Overview
The Bill affects creditors (those holding rights) and debtors (those under an obligation).
The Bill makes changes to the law on negative prescription. This is to make it clearer and easier to understand. Negative prescription sets time-limits for when obligations and rights stop. For example these might be obligations under a loan contract.
The Bill updates the law about the time limits of when rights can be exercised and obligations enforced. It changes the law about 5 year and 20 year negative prescription. After these time periods have passed, a person cannot pursue their case.
You can find out more in the Explanatory Notes document that explains the Bill.
Why the Bill was created
Scottish Law Commission reported on Prescription, published in 2017. Prescription lets the person exercise their right or enforce obligations about a contract.
The Law Commission review followed the case of Morrison v ICL Plastics where the pursuers could not continue the case. This was because it had been more than 5 years since the incident took place.
If there is a long delay in bringing actions:
- evidence may be lost, such as witnesses dying or becoming incapacitated
- it’s arguably unfair to raise an action long after the circumstances have passed
For legal certainty a cut-off is needed. Individuals can then organise their affairs and resources without an indefinite obligation. This also means that they can't exercise their rights after this time.
You can find out more in the Policy Memorandum document that explains the Bill.
The Prescription (Scotland) Bill became an Act on 18 December 2018
Becomes an Act
This Bill passed by a vote of 111 for and 0 against or abstentions. The Bill became an Act on 18 December 2018.
Introduced
The Scottish Government sends the Bill and related documents to the Parliament.
Related information from the Scottish Government on the Bill
Why the Bill is being proposed (Policy Memorandum)
Explanation of the Bill (Explanatory Notes)
How much the Bill is likely to cost (Financial Memorandum)
Opinions on whether the Parliament has the power to make the law (Statements on Legislative Competence)
Information on the powers the Bill gives the Scottish Government and others (Delegated Powers Memorandum)
Stage 1 - General principles
Committees examine the Bill. Then MSPs vote on whether it should continue to Stage 2.
Committees involved in this Bill
Lead committee: Delegated Powers and Law Reform Committee
Who examined the Bill
Each Bill is examined by a 'lead committee'. This is the committee that has the subject of the Bill in its remit.
It looks at everything to do with the Bill.
Other committees may look at certain parts of the Bill if it covers subjects they deal with.
Who spoke to the lead committee about the Bill

First meeting transcript
The Convener
Agenda item 2 is consideration of the Prescription (Scotland) Bill. The Delegated Powers and Law Reform Committee has been designated as the lead committee for the bill, and we will begin our stage 1 scrutiny this morning.
We have before us Jill Clark, the head of the Scottish Government’s civil law reform unit; Neel Mojee, a solicitor from the Scottish Government; David Johnston QC, a commissioner from the Scottish Law Commission; and Gillian Swanson, a project manager from the Scottish Law Commission. I welcome you all.
I will start with a couple of general questions about the consultation exercise. Will the Scottish Law Commission tell us what the key features of its consultation were, how it went about the consultation, what documents were published, who was consulted, and what the responses were?
David Johnston QC (Scottish Law Commission)
Yes. Thank you very much, convener.
We carried out a comprehensive consultation exercise. At an early stage, we held a seminar for interested people—various professionals and business interests—and we used that to formulate the proposals. We drew the proposals together in a discussion paper, which was put out for consultation for a period of three months. We publicised the discussion paper to around 110 people directly and made news of the consultation available on our website and through Twitter.
Having received the responses to the consultation, we drew together our report. As members know, such reports always include a draft bill. We then carried out a further exercise to consult on a working draft of the bill, which we found to be quite productive. We tried to follow the same pattern in publicising that as widely as possible and drawing it to the specific attention of various stakeholders, including local authorities, central Government departments, insurance companies, business interests and professionals.
Those are probably the key features of the consultation. If I have missed something, I am, of course, happy to expand on that.
The Convener
What were the main points that emerged from the consultation?
David Johnston QC
The main topics that consultees were interested in included the scope of the five-year prescription. As the committee is aware, we propose that that be expanded for various reasons. That particularly engaged the interest of central and local government, especially when they saw the working draft of the bill. That was one key issue.
The key issues for business professionals and insurers probably related to the so-called discoverability test—that is to say, changing the time at which, in claims for damage that was originally latent, the prescriptive period begins to run. As the committee knows, we recommended changes to that as well as to the length and the starting point of the 20-year cut-off prescription. Those people were especially interested in that.
The question of whether the bill should be permitted to extend the prescriptive period and, if so, in what circumstances, is important in practice for solicitors and professionals; it was an issue on which they certainly expressed their views fully in the consultation.
Those are the main issues.
The Convener
Thank you very much for that. Did the Government carry out a public consultation?
Jill Clark (Scottish Government)
In general, the Scottish Government does not consult on bills that have been identified as being suitable for this process, which is mainly because the SLC has undertaken a comprehensive consultation of its own, as it has recently done in this case. However, we carry out targeted and focused consultation with key stakeholders. To that end, last September, the Minister for Community Safety and Legal Affairs wrote to a number of representative bodies, including the Association of British Insurers, the Institute of Chartered Accountants of Scotland, the Royal Incorporation of Architects in Scotland, the Scottish Law Society, the Faculty of Advocates, the Convention of Scottish Local Authorities, the Royal Institution of Chartered Surveyors, Construction Scotland and the Civil Engineering Contractors Association. We received two responses. One offered continued assistance with the bill—I think that the respondent had been assisting the Scottish Law Commission. The other sought clarification on a couple of technical issues. We wrote back to the body and it confirmed that it was content.
The Convener
Was the latter body COSLA?
Jill Clark
Yes.
The Convener
Do members have any questions about the consultation?
Stuart McMillan (Greenock and Inverclyde) (SNP)
Did either the SLC or the Government write to Citizens Advice Scotland or to any other welfare rights organisation?
Jill Clark
We did not do so.
Gillian Swanson (Scottish Law Commission)
I do not think that we did on this occasion. Citizens Advice Scotland recently informed us that it is paring down its responses; it will pick up from our Twitter feed issues to which it is interested in responding.
The Convener
We will move on. Alison Harris has a question.
Alison Harris (Central Scotland) (Con)
Good morning. In England and Wales, debts relating to council tax and business rate arrears are extinguished after six years. What is the policy rationale and/or the legal reasons for allowing councils 20 years to recover such debt in Scotland?
Jill Clark
I will leave the legal reasons to colleagues to comment on. On the exceptions relating to council tax and business rates, the bill basically maintains the status quo. We cannot comment on why the position is different in England and Wales, but that difference will have subsisted for some time. Here, local authorities made representation to the Scottish Law Commission on the matter, and among their points was that the policy reasons that justify accepting taxes payable to the Crown, such as Her Majesty’s Revenue and Customs and Revenue Scotland, for the five-year prescription apply equally to taxes payable to local authorities.
Although it was acknowledged that, as a rule, five years should be sufficient time in which to collect such taxes, there were cases in which local authorities faced difficulty in collecting those taxes when they fell due, as well as in collecting arrears of tax from previous years. The Scottish Law Commission was persuaded by those arguments. It noted that both taxes benefit from the same special provisions for enforcement by diligence and by summary warrant procedure, and it seemed appropriate that their amenability to prescription should be the same.
The Convener
If somebody has managed to dodge paying council tax for more than five years down south, they can get away with it, but not here.
Jill Clark
It is six years; here, it is 20 years.
Alison Harris
Do you want to come in, Mr Johnston?
David Johnston QC
There is not very much that I can add to that. When we first consulted, we were not much persuaded that special rules needed to be made for council tax, albeit that—as Jill Clark has explained—it is generally understood that council tax is not covered by the five-year prescription and therefore only the 20-year prescription is available.
It is perhaps worth adding that the difference between the six-year period in England and the 20-year period in Scotland is less stark than it first appears, because if you get a liability order within the six-year period you can enforce it without any limit of time. In practice, the differences in timescale might not be so stark.
After the representations that have been described, and given that there were difficulties in recovering arrears, we decided that we should not be too dogmatic about saying that we were not persuaded and that we should stick with the status quo, which is where we have ended up.
David Torrance (Kirkcaldy) (SNP)
The combined effect of section 3 of the bill and section 38 of the Social Security (Scotland) Bill is that five-year prescription would apply to devolved benefits but 20-year prescription would apply to reserved benefits. Why is there a divergence of approach?
Jill Clark
As I said, the Department for Work and Pensions policy on the reserved social security benefits is a matter for the DWP and I cannot comment on that. The bill provides for maintenance of the status quo for the DWP—it was 20 years before and it remains 20 years.
The Social Security (Scotland) Bill, which is currently before the Scottish Parliament, sets out that obligations to make payments to Scottish ministers for recovery of devolved social security payments made in error will prescribe after five years. The effect will be that it will not be possible to recover overpaid, devolved social security payments after five years unless Scottish ministers were misled into making the overpayment.
Scottish ministers considered that that approach fitted better than any longer period of prescription, given the fundamental principle that underpins the Scottish social security system, that is, that people should be treated with dignity and respect.
Having a five-year prescription might also act as a driver of continuous improvement in the new social security agency, supporting prompt action on whether to recover overpayments. The difference in the approaches is probably a natural consequence of the devolution of powers to the Scottish Parliament and the fact that the Scottish Government can do things differently, based on the priorities set by Scottish ministers.
David Torrance
More generally, when the proposals were being developed, what consideration was given to the possible interaction between the Social Security (Scotland) Bill and the Prescription (Scotland) Bill?
David Johnston QC
The timing meant that, when the Scottish Law Commission was formulating its proposals on the Prescription (Scotland) Bill, we did not give consideration to the Social Security (Scotland) Bill. The Social Security (Scotland) Bill was introduced in June 2017 and our report was published two to three weeks after that. We were not in a position to take into account the provisions of that bill when we formulated our policy and made recommendations.
However, once the Government took on board our report and was considering how best to progress it, in the course of August and December 2017, we had discussions about how the bills would interact. I will leave the story for Jill Clark to take over.
Jill Clark
The position is as described. The Department for Work and Pensions has a prescription of 20 years and that is what it wants in policy terms. For the Scottish Government’s policy terms, five years was seen as more appropriate and that is why there is a divergence.
The Convener
Why is it seen as more appropriate?
Jill Clark
I am speaking about a policy area that is not the one that I deal with, so forgive me if I take some time over my answer. My social security colleagues would say that they have taken a different approach in the Social Security (Scotland) Bill, by setting out its principles and because having benefits is a human right in the bill. Dignity and respect are paramount in the approach that they have taken. Therefore they consider that five years is a much more appropriate prescriptive period.
The Convener
It was probably not fair to ask you that question, Ms Clark. I should direct it to someone else.
