 We are satisfied that this will meet a clear and pressing demand from those likely to be affected by the bill, and we should not underestimate the value in bringing this clarity to the law. Beyond that, it does not attempt to alter the law and delivery. Having said, convener, what the bill does do, it's also worth briefly reminding ourselves of what it does not do. It does not deal with electronic delivery of electronic documents, nor does it deal with electronic signatures or alter the law in relation to the use of pre-signed pages. The Scottish Law Commission's paper, entitled Signatures in Scots Law, Form, Effect and Proof, provides a comprehensive account of the current law on these last two matters, and the first is now provided for in legislation. Convener, I'm aware of the criticisms levelled at the bill by the Faculty of Advocates. For such a body to raise concerns has rightly caused us to pause and give them full consideration. Having done so, we remain of the view expressed in the policy memorandum that the bill does not create any difficulties with the law as it stands, and it will in our view, which is a view shared by the other stage 1 witnesses, do nothing to increase the prospects of fraud or error as a result of executing in counterpart, including where only the signature pages are exchanged. I have four reasons for that, but perhaps I can share those with you if members are interested in under questioning. If I could continue by saying that it's worth commenting a little more about a particular possibility for error that was identified, namely that parties may inadvertently execute different versions of a document. In practice, if a document is transmitted to parties for signature, for example, in the form of a PDF, that will limit the risk of parties signing different documents. If, however, parties do sign different versions of a document, they will not, in fact, have validly executed it in counterpart in terms of the bill. The bill provides that a document is executed in counterpart if it is executed in two or more duplicate interchangeable parts. Nonetheless, this only matters if the transaction is by law one which should be in writing. In other cases, there may be sufficient agreement between the parties to constitute their contract. I'll also say something more in the matter of exchanging only signature pages. The approach of the legislation has been to ensure that it is permissive and as flexible as possible. Inherent in that flexibility is the ability of the parties to a transaction to set out how the process will work for them. The parties can agree the method of delivery and the parties can agree what will be circulated. That may be only the signature pages or it may be, for example, the signature pages plus one counterpart. A crucial provision of the bill is section 4 subsection 3, which applies only to delivery by electronic means and provides that if only part of the document is delivered by electronic means, it must be clear that it is part of the signed document and must contain at least the signature page. Where the parties agree to only deliver the signature pages electronically, it will usually be because their solicitors are involved and there is an implicit relationship of trust between the solicitor and their client with tried and tested methods for addressing any issues of fraud or error. In common with other witnesses, you have heard from the suggestion by the faculty to amend the bill to require that for electronic delivery, the full counterpart is to be delivered by each party in all cases would, in our view, just not work. It would, as you have heard, also be unacceptable to practitioners and their clients and effectively undermine the objective of the bill. For those reasons, I hope that the committee is reassured that the bill provisions do not, in any way, encourage fraud or increase the chances of errors occurring. In summary, this is a bill that one witness described as having aims that are admirable in the sense that they are trying to address a specific problem and to achieve a specific outcome and that that is an admirable ambition. It will plug small but important gaps in Scots law and, in so doing, will punch above its weight and address the impact of the undesirable shift toward the use of other law, usually English law, to complete many business transactions, which should, for every other reason, be transacted under Scots law. I hope that this is helpful to the committee and myself and my officials will be happy to seek to answer any specific questions. Thank you, convener. Thank you very much minister, and that is very helpful. I think that it pre-empts some of the questions that we have, but I have to say not all of them, so I now hand it over to Margaret McCulloch. The potential benefits of the bill have been discussed in some detail with other panel members. However, could you expand on the benefits that the bill will bring and how it would meet the policy objectives of the policy memorandum, for example commercial expediency and saving time and money, consistency as well, the argument is that certain procurement contracts and land agreements have to be subject to Scots law and that no workarounds are therefore available, and also the promotion of Scots law. Could you expand if there is any other benefits on the bill, please? I think that there are benefits of the bill. I do not wish to overstate them, but nonetheless there are benefits. I think that the fact that there are benefits is fairly