committee agree to do that? Okay, so move on to gender item 2, which is consideration of the prescription bill. We've got a couple of panels with us today representing the legal profession. Welcome again John Paul Sheridan of the Obligations Committee of the Law Society of Scotland and Robert Howey, QC of the Faculty of Advocates. Thanks very much for coming gentlemen. I'll open the evidence session and I think we've got two or three questions from Neil Finlay. Thanks very much. Good morning. We'll try not to fall into cliché and stereotype talking about lawyers and money this morning. I'm sure we'll get those gags over early. Section 3 of the bill talks about the five-year prescription to obligations to pay money. I wonder if you could comment on the general principles of section 3 and in relation to the exemptions in section 3 also. Well, general view is that parties or anyone should be able to move on with their circumstances after a period of five years, so they shouldn't be chased for debts after that period of time. So if someone has an outstanding mortgage or a credit card or a bank overdraft, then they should be able to arrange their affairs so that they can't be chased after that period of time. Obviously that is the legal principle applicable in most areas, most countries around the world. In terms of the exemptions, the vast bulk of the exemptions are not there for any legal or logical reason in the sense that a debt is treated any differently. The principle is, obviously, whether it's fair for the more common good, for taxes, council tax, social security payments and the like, for people to be able to avoid repaying those after a period of time. Certainly, the society's previous response indicated that the view that council tax should not be an exemption, because, as we understand it in England and Wales, the principle prescribes after six years, which is the English Equivalent Limitation period. We have come across situations where there can be particularly harsh results in council tax annals because it's joint in several, so you could have two tenants, for example, one who has paid their fair share, they split up, move along and they can be chased seven, eight, nine years down the line. However, we understand that there may well be political reasons for that not to be treated in the same way as, say, for example, a commercial debt arrangement, but that's the sort of general statutory exclusions. Certainly, tax and social security are reasonably common exemptions. There is no legal or logical reason why that should be treated any different from any debt. However, again, it's a matter for the committee as better able to assess political dimensions than I am, but I see no reason in principle why you shouldn't have that as excluded. There is relatively little I have to say about this gentleman because faculty takes the view that these are political considerations and, therefore, faculty expresses no view on them. There are some questions raised about various drafting points and the faculty's response to the bill. In relation to section 3, maybe can you summarise briefly what those are? The short answer is no because they are detailed and that's why they are down in print. There is, with respect, little benefit in discussing individual drafting matters just as somebody talking about it tends from lots and many years of unhappy experience not to work. It's better to look simply at what has been said as to why it is that it's being contended that the drafting becomes unclear as it's suggested in the drafting originally. You have also, to bear in mind, that the faculty is talking about the original draft as originally produced and certain changes have, we know, been made in order to meet a number of the objections which were made on drafting points, and, therefore, a number of them simply no longer have relevance. However, they tend to be rather detailed items and, frankly, their best read in print. You have the benefit of legal advice. You can operate on that principle, I suspect. I would not be putting your time to the best use to say it all again and probably in different language and then have somebody saying, yes, but the other word is here, so what's the difference between that word and this word, which, of course, is exactly the kind of thing we're talking about. I don't know if it's one of the things you were intended to ask about, but you get an almost ideal example of it when you get to the discussion of act neglect and default later on, where there's a proposal to change this. One of the issues there is, well, we say, we don't see the need to change it because everybody knows, or at least all lawyers, know what act neglect and default mean because there's a House of Lords case that tells you what it means, even if you weren't brought up with Cranmar in a good presbytydian country, we might be a bit bemused as to what some of it is or not have the immediate grasp of it since we were that high, but there is a House of Lords act that tells you what the answer is, so once you've been told what the answer is in this very field in a Scottish appeal, why change it? It looks like you're trying to achieve some change of meaning when, in fact, as I understand it, you're not, but that just demonstrates part of the difficulty about talking about drafting changes. The best looked at in print with respect. Your privacy is welcome. Thanks for sparing us, but are drafting errors in your view a significant issue? There are drafting questions. I'd like to avoid the word errors because it's simply an exercise in hypocrisy to talk very much about drafting errors. Everybody knows that it's fearsomely difficult. You think that you've got it right and you can guarantee that the one thing that happens if you do this commercially, for example, is the one thing that you didn't draft for. That problem is writ large when it comes to the parliamentary draftsman and it's all very easy for us to sit in a court and say, well, that wasn't terribly clever drafting and frequently it wasn't. This is simply a matter of drafting. It's not as if hiding a particular substantive issue. The danger is that what is lurking particularly in one of the ones that we had mentioned, I think that this is one of the ones that has been corrected, was there was one that potentially hit a substantive issue and that's why the commission changed the drafting. Section 5 of the bill relates to the start date for five-year prescription in relation to the obligation to pay damages and it reverses the effect of a supreme court case. That was the Morrison case. The SLC consulted on four options for section 5 of the bill. They decided to use option 3. Can I ask you which option you favour, both of you, and why? Are there any drawbacks to the option now set out in section 5? If you like, you can give some examples to illustrate your point. The law society favoured option 3, although we wouldn't have had any significant problems with option 2. Just to summarise what the issue was, Morrison ICL plastics was an explosion of the plastics factory in Mary Hill a number of years ago and everyone had understood the law to mean that the five-year period started from the date that you knew there had been a loss and that the loss had been caused by someone else's problem. What happened there? There had obviously been a loss. Everybody knew there had been an explosion but it had taken a number of years to work out what happened. There had been prosecutions for deaths. There had been a fatal accident in a number of years past. Everyone had taken the view that you needed to have both the loss and an awareness of who had caused the loss before the five-year period started to tick. However, the Supreme Court in that case said that it was the awareness of the loss that was key. That has been followed on a number of other occasions and it has led to some problems or what people view as harsh results. One of the other ones that is featured quite heavily in the Scottish Law Commission is the case of Gordon's trustees in Campbell Riddle. I hesitate to go into that too much detail because I am conscious that my fellow panellist appeared in the Supreme Court in that case and probably knows an awful lot more about it than I do. One of the issues in that case was to do with a farming tendency. The landlord had issued notices to remove the tenant and it turned out ultimately some years down the line that those notices were defective and what the court had said ultimately in that case was that when you incurred costs trying to remove the person, that was a loss. I do have a slight concern that the way that the drafting has been set out is that it does not actually deal with that particular problem and it is a question of what loss is. For example, if you take a standard case where somebody buys a house, they pay their solicitor and they pay the surveyor and many years later it turns out that there is a problem, they do not own a part of the ground or there is some problem with the building. On one view, the person incurred a loss when they paid the professional fees to the solicitor or the surveyor and I do not think that that would be the intention but on one view of the wording you have incurred a loss right at that point in time. I would have a slight concern about the wording there but generally we are of the view that it does provide more clarification for the general sense and it puts the law back to what it was understood prior to the decision in the Morrison's case. I have to declare an interest. You have already heard part of what it is but in fact I was the losing senior in both of the cases. I have to be a little careful about what I say about each of them. However, clause 5, as we understand it, is directed to a rewrite of Morrison so as to restore the law to what it had previously been that there was a thing known as the action ability test, i.e. that you had to be aware of the fact that this great act neglect and default was the source of the problem, i.e. that there was something legally exceptional which was what had caused your loss. In