David Torrance
In Scotland, recovery of an overpayment of reserved benefits or tax credits is to be subject to a 20-year prescription. However, England and Wales take a different approach, with a distinction between recovery by court action and recovery by a deduction from on-going payments. Did the Scottish Government or the SLC consider whether Scots law should make that distinction? If so, what conclusions were reached?
10:15David Johnston QC
The commission did not get into that issue. At a more general level, we considered what exceptions should be made to the proposed general rule that statutory obligations to make payments should prescribe after five years. We did not get into the question of what the appropriate procedures for recovery of benefits should be. We regarded that question as a policy matter for others, and it was probably strictly outside the narrow confines of our project on prescription.
Stuart McMillan
An earlier version of the proposals included a specific exception to five-year prescription for forfeiture. What is forfeiture and why are you now content that that exception is not necessary?
Jill Clark
It is really just a technical change to remove unnecessary provisions. Proceedings for forfeiture in relation to customs and excise and proceedings for the forfeiture of a ship were excepted from the five-year prescription. They were included in the bill to align Scots law with the position in England and Wales under the Limitation Act 1980. However, further work revealed that those provisions are not necessary. In relation to statutory obligations to pay tax and duties, the proceedings relate to underlying obligations that are covered already by the exception of tax and duties. If the underlying obligation to pay tax does not prescribe after five years, the means to enforce that obligation by proceedings for forfeiture remain open as long as the obligation exists. The provisions were removed from the bill following discussion with the Scottish Law Commission, and with its agreement. Their removal makes no practical difference.
Stuart McMillan
Is it really just a tidying up exercise?
Jill Clark
Yes—otherwise there would be duplication.
Stuart McMillan
The SLC’s option 2 in relation to section 5 of the bill is to go back to the law as previously understood before the Morrison case. That option got a reasonable amount of support during the consultation. What is the policy benefit of adding the requirement that the pursuer must know the identity of the defender? You can respond by reference to examples of situations in which you think that that would be important, if that would be helpful.
David Johnston QC
At the most straightforward level, it seemed to us that prescription is about the extinction of obligations once they are enforceable. It is hard to say that there is an enforceable obligation unless it is known against whom we should enforce it. That is the simple answer.
A slightly more sophisticated answer is that it also seems fairer, if we do not know who was responsible for an act or an omission, that prescription should not start running against someone.
To take up your invitation to provide an example, I think that, in many instances, construction cases provide the best examples, partly because they are complex and involve many parties. When a defect in a building emerges, there is often an argument about whether it was caused by inadequacies in the design, which might be down to the architect or possibly the structural engineer, or by inadequacies in the construction, which would be the fault of the contractor or perhaps one or more of the subcontractors. The key difference that the requirement would make in such a case is that, if a design problem was identified, it would need to be known whether the architect or the structural engineer was at fault. It would be a similar story if there were construction problems.
I will develop the point a little further. As the committee will know, one of the problems that we identified in the existing law is that, if something goes wrong with a building contract, employers to the contract typically sue everybody—the architect, the engineers, the surveyors, the contractors and the subcontractors—because they do not want to miss anyone out in case they lose their claim by prescription. We think that that is wasteful of resources for the parties, the insurers and also for the courts. The difference that is made by adding the identity criterion—the third of the three facts in the bill—is that employers will not be at risk from prescription until they have identified who is at fault. In my example, they have identified that there is a design problem and that it is the architect who is responsible for that. Without the identity query, you will still potentially be faced with having to sue engineers, architects and anyone else who had some involvement in the design. The identity criterion should obviate that need.
Stuart McMillan
I am not an expert in contract law or building but it strikes me that, in your example, if the question of the nature of the defect was still not clear, all the parties would state that they were not at fault and that it was not their responsibility. If you do not know which person or company is responsible, how would that aspect of the bill work? Would people just do what they do at the moment, and pursue litigation against everyone?
David Johnston QC
That is one possibility, I suppose. We have been seeking to ensure that the time does not start too early. As I said, if it starts too early in a situation in which you do not have enough information, you will be forced to sue everybody just to protect the position.
The proposed tripartite test in the bill means that, first, you need to know that you have suffered some loss. That is usually easy if there is an evident defect in the building. The difficulty then is determining whether it was caused by somebody’s act or omission—that is, did someone either do something or fail to do something that should have been done? I think that the short answer to your question is, with regard to this test, if it was impossible to pinpoint what the problem was, the time would not be running yet against the pursuer, so the claim would still be alive and not subject to being cut off by prescription.
Stuart McMillan
The claim would remain alive until such time as it was possible to identify one party or multiple parties.
David Johnston QC
Exactly. For each relevant person—that is, each party that might be sued—you need to be able to tick all three boxes: defect; act or omission; and identity. Once you have done that, the time will start to run, and you have five years in relation to each of those people.
Stuart McMillan
Thank you, that is helpful.
The Convener
I would like to ask a supplementary question that is based on the example of a case that I dealt with. If I have bought a new house and problems emerge with the foundations, I might think that I will make a claim against the people who built the house. However, the people who built the house might make a claim against the people who put in the foundations, and the people who put in the foundations might make a claim against the person who designed the foundations, and so on. I, as the householder, cannot possibly go all that way down the chain, so what am I to do?
David Johnston QC
Obviously, there are difficulties in cases in which people are unable to get professional advice. That is something that we just have to live with in relation to the creation of the legal system. However, in the case that you describe, what one would do is go to an expert and ask for an expert report that says what the problem is, how it was caused and who is at fault. Good-quality expert advice will tell you that the fault lies with the person who designed the foundations, the person who inadequately poured the concrete or whoever. That will allow you to start to accumulate the knowledge that you need for prescription to begin.
The Convener
In that case, I do not have a contract with those people. I bought the house from the builder, so surely my claim is against the builder and, if there is another claim, it is up to them to pursue it.
David Johnston QC
Yes. Clearly, if the claim is in contract, you have to rely on the person with whom you contracted.
The Convener
The clock starts ticking as soon as I take action against the builder.
David Johnston QC
Yes, I think that that must be right. For example, if you were able to find a claim in delict to bring against somebody else—which it is not totally straightforward to do under the current state of the law—the question of when time started to run against that claim would have to be addressed by looking at the same three factors that we have been discussing. That start time would not necessarily be the same date as the one for the contractual claim.
The basic position, as you have said, is that if someone has a contract, that should be the first recourse that they seek. If someone is simply seeking, for example, the making good of defects in the building, that might not be in the territory of a damages claim at all. All those things will be quite sensitive to the particular facts of each case.
Stuart McMillan
You mentioned subcontractors. Clearly, the economy has not been totally solvent over the course of the past 10 years, particularly in the house-building sector. Many house builders will have brought in—and will still be bringing in—subcontractors. If there was a problem in a house that was ultimately down to the work of a subcontractor, but the subcontractor had gone out of business, would the claim go against the house builder, for them to attempt to recover money to get the problem fixed? Whom would they recover money from, and what would happen to the person who had purchased the house?
David Johnston QC
If you were working on such a case in practice, you would first look closely at the contract for the remedies that it makes available to the contracting party who has been let down. Typically in a case like that, you would expect the remedy to be against the seller of the house, who might be a property developer or a building contractor—I imagine that that is where most contracts would make the liability lie. It is difficult to give a general answer, because it will depend entirely on the contractual situation. Typically, you might find that there is no contractual entitlement to pursue other parties in such contracts; the only remedy is to pursue the party with whom one entered into the contract. I am not sure that I can give you a more specific answer, because it will depend very much on the content of each contract.
The Convener
Do you have a question, Alison?
Alison Harris
No, I am listening with interest and I think that Mr Johnston answered my question.
Stuart McMillan
On section 8 of the bill, some responses to the discussion paper expressed doubt that the proposed rules will work well in relation to the defender’s omissions or on-going breaches compared with how they will work for the defender’s actions. Can the Scottish Government offer the committee any reassurance on that?
Jill Clark
I look to David Johnston to answer that.
David Johnston QC
Yes. The commission considered the submissions that were made about the difficulty in applying the proposed new rules to omissions. We were not persuaded that the bill introduces anything that is not already an issue under the existing system. Under the existing legislation, there is already reference to continuing acts or omissions; therefore, even under our current system, in certain cases you have to be able to identify when an omission took place. Typically, you can say that it took place when it becomes impossible for it to be remedied—that is, you have to do something by a certain date or it becomes impossible to do it. That is often the date that you identify as the date that an omission occurred, as a matter of law.
The short answer is that that is an issue under the current law, and we were not persuaded that referring to “the act or omission” in section 8 would introduce a problem that lawyers are not already used to dealing with under the existing legislation.
10:30The Convener
We will move on to section 6, which deals with interruptions and extensions to the 20-year prescription. It would amend the law so that the main type of 20-year prescription could no longer be interrupted and halted by a relevant claim or a relevant acknowledgment. However, there would be the possibility of an extension to that prescription period, which would be only to allow litigation that has commenced to finish.
The proposals received majority support on consultation. However, Brodies was one of a minority of respondents that expressed reservations about section 6. It suggested that the period should still be able to be interrupted but that it should restart not from the beginning but from where it left off in the first place. Would you like to comment on that suggestion?
David Johnston QC
We have common ground with Brodies in thinking that there is an issue that needs to be addressed. It is simply a question of what the best mechanism for doing that is. As you have explained, this is the single exception that we propose to the position of there being an absolute cut-off after 20 years. The rationale for that is that prescription is meant to cut off old or stale claims, but clearly that does not apply if someone is actively pursuing a claim when the 20-year cut-off period arrives.
In common with Brodies, we regarded that as an issue that needed to be addressed, and we gave some thought to its proposal that we might do it differently from the way that we have suggested, which is simply tacking on a bit to the end of the 20-year period. However, we thought that our solution was preferable. Under Brodies’ suggestion, if a litigation that took five years to conclude was raised in the middle of the 20-year period, we would then have, in effect, a 25-year prescriptive period. That is certainly one way of doing it. However, we thought it preferable to extend the period simply by whatever balance of time is needed to complete the proceedings that are in play at the end of the 20 years. We hope that, in the rare cases in which the issue arises, that balance of time would be really quite short. We are relying partly on the fact that, nowadays, courts tend to manage cases and do not allow them to drag on indefinitely. On the whole, it seemed to us that, in order to keep as close to the 20-year limit as possible, our solution would be preferable to the one proposed by Brodies, although they aim to achieve the same thing.
The final point that I would make is that, when Brodies responded to our consultation on the draft bill, it expressed the view that it was content with the scheme that we had proposed, so I think that it is satisfied with the provision in the bill as it stands.