clear and pretty much incontrovertible, and let me just answer this directly and answer McCulloch's question. In the circumstances where Scots law should have been used, but because of doubt, the existing doubt over the legality of executing a document in counterpart it is not used, parties will now have the confidence to use Scots law, so that is a plain benefit. At the moment there is doubt, so if this for practical business commercial reasons is a method of execution which parties wish to adopt because perhaps they are unable to be physically present in a room and traditionally sign documents, then they will be able to use Scots law safe in the knowledge that execution in counterpart is valid. In a world which is increasingly busy, the expectation that people can get into a room all to sign a document is, I think, unrealistic. It used to be, convener, that in my mother's day when she was in practice, that when one completed a conveyance in transaction that the two solicitors met, and in fact, indeed, I think, I believe, I'm told by my mother, so it must be true, enjoy a glass of sherry as the conveyance in transaction was completed. Those days are long gone and therefore execution in counterpart, I think, is simply bringing up to date using electronic media communication where the parties so choose with execution in counterpart of a method of being able to execute a contract under Scots law. That has not been possible. This bill will make it possible. The Scots law commission has probably put it much more elegantly than I just have, but I hope that I have described the principle benefit of this bill. I wonder, minister, clearly as your introductory remarks made clear in the answer to the previous question expanded on, much of the activity between those who are contracting is delegated to lawyers. The bill that is before us lays out processes in relation to that. I wonder if, in relation to some of the things that the faculty of advocates in particular have said to us, it is clear in your view that if there is a failure of process, perhaps minor, perhaps more significant, whether that actually compromises the legal validity of the resulting contract that has come through the process, where the failures are through those who are acting as nominees on behalf of the contracting parties or whether, by being permissive, the bill simply creates a framework but does not make things that fall outside the framework inadvertently illegal in and of themselves. If I understood the question correctly, convener, then I hope that my answer is correct and my officials will no doubt step in if it is not. However, my understanding is that this bill makes no difference to the law in relation to the status of a contract and whether it is void or voidable where there has been fraud or error. To play that back to minister, this creates a legal framework which may be selected to be used but if, in practice, other approaches are taken deliberately or inadvertently, they remain as they currently are in the law. That is correct. We need to be clear that fraudulent activity is a deliberate act. Where someone is determined to carry out fraud, this bill will not stop that happening. That is of the nature of fraudulent activity but the situation is no different to the current situation where determined individuals can carry out fraudulent activity. Perhaps, convener, it may be more likely to encounter examples of error rather than fraud where, through human fallibility, the possibility of error is omnipresent, as I am sure we all appreciate very well. However, this bill, as I understand it, makes no substantive change to the law which applies to determine whether or not where there has been error, the contract and the validity, the enforceability of the contract are affected in any way. I think that is correct and I am looking to officials to see if that is so. I think that what I would say in most cases is that we expect these transactions to be carried out. I think that we have described before by a PDF being sent which I appreciate that there are means to alter PDFs but that would require some deliberate act and we are not in that territory so that would minimise the scope for error. We have also said that there may not be a valid execution in counterpart if different documents are accidentally executed but that does not detract from the overview of contract law that there would still be sufficient evidence depending on the circumstances to constitute a valid contract. Therefore, this bill does not cut across existing contractual rules and remedies and different ways of rectifying errors have been made depending on the significance of the error. Thank you. I think that we are on to Mike. Minister, as you rightly said that the committee took evidence from a range of witnesses and that the only opinion that was negative with respect to this bill was expressed by the faculty of advocates. All the other witnesses seem to be pretty enthusiastic and welcome the bill and we heard the talk of how this would enable a number of contracts to be dealt with under Scots law, which currently people prefer to use English law but none of the witnesses was able to give us any data, any feeling for the amount of potential business that this would direct to Scotland, either in terms of the number of contracts that would be signed under Scottish law now rather than English law, nor indeed of their value. The other benefit that we heard about this bill was the effect on the environment, the