Morrison, as Mr Sheridan says, everybody knew immediately that there was a horrible hole where there used to be a wall but it did not follow that. It knew that the reason that hole existed was down to the negligence of some third party. With respect to Mr Sheridan it may have been a slip of the tongue but the law has not been so far that you needed to know the identity of the person who was responsible. You never needed to know that. The part of the catch sometimes was that you knew that somebody was in there and that is why you had building contracts with about five sets of defenders in them because you knew one of them was responsible for this but you might not know which but the fact that you know one of them has got to be responsible for this meant that the time was running and the responsible lawyer did not hang around and let his client wait before suing. You got ensued and then you could sit back and think once it was safe. What this does is it restores the action ability test. That is what subparagraph B is designed to do. As Mr Sheridan says, it is not directed immediately to the Campbell riddle problem which was about what is loss for this purpose and that is not addressed here and presumably that is because the commission considers that loss should continue to mean whatever it is that came out of Campbell riddle meaning. The trouble in Campbell riddle was that the loss could be said to have risen as soon as the unfortunate landlords had paid their solicitors their fees for drafting the notices that turned out to be defective a year later so that was one year gone before they knew anything about it. There are still worse examples than the rather harsh one for the unfortunate landlords in Gordon's trustees. The classic is the person who has a where there is a trust defect in drafting which only emerges after a generation when someone dies at the age of 98 and time has long since run before anybody knew there was even a problem. The other one is the perhaps more common case where there has been a terrible mistake made in conveying land and that shows up when somebody sells the house 22 years later and there is nothing to be done about it and that as I understand it is not what section 5 is designed to do. Section 5 is designed to reverse Morrison and to change the law in a case called Dunferman District Council against Blythe and Blythe which is the one that says you do not need to know the identity of the defender. What it will do is mean that the time for prescription will start running a lot later than it does now and certainly faculty was of the view that that was no bad thing. We were in as it were the same position but the opposite way round from the law society we weren't really concerned whether Parliament chose to legislate in favour of the second or the third option just so long as the legislated for one of them our marginal preference was for the second the same way I understand the law society was marginally the other way but it is entirely marginal and if it seems proper to Parliament to legislate for the identity of the person being in that's not a matter of which we would complain. OK. Any follow-up questions to any of that now? You should say the convenience in the situation. Explain to me just the practical differences this would make if there was a convincing error. Right. You need to have a situation in which if you imagine the situation at the moment there is a convincing error is made. We'll assume it's fatal. The matter is not noticed at the time. The document goes on to the registers. Nobody bothers to look at it again for 20 years until you sell the house. The difficulty here is that it will be taken that as matters presently stand you look at loss with hindsight and you say paying the lawyers was the first item of your loss because it was wasted. You bought, if I can use that phrase, a good title to your house. You didn't get it. You got a piece of paper with words on it which was legally quite worthless. So the money was thrown away therefore one says that that was lost. You knew perfectly well that you were doing the facts which amounted to loss because you knew you were paying your lawyers and you knew your pockets were getting the lighter. However, that means that you are time starts running against you and by the time you find out there's anything wrong time ran 10 years ago. What clause 5 is designed to do is to say right you have to know or reasonably constructively or actually if I can use the shorthand for the moment you have to know the three sets of facts. The first of these is that loss has actually occurred and of course the idea is that's meant to hold up the date till you find out that there's a problem when you try to sell your house being a loss which was caused by actor omission. Now in the house sale context that's unlikely to be terribly difficult that's more of a problem elsewhere. If I go back to Morrison, Morrison could have been not the result of anyone's fault. If you imagine that the misdesigned gas system was simply designed wrongly but not negligently, i.e. it was not something where you could point to a fault that was objectionable, something that no ordinarily skilled designer would have done of acting with ordinary care. It was just the state of science when that system was done was such they didn't know there was a problem there so the design was wrong it caused it to blow up but it wasn't anyone's fault. So that's one way you've got to try and find out that it was somebody's fault or at least that's what we all thought we had to do until I made the nasty discovery in London. In the conveyance in case that's not the real problem in the conveyance in cases nobody has reason to believe there's a loss at all and what this is seeking to do is to say that until you know that you've got a loss caused by an identifiable person's fault and the identity of the person in this case won't be difficult either but until you know the last of these things time isn't running against you so what it'll do is move time running from when you paid your lawyers in the first place 20 years ago to when you find out there's a problem and somebody tells you it's because somebody made a terrible mess of the conveyance thing so it'll move the day quite dramatically in that context. What's the role of the insurance industry in this in terms of delaying tactics that they use? Does that mean that the egg timer is running down all the time that they're prevaricating delay? Well if you look at the responses to the law commission paper generally the insurers favoured retaining the decision from Morrison's as being the applicable law. As indeed did the firms of solicitors who are viewed as the insurer firms the society takes a neutral view in that the society is solicitors who act on both sides of these things. I personally don't act for any insurers, I tend to act in pursuing claims of this nature and therefore understandably favoured lengthening the prescription period but the view generally amongst the members of the obligations committee of the society was that the prescription period should be extended in the sense that the decision on Morrison was unfair and harsh and should be returned to the position previously. I have a personal interest in a case that somebody, I don't know if you are the happy valley road case in terms of conveyance and the law society has been involved with it and it's not particularly related to prescription but it is a situation where the owners of the property have done nothing wrong ever in this case and have been very badly let down by the insurance industry and the legal profession and still have not got that situation entitled to their property yet as far as I'm aware. Anyway, I devil most of the divertory from that. Little careful of incidentally jumping to the assumption that the insurance industry is always delaying things. The examples that I was giving you of the bad ones, in this case they have, the kind of example that I was giving you in relation to the conveyancing flaw or the Morrison type of thing, there was nothing that insurers could do for good or ill about changing the time at all. The problem is wholly independent of anything that they do and when you get the issue that may arise with delays is one that was canvassed by some respondents, which was to do with delay in prosecution of actions and whether or not prescriptions should keep being interrupted permanently by actions that are raised and which may take an awful long time to go and which then, when they are thrown out, restart a new period of prescription for an immensely long period of time away. However, it is, with respect to a little too easy, just to jump to the conclusion that the insurance industry is always out for its own fell purposes to delay things to secure prescription. It frequently isn't doing anything. You said that, I didn't. David, I wonder if that leads into your question on the Hugh Paterson case. Thank you, convener, and good morning, panel. The committee is aware of a Parliament petition from Hugh Paterson, which provides an example of a situation where 20-year prescription has operated harshly. The petition relates to a situation where a solicitor made a significant mistake when applying to register a change of ownership of a house. Furthermore, the mistake is not discovered until the 20-year prescription has extinguished the associated right to suicide that is responsible for the damage. How common is this type of situation at the moment, and do you think that such cases can be successfully dealt with by measures other on the reform of the 20-year prescription? I have no immediate knowledge of the case at all, but I take it that it is an example of the kind of genus that we have just been talking about. The fact that I know nothing about it probably makes it a lot easier to say something. There is a difficulty here. 20-year prescription is here for a critical purpose, which is to ensure certainty. Here, as it seems to faculty, there are differing interests at play from those at play with a short negative prescription, where