The Convener
Right. Thanks for that.
Alison Harris has a question on section 13, which is on standstill agreements.
Alison Harris
When the SLC, in its discussion paper, proposed the possibility of contracting out of prescription, it got a mixed response. Is the Scottish Government content that the conditions that are now set out in section 13 of the bill will remove any controversy and make it a suitable proposal for this committee to consider?
Jill Clark
Yes, absolutely. David Johnston can perhaps explain the rationale behind our position.
David Johnston QC
I will briefly outline the background thinking. The starting point is that the act lays down the prescriptive periods and therefore we think that, in general, those ought to be the periods that actually apply. That is one premise. A second premise is that, if we are to allow any extension to those periods, the extension must balance the interests of parties—which obviously diverge—and must not be capable of undermining the system as a whole. That led us to the view that it should not be possible to extend the 20-year period, with the single exception that we have already discussed about proceedings that were continuing. The period is meant to be an absolute cut-off, so to allow people to extend it would clearly undermine that principle.
We then focused our attention on the shorter periods, such as the five-year period. Should it be possible for parties to change that? A key factor for us was that we thought that it would be inappropriate for parties to be able to change the prescriptive period in advance—for example, while making a contract. We were concerned that if, for example, parties were to enter into a contract that stated that there would be a 10-year prescriptive period instead of a five-year one, that would, first, undermine the system, which is supposed to be as clear and have as few different periods as possible, and, secondly, favour the party in the stronger bargaining position. That is what led us to the view that the right balance is struck if we permit some agreements to extend beyond the period but only in strictly limited circumstances. As I have just been saying, we proposed that the dispute must have arisen already. You do not invent a new prescriptive period in advance; you enter into the agreement after the dispute has arisen. We also proposed that the agreements should be limited in time and should be capable of being made only once.
To go back to the construction example, if the employers in a building contract have learned all the relevant facts and know that they have suffered a damage as a result of a design problem that was caused by the architect, they then have five years. Under the existing system, the only way in which to preserve their claim is to raise proceedings. The provision in the bill seeks to give them another option, which is to agree with the architect, before the five years have run out, that they will have a short extension—say, for six months or a year—to see whether they can settle out of court. We thought that that was a more efficient use of resources. It also avoids raising the stakes, or increasing the pressure, in the way that litigation does, and it saves costs, too. It seemed to us that that was an appropriate way of dealing with the issue and that it struck the right balance.
The other point to make in addressing Alison Harris’s question is that, although there was some divergence of view about whether these agreements were a good thing, a lot of it was really predicated on the particular conditions that applied. We think that the three conditions that I have mentioned—that the period can be changed only after the event, that it can be extended only by one year and that there can be only one extension—address all the reservations that were expressed by consultees.
The Convener
Stuart McMillan is going to ask about the Hugh Paterson case, which is a very interesting one. Stuart, can you outline the background to the case?
Stuart McMillan
Mr Paterson submitted a petition—PE1672—to Parliament in October 2017. He had experienced the effect of the 20-year prescription when the conveyancing associated with a house purchase went wrong, which he did not find out about until many years later. He then tried to sue his solicitor for damages. What Mr Paterson found was that the legal obligation to pay damages can be extinguished by the 20-year prescription without the five-year prescriptive period even starting to run and without the pursuer having been aware that the legal obligation to pay him or her damages existed.
The SLC acknowledged that Mr Paterson’s case was a difficult one, in which the prescription had operated harshly, but said that the need for the law to be certain meant that no proposals to help people in Mr Paterson’s position could be included in the bill. The Scottish Government supports the SLC’s position on that, and the latest correspondence from Mr Paterson to the Public Petitions Committee suggests that he now thinks that reform to land registration law and practice might be the appropriate avenue for change.
The committee is aware of Mr Paterson’s petition relating to his experience of the 20-year prescription. For the benefit of the record, is the solution to the problem that he outlines the reform of the law of prescription? If not, can the Scottish Government indicate where it thinks the solution might lie?
Jill Clark
We note that Mr Paterson understands the law of prescription and that the liability cannot be carried in perpetuity. The Scottish Government’s view is that the 20-year longstop is important in creating legal certainty, finality and fairness.
We were asked by the Public Petitions Committee for our view on notifying purchasers of the title at time of registration, which is an approach that was suggested in one of the committee’s meetings. We commented that relevant legislation is in place under section 40 of the Land Registration etc (Scotland) Act 2012, such that when an application for registration is accepted or rejected by the keeper of the registers, the keeper must notify the applicant, as long as it is reasonably practicable to carry out the notification. In most cases, the applicant is the solicitor who is acting for the party involved in a property transaction. The person submitting the application can specify on the application two email addresses to which the notification should be sent. A further two email addresses may be provided for notification to the granter of any deed and/or their solicitor.
We are going to check with the Law Society of Scotland what solicitors do in practice about notifications. Hopefully, there is an administrative solution to the issue that would remedy the difficulty that Mr Paterson faced and that does not disturb the law of prescription.
Stuart McMillan
It is clear that Mr Paterson’s case started some years before the 2012 act came into force.
Jill Clark
Yes.
Stuart McMillan
I sat on the committee that scrutinised the 2012 act and it was a welcome update to that area of law. However, Mr Paterson’s case predates that act and I am sure that we all accept that it is a hard case. Something has happened that has had a negative effect on Mr Paterson. In terms of a remedy or some kind of successful outcome for Mr Paterson, there has to be some other way of using legislation—whether that is the Prescription (Scotland) Bill, other legislation or, as you suggested, an administrative step—to try to prevent such a thing happening again.
Jill Clark
We can try to prevent it or look at remedies to prevent it happening, but I do not think that anything can be done for Mr Paterson’s position.
Stuart McMillan
Is there no way to achieve successful closure for Mr Paterson?
Jill Clark
His claim has prescribed, as far as I am aware, so there is no remedy in that aspect of the law. I do not think that the solicitor firm is functioning any longer—I think that it went bust.
Stuart McMillan
I imagine that the Law Society would be very involved in that particular case.
Jill Clark
I do not know whether that is the case.
Stuart McMillan
Okay. Thank you.
The Convener
That was a brief session, but we are only at the start of the process of considering the bill. I thank the witnesses for their time.
10:44 Meeting suspended.10:45 On resuming—
20 March 2018

20 March 2018

27 March 2018

17 April 2018

24 April 2018

1 May 2018
What is secondary legislation?
Secondary legislation is sometimes called 'subordinate' or 'delegated' legislation. It can be used to:
- bring a section or sections of a law that’s already been passed, into force
- give details of how a law will be applied
- make changes to the law without a new Act having to be passed
An Act is a Bill that’s been approved by Parliament and given Royal Assent (formally approved).
Debate on the Bill
A debate for MSPs to discuss what the Bill aims to do and how it'll do it.

Stage 1 debate on the Bill transcript
The Deputy Presiding Officer (Christine Grahame)
The next item of business is a debate on motion S5M-12958, in the name of Annabelle Ewing, on the Prescription (Scotland) Bill at stage 1. I call Joe FitzPatrick to move the motion.
Motion moved,
That the Parliament agrees to the general principles of the Prescription (Scotland) Bill.—[Joe FitzPatrick]
The Deputy Presiding Officer
I call Alison Di Rollo, Solicitor General for Scotland, to speak to the motion. You have nine minutes, Solicitor General.
15:18The Solicitor General for Scotland (Alison Di Rollo)
I am pleased to be here today on behalf of the Scottish Government to open the debate on the general principles of the Prescription (Scotland) Bill, which began as part of the Scottish Law Commission’s ninth programme of law reform. I thank those who gave evidence, the convener and members of the Delegated Powers and Law Reform Committee and, in particular, the Scottish Law Commission, whose report included the draft of the bill, for its work. The bill will be taken forward by the new Cabinet Secretary for Justice and Minister for Community Safety following their formal appointment, subject to Parliament’s approval tomorrow.
The Scottish Government welcomes the committee’s support for the general principles of the bill and its recognition that the bill will provide clarity and legal certainty in those areas of negative prescription that have caused practical difficulties for creditors and debtors alike in Scotland.
The bill began as part of the Scottish Law Commission’s ninth programme of law reform, and its aim is to increase clarity, legal certainty and fairness in the law of negative prescription. In civil law, that doctrine serves a vital function: it sets time limits for when obligations and correlative rights are extinguished. That serves the interests of individuals where, after a certain lapse of time, it is fairer to deprive one of a right rather than allow it to trouble the other; it also serves the public interest, because litigation begun promptly encourages legal certainty.
It is probably worth briefly revisiting the bill’s intentions, which are to resolve issues with the law of negative prescription that have caused practical difficulty. Those are deemed to be worthy and welcome reforms to this aspect of the law. We should perhaps bear that in mind when we debate the bill’s principles this afternoon.
What does the bill do? By extending the five-year negative prescription period to cover all statutory obligations to make payment, the bill will significantly simplify the law in that area. Currently, the Prescription and Limitation (Scotland) Act 1973 lists specific categories of obligation that are subject to the five-year prescriptive period. Consequently, that list needs to be constantly updated if new obligations are to come under the five-year prescription. At the same time, there are statutory obligations that do not come under the five-year prescription but where there are no policy grounds to explain or justify that. There are exceptions to the new rule, such as taxes, council tax and Department for Work and Pensions overpayments—in other words, generally those statutory obligations of a public law nature.
Negative prescription is about the extinction of obligations after they become enforceable but it is difficult to say that there is an enforceable obligation unless we know whom to enforce against. In the case of seeking damages, it is, after all, only fair that, if a person does not know who was responsible for their loss, injury or damage, time should not run against them until they know, or can reasonably be expected to know, who was responsible. Section 5 will do just that. It makes little sense to postpone the start of prescription when the creditor becomes aware of the cause of their loss yet unaware of the identity of those responsible. The Scottish Government welcomes the committee’s recognition that the new test proposed in the bill will achieve a fair balance between the interests of the creditor and those of the debtor.
While it seems fair to creditors to allow them some time to discover the identity of the person responsible for their loss or damage, it is also fair to defenders that time does not carry on indefinitely against them. An unusual feature of Scots law is that both the five and 20-year prescription for obligations to pay damages run from the same date—that is, the date of the loss. Another unusual feature is that the 20-year prescription can be interrupted, with the effect that the 20-year period starts again, so it is possible for a long time to pass before an obligation finally prescribes.
The bill will make the 20-year prescription, in relation to obligations to pay damages, commence on the date of the act or omission giving rise to the loss. It will also make the 20-year prescription a true long stop by preventing the period from being restarted. The committee, along with a number of those who gave evidence at stage 1, agree with the Scottish Government that such provision will increase legal certainty and clarity. The committee also recognises the logic in allowing the prescription period to continue until proceedings finish, where that happens after the end of the 20-year period.