reduction in paper consumption, which may not be hugely significant but nevertheless is welcome, and perhaps more importantly the reduction in journeys required to sign contracts. I just wondered whether the Scottish Government has any data or is able to make any assessment of the number and values of contracts that will now be written under Scottish law or in any sense can quantify the environmental good that will spring from this bill? In response to Mr McKenzie's question, I think that I'll make the following points. First of all, the financial memorandum makes it clear that the bill is permissive by nature. It doesn't force or require anybody to do anything, it simply makes it clear that if a party is so desire then they can use execution in counterpart as a modern, effective way to enter into a contract and at the moment that is not something that is clear under Scottish law. So because it is permissive by nature, it is not really possible to predict with any certainty what commercial value may be. I'd say another couple of things though. First of all, there should be benefits in some situations and I think that Mr McKenzie has mentioned or foreshadowed some of those reduced expenditure on travel, postage and stationery. Fairly obvious. Reduced amount expenditure of time. Convenience. Speed. It is very difficult to arrange multi-party meetings. If matters can be done satisfactorily by the use of PDF documents, as of course is widespread in use at the moment and that can form the basis of a validly executed contract and counterpart, then that is a useful tool. We are providing a useful tool. It is not really possible to state what the benefit of this tool will be. It depends on how the business world in Scotland uses it but it has been welcomed by the legal profession broadly, the Law Society of Scotland, the witnesses you have heard. I believe that there should be a potential value. I was pleased to note that the press and journal likes to cover stories that perhaps of less interest to other newspapers promoted this bill very recently. Plainly, the more we can promulgate the change that I hope Parliament will choose to make, the better will be the appreciation of this as a new device open to business. I cannot help feeling that it is the saving in time, which is probably the one that people will eventually decide was most important because we tend to undervalue our time and the opportunities to do something else, particularly if we are travelling. That thought then I think we are on to Stuart McMillan, please. Thank you, convener. Good afternoon minister. Certainly, on 7 October, when we took evidence from the registers of Scotland, they had explained that they actually had not had any more detailed discussions with the Scottish Government on the possibility of setting up the electronic document repository. Given that, can the new minister provide us with some further information or any information regarding any detailed plans in relation to the electronic document repository? If that goes ahead and what they like the timeframe for that will be? I think probably my officials can help you out with this one, convener, if that's all right. I think that when colleagues from registers gave evidence, they spoke about other on-going work to do with the implementation of the Land Registration Act and that that was their given priority at the time, and then they were going to timetable their IT-related work. We're taking that as our cue as to when they'll be in a position to have some discussions about this, but we've not had any further discussions at this stage, and we were certainly interested in the evidence that was given to the committee in terms of the views of the legal profession and some of the concerns that they had, and we'll consider that further. Nothing more at this stage, but when registers are in a position to, we'll be taking that forward. I think there's another point here, which is one that officials have made to me in private discussion preparatory to this meeting, convener, which is this, that by the very nature many of these documents will be very confidential of nature, and therefore there may not be a desire for the contracting parties to submit the contracts to be registered in any public form. It is possible to register any document that one wishes in the Council of the Books of Council and Session, and indeed solicitors regularly use these for registering wills after the death of the testator, but I think that in general it may well be the case that many of the documents that will be executed in counterpart will cover commercial matters in respect of which the contents would be intended to remain confidential, and therefore I think that that's a factor that would need to be considered in respect of any electronic document repository and whether or not whether to be such a repository that would provide for parties to preserve the confidentiality of the contractual documents, which would be something of course that would be necessary and desirable. Thank you for the responses, but I think that it would be useful certainly for the committee that, as the bill is going through the parliamentary process, if we can be kept up-to-date please or in any progress on this particular matter. Well, I think that given that it's been raised by member of the committee, convener, I will ask the keeper to see if there's any further information that we can provide for parliamentary 2 stage 1 debate. Thank you very much minister. I'm just slightly