one can see grounds for extending time in the interests of pursuers. With 20 years, the whole object of the exercise is to bring things to a final halt. That is that critical and most important thing generally on a public interest basis. There will be hard cases. Mr Paterson's might be one of them, but I do not know. People go over the 20 years and find themselves simply without remedy. That is the classic adage of the hard case that makes very bad law if you legislate on the basis of it. One has, if I may suggest it, to legislate on the basis of the general cases and accept that, unfortunately, from time to time, there are going to be hard ones. I cannot answer at all the suggestion whether or not there would be other ways round of getting around the kind of problem that lies in Mr Paterson's case, because I just do not know what it is. I do not really have anything to say beyond that, other than that we are supportive of having a final cut-off point at 20 years. I have read Mr Paterson's petition. I do not know the full circumstances, but, as Mr Howey says, there are always going to be problematic cases, and I do not think that you can design a law that covers everything. Is it not right, though, that if you only discover that there has been an issue after 20 years, say when you sell a property that is when you find out that there has been an issue? Surely it is right that you should be able to do something about that in law? Respect no, and indeed, as I understand what has been proposed by the commission, the commission would make it even clearer that you cannot do anything about it. The object of the exercise is to secure a date that is absolute cut-off date, which is certain, which the insurance industry and indeed all of commerce that ensures itself against risks can work against. What you cannot have is a situation where liabilities could keep on running. That, for example, feeds into the question that was raised about should 20-year prescription be able to be interrupted, to which faculty said no. The reason is that, if you can interrupt it, and by interrupt I mean, stop it and restart it again from the beginning once you restart the situation that exists now, then you have a situation in which you never know when liabilities are going to end. I think that the commission had an example of a liability that would last 39 years. That makes it very difficult, certainly very expensive, possibly even impossible to ensure against. That is not in anyone's interest at all. When it comes to the 20-year prescription, it seemed to members of the faculty that the crucial importance was bringing about a final end date. Some people are going to suffer because you do that. That is undoubted. There are going to be bad cases. There are going to be cases that, if they came before any of us, we would be sitting there trying to find some schemer or another which we could use to get round it to re-characterise it. Lawyers are paid to do that kind of thing. That would be when your professional ingenuity would be put to a test. For the purposes of determining how does one legislate on the general case for the good of the public at large, then I suggest that that is not the way of approaching it. Legislation for individual cases has been found in the past to be the legislation that proves to be the most problematic, shall we politely call it. Section 8 would change the start date of the 20-year prescription for the obligation to play damages. For section 8 of the bill, you expressed some concerns about how it would work in relation to omissions to act and on-going breaches. The SLC says that oral evidence to a committee that a language used in section 8 would be familiar to the courts from another part of the 1973 act, so it could not see a difficulty here. Are you now content on this point or do you remain concerned? We remain concerned. We are concerned that it is difficult to say when an omission stops if just nothing happens. How do I distinguish between nothing any longer happening and the omission carrying on? It just is not possible. It may be that what has been was being done by somebody is no longer being done by him, but other effects from elsewhere mean that nothing appears to be happening or nothing is being noticed to be happening. If there is a concern about an importance attending the need to notice what is going on or to be able to notice what is going on, how in a number of kinds of cases we have been talking about some with, for example, technical legal breaches, how is the ordinary member of the public to know that that is or isn't happening? It just can't be done. It may be that it is a problem that can't be fixed, I grant. It may be that this is possibly as good as you can do because, as I say, you just can't distinguish the ends of emissions, but we had some nervousness that in the cases of emissions in particular, this wasn't going to work terribly readily. Perhaps it can't be made to work readily. That may be a fair enough point for the commission to make. Any thoughts on that, Mr Jordan? My concerns are the society in terms of on-going breaches and omission cases. That is in our previous response, and it is in our draft written response to this as well, but, like Mr Howey, I am not sure that there is a solution to that. The obligation to pay damages in section 8 of the bill proposes a new start date for a 20-year prescription. That will be earlier in some cases than the current law and never later. Is there a risk of section 8 that you would see more cases with obligations to pay damages as extinguished by a 20-year prescription without the right to holder ever having to be aware that there is a problem in the first place? If so, is section 8 a good idea on this basis? I think that the answer to the first part of that is yes. The current law is 20 years from when the obligation became enforceable and what is being proposed is 20 years from the date in which the actor omission took place, which is always going to be either at the same time or earlier. I think that the short answer is yes. We will find situations where there are people who are left in a situation where they have no awareness of a problem. Is that a good idea or not? Again, we go back to what we discussed earlier about the certainty and the whole purpose of having the 20-year cut-off point is to have finality and certainty. If that is deemed to be a good, then yes. The faculty was fairly firmly of the opinion that securing certainty was to advantage here and indeed to tie this. Even if it is to the actor omission, it was wiser than trying to tie it to loss because loss will simply mean that the date you start from bounces off away further into the future and you could end up with these 39-year indefinite obligations, which are, in our opinion, thoroughly undesirable. Therefore, we felt that that was an advantage. We are not persuaded that the problem to which you advert is one that is going to be particularly significant statistically or serious. Most of those cases of damages will be covered by five-year prescription things and therefore discoverability and the rest of it. There comes a point, however, at which you have just got to say that an end has to come to. I was about to say enough is enough, but I think that that is probably a unwise phrase to use right now. However, you have to say that an end has to be brought to this. We felt that that was the greater advantage because we suspect that the number of cases that will present the problem with which you show concern is going to be very limited. Indeed, they will almost be called by five-year or extensions of five-year. Stuart McMillan Thank you. Good morning, panel. I just want to get back to section 6. It really has been touched upon in some of your answers over the last few moments regarding the 20-year prescriptive period. Is it, Mr Herrie, that you were quite clear that you do not feel as if there should be any interruptions? Mr Sheridan, can you clarify your position and the position of the Law Society, please? Yes. The Law Society's position on this is that it is happy not to have any interruption to the prescriptive period for 20 years. That is different from the five-year period, but I think that we are at one with the faculty on that. Certainly, in the SLC discussion paper, Brody's had suggested otherwise that they suggested that there should be an interruption period. Do you have any comments about Brody's suggestion? No, there is a reference of Brody's on the next panel. I will let them answer for themselves, but certainly that was not the view of the society as a whole. On section 7 of the bill, it states that the 20-year prescriptive period, which applies to certain property rights, will no longer be able to be interrupted, but it can be extended only to allow on-going litigation to finish. Certainly, in response to the consultation on the draft bill, the faculty suggested that the approach in section 7 might not work as well for property rights, like servitudes. Can you explain why not and whether there are any alternative approaches that might actually work better? The faculty had here was that when you have servitudes, those are rights that run with the land and keep on going indefinitely into the future. The idea that you can have a prescription coming along must not be allowed to stop continuing property rights simply by saying that they continue until this action finishes and then, apparently, they would somehow prescribe at the end of the action. If you have rights that are land rights that are meant to continue, are those not meant to be rights that, broadly speaking, relate to property and are therefore meant to be improscriptible? You do not lose your rights to property simply because you are not litigating about them. If you have a dispute about them, why is it that if 20 years come along and that dispute is still going, it lasts only until the end of that litigation? Should not the right to servitudes still continue in any event, whatever the outcome of the litigation? If the outcome of the litigation is that you do not have a