A good deal of time has been spent on what the bill does not do, as opposed to what it does. It simply maintains the exceptions that exist under Scots law. With respect to council tax and non-domestic rates, the bill does not seek to change the position as it is generally understood. Local taxes are vital sources of income for local authorities in the same way that other taxes are vital sources of income for the Scottish and United Kingdom Governments, and the Scottish Government does not want, as the SLC has indicated, to differentiate the treatment of local taxation payments from all other tax payments.
Neil Findlay (Lothian) (Lab)
Will the Solicitor General take an intervention?
The Solicitor General for Scotland
I want to make progress at this stage, if that is all right.
The Convention of Scottish Local Authorities told the committee that it is rare for action to be taken to recover a debt that is more than five years old, but that any move to a five-year negative prescription period would—just like with the DWP—hurt the debtor most. Payments would either have to be recovered over a shorter period—and we must always remember that local taxes are recurring obligations that are due every year, so failure to make payment one year is likely to be compounded the following year—or councils would have to change the way they try to pursue and enforce payment, leading to substantially increased costs for councils, for the Scottish Courts and Tribunals Service and, more important, for the debtors themselves. The Scottish Government notes from the committee’s report that the committee has agreed to write to all 32 local authorities for more information about such debts.
Reserved social security spending in Scotland is still decided on the basis of rules that are set by the DWP, and that includes how it decides to recover any overpaid benefits. The DWP has made it clear to the committee that, if there was no exception from the five-year prescription for obligations to repay reserved benefit overpayments, debtors would be placed in a worse position than they are in now, as the DWP would have to recover the money over a shorter period, meaning that larger amounts would require to be deducted from a debtor’s benefits over a shorter period.
The Scottish Government does not have any jurisdiction over policy decisions concerning the operation of reserved benefits, and the committee is keen not to increase the financial hardship on vulnerable people in our society. The DWP is in control of the matter, and the Scottish Government hopes that the committee will join it in recognising the impact that making reserved benefit overpayments subject to the five-year prescription would have.
Mark Griffin (Central Scotland) (Lab)
Will the Solicitor General take an intervention?
The Solicitor General for Scotland
I am going to press on for now.
As well as the provisions that I have mentioned, the bill makes some miscellaneous provisions, which I want to mention briefly before time runs out. First, the bill allows for agreements to extend the five-year prescription by no more than one year in order to allow parties time to negotiate an end to their dispute without the need for protective proceedings. The committee recognises the merit in those agreements. Secondly, the bill adds to the definition of “relevant claim” in order to take account of claims that are made in sequestrations and company administration receiverships.
In concluding my opening remarks, I again thank the Delegated Powers and Law Reform Committee for its scrutiny of and support for the bill’s general principles. The approach that is taken in the bill is not one of wholesale reform. Its aim is to focus on and address those particular areas that have caused difficulty in practice. The Scottish Government believes that the bill strikes a fair balance overall in redressing cases of unfairness for creditors and debtors while also serving the wider interests of fairness, justice and certainty.
In those circumstances, I move that the Parliament agrees to the general principles of the Prescription (Scotland) Bill.
The Deputy Presiding Officer
Thank you, Solicitor General. I know that you are not used to this, but the motion has already been moved by Mr FitzPatrick.
The Solicitor General for Scotland
Sorry, Presiding Officer. That was corroboration. [Laughter.]
The Deputy Presiding Officer
Oh, yes. I was all in favour of corroboration. It got me into a lot of trouble. [Laughter.]
I call Graham Simpson to speak on behalf of the Delegated Powers and Law Reform Committee.
15:27Graham Simpson (Central Scotland) (Con)
I thank Ms Di Rollo for stepping in today.
One of the responsibilities of the Delegated Powers and Law Reform Committee is to scrutinise Scottish Law Commission bills. They are often seen as being quite technical, and members may think that our scrutiny is therefore quite turgid. As convener of the committee, perhaps I have just gone a little native, but I think that the Prescription (Scotland) Bill has proved to be a thoroughly interesting, important and thought-provoking piece of legislation.
I appreciate that many members might not have given much thought to the bill before today. They might have noted that it is a Scottish Law Commission Bill and thought that there is generally wide consensus among stakeholders on the need to reform the law and that any changes are fairly procedural and uncontroversial. Indeed, if they were asked to take part in this debate, they might have thought that they just needed to take their prescription and move on. They might even have thought that the bill is about the prescriptions that they get from their doctor. We have all had such prescriptions, but, thankfully, very few of us have had anything to do with the prescriptions that are covered in the bill.
There are some bills that we can really get stuck into—the Planning (Scotland) Bill, for instance. At first glance, the Prescription (Scotland) Bill did not appear to be one of those, but the DPLR Committee has had to wrestle with some important policy areas, such as council tax and social security benefits—policy issues with potential implications for our constituents, issues that affect some of the most vulnerable people in our society, and issues of justice for people who have suffered injustice.
I will give two examples that demonstrate why the bill is so important and why our committee was required to give it such robust scrutiny. Before I do, and for those members who are new to the legal term “prescription”, I can tell the chamber that I have found a handy way of thinking about it: it is the available time in which one is able to make a claim against loss. If someone has missed the deadline—the prescription period—their right is extinguished and, sadly, they are too late.
I turn first to the case of Morrison v ICL Plastics. As many members will remember with great sadness, the case stemmed from the tragic explosion at the Stockline Plastics factory in Glasgow in May 2004, in which nine employees were killed and which left many seriously injured. The case centred on a nearby business, David T Morrison and Co, which suffered significant damage from the explosion. However, when it sued ICL Plastics, which owned Stockline, for its loss, ICL defended the claim on the basis that it had already prescribed. In essence, Mr Morrison was told that he was too late to receive justice.
The case revolved around the interpretation of the existing legislation, the Prescription and Limitation (Scotland) Act 1973, and what the start date was—the date on which the loss, injury or damage occurred. Morrison believed that the start date was in 2013, when he found out that the explosion was ICL’s fault, but ICL argued that the start date was in 2004, when Morrison’s had initially suffered the loss. The Supreme Court, by a majority of three to two, found in favour of ICL.
The committee recognises the impact that the Supreme Court’s decision had on the law of prescription. We therefore agree with the proposal in section 5, which allows the pursuer to know who caused the loss before the prescription period begins. That will mean that, in future, people who, like David Morrison, are trying to seek recompense for damage suffered due to negligence will not be told that it is too late to pursue the ICLs of this world. That is a welcome change to the law.
Another example might help to explain section 8, which covers the start date for the longer 20-year prescription period. Under the bill, that period will now start from the date when the act or omission that led to the loss occurred.
Fenella Mason, head of construction and projects at the law firm Burness Paull, gave the helpful illustration of a problem with a large infrastructure project such as—and I do not want to cause any undue worry to the current transport minister—the Queensferry crossing. Ms Mason asked the committee to assume that, back in 2008, one of the bridge’s engineers produced a defective design. As the structure did not open until 2017, and as it is not unusual for it to take 10 or 12 years for a problem to manifest itself, in that example the right of the Scottish Government to sue for damages could be lost.
The committee recognises that the start date for the 20-year prescription that is proposed in the bill might therefore result in some harsh cases. However, it was persuaded by the argument that evidence can deteriorate considerably over time, which in turn can lead to difficulties when compiling a case. As a number of witnesses said in evidence, we have to draw a line somewhere.
In the time available, I have not been able to mention the important welfare aspects that the committee wrestled with. We felt that they were of such significance that we wrote to the Social Security Committee, the Justice Committee, the Equalities and Human Rights Committee and the Local Government and Communities Committee to ask for their views on our work and whether they had anything to add. I am grateful to those committees for their helpful responses, particularly given the very tight deadline that we gave them. I am sure that some of my colleagues will pick up on those welfare issues in their own contributions.
I thank all those who contributed to the committee’s scrutiny of the bill, whether in writing or by appearing before the committee during one of our evidence sessions. As members know, a committee’s scrutiny is only as good as the evidence that it receives, so we are very grateful for the time and energy given to help us in our work.
I thank the Minister for Community Safety and Legal Affairs and her officials for the constructive way in which they engaged with the committee, and I thank the Scottish Law Commission for proposing the bill. The committee was a little concerned that the commission did not perhaps consult as widely as it could have done, and we have called on it to review its processes for future consultations.
I also thank my fellow committee members for their enthusiasm in grappling with the issues that the bill raises. Although there were a couple of areas on which we could not reach agreement, that work was a great example of parliamentary scrutiny, with the committee wanting to get the best legislation possible on the statute books.
I close with the words of William Gladstone, who said:
“Justice delayed is justice denied.”
I hope that the provisions of the bill will ensure that justice might not be completely denied due to the passage of time. My committee and, indeed, all members, will welcome that. The bill will ensure greater fairness and equity in the civil justice system. I commend the committee’s report to members.
15:35Alison Harris (Central Scotland) (Con)
First, I will simplify the meaning of “prescription”. Prescription and Scots law on prescription encourage people to enforce their rights swiftly, and before it becomes too difficult for a person—or, indeed, an organisation—who is defending a claim to gather the appropriate evidence. As we heard from Graham Simpson, delay can cause the quality of vital evidence that might be available for use in a court case to diminish. The Prescription (Scotland) Bill aims to amend the law relating to the extinction of civil rights and obligations by the passage of time.
For negative prescription, the Prescription and Limitation (Scotland) Act 1973 established five-year and 20-year prescriptive periods. Twenty-year prescription applies to all obligations other than those that are specifically excluded from it by other provisions in the 1973 act. Five-year prescription applies to obligations on one statutory list and not to obligations on a second statutory list in schedule 1 to the 1973 act. In practice, most obligations in Scots law end after five years.
If enacted, the bill would implement the Scottish Law Commission’s recommendations on the law of prescription and amend the 1973 act in relation to negative prescription only. That means that a person has a certain timeframe in which to do something or it will become time barred. With positive prescription, the person needs the time to pass in order to claim the right to something.
The bill contains three main proposals in technical areas of law. However, what I am about to say is just a general guide.
Section 1 of the bill relates to obligations to pay damages and obligations under the law of delict. “Delict” refers to Scots law that relates to types of civil law, apart from breach of contract. It covers a group of wrongful behaviours in relation to a person who has been wronged and can obtain a legal remedy in the civil courts. It includes the common law of negligence and other specific types of delict, such as defamation and occupiers’ liability. It is separate from the law of contract.
Section 2 will extend the scope of the five-year prescription to include certain obligations that are associated with contracts.