concerned that we don't confuse the two issues of an electronic signature with an electronic repository, but I'm sure the officials will separate those two in their thinking. I think that that takes us on to John Scott, please. Thank you convener, afternoon minister, and I'm taking you back. I'm afraid to the Faculty of Advocates' evidence on the concerns about fraud and error. You said that you had four reasons which you would give us by way of reassurance that this was not real fears that they were raising and perhaps you might want to do that and you're summing up to my question, but initially I would just want to ask you does this bill make it more or less likely that error or fraud will take place? We've just discussed that a bit, but if you would want to develop that theme a little more, please. I see no reason why the bill should either increase or decrease the likelihood of any instance of fraud or error, but I can, convener, expand. I think on the reasons why we do not share the analysis that the Faculty of Advocates witness offered the committee and out of respect to the faculty I think it's useful to do so, so I'm grateful to Mr Scott for having me providing with an opportunity so to do. The four reasons which I would put forward are firstly that the issue of fraud and error is not new. The risk of a document used at a signing ceremony being incorrect because of error or fraud exists currently. There are means to deal with this already in the civil and criminal law. The bill does not need to add to these, so there is an existing risk and this bill doesn't alter that in our opinion. Secondly, for the most part, clients will have placed their trust in solicitors, professional advisers for the sorts of contracts that are likely to be executed in counterpart. Should an error go unnoticed and that error result in a loss to the client, they can have reasonable confidence that their solicitor is insured as they require to be and we will be able to make good any loss and indeed that applies both for the negligence and fraud. There are two separate funds which solicitors must contribute to protect their clients. The fact that a solicitor is used is a second reason why I think that there is no additional risk posed by this bill. Thirdly, there is no evidence from other jurisdictions where execution in counterpart has already been used that there has been an increase in fraud or error. My understanding is that such usage has been legal in England and Wales and that there has been no increase in the risk of fraud or error so far as we know and I think that the witness Warren Gordon gave evidence broadly to that effect. Fourthly, I think that Professor Rennie made a good point in his evidence that when he spoke of the example of legislation 1970 which allowed ordinary convincing documents to be signed on the last page only, he indicated that at that time there was concern that the change might increase the risk of documents being changed after signature by removing pages which, if you like, hadn't been signed and inserting other ones. However, he said in his evidence that there was no evidence to suggest anything like that has happened. I must say that I am not entirely sure if that's 100 per cent correct because I'm aware of the case Brebner where the dispositive clause disposition was altered by fraudulent means and had each page of the contract been signed, that would not have been possible. However, by and large, that's an extremely rare occurrence, I think. We remain of the view expressed in the policy memorandum that the bill doesn't create any additional difficulties with the law as it stands and will do nothing to increase the prospects of fraud or error as a result of executing in counterpart. Finally, I would say that having had the opportunity afforded to me by John Scott, obviously if the faculty of advocates have, when they read this evidence, any additional evidence that they may care to reduce for the benefits of the committee prior to or indeed after stage one, then of course we will accord any such additional evidence should it be produced with extremely careful consideration. I hesitate to challenge distinguished persons such as yourself, minister, but faculty of advocates were quite determined that full counterpart signing in full counterpart was important, but you're quite dismissive of that as I understand the practical grounds, it may not be easy, but perhaps you would want to just elaborate a little as to why you are, we were so dismissive of that in your opening statement. Well, I would say that where we don't accept the analysis of the faculty of advocates, we do of course respect their views, but we are not aware that in the evidence they cited any clear example of any instance in which the measures proposed in this bill would increase the likelihood of fraud. I've already said that fraud is something that no parliament or government can eliminate. As long as we have criminals who are prepared to engage in fraudulent activity, that is sadly a reality, but this bill, if it becomes law, will not increase the likelihood of fraud, in our opinion, because the issue is not new, solicitors will usually be involved. There is no evidence from other jurisdictions that, particularly England, the practice has led to more instances of fraud, and there has been changes made since 1978 that not every page requires to be signed. Now, if the faculty has any specifics, convener, of why the arguments that I've just set out, then I would be very