servitude right, well, there is nothing to talk about. If the outcome of the litigation is that there is a servitude right, why is it that you have been declared that you do have a servitude right, except that, apparently, according to this, now that it has gone over the 20-year period, it has automatically been prescribed? That seems to us to be wrong. I just wonder, Gents, if you could explain for us, because you are doing so well in plain English, what the issue is over the contracting out of prescription, and then I will ask you your views on that. The contracting out position is that under the 1973 act, parties could not agree effectively to put the five-year period on hold, and they had to raise proceedings and serve those proceedings in order to interrupt the five-year. What is being proposed here is that parties will be entitled to enter into a contract effectively to suspend that period without the need to raise proceedings. What is proposed in the draft bill is slightly narrower than what was in the original discussion paper, in the sense that the period in time is restricted to only one year, so parties can only put things on hold for a year, which would effectively extend the prescription period from five to six years. Certainly, as far as the law society is concerned, we do not see any reason why it should be restricted to one year, because if parties want to agree to put things on hold for two or three years, then we do not see any particular reason and principle why that should be objectionable. You can have all sorts of reasons why investigations might need to still go on, or there are issues about loss or calculations or looking at different medial solutions, which might take longer than a year. The whole purpose of this section is to say, well, this is to stop people having to incur the costs of raising proceedings, and if it is just being delayed for one year, then you might end up having situations where people contract out for a year and still need to raise proceedings anyway, because it has not been resolved. Basically, both parties would agree to put things at a standstill for only a year under those proposals. Your argument is that you should be able to agree to almost any period that you like. That would be subject to the 20-year maximum, but I have no particular problem with anything two, three, four or five years or whatever. I do not see any problem with that. As long as both parties agree to that? Yes. Mr Howey, do you have any thoughts on that? The faculty was very much more antagonistic to this idea. We were the people who were saying that there had to be very tight restrictions on the so-called standstill agreements if you were to allow them at all, and we would very much favour their being restricted to no more than one year. The danger is that if you allow them on an open-ended basis, they will be abused roundly. What will end up happening is that there will be provisions to extend being put in contracts. If you did not have, for example, the restriction in 2A here, which says that you can only do it after the period has commenced, the importance in that is to stop people writing it into standard form contracts right at the start, because that effectively means saying that I write in a provision of my standard form contract because I have lots of money and you do not. I am bigger than you and I am going to use my commercial power is that your obligations to me last for 40 years and mine to you last for 40 minutes. We regard that as thoroughly undesirable. Unless you have a restriction, for example, about when you can arise, make one of those agreements, that is the kind of thing that we fear happening and we are not persuaded that legislation against unfair contract terms will be able to get at that, people will draft round it, they do regularly. We are also concerned that the other danger is that if you do not restrict the period of time for which you do it and the number of times you do it, it will become an excuse for procrastination, for phabian tactics, for delaying, for foul reasons or fare and that it is an invitation for nothing to happen to, in fact, invite the very problems that prescription is there to prevent. Evidence going stale, actions not happening on time, people being persecuted with old claims which can't prove because everybody's forgotten and the documents have been lost and generally all the reasons we have prescription in the first place are in danger of being thrown out with a bathwater. Lastly, it seems to us that there is a question as to the logical sense in having legislation in which Parliament says, we have produced a carefully calibrated balance between the interests of pursuers and defenders and we say it's five years, it's 20 years, it's whatever number you care to insert, with whatever rights of extension you care to insert, and then say that parties can contract out of it on an open-ended basis whenever they want, whatever they want, one might ask why we are bothering to legislate in the first place, because it's a free-for-all. Therefore, the current legislation simply prohibits this. Sorry, I say that with assertitude which may mislead you. There isn't actually any real authority about it, but the general understanding is that it's simply prohibited under section 13. Faculty was of the view that that should be the general ruling proposition still and that if standstill agreements are to be allowed, they should be very tightly controlled to deal with the kind of case where it is necessary to try to obviate the need to go into court immediately because of some particular difficulty about the whole things likely to sort out, but we just can't get somebody to sign up at the end sort of thing as opposed to being an excuse for putting the matter off and off and off until eventually somebody says, I'm not playing anymore and it's in fact been used as a weapon to delay them long enough until the evidence has gone and then you refuse to agree the next time and they're caught. I also suspect that this argument about people being required to sue in great numbers of cases for lots of things on protective basis can be readily exaggerated. It does happen, but it's certainly true. It's a particular notorious in the construction industry, but it doesn't take up much resource, in fact, because what tends to happen is you raise your action against all the people and they serve the thing, get to the tax and run around to all the defendants and say, it's all right, you don't need to waste time defending this. We're going to agree to stop this. We'll call it if we have to, to assist it. Once we've got the time bar broken, we'll stop and everybody can sort it out. It's not actually that much of an imposition, and we fear that you may be producing something worse to cure a minor problem by allowing anything other than the tightest of rules on standstill agreements. Basically, we consider if Parliament has decided that these are the rules on which people's rights are to be extinguished on these circumstances, that should not be entitled to be altered by parties so-called agreeing, where the agreements may be more or less in somebody's interests. This is a situation in which, in some respects, Parliament may have to protect people from themselves. Right. Mr Sheridan, how are we vehemently disagreeing with you there? Do you want to go back to that? I think that, to some extent, the first point that Mr Howey made, I think that we're maybe speaking at cross purposes, because it's not the society's position that people should be able to contract out of it in advance. The example that he gives is a good one, where, for example, a bank has a bunch of solicitors on their panels and they say you're responsible for 30 years. That's not what we're suggesting, and that's what's covered in terms of this. In terms of the suggestion that it would be some sort of free for all it, I just don't accept that, because where we're talking about having an agreement, or a standstill agreement, it has to have both sides agree. If, for example, the insurers thought that it was an unreasonable position to continue the period, they wouldn't need to agree and proceedings would need to be raised. Where you have to have both parties agreeing to the period being extended, I don't see any reason in principle why parties should be prevented from agreeing a contractual position. In terms of the suggestion that it's not a big problem in practice, that's not the society's experience. There are several hundred claims a year. The construction, one is a good one, banks and lender claims, for example, another one, where there are several hundred actions raised, served and effectively wasted time, not only for the solicitors and parties involved, but for the judicial resources. We don't see any reason in principle why you can't agree amongst commercial parties or individuals why that should be the case. Do you want the final word on this, Mr Howie? Well, in so far as judicial resources are concerned with respect, that's in danger of being misunderstood because, of course, the whole point of these, if they're operated properly, is that judicial resources are never actually involved. All that happens is that the case goes into court to be called if it has to be in the court of session, in the shadow court. It doesn't even need that. It's simply been served. It may not ever actually see a judge because people promptly assist the things in order to make sure that neither time nor money is spent if it can be avoided. I suspect that there is simply fundamentally a difference of view about what the right thing to do between Mr Sheridan and myself about this, and I suspect that it's a matter where the legislatures are going to have to do what they're there to do, which is make up their mind which way they're going to jump. Any members got any more questions? Just on the same difficult cases. I know that they're small in number, particularly, I'll refer back to the convenes one that I'm talking about, and also the Paterson case. They are small in number, but I think that they're quite