Section 3 sets out the general rule that statutory obligations to pay money are covered by the five-year prescription. However, there are some statutory obligations that are covered only by the 20-year prescription.
The committee not only took oral evidence; written evidence was also taken from the legal profession, academics, the welfare rights sector, the Scottish Law Commission and the then minister in charge of the bill, who was Annabelle Ewing MSP. All those who responded to the committee’s call for written evidence and who gave oral evidence agreed that the bill is necessary. In its written evidence, Shepherd and Wedderburn LLP agreed, and said that
“the Bill will improve clarity, certainty and fairness”
and that
“overall resources will be more efficient and costs reduced. It is likely that advising clients on potential prescription will be less complex whilst still not straightforward.”
Under the 1973 act, the five-year prescription applies to obligations on one statutory list and not to obligations on a secondary statutory list, as detailed in the act. The lists have been amended many times over the years, which makes the law extremely complex.
Section 3 of the bill will extend the five-year prescription to all statutory obligations to pay money, with some exceptions that will remain within the scope of the 20-year prescription. Those exceptions are taxes and duties that are recovered by Her Majesty’s Revenue and Customs and Revenue Scotland; council tax and non-domestic rates, as well as the sums that are connected with enforcement of obligations; the obligation to pay child maintenance; and sums that are recoverable under the legislation relating to social security benefits and tax credits.
There is some debate about those exemptions. For example, there appears to be some uncertainty under the current law about the prescription period relating to council tax and business rates debts. Under the current law, council taxes and business rates are probably covered only by the 20-year prescription, although there is no decided case on the point, which leads to some uncertainly in practice. It is not as clear cut as the time simply being five or 20 years, when we consider joint and several liability in situations in which people genuinely believe that they have paid but discover that a debt is outstanding and is significantly more than the original amount. Joint and several liability is a general principle of Scots law, but people do not always appreciate the meaning or severity of its implications.
The committee has recommended that the Scottish Government give further consideration to the exception for council tax and business rates, and that it provide a more detailed description of the public policy arguments for the exception, ahead of stage 2. The committee also recognises that there are wider policy considerations in the bill, particularly in relation to welfare rights.
Overall, the committee welcomes the greater certainty that the bill will provide for users of the law, agrees with the bill’s aim of increasing clarity, certainty and fairness for the law on negative prescription, and considers that the bill, as drafted, generally meets its aims.
I thank the four committees that responded to the questions that were put to them on the wider policy areas, and I thank the committee clerks for the time, patience and effort that went into guiding the committee members through the bill.
15:41Daniel Johnson (Edinburgh Southern) (Lab)
In the light of the announced reshuffle of Government ministers, I begin by registering my thanks to Michael Matheson and Annabelle Ewing. Over the time that I have spent shadowing the justice brief, we have had some notable disagreements—on police governance, the British Transport Police merger and the repeal of the Offensive Behaviour at Football and Threatening Communications (Scotland) Act 2012—but there have also been some clear areas of constructive engagement on the broad issue of prison reform, on ensuring that the criminal justice system and the judicial system work and on the more specific circumstances around the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. I thank both Michael Matheson and Annabelle Ewing and wish them luck in their new roles.
I also welcome Humza Yousaf—I am glad that he is here this afternoon on the front bench—and Ash Denham to their new positions, and look forward to engagement with them, be it constructive or, on occasion, critical, where that is needed.
I must admit that the Labour group was very excited to hear that there was going to be a debate this afternoon about prescription. Indeed, a queue lined up so that we could talk about medication, pharmacies and, on the 70th anniversary of the national health service, some very important health issues. When the truth was revealed about the debate, I am not sure that we had quite the same ease in filling the debate slots.
However, the issues around debt and the length of time for which it is reasonable to pursue debts are very important and have very real and human implications. We are therefore debating important issues this afternoon. In that regard, I thank the members and clerks of the Delegated Powers and Law Reform Committee for the stage 1 report, which provides a useful basis for the debate; and I thank the organisations that provided briefings to inform the debate. I also thank the Scottish Law Commission, whose work prompted the bill’s introduction.
Prescription is a valuable principle in civil law that ensures that people who are aggrieved face a time limit for raising a claim in court, which is important because it encourages people to enforce their rights promptly. Without that, paper evidence could become lost, damaged or destroyed and witnesses might have died or become untraceable, or simply might not remember the facts of the case.
Above all, having no time limit might lead to people being pursued for debts for a length of time that anyone would consider to be unreasonable. It is against that principle that the bill seeks to reform prescription. I will focus my remarks on the discoverability test and the exceptions to the five-year period.
The discoverability test is used to determine when the prescriptive period starts. Recently, two important cases at the Supreme Court have altered interpretation of the test, one of which has already been mentioned in the debate—David T Morrison & Co Ltd v ICL Plastics Ltd and others. The other is Gordon and others v Campbell Riddell Breeze Paterson LLP, in 2017. Those rulings held that the five-year period started when the pursuer knew, or should reasonably have known, that the loss occurred, regardless of whether they knew that it had been caused by fault or negligence.
The bill changes that test to meet three conditions: that the pursuer knew that the loss had occurred, that they knew that the loss was caused by another person’s act or omission, and that they knew the identity of that person. Labour members believe that that is a reasonable and sensible compromise position that means that pursuers are not placed in a harsh situation in which their claim could be invalid before they even knew or had discovered that they had a claim.
There are two notable exceptions to the five-year prescription period, which members have acknowledged in the debate. Those exceptions are council tax and non-domestic rates. Other members might well have been contacted by constituents, as I have, about issues arising from council tax debt, when people are frustrated that councils that have failed to enforce actively a debt for several years suddenly come down on the debtor like a pile of bricks, even when the debtor had been paying what they thought was the correct amount for years. Citizens Advice Scotland told the committee that a five-year prescription period would force all creditors actively to pursue and enforce their debt, which would perhaps put off the need for such things as sequestration by councils.
We should not let policy be led by the inability of councils to enforce debts, nor should the law encourage in councils and public bodies inefficiency in actively pursuing those debts.
The Government’s argument is that the exception retains the status quo, but that does not persuade me or my Labour colleagues. The bill, unsurprisingly, is about changing the status quo where necessary, so the justification to exempt council tax and business rates should be based on the merits of the case, not on the basis that it has always been so.
Prescription is an important principle that is in need of reform. We are happy to support the bill at stage 1, but Labour members look forward to further debate and to seeing how it can be improved at future stages.
15:47Liam McArthur (Orkney Islands) (LD)
Like Daniel Johnson, I start by acknowledging the contribution that was made by the new justice secretary’s predecessor, Michael Matheson, and by Annabelle Ewing. I am sure that the new justice secretary will have advised his predecessor that despite his move to the transport portfolio, he has not got rid of me yet, because I will beat a path to his door first on ferries and thereafter on many other issues. I look forward to working with Humza Yousaf in his new role.
I am conscious that unlike most colleagues in the chamber, except Daniel Johnson, I do not have the advantage of having listened to the stage 1 evidence. That is never ideal and—as Graham Simpson acknowledged—we are discussing a highly technical bill, so it makes me rather nervous. I am sure that the justice secretary feels that, too.
Nonetheless, having read the committee’s report—I pay tribute to the work that was done by the committee—and the many briefings from stakeholders, for which I am more than usually grateful, I wish to raise a small number of points in this brief contribution to the debate.
First, it is worth my while to confirm that the Scottish Liberal Democrats welcome the bill, which is a welcome attempt to modernise and to bring greater clarity to the law on prescription. It seems to be self-evident that establishing a cut-off point for claims to be raised or rights to be asserted has the advantage of providing certainty, so that individuals and businesses have some prospect of being able to organise their affairs and to plan for the future. Even prospective pursuers will benefit from the enforced discipline of making timely claims. The Law Society pointed out that
“many years after the fact, evidence will have deteriorated or disappeared and relevant individuals may no longer be traceable, or indeed have passed away.”
Although that does not preclude the possibility of unfairness arising in individual cases, the principle that underlies the bill appears to be sound.
I will touch on a couple of specifics. I note the lively debate around whether council tax and business rates should be exempt from the five-year prescription. In its briefing, the Law Society outlined half a dozen reasons why it believes that that is not justifiable and might produce unfair results. Although I think that councils, like others, should be required to do everything possible to pursue debts in a timely fashion, I struggle to accept that the 6 per cent penalty charge that attaches to unpaid council tax would act as a disincentive on the collecting council. I cannot see a council adopting a strategy, which is what it would have to be, to deliberately delay collections in order to rack up penalty charges. The Law Society seemed to acknowledge that, and it undermined its own argument when admitting that
“uncollected sums are quite small and if the council has not sought to enforce within 5 years, there may be little practical appetite to pursue them many years later.”
I have more sympathy with the concern of the Convention of Scottish Local Authorities that introducing a five-year prescription would
“dis-incentivise payment and would lead to a decline in in-year collection.”
That said, I note that the committee was unable to reach an agreed position on that—I also note Daniel Johnson’s comments on the matter—and that the committee is looking for further rationale for the exception in advance of stage 2. That seems to be a sensible strategy. Like other members, I will look with interest at the forthcoming responses.
In relation to the discoverability test, the bill’s proposal to start the five-year period only when a pursuer knows that they have suffered a damage, injury or loss, that it was the fault of someone else by act or omission, and that they can identify that party, offers on balance more upsides than downsides, particularly for legal certainty.
I want to flag a concern that was highlighted by the Law Society, again, about the treatment of existing obligations that might be affected by the new law. In a bill that is aimed at delivering clarity, the confusion around claims that are prescribed under existing law but not under the new law is unhelpful. I hope that the Government will be able to address that at stage 2.
For now, I thank the committee and those who gave evidence, and confirm that the Scottish Liberal Democrats will support the bill at decision time.
15:51Stuart McMillan (Greenock and Inverclyde) (SNP)
I am delighted to speak in the debate, and I place on record my thanks to Michael Matheson and Annabelle Ewing. In particular, I appreciate Annabelle Ewing’s dedication when giving evidence to the DPLR Committee not just on the bill but on previous occasions.
I welcome the bill and, as a committee, we recommend it to Parliament. Paragraphs 52, 56 and 57 of the committee’s report provide a clear indication that the bill is a step forward, that it will provide clarity of understanding and that stakeholders are generally content with its proposals.
For something that started off as a fairly technical bill, it certainly came to life when we received evidence from Mike Dailly of the Govan Law Centre. We have already heard some commentary on that, and I am sure that Mr Findlay will touch on it in his speech.
The convener and the Solicitor General have touched on the technical nature of the bill, which has been helpful. I will touch on a couple of other areas.