keen to see them. I may say that this section of the evidence I've given today arose from a fairly lengthy pre-meeting that we had, which was convened primarily, in fact, almost solely to discuss this issue, because we take what the faculty of advocates say extremely seriously, and therefore I would welcome any further evidence if they feel what I've said this morning, or that now this afternoon, convener, isn't any way defective, because that would be a very useful contribution to the process with which we're all engaged to pass good law. Thank you, that's very helpful. Thank you minister. I'm also aware that the faculty suggested that there might be a complication with annexes that had documents in there which were themselves subscribed, and that was maybe not allowed within the act. Now, the government's response has clearly indicated that you disagree with that. I wonder if there's anything you want to add to that. Well, I don't think that that's the case, but I would draw attention to the provision of the bill which says that unless the document is executed and duplicate, it is not executed in counterpart and will not be protected by the bill. In other words, the documents that are signed and executed in counterpart must be the same. If they're different, then there will be no valid execution in counterpart. Perhaps I haven't addressed myself to the specific issue of appendices, so I don't know whether, if there's anything to add, officials could usefully add to that. I think that we have sent you a note to say, when we've looked at what the faculty have said, that we don't think that is the effect of the bill. What is the part that is signed and duplicate? That is the counterpart and not the individual annexes that may be associated with the counterpart. In section 12b, the reference to part means that the counterpart part sounds at the level of the document. We note that Professor Rennie also took that view when he gave evidence. I'm grateful to you for just simply putting that on the verbal record. I think that there are just a couple of other thoughts that I would like to put in front of you, please. I'm specifically thinking about some of the evidence from Dr Gillian Black. I'm just wondering whether there's anything else to be said about a document which isn't actually correctly signed. I have a feeling, Minister, that you've probably addressed that issue. This is only facilitative, and the general law addresses that. Maybe there's nothing else to say there. Could I then just pick up on the particular issue of counterparts as a single document in section 13? Whether there's anything that needs to be said to make it clear that it is one document, even though there's more than one copy of it? The first point that you make, convener, is answered by stating that if parties inadvertently sign different versions of a document, they will not have validly executed in counterpart in terms of the bill because it provides that the document is executed in counterpart if quotes it is executed in two or more duplicate interchangeable parts at section 12a. So the effect and the transaction will be determined under the existing laws, you rightly said, and much will depend upon the particular facts and circumstances. I think I'm right in saying in response to your second question that the answer is really very simple, that the parties in Gremio of the document will describe what the document contains. In other words, the contract will give a description within the documents of what documents are part of the contract, a list of contents, including appendices. That is required for clarity, obviously. So I think that that really is the answer to the question, and that's perhaps just good drafting or convening practice. However, I don't know if officials have anything to add to answers to either of those questions. I think that Dr Black was concerned with the legislation suggesting that two documents were to be treated as single documents. I would say that we have thought that as a convenient way of describing the situation, particularly for the situation in which parties want to register the document in the Books of Council in session, that it's important to explain that that is regarded as a single document, and yes, it's a legal fiction in some sense, but it does have precedent, I think, in other legislation as well. So on reflection, it causes us no difficulties. That's our view. No, I think that that's a view with which we would be wanting to agree. I think that that takes us to the end of the questions that I'm aware of. I'm not seeing members wanting to indicate anything further. Is there anything further that the minister wishes to add, please? I've never had an opportunity to use the phrase in Gremio before. I thought that was very impressive, actually, minister. Some of us will have to go and look it up. Well, it means in the body of the deed, within the deed itself. Thank you. I'm grateful for that clarification. That'll be five guinews, please. I think that's a wonderful point at which to stop to thank the minister and his officials for being with us today. Again, just to note that this has all been very easy, I think, from our point of view. Great deal of cooperation all around, and it does seem to have worked. We will, as a committee, have the opportunity to reflect on the evidence we've heard for a draft report, which I think we'll get to look at next week. And with that, I thank everybody, indeed, for attendance and close this meeting. Thank you.