fundamental to confidence in the convenesing system in particular. Therefore, do we just say, well, these are just odd cases in the big scheme of things that don't really matter, but ultimately if they become more high profile cases, people start to say, well, you know, here's people who thought they had purchased a property, that everything was fine, they engaged a professionally qualified solicitor and that did not materialise. That surely puts into some question the convenesing system. I don't know anything about the valley case that you're talking about particularly, and I'm not sure of the full details, Mr Paterson, on the case, but I do accept your point in principle that there has to be an element of confidence in the convenesing system as a whole, and obviously the Parliament has looked at the registration and the land registration deeds and the whole land registration process, and as I understand it, there's an incentive to try and have all land registered on the land registry within the next seven or eight years, and it may be that that will do something to resolve it, but I do get the point. I'm not sure what the solution is, because if you have a cut-off point at 20 years as a point of general principle, there will always be situations where somebody doesn't know about it until after that period of time. People buy homes and they can own them for 30, 40, 50 years without ever looking at the title deeds, and I'm just not sure what the solution is to that. I think the difficulty, I suspected that there might be some question about how many of those hard cases there are, and when Campbell Riddle was in the inner house, Lord Malcolm observed that there are going to be more of these harsh cases than perhaps had been thought when Morrison was decided. I bent my mind to thinking of a way in which you could get an idea on some kind of scientific, evidential basis, as opposed to just what is ultimately anecdotal material from the likes of me about how many of these there are. I regret, I don't think there is. One of the reasons is that if cases are abandoned for Morrison or Campbell Riddle-type reasons, it will happen in private, quietly. Nothing will appear above the water line. What will be seen in court is a document that's indistinguishable from the document that would go in if a pursuer had won on a settlement, a defender had won on a settlement. The case had gone away for umpteen reasons. Nothing will give it away. The best that you're going to be able to do is that there's an anecdote that Morrison and Campbell Riddle have done quite a lot of damage and will do, kill quite a lot more cases yet. The difficulty that you have particularly with your conveyance in cases is that you're talking about losses that happen at such long terms, that if you use that as being the determinant of where you were going to fix your ultimate long negative prescription, what we've been talking about is the 20-year period, you will end up with a period so long that if you're applying it to across the board just the general cut-off for all obligations, it'll be picking up all the other obligations that haven't been picked up by the five years. The sets of five years can carry on now instead of for four times, they could carry on for 10 times because, let's say, 50 years was the ultimate cut-off date and you would find yourself in the kind of difficulty, the kind of cases that you'll find if you look up in 18th century and 17th century law books when we did have 40 years as the period of the whole negative prescription and you get these cases fighting on and on and on. And the whole reason that things were pulled back in the 1970s to 20 years was to make a major reduction from the 40 years because it was felt that this just meant that people were trying to pursue obligations at 35 years when everybody was dead, half the evidence was lost and it was just a hopeless endeavour for a court trying to work out what to do. So I think the difficulty is that this is simply demonstrating the old adage about the hard cases and the bad law. If there is a problem, particularly in relation to conveyancing, that would suggest that the place to attack it is not in relation to the general law of prescription, which is what you're considering here, but some legislation in relation to conveyancing. But I would caution that the problem may just be impossible. It's a function of this. If you have any line drawn in the sand as being where it go beyond that and your rights are extinguished, there is always some poor soul who is going to find himself at some case on the wrong side of that line through no fault of his own and there is nothing that human power can do about that. I don't think that there is any idea in prescription. Thanks, Mr Findlay. Any more questions? Yeah, okay. Well, that's all there are questions, so for you anyway, we've still got the second panel to go, so can I thank you for your time and I'll suspend the meeting briefly so we can swap over. So can I welcome our second panel this morning? We've got Douglas MacGregor of Brody's LLP, Craig Connell QC of Pints at Mason's, Finella Mason, Head of Construction and Projects of Burness, Paul LLP and Ian Drummond of Shepard and Wetherburn, and I think I'm right in saying Mr Drummond, your firm hasn't given us any written evidence so far. No, that's right. We participated in the early stage of the workshop stage, but we didn't provide a written response. Suggested earlier, you might be the wild card on the panel. We have no idea what you're going to say. Right, so we'll move on to questions. You've obviously all been asked because you're involved in construction and engineering disputes. I think you could maybe give us a different tack to the previous panel and we'll start off again with Neil Findlay. Yeah, the previous panel was asking about section 3 and the extension of prescription to all obligations to pay money. I wonder if you could comment on that section and whether you approve of what's being proposed and if you could talk about the exemptions and whether you agree with the exemptions as well. It's not something that troubles us in the construction arena on a regular basis, but I agree with the approach of the commission and I agree with the introduction of the five-year prescriptive period in relation to statutory obligations to make payment and the way that the commissioner approached it and distinguished between statutory obligations that are more akin to private law rights as opposed to public law rights and I think the way that they're approaching it to carving out, as exceptions, the public law rights, so taxes and so on, but when you come to obligations, statutory obligations to make payment, one of the few experiences I've had in this arena is with clients in relation to SEPA invoices, which look like contractual invoices but they don't prescribe and that didn't seem terribly fair because they came about through what looked like a contract and were operated in a way that was like a contract and yet, even though they hadn't been followed up and the client organisation had been bought and sold so papers were lost, they were still exposed to an imprescriptible claim. So, I agree with the approach that's been taken. The approach that the commission has adopted, we have no real difficulty with the proposed exceptions which have been agreed. We haven't been privy, I don't think, to the submissions that were made to the commission by various bodies about those exceptions. Obviously, in an ideal world you would probably have no exceptions to a general rule but the decision has been taken and we don't have any problem with it. I think I heard the previous session and there was some talk about preserving the status quo effectively and I think that is potentially a good reason for including some of the exceptions that have been included. I think that the only point perhaps that we should make is maybe that the number of exceptions should be relatively limited. This is meant to be a general rule about statutory payments and if you started getting a situation in which every statute started to introduce a new exception to the general rule that might cause problems for people so we would like to see them fairly limited but we have no difficulty with the ones in the bill. I won't be deploying my wildcard just yet. I agree with what's been said already. We don't have any particular issue with the approach. I agree with the approach that's taken and I think that the exceptions that are listed are really policy exceptions. I can understand the policy behind them but it's clearly a matter for the Parliament as to whether those are correct. I've nothing useful to add on this at all to be perfectly honest. I'm not particularly representing the infrastructure industry. The focus here at my view position is more general but I agree with what the other speaker has said. Will you take up any more time? In terms of construction then, what kind of example areas would you be involved in this kind of area in terms of between two parties and payments? Would it be from main contractor to subcontractor that type of arrangement or what would your involvement be as a construction lawyer in disputes around payments? Normally they're private rights so yes disputes between contractor and his employer or the contractor and his subcontractors or between the design team. That's where our disputes lie. Can you ask is that an increasing phenomena disputes in those areas? It seems to us that it's very busy. It does seem to me to be cyclical so when the economy is buoyant we tend to see more disputes. We are very busy with construction disputes at the moment. I mean this is wider than the topic but I'm very interested in it. It does seem to me that some of that practice of there being is almost becoming a standard practice in some contracts where dispute is just part of how some main contractors see the process. I've heard, for example, from some recently who are saying that we do work for company X and we know we will be in dispute with them irrespective of how good we do the job, the