The Scottish Law Commission has brought forward three bills in recent years. I previously suggested that there could be the potential for more than one small technical area of legislation to be brought together, where possible, to make progress in dealing with outstanding issues. I still believe that that would be beneficial on occasion. However, the bill highlighted a different scenario regarding the SLC’s consultation process.
As the bill is technical, the examination of some areas, such as welfare rights, might not have been fully pursued. That became evident once we started our deliberations, which the executive summary of our report highlights. Although the welfare rights sector was contacted during the SLC’s consultation, it was only as we undertook our work that we established some issues that affect the sector. Therefore, I firmly believe that our recommendation that the SLC
“reviews its consultation processes with a view to giving policy considerations a greater level of attention when deliberating on law reforms”
highlights something that would be beneficial.
Section 3 of the bill and its exemptions are the main focus of our report and considerations. We could not agree on whether the exemption for council tax and business rates was appropriate. With councils clearly wanting the status quo but Mike Dailly suggesting that the period for council tax should be cut—and with very little other evidence—we had to try to test what was being suggested. We believe that our action in writing to COSLA and the Society of Local Authority Lawyers and Administrators in Scotland, as well as to four other committees of this Parliament, was the right thing to do to test any new evidence. COSLA’s response was helpful but, as we indicate in the report, it was not signed off politically, so our decision to write to all 32 councils was also the correct thing to do. Attempting to establish the exact debt situation, broken down into five-yearly periods, will be advantageous for further understanding of and deliberation on that section of the bill.
However, COSLA’s response indicated that, if the collection period was reduced from 20 years to five years, higher instalments would have to be applied, which would have a detrimental effect on the debtors, who are the people we all want to protect.
Ultimately, we all want the bill to be right, and I am sure that we all have a great deal of sympathy for Mike Dailly’s arguments, but a few things need to be considered. First, is this the correct bill to attempt to change that part of the law?
Secondly, why should the bill hamper the ability and flexibility of local authorities when they collect unpaid council tax? A reduction from 20 years to five years would be vast, so what would the effects be? I hope that the committee’s letter to the councils will provide some information to help with that. As the minister indicated in her reply to the committee’s report,
“the 20 year prescription will no longer be capable of interruption by a relevant claim or acknowledgment and will therefore act as a true long stop.”
I am delighted that this technical bill is being recommended to progress and look forward to the next stages of the bill’s journey through the Parliament.
15:55Bill Bowman (North East Scotland) (Con)
I thank my colleague Graham Simpson, the convener of the Delegated Powers and Law Reform Committee, and the committee clerks for their work on the bill. Having substituted on the committee for my colleague Alison Harris while the bill was being discussed, I am grateful to be able to add my voice today.
The bill enjoys support inside and outwith the Parliament, and the convener recognises the general contentment among stakeholders. The Law Society of Scotland summed the bill up by noting that it would modernise and bring greater clarity to our law of prescription.
It will do so through a series of changes to the five-year and 20-year prescription periods. It is not an attempt at wholesale reform but rather aims to address specific issues that have caused, or might cause, difficulty in practice. More fundamentally, it aims to bring clarity, certainty and fairness while balancing the law between creditors and debtors.
With that in mind, the committee has recognised the need to address various issues before the bill reaches stage 2, such as cases involving council tax, benefit overpayments and situations in which 20-year prescription can mean harsh results for individual cases.
The committee was split on whether council tax should be exempt from the five-year rule. The disagreement came down to balancing perceptions of fairness with public policy. No one wants to see individuals treated unfairly, but we have a public duty to treat taxpayers fairly by recovering their money, because that serves a wider public good. I hope that the issue receives the attention and review that it deserves as the bill progresses.
That process is already under way. The committee will write to local authorities to ascertain how many still have council tax and business rates debts outstanding after five years and how often payment has been sought using the 20-year prescription. I welcome that engagement, but we must ensure that the process is kept on track and that responses are acted on.
In a similar vein, more discussion is needed about whether overpayment of benefits should be subject to five-year or 20-year prescription. Avoiding overpayments is the best solution, but, when it happens, there is again the question of fairness versus the wider public good. Some people regard 20 years as too long, but, to paraphrase a clever man, time is relative. Public finances do not obey neat demarcations of time and we must retain flexibility in safeguarding public money.
On the 20-year rule, there will always be a need for longer prescription periods, even though we recognise the problems that they can create, such as with gathering evidence after a number of years. The bill balances that necessity by strengthening the hand of defenders through much earlier prescription starting points in many cases and by preventing court proceedings from resetting the clock on the 20-year period. That measure, in particular, is a welcome boost, as it offers greater certainty to defenders.
Certainty is a fundamental point. People must be able to live their lives without fear that they will be open to lawsuits for evermore. Even if individual cases might throw up some unwelcome developments, there is a wider public interest in legal certainty that must be served. Of course, as the Law Society points out, individual cases can also be better served by claimants taking early action.
People have a right to claim what is lawfully theirs, but they also have a right not to be dragged through the courts to settle decades-old debts. The reforms before us help achieve that through increased clarity and better balance between parties. However, as we move towards stage 2, I hope that ministers will pay heed to the concerns that have been raised by the committee and will seek to address them in a manner that carries the Parliament with them. That will allow the bill to continue to focus on the substantive issues and ensure the continuation of the broad support that we see here today.
The Deputy Presiding Officer
I would appreciate it if the last two speeches in the open debate came in at just under four minutes, please.
16:00Mark Griffin (Central Scotland) (Lab)
We welcome the bill. The new discoverability test, which requires a person to be aware that their loss, injury or damage was caused by a person’s act or omission and to know that person’s identity before the five-year period starts, is fairer than the current law.
The bill seeks to simplify prescription and ensure—with few exceptions—that all debts that arise from personal contracts or statute are covered by the five-year rule, but it is disappointing that the Government has been persuaded to exempt certain statutory creditors. The exemption from five-year prescription of council tax and benefit payments under United Kingdom legislation, which makes them subject to the 20-year prescription, will leave people vulnerable to high penalties many years after they were incurred, even when those people might not have been aware of them. Given the six-year prescription that covers council tax debt and benefit overpayments in England and Wales, the bill fails to provide simplicity, fairness and clarity, particularly for those who will access devolved and reserved benefits.
When I tried to intervene on the Solicitor General, I did not want to catch her out in unfamiliar surroundings; I genuinely wanted to seek clarity about the debt that will be transferred from the UK Government to the Scottish Government. The devolution of social security powers to the Parliament means that the debt that is associated with historical claims will also be transferred. Maybe the Solicitor General will cover, in concluding, what system will apply to the debt that is transferred from the UK Government to the Scottish Government if the bill is passed.
Mike Holmyard from Citizens Advice Scotland told the Delegated Powers and Law Reform Committee that the position was unfair, and he gave examples of problems with obtaining adequate evidence from debtors and local authority collection systems. He explained that the way in which council tax is collected exacerbates the difficulties that debtors have in understanding their council tax debt. CAS advisers see clients who have built up debts over 10, 11 or 12 years because their council does not appear to have taken any action to collect those debts. The clients do not understand how a council can go from making no effort to collect payments over a long period to taking drastic action to recover the debts. Similar issues arise in relation to benefit overpayments under UK legislation.
A divergence between devolved benefits and reserved benefits would result from how section 3 of the bill interacts with section 66 of the Social Security (Scotland) Act 2018. The combined effect of the two provisions is that five-year prescription would apply to devolved social security benefits but 20-year prescription would apply to reserved social security benefits.
We welcome the bill, but we will look again at some areas of it at stage 2.
16:03Tom Arthur (Renfrewshire South) (SNP)
I join colleagues across the chamber in paying tribute to Annabelle Ewing. I had the privilege of being the parliamentary liaison officer to Michael Matheson and her earlier in the parliamentary session. I wish her the very best and I congratulate him on his new post.
I welcome the opportunity to speak in support of the bill at stage 1. As the bill originates in the work of the Scottish Law Commission, it is—naturally—more technical than many other matters that we debate in the chamber. Given that the Delegated Powers and Law Reform Committee was also appointed as the lead committee, the proposals that the bill contains are situated closer to the consensual end of the spectrum of political debate.
However, given the implications that the law of prescription has for a range of areas, the bill has provoked some broader questions, particularly on the recovery of debt by public bodies. The two areas of contention that emerged from the committee’s deliberations are reflected at paragraphs 111 and 144 of the committee’s stage 1 report and concern council tax and benefits respectively. I will focus my remarks on the issue of debt to local authorities.
Currently, the prescription period as it applies to council tax and non-domestic rates is uncertain. It is probable that the 20-year prescription period applies, but there is no decided case on the point that could offer more certainty, as has been noted. I believe that there is consensus in seeing the bill as an opportunity to bring clarity, but there is contention as to whether the period of prescription should be five or 20 years. Both the advocates of five years and those advocating 20 years have offered strong arguments.
Those who advocate a five-year prescription period include the Law Society of Scotland and Mike Dailly from the Govan Law Centre. The Law Society contends that a 20-year period is unfair. Its reasoning is set out in paragraph 86 of the committee report, which states that
“non-payment of council tax attracts a high penalty charge so that the value of the debt grows over time, and”
there are
“situations where people in good faith believe that they have paid their council tax yet are chased for the debt many years later, particularly in situations where joint and several liability applies.”
Mike Dailly argues that the position in Scotland should equate with that in England, where action to recover council tax debt must be initiated within six years. Mr Dailly offered a further nuance to his position by suggesting a compromise through having—I quote from paragraph 90—
“five year prescription with an exceptional circumstance test to establish whether there had been deliberate behaviour on behalf of the debtor to create delay in enforcing debt.”
Those who advocate retention of 20-year prescription include SOLAR and COSLA, although COSLA’s response to the committee had not been politically endorsed. Both organisations highlight the importance of local taxation to councils and the need for a legal regime that allows effective collection of debt. A further argument that the committee considered was on there being parity between local and national Government with regard to the prescribed period for debt recovery.
Although I am sympathetic to the arguments that have been made by the Law Society and Mike Dailly, I am not yet convinced that the bill that is under consideration today is the appropriate vehicle for delivering significant reform of local authority debt collection. There are three reasons that have led me to that view. First, there has so far been insufficient consultation with relevant stakeholders regarding the implications of any reform. However, as my colleague Stuart McMillan said, efforts have been undertaken in that regard.
Secondly, on a practical level, the process of council debt recovery is normally commenced swiftly, and the consequential issuance of a summary warrant creates, in effect, a 20-year prescription period. It should be noted that that compares favourably with the English equivalent—a liability order—which, as an instrument of English law, is indefinite due to the lack of prescription in that jurisdiction.