quality, the standard, the timescale. They just operate on the basis of we are going into dispute. I'm not sure that I would say that parties go into a contract and tend to go into dispute but they probably go into the contract not having put enough money into it and if there's not enough money in it they will end up in a dispute because they will be desperate for more money and they won't price risks that are inherent in the job. I would tend to agree with that. I think that there's two particular issues that people talk about in the industry at the moment and that is that margins are so tight. You're talking one to three per cent maximum so as soon as there's a problem on the project, even if it's fairly minor, that's the margin eaten up for the contractor so the contractor has to find a way of trying to make that back. That is a problem. The other problem is, as Ms Mason said, the issue of the lack of attention to design and planning because everything is done in such a rush now but often the temptation is to skimp on those aspects. Apart from anything else, construction is a complex business so there are going to be problems and it is difficult to sort those out when margins are tight. Contractors talk about in the olden days when margins were better they were able to experience difficulties and resolve those with their clients and perhaps swallow some of the margin for the sake of future relationships but I think that's much more difficult at the moment. Was part of this culture behind the Corellian collapse in your opinion? Difficult to say but my sense would be that a lot of it would have been over-optimistic bidding. It's a very very competitive market and there's not enough. You get it back. When I had you there, I had to ask. It's okay, Mr Finlay, you know. I like to give a bit of leeway. It was interesting. Who's after you then? Have you finished your questions? It was relating to the start date for a five-year prescription to pay damages. In relation to the reversal in Morrison case, the law commission consulted on four options for section five before deciding to use section eight, option three. What's your preference in terms of the options that were put forward? Are you happy with option three being the one that is favored? I was certainly in favour of option three. I think that it represents the best balance of curing the current situation and moving back towards what the law was before ICL plastics, but also this new ingredient of needing to know the identity of the person. I know that there are concerns being expressed that that will unduly lengthen the time until which the five-year period starts running. My opinion is that it's actually quite a short hop between B and C, namely once the party who got a potential claim knows that the loss, injury or damage has been caused by a person's act to remission. It tends to be a pretty short gap between knowing the identity of that person, but I think it's a fair balance to reach to say to somebody if you don't pursue your rights within a certain period of time, you lose them. I think that the corollary to that is that you must allow that person to know and to discover that loss has occurred, that it's due to somebody's act remission and that to know the identity of the person so that they can actually pursue those rights in court. I think that it's a fair balance. The concern that was being discussed earlier about the five-year period perhaps moving on too much, of course, one of the balancing aspects to that that the Law Commission pointed out is the fact that the 20-year period is arguably becoming shorter. I think that they felt and I agree with this that that's a counteracting aspect that helps to keep the balance. I agree with that. We were horrified by the stop-line decision. It seemed unfair and unduly harsh, and the proposed reform puts a much fairer balance, I'd say, between both parties. We also opted for option three when we responded to the consultation. We are quite happy with the bill. I didn't go for that. I think that the members of the committee should probably understand that this area of law is every lawyer's nightmare. These are very difficult areas. Whatever the Scottish Government says, the effect of the bill is going to continue to be difficult. It gives everybody nightmares when we're looking at prescription. It's the least favourite question to be asked. Those are very difficult areas. Perhaps I can illustrate the position by perhaps disagreeing with something that Mr Howie said to you earlier. If you take stop-line, the place blew up. Generally speaking, the conclusion would be that that doesn't tend to happen just due to an act of God or something. There's likely to be some fault in there somewhere. I suspect that many people would have taken the view that proceedings ought to have been raised, if at all possible, against somebody within five years of the incident. Now, there might have been a debate about who it was. Perhaps more than one target might have been identified. One of the difficult questions that arises in those areas—I'm sorry to raise a broader issue—is what is the five years intended to be for. This was a question that I raised with the commission. If you follow the theory of the average case through and you know that there's a loss and you know it's due to somebody's fault and you know who somebody is, what policy purpose does giving you then five years actually fulfil? That's quite a long time just to start the proceedings, which might then take some further time. I wouldn't necessarily agree with Mr Howie that proceedings nowadays are going to take ages, because other policy initiatives that the committee might be perfectly aware of are all designed to make court proceedings more efficient and speedier, and so on. I think that it's quite a difficult exercise. Mr Drummond talks about the balance, and that is one thing that the commission referred to, trying to create a sort of balance between different competing interests. My only comment on that is that everybody's anecdotal material is different, but in my experience over a depressingly large number of years in contentious work, 20-year prescription cases in any form are pretty rare animals. I don't know how many times I've been asked about 20-year prescription, but it's not that many. Five-year cases are always on the table somewhere in the mix, so any extension of a five-year period potentially by quite a long time, and that could be quite a long time by the time you have all the elements, impacts far more cases in terms of volume of claims than any 20-year change. I think that this is quite a difficult balance. This is where the commission has decided to fix it. The issue of the identity is quite well illustrated by Stockline, because in that case you might well have thought, well, building blows up, I'm injured, I've got a claim. Really the only question was who. Now there was an obvious target, as further investigations revealed, perhaps a less obvious target emerged in relation to the gas systems and so on, but undoubtedly it does have the scope for substantially extending the period. If you take the view that broadly speaking the way the world is going now is actually to tighten time limits, your average personal injury case ends after three years. If you don't get off your mark and sue, there are other statutory provisions that talk about one year. Most people who have contracts with bars on claims have shorter periods, so I felt perhaps the balance had tilted a bit more, but that's just a personal view. Okay, thanks for that. Okay, you've got a follow-up. No, okay, David. Thank you. Good morning everybody. Section 8 of the bill proposes a new start date for a 20-year prescription, which will be earlier in some cases and the current law another later. For the benefit of a record, what are your views and what is proposed here? My view is that I agree with the approach that's being taken. I think it has the benefit of certainty and that's the overriding aim of this change in the legislation. Whilst this will tend to shorten the 20-year prescription period, I suppose particularly in the sphere of work that I'm in and Ms Mason's in of building contract disputes, so it probably will shorten that period. I don't see that that will create a problem in practice. I don't think we are going to see lots of cases which will fall off the new slightly shorter period. Certainly at the moment, the difficulty is usually with the five-year period. I think maybe once in my career to date if I had an issue with a potential 20-year period, so it's not a big issue and therefore I think this approach is important for the benefit of certainty because I think for most people who practice, if you ask them what's the point of the 20-year period, they would say it's a long stop and I think most people even solicitors who practice in this area perhaps wouldn't quite appreciate that the date when the period starts can actually be quite a lot later than they might think and then of course you have the aspect of it being interrupted. So I think the point of view of being a true long stop and being certain, I favour the approach that's been taken. I agree that it's a very difficult area and that now one is moving towards when the wrong occurs as opposed to previously you had to have damage. So in my area of work we would have waited until cracking occurred in the building and the 20 years would have started from the cracking whereas now the 20 years starts from the wrongful design for example that allows the cracking to emerge. So in big infrastructure projects for example the Queensford crossing, if one of your designers back in 2008 creates a doomed or defective design, the structure wasn't opened until 2017, it's not unusual that it might take 10, 12 years for the problem to manifest itself by which time it's too late, it's more than 20 years since the wrongful design was created and I suppose that's exactly the same as the situation with Mr Paterson and his defective conveyancing, the right to pursue it has gone and it is harsh and it's difficult but we've talked around it and around it and come back to the same position that you have to draw a line somewhere and the problem is that after 20 years you can't find the records, you can't find the witnesses, people have died, they've left the company and it becomes incredibly difficult to pursue an action anyway. So overall I think it is the right thing to do. The thing to do because it's difficult to do something else? It's simpler and it's cleaner and it's logical. Your bridge example was very good because these are long-term projects, so is it right? I mean Mr Howey seemed to think it is right to set this limit but in a case like that where problems may only emerge some years down the line, is it right to set a 20-year limit? For us there's a marked difference between the position of the designer and the position of the contractor and with the contractor it's much easier to see that the 20 years from the date of the wrong is fair because the wrong will be when he completes the structure and hands it over. So the 20 years would only start on the bridge for example for the contractor in 2017 whereas the designer in the big project he's done so much in advance before anybody ever puts it into place. So there is a disparity there but I can't see a way of dealing with that in the legislative reform. There is a disparity and you're not going to have any idea that the designer's done something wrong until the bridge is open and has been in operation for some years. Sorry, does anyone else want to come in? I agree with the principle of the 20 years and I think we have to acknowledge that this is simply a question of policy. Most jurisdictions have some kind of long-stop and they just take a view that other jurisdictions have a period less than 20 years. 20 years isn't particularly short or out of place. I think it's the right thing to do, I think that you now have a simple rule and once everybody knows that then they gear themselves up, they inspect the bridge or whatever it is in order to try to find it out and I think that the reality of trying to deal with claims after a very long period of time is quite significant. We had one, I think that I mentioned my response that came in where somebody was complaining about something done on a document 47 years previously and everybody went, well who was that? I can see the initials on the document that this person is dead, anyone who worked with them has gone, the papers have been destroyed and even with the electronic world it's very very difficult to track random emails from a very long period ago. So I think that there was a case actually involving the Kingston bridge in Glasgow that I have a vague recollection of, I can't remember now why, and it caused enormous problems because under the previous law it was said that no loss had been incurred until many years after the event, therefore time hadn't started to run and people were trying to traipse back into history and then you get great difficulties getting a just solution after that time. So it's just a question of policy and I think it's the right one. That's right policy really for the reasons for being given, clarity, certainty. I think it's also more in keeping with the idea of the 20-year period as a long stop and we have in the bill a package of reforms to the 20-year period which all taken together create that long stop period. I think probably the only point maybe that's worth making is that as far as the 20-year prescriptive period is concerned awareness of loss has never been an issue so it's not like the five-year prescription where the period is delayed by a lack of awareness. In the 20 years awareness has never been an issue, what's looked at is the fact of loss, injury and damage having occurred and that in itself is a separate argument which people have from time to time in cases but it's not as if that awareness issue is being removed by the bill. Law Society and the Faculty have previously expressed some concerns about how section 8 would work in relation to omission to that and continuing breaches. What are your views on the topic, including the SLC's comments on this during the first evidence session? I think rather like the last panel for myself, I sort of struggle to see a solution to that because an omission is potentially by definition something that hasn't been noticed. It's an act that hasn't been done that ought to have been done and if it hasn't been done then it's difficult to know that that's absent. I don't see any solution to it myself. I think that section 8 is, I agree with the approach that's taken, I think that's probably all I can say. I listened to what was said earlier which I found quite interesting and the only reconciliation I could make is that if you're dealing with a claim that arises from the involvement of some form of profession on it, it might be a surveyor or it might be a lawyer, there's usually a time when that person ceases to be involved in the matter and the omission would then presumably cease when their engagement finished. So in practice it might not be as repeatedly difficult to deal with this as has been suggested but beyond that I have nothing useful to add that we've made. Omissions are harder to deal with than acts but I don't think there is any way that the bill can really deal with or address that problem. Don't all feel we have to answer every question. That's just for planning. Are you all defending cases from people who are claiming or are you on both sides of the process? Mr Torrance? I think they've answered the question on Mr Patterson's and that letter I did say. Thank you. Good morning panel. We'll go back to section 6 of the bill and that's the issue regarding the 20-year prescription and the idea of should it or should it not actually be able to be interrupted or for it to be extended to allow on-going litigation or other proceedings to finish. Can you tell the committee what your thoughts are on that particular option? My own view is that if you ask most practitioners, they would consider the 20-year to be a pure long-stop so it starts as a period, it finishes and that's it. I think most practitioners wouldn't readily appreciate that it can be judicially interrupted by proceedings and I agree the commission's approach to that rather goes against the whole policy of it being a true long-stop so I again I agree with the approach that's being taken. I think in the consultation period we suggested that one possible alternative I think it was referred to earlier might be that the 20-year period would simply be suspended for the period of the court action so that you would have the period that had run before the action was raised you would then have the period of the court action then you would have the remainder of the 20-year period that is only one possible alternative and I think there are benefits to it in the sense that it's a halfway house between what we have at the moment and what the commission are proposing but I think our real problem and the reason we raised the issue in the first place was the concerns that we had about the possibility of rights prescribing during the course of litigation and that is being dealt with by the commission elsewhere in the bill so that concern flies off and in those circumstances I think we're now in the position where we accept that the proposals which the commission have put forward fit better within the framework of the 73 act and we're quite content with the decision that it should not be capable of any interruption or suspension I would agree with that I think the current situation of restarting the clock makes no sense you've got a 20-year period it runs but that should be it no I've nothing to add to that thank you sir I'll sit on the back of what Mr McGregor said and what Mr Mason agreed to Mr Drummond also your position is it's also just to continue do you agree or disagree with your colleagues in the panel or do you have any would you have anything further to add well my position is the same actually that the 20-year period should start and should stop over that 20 years continuously which is what the commission is proposing I mean I didn't mention the subsidiary point which is that there ought to be a short extension at the end say if there is proceedings on the go and I think that's that has to be the position because obviously you can't have a situation where rights are litigated prior to the end of the 20-year period and then they end just because the 20-year period comes to an end so that that's good common sense in my view okay okay section seven excuse me section seven of the bill says that the type of 20 year prescription applicable to certain property rights can no longer be interrupted excuse me again there is the possibility of an extension to the on-going litigation or other proceedings to finish and the faculty has previously suggested that this approach might not work as well for property rights like servitudes as we heard from the faculty earlier and certainly can the panel provide the committee with any thoughts on that particular issue please I listened to what Mr Howie said and I was in complete agreement with him I agree with that convener that it made logical sense I don't think the intention of the drafting was actually to cut off any right that wasn't the way it was structured but I don't have any concrete examples I'm afraid to offer you okay okay thank you okay thanks so you heard the discussion earlier about the contracting out so I wonder if I can just ask for for your views on that and I think I should start by saying that we agree with the commission entirely that opting out or contracting out should be available to parties it's only available to parties in relation to the section 6 five year and the section 8a the two year prescriptive periods we agree that it should be limited to one chance at varying the period that it should be a maximum of one year and that it has to be during the statutory prescriptive period and the only remaining concern really we have about section 13 is in relation to the language in section 13 it talks