Thirdly, I believe that there is a risk of the bill going beyond its SLC-inspired remit and trespassing into policy areas that should be the concern of other committees in the Parliament beyond the DPLR Committee.
Time limits me from going into further detail on benefits, but I look forward to hearing the Government’s response to the issues that have been raised in the debate.
16:08Neil Findlay (Lothian) (Lab)
I welcome the new ministers—although I think that they have left the chamber—and I thank the outgoing ministers for their public service. I thank the Solicitor General and the convener of the DPLR Committee for setting out the positions of the Government and the committee on the bill and for highlighting some of the key issues.
There have been welcome changes on discoverability and other technical aspects, as we have heard during the debate. However, I want to focus on how the bill and the issues around it will impact on people.
In a past life, I worked for six years as a front-line housing officer in the social housing sector. I worked with tenants, housing associations and councils, and I took a great interest in the welfare rights side of the job. I tried to ensure that people received their entitlement and that the council or housing association was paid the rents and housing benefit that it was owed.
That job was a tremendous apprenticeship for going into politics, as I saw people’s lives in the raw. By going in and out of people’s houses every day and helping them deal with financial pressures, I gained an understanding of the stresses and strains that are put on families and communities. I gained an understanding of the crushing impact that debt can have on relationships and on mental and physical health and general wellbeing.
In cases of extreme debt, I had to invoke an eviction process that, ultimately, meant that people lost their homes. Housing officers in Scotland are faced with that awful dilemma every day. That is very grim and the worst part of the job, and it is also evidence of a failure of policy.
In my experience, many debts came on the back of problems in the benefits system that meant that people had their benefits stopped or reduced or that overpayments accrued through errors in the system.
I say that against the backdrop of the bill and, in particular, the exemption from five-year prescription of council tax and overpayments of reserved benefits, which means that people will be subject to a 20-year prescription period and possibly higher penalties after that debt is discovered. People might not be aware of that debt. They might have long since disposed of any files or records that they had at home that would help them address the debt when they discover that they have it. A six-year prescription period covers council tax and overpayments in England and Wales, but it will be 20 years in Scotland.
The Scottish Government took the correct action when it wrote off historical poll tax debts after almost 30 years. Under the proposed system, if it is enacted, people will have council tax debt hanging over them for up to 20 years. Let us think about that.
If the benefits system were starting from scratch and the UK Government proposed a six-year debt recovery period in England but a 20-year period in Scotland, there would rightly be an outcry, but that is what is being proposed in the bill. Mike Dailly from the Govan Law Centre made a very positive contribution to the committee’s proceedings, as did CAS and the Child Poverty Action Group. All of them share my belief that the law in Scotland on prescription for council tax and reserved benefits overpayments should be brought more into line with the law in England and Wales, and my Labour colleagues have said that today.
We believe that a five-year prescription period would bring Scotland more in line with what happens in England and Wales. If we do not see any movement on that point during the bill’s progression, we will bring forward an amendment on it at stage 2.
16:11Gordon Lindhurst (Lothian) (Con)
In a debate of this nature, it may seem that my right to say anything interesting by this stage has been extinguished by prescription. Let me start by mentioning my entry in the register of interests as a practising advocate.
Prescription might seem to be a boring lawyer’s topic—those lawyers with their pedantic pronunciations. It is, of course, an ancient topic known to legal systems the world over, and it hardly needs to be mentioned that the Romans with their usucapio and other rules were the basis of much of present-day European thinking on the matter.
When I was at Heidelberg University, I remember a professor teaching us about the subject and telling a story to illustrate its meaning. He told of purchasing a bottle as a student—I will let others guess what was in it. He gave only a receipt to the shopkeeper and did not actually pay for it at that stage. As a student, he thought what a convenient arrangement that was. However, he said, it would not be convenient if, more than 40 years later, the shopkeeper came calling and demanded payment of the bill for that bottle. The professor’s point was simply this: an agreement should not be left as if forgotten and forgiven, only to be trundled out years later and a demand presented, when circumstances, situations and even fortunes might have completely changed.
Eleanor Roosevelt once said:
“Justice cannot be for one side alone, but must be for both.”
Prescription is about that balance of justice, which seeks to be fair to both parties. It sets a limit to the time beyond which a right cannot be relied upon—in vox pop, “use it or lose it”. Those are well established and widely accepted principles in the legal systems of the world, past, present and—one would hope—future.
As the professor’s illustration indicates, the question of prescription is one that applies across a wide breadth of human life and experience. I did a short trawl through Scottish case law of the past couple of centuries. A huge number of issues were covered, ranging from salmon fishing rights to boundary disputes to every other conceivable form of commerce. I certainly will not bore the Parliament with a tale of each and every one of those cases.
However, the subject even featured in a case relating to the interpretation of the Temperance (Scotland) Act 1913—the case of Macfarlane v Lanarkshire County Council of 1921, which is Session Cases 664. The case related to a poll conducted and the question of whether it had taken place on a market day, which would have been prohibited under the act. The Lord President commented:
“to shut all licensed premises in the area on the day of a poll which is concerned with a question of licensing policy is an intelligible precaution against influence; while to shut them on a market day is to cause needless inconvenience and annoyance. The Act of Parliament is framed in view of both these considerations.”
Neil Findlay
Has the member lifted Stewart Stevenson’s speech today?
Gordon Lindhurst
What can I say? I have been found out. No, not on this occasion, Mr Findlay.
There is a need to balance the rights and obligations of creditors and debtors, which is what the bill aims to achieve. It also aims to achieve desirable clarity in the current prescription regime, because fairness requires that and not just the balancing of interests. It is that particular aspect of clarity on which the current law has been found to be wanting in a number of respects. The bill is to be welcomed, for we all need to know where we stand when it comes to our rights and obligations, and we need to know within a reasonable time. Any lack of clarity in prescriptive rules is undesirable.
There are of course points that need to be looked at carefully, and those have been covered by my colleagues, members of the committee and others who have spoken. There is an issue with the section 5 discoverability test. There can be complexity in relation to multiple defenders, particularly where the burden of proof is being placed on the pursuer rather than the defender. There is a question in relation to heritable rights at 20-year prescription where the land register has failed to correctly reflect rights and obligations. Finally, there is the point that Mr Findlay eloquently raised and talked about—perhaps in a speech lifted from Mr Stevenson—to do with recovery of taxes and obligations to the state. The question that he raised was why there should be a longer period for that than there is in relation to private individuals.
16:17The Solicitor General for Scotland
I do not want to turn this into a mutual appreciation society, but I add my thanks and tributes to the outgoing justice ministers and the members of the DPLR Committee, who have obviously given close and intelligent consideration to the bill. At first sight, the bill seems technical and dry, but it is anything but that. We can see from Neil Findlay’s positive contribution that the bill is about improving Scotland’s statute book. It is black-letter law and technical to that extent, but it matters. I am delighted that the bill has been given the amount of scrutiny that it clearly has had. I thank all members for their contributions to what is an important and valuable debate, which has confirmed that there is support across the chamber for the general principles of the bill, and that is surely to be welcomed.
Issues have been raised, however. In essence, it is a matter of balancing the rights and interests of various parts of society, and it is clear that balancing exercises have been carried out from the genesis of the bill in the Scottish Law Commission right through to its consideration today. All the issues that have been raised—I will touch on just two or three of them in the time allowed—will of course receive the close consideration that they deserve.
The first matter to mention, which Daniel Johnson, Graham Simpson and others referred to, is the fact that the bill does not change the position in relation to council tax. So far as the aim has been expressed, it is simply to maintain the status quo. How did we get to that considered position? The exception maintains the status quo with regard to council tax debt. Following the publication of one of the first drafts of the bill, the Scottish Law Commission immediately received representations from local authorities. Among the points that they made was that the policy reasons that justify excepting taxes that are payable to HMRC and Revenue Scotland apply equally to taxes that are payable to local authorities. It was acknowledged that there would be few cases in which it would take more than five years to collect such local taxes, but the point of principle was made well, and the SLC, in taking an overview of the situation, was persuaded by the arguments—
Daniel Johnson
Given that the situation is different south of the border, has any evidence been gathered on whether the six-year prescription period for local authorities in England has had negative consequences?
The Solicitor General for Scotland
I do not think that such a comparative exercise has been done. The scope of the bill does not go that wide. As Tom Arthur mentioned, the purpose of the bill is to amend, reform and clarify the law on prescription in Scotland; it is not to bring about wholesale reform of debt recovery and the arrangements for the collection of taxes and revenues. Therefore, the answer to Mr Johnson’s question is no.
We know that more than £2 billion-worth of council tax debt is owed across Scotland, £1.2 billion of which relates to debts that are more than five years old. It is likely that making the prescription period for those debts five years would force a change in the way in which councils recover the debt, which would be to the detriment of the debtor, about whom Neil Findlay has spoken so passionately. In its letter to the DPLR Committee, COSLA made it clear that a greater impetus would be given to local authorities to secure repayment within the reduced period. There are competing issues, and arguments can be made on both sides, but the Scottish Government, in common with the Scottish Law Commission, is satisfied that the exemption for council tax debt is justified.
I turn briefly to the exception to the five-year prescription period for social security. Again, it is a question of maintaining the status quo, which is that 20-year negative prescription applies. In England and Wales, the analogous legal concept is limitation rather than prescription, so the debt might still be active after that time. It is crystal clear from the DWP’s evidence to the committee that making reserved benefit overpayment subject to the five-year prescription period would impose greater hardship on the most vulnerable members of society. That is a key message, which has been delivered to the SLC and the DPLR Committee repeatedly, and it is part of the balancing exercise that I have mentioned. I am sure that the committee, as it outlined in its report, is keen to ensure that greater hardship is not imposed on the most vulnerable in our society.
Neil Findlay
That might be the DWP’s position, but it would be highly unusual if it was the argument of Citizens Advice Scotland, the Govan Law Centre and the Child Poverty Action Group that we should have a harsher regime for poor and vulnerable people in Scotland. I find that very difficult to believe.
The Solicitor General for Scotland
Mike Dailly and other consultees have expressed their views. This is a complex, nuanced matter on which there are different shades of opinion. However, there is no question but that the consultation process resulted in the view being expressed that removal of the exception would cause greater hardship. I repeat that we are talking about a series of balancing exercises, as the DPLR Committee and the SLC are aware, and the Scottish Government is satisfied that the right balance has been—
Neil Findlay
Will the Solicitor General take an intervention?
The Solicitor General for Scotland
I must press on.
I turn to an issue that Daniel Johnson and Tom Arthur mentioned, and of which Alison Harris gave a helpful explanation—discoverability and joint and several liability. The Scottish Government consulted the SLC on joint and several liability, the law on which the bill will not change.