very specifically about extending the prescriptive period and provides parties with the right to extend it when it doesn't talk about is suspending the prescriptive period and in reality our view is that that is probably in many cases a more attractive option for parties it would also work better with the one year restriction because parties would have more certainty about the length of time they were agreeing to to suspend the prescriptive period where you are looking to extend a period by no more than one year there needs to be some knowledge of the start date and the end date of the prescriptive period and I think simply allowing or only allowing extension will cause problems in the in the future so I think I think we would be keen to see the bill amended to allow suspension and possibly alongside extension because both can operate successfully but we would certainly like to make sure that suspension is a is a possibility. I would just endorse what Mr McGregor said about suspension I had the opportunity of discussing this with him before we joined the committee because it wasn't the point I'd considered but as soon as he told me I think it's an excellent point because in reality these things arise people haven't worked out a precise start date a precise end date now talking about extension what you're actually talking about is pressing the pause button and often in my experience what will happen is that you think your claim is against A and everybody thinks A is probably the right target but actually it's possibly B but then you're starting to worry about time bars so what you're doing is pausing on B until A gets sorted out. Now for that reason I would agree with the Law Society's comment this morning about timing because I don't see why it should be restricted in all cases to one year there might be cases where a longer period would be agreed and I certainly don't agree with the faculty's view that this is some kind of abusive process. Now everybody's experience is different but these things tend to arise in discussions between lawyers on both sides now if somebody was bothered that some lay party was going to be bulldozed into something that was unwise then no doubt as in other legislation you could write in that it's only possible if the party had independent legal advice or something of that kind but I suspect that that's an unnecessary precaution these are usually discussed between lawyers in a messy situation where there's good reason to press the pause button so I think it's an excellent idea it's commonly used in England and Wales that's no reason to do anything just because it's used down there but it is a practical solution and although Mr Howey is right in saying that judicial resources aren't usually deployed to deal with these claims when they're commenced it's not always easy in the Scottish system where you have to serve the proceedings in England you just have to issue them you get them passed the court Scotland you have to serve proceedings to break the time bar and that can mean finding somebody who you may not be very sure where they are or they've moved address or the company has changed or whatever and if you're forced to rush about and do that it can be productive of certainly worry and expense as well so the option is I think very worthwhile how big a difference cost wise I think could be readily exaggerated but nevertheless an option that's worthwhile we're very much in favour of the introduction of a standstill agreement and we have had experience of English clients or English lawyers saying to us well can we not just have a standstill agreement please we're all talking about the problem we don't know the cause of the defect that's emerged we want to investigate it we don't want to litigate and our advice has to be I'm sorry we can't do that for you we have to litigate in order to stop the clock from running so it sets the scene and perhaps puts parties against each other when they have been working together so a standstill agreement I think would be a welcome introduction there's another point in relation to contracting out that causes us a real concern and for some reason hasn't been picked up by the Scottish Law Commission in this report has been dismissed but was picked up in the 1989 report and that is in relation to the party's ability to shorten the prescriptive period and that is an issue that we come across on a regular basis and I understand that the reluctance of the Law Commission to get into this is because of the distinction between prescription and limitation and you're probably all looking blank and a lot of lawyers look blank and to my mind it's a pretty artificial distinction the commercial reality is that parties need to be able to price for a risk and in the big infrastructure jobs that we see they will accept around a 12 year period for risk and everybody knows that's the position and what we don't want to see is parties arguing about whether that clause in the contract which says we're only on hook for 12 years is prescription and therefore void and null because it's an attempt to contract out or whether it's limitation which is allowed and if the language is incorrect then it may be that it falls foul of the legislation and there seems to be no point in having legislation that's here to you know the purpose of this legislation it's to produce certainty and avoid stale claims it's not that interfere with the freedom to contract and there is a real missed opportunity I would say in this legislation and in the 1989 report the draft bill provides to my mind very adequate wording as to how to deal with this problem and it makes it clear that you can by contract limit your exposure and that that is not in the face of the legislation and I think it's a great shame that we haven't taken the opportunity here to reassert that okay that's very that's very useful sorry mr droman you would you mind if I just commented on two points I tend to agree with most of what has been said already I think just picking up on two points the limitation on the standstill agreement allowance to one year I think in practice that would make the utility of those standstill agreements it would undermine their utility because I can think of three cases at the moment that my small team is handling where the period to investigate issues with building and engineering defects is taking much longer than a year because they are so complex so I think the tendency would be just simply not to use them if they were restricted to one year in practice and for proceedings just to be raised in a protective way as it's done at the moment so I thought that that would be my concern if we're going to have standstill agreements let's make sure they have a commercial utility but secondly I absolutely agree with a point that's just been said about the fact that there's no reference to an ability to shorten a limit or rather restrict the limitation period because in the Scottish law commission's report they do specifically pick up on contractual limitation clauses both in the area of convincing but also in building contract claims and what they say is they do not want the provisions of 13 to disturb commercial parties ability to enter into contractual limitation clauses but my concern is the same is that what's now provided in this clause 13 doesn't make that clear and I think will give rise to arguments in the courts in future as to whether or not this new clause 4b in particular strikes down contract limitation clauses as well which the law commission has specifically said it's not intended to do so I think my preference would be if there were some sort of clarification in this clause to specifically say that contractual limitation clauses are not intended to be struck down by this I mean I I think perhaps the general rule is it's not particularly good statutory drafting to put in a sort of fully avoidance of doubt provision but I mean that that's already done elsewhere in this this proposed bill for example at five three sorry section five provision five three b where it said that where one's looking at the facts that a litigant needs to know in order for the five-year period to start running three b says you know almost for the avoidance of doubt you don't need to you don't need to be aware that the actor or omission is actionable I think what my preference would be to see a similar provision in four b that preserves contractual limitation clauses does everyone else agree with that don't necessarily agree I quite see the problem that is being talked about I think the view that we formed was that the bill as presently drafted would not prevent contractual limitation clauses but clearly others have formed a different view and that will become an argument no doubt at some date so there may be some advantage in clarifying that particular issue just to prevent any dispute arising in future I think that is the problem it leaves open scope for argument which is unnecessary and unhelpful and these clauses are used widespread across PFI contracts building contracts it's it's something that's come from English law but it's established so you know if there's not clarity in protecting that I think that will give rise a lot of arguments speaking personally I've not come across the argument about the the clause and whether it falls foul but maybe just the nature of the random nature of anyone's general practice obviously the committee will be aware that it's common place in contract of every kind which everyone will enter into for a provision to be sitting there basically saying if you want to complain about this you must do it you must make a claim or whatever within a particular period of time and in the main that doesn't seem to have caused a problem but I've nothing more to add well thanks Mr Mason for raising that and if any of you want to write to us with your further thoughts on that please feel free to do so any further questions from members no okay well I will close the session and thank you very much for your time a couple of very interesting sessions there and I'll suspend the meeting