I am heartened to hear universal approval of the clarity that the proposed new discoverability test will bring. The test will improve the position of creditors generally in relation to latent damages. It is significant that Brodies LLP, in its submission to the committee, was clear in its view that
“the reform of s11(3)”—
of the 1973 act—
“will be welcomed since it clarifies the essential facts which a party must be aware of before a 5 year prescriptive period starts to run in respect of an obligation to pay damages.”
The bill remedies a defect that Morrison v ICL Plastics brought about, and I am heartened by the consensus across the chamber that that is to be welcomed.
There are many more issues in this technical but fascinating bill. I simply thank members again for their speeches in the debate. It is clear that many if not all members support the general principles of this important bill: to provide fairness, clarity and certainty to those areas of the law of negative prescription that have caused practical difficulties in its operation.
The bill is an opportunity for this Parliament to protect those who have a claim from running out of time in which to proceed with it, to change the current situation of possible perpetual liability to claims, including for those who have historical council tax debt, and to make clearer which obligations prescribe after five years.
27 June 2018
Vote at Stage 1

Vote at Stage 1 transcript
The Presiding Officer (Ken Macintosh)
There are four questions to be put as a result of today’s business. The first question is, that motion S5M-12958, in the name of Annabelle Ewing, on the Prescription (Scotland) Bill, be agreed to.
Motion agreed to,
That the Parliament agrees to the general principles of the Prescription (Scotland) Bill.
The Presiding Officer
The next question is, that motion S5M-12943, in the name of Clare Haughey, on a complaint against Mark McDonald MSP, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Baillie, Jackie (Dumbarton) (Lab)
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baker, Claire (Mid Scotland and Fife) (Lab)
Balfour, Jeremy (Lothian) (Con)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Davidson, Ruth (Edinburgh Central) (Con)
Denham, Ash (Edinburgh Eastern) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Fergus (Inverness and Nairn) (SNP)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Halcro Johnston, Jamie (Highlands and Islands) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Hyslop, Fiona (Linlithgow) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Derek (Renfrewshire North and West) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, Tom (North East Scotland) (Con)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McArthur, Liam (Orkney Islands) (LD)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Mitchell, Margaret (Central Scotland) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Scott, John (Ayr) (Con)
Scott, Tavish (Shetland Islands) (LD)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Somerville, Shirley-Anne (Dunfermline) (SNP)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Sturgeon, Nicola (Glasgow Southside) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Wells, Annie (Glasgow) (Con)
Wheelhouse, Paul (South Scotland) (SNP)
White, Sandra (Glasgow Kelvin) (SNP)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
Abstentions
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
The Presiding Officer
The result of the division is: For 101, Against 0, Abstentions 6.
Motion agreed to,
That the Parliament notes the Standards, Procedures and Public Appointments Committee’s 5th Report, 2018 (Session 5), Complaint against Mark McDonald MSP (SP Paper 362), and agrees to impose the sanctions recommended in the report that the Parliament excludes Mark McDonald from proceedings of the Parliament for a period of one month, to take place from 3 September to 2 October 2018 inclusive; withdraws his salary for a period of one month to coincide with his exclusion from proceedings of the Parliament; withdraws his right of access as a Member to the Holyrood Parliamentary complex for the period of one month to coincide with his exclusion from the proceedings of the Parliament, and withdraws his rights to any representational, ceremonial and related privileges until dissolution.
The Presiding Officer
The next question is, that motion S5M-12953, in the name of Andy Wightman, on witness expenses, be agreed to.
Motion agreed to,
That the Parliament determines that:
(a) allowances and expenses in respect of the matters set out in column (1) below be paid or payable, as the case may be, in accordance with Rule 2.6.2 or 12.4.3 of the Standing Orders, as the case may be, to a person who attends proceedings of the Parliament for the purpose of giving evidence or who produces documents in his or her custody or under his or her control;
(b) said allowances and expenses be at the rates set out in column (2) opposite the respective entries in column (1);
(c) the rates set out in column (2) be uprated in accordance with column (3);
(d) said allowances and expenses be applied in accordance with the set of underlying principles and rules detailed below;
(e) the SPCB be directed to issue revised guidance and provide claim forms in connection with the payment of such allowances and expenses; and
(f) that the qualifying date for such expenses and allowances be 2 July 2018.
ANNEXE A – OVERVIEW OF CLAIMABLE EXPENSES
The below rates are reviewed annually and may be revised. Any changes will take effect from 1 April.
Current Scheme (2017/18)
Accommodation (not including food/drink)
Overnight Stay £118.75 per night
Updated scheme (2018/19)
Overnight expenses
(including accommodation,
food/drink) £156.00 per night
____________________________________________
Current scheme (2017/18)
Subsistence (including overnight)
Less than 5 hours Nil
5 to 10 hours £6.29 max
Over ten hours £13.61 max
Updated scheme (2018/19)
Food and drink (not overnight)
Less than 5 hours No change
5 to 10 hours No change
Over 10 hours No change
____________________________________________
Current scheme (2017/18)
Travel by public transport
Standard fares Paid at cost
Updated scheme (2018/19)
Travel by public transport
Standard fares No change
____________________________________________
Current scheme (2017/18)
Travel by private transport
Taxi Paid at cost
Car 45p per mile
Motor Cycle 25p per mile
Pedal Cycle 21p per mile
Updated scheme (2018/19)
Travel by private transport
Taxi No change
Car No change
Motor Cycle 24p per mile
Pedal Cycle 20p per mile
____________________________________________
Current scheme (2017/18)
Loss of earnings
Paid employment £237.51 per ½
day max
Self-employment £237.51 per ½
day max
Updated scheme (2018/19)
Loss of earnings
Paid employment No change
Self-employment No change
____________________________________________
Current scheme (2017/18)
Caring costs
Childcare £8.45 per
hour max
Unpaid primary carers: replacement
care cover for dependents for
up to 7.5 hours N/A
Updated scheme (2018/19)
Caring costs
Childcare No change
Unpaid primary carers: replacement
care cover for dependents for
up to 7.5 hours To be paid at cost
____________________________________________
Current scheme (2017/18)
Other
Photocopying 13p per sheet
Postage Paid at cost
Video conferencing N/A
Updated Scheme (2018/19)
Photocopying No change
Postage No change
Video conferencing To be paid at cost
ANNEXE B – WITNESS EXPENSES SCHEME PRINCIPLES AND RULES
SCHEME OVERVIEW
In submitting a claim, the claimant shall:-
(i) act in accordance with the Scheme Principles; and
(ii) comply with the Rules of the Scheme.
PRINCIPLES OF THE SCHEME
The Principles of the Scheme are:
Inclusivity
The Scottish Parliament aims to promote engagement and participation to support and strengthen the work of the Parliament and to enhance parliamentary democracy at home and abroad.
In striving to meet this aim, the Parliament recognises that individuals have different needs which impact on their ability to participate equally in the work of the Parliament and its committees.
The principle of inclusivity shall therefore be the paramount principle of the Scheme.
Accessibility
In supporting equal participation in the committees’ work through the payment of witness expenses, due regard shall be had to the following–
(i) whether the claimant has been invited to participate in an individual or professional capacity. If participating in a professional capacity, whether the body being represented, or individual representative, is able to recoup the expenses incurred from their own professional allowances scheme, entitlement or taxation relief;
(ii) whether the claimant has any individual need(s) that, if not met by a claim for expenses, may otherwise have a negative impact on their ability to participate equally in the work of committees.
Honesty
All claims under the Scheme shall be made in good faith. In this regard, the claimant shall ensure that any claims submitted relate solely in respect of their attendance of parliamentary activities and are not submitted in order to gain financial or other benefit for the claimant, or any other person.
Objectivity
With regard to the principle of inclusivity, the claimant, in submitting a claim for expenses under the Scheme, shall be satisfied that the amount and type of claim(s) represent value for money and were incurred having due regard to–
(i) the claimant’s individual needs; and
(ii) the efficiency and effectiveness of the claimant’s ability to participate in relevant proceedings.
Sustainability
The Scottish Parliament aims to reduce the need to travel and develop and promote the use of sustainable travel by people working in and visiting the building.
When deciding on whether transportation options to attend parliamentary activities represent value for money, claimants shall also give regard to ways in which they may be able to minimise the carbon footprint of their participation. In this light, claimants may have regard to:
(i) low-carbon transportation options; or
(ii) providing evidence by more sustainable means, such as by video conference or submitting any written evidence electronically.
RULES OF THE SCHEME
1. The payment of expenses shall be at the discretion of the Group Head of Committees and Outreach and all claims under the Scheme shall be assessed on an individual basis.
2. All expenses claims made under the Scheme must be evidenced by original receipts or vouchers (as applicable).
3. Payment of expenses under the Scheme may be made in advance of proceedings with approval of the Group Head of Committees and Outreach.
4. Claims must be received by the clerking team within 28 days of the date on which the proceedings took place in respect of which the claimant makes a claim under the Scheme.
5. Claims for loss of earnings in respect of self-employment must be evidenced by a certificate from an accountant or a copy of the claimant’s previous year’s tax.
6. Travel and accommodation shall be incurred at standard rates, unless previously agreed with the Clerk to the Committee.
7. Claims totalling more than the upper limit set by the Group Head of Committees and Outreach must receive prior approval of the Clerk to the Committee.
8. Private transport should only be used where it is more economical in the circumstances, or where travel by public transport is otherwise inappropriate.
The Presiding Officer
Finally, I will put a single question on three Parliamentary Bureau motions. The question is, that motions S5M-12990 to S5M-12992 be agreed to.
Motions agreed to,
That the Parliament agrees that the Digital Government (Scottish Bodies) Regulations 2018 [draft] be approved.
That the Parliament agrees that the Land and Buildings Transaction Tax (First-Time Buyer Relief) (Scotland) Order 2018 [draft] be approved.
That the Parliament agrees that the Land and Buildings Transaction Tax (Group Relief Modification) (Scotland) Order 2018 [draft] be approved.
27 June 2018
Stage 2 - Changes to detail
MSPs can propose changes to the Bill. The changes are considered and then voted on by the committee.
Changes to the Bill
MSPs can propose changes to a Bill – these are called 'amendments'. The changes are considered then voted on by the lead committee.
The lists of proposed changes are known as a 'marshalled list'. There's a separate list for each week that the committee is looking at proposed changes.
The 'groupings' document groups amendments together based on their subject matter. It shows the order in which the amendments will be debated by the committee and in the Chamber. This is to avoid repetition in the debates.
How is it decided whether the changes go into the Bill?
When MSPs want to make a change to a Bill, they propose an 'amendment'. This sets out the changes they want to make to a specific part of the Bill.
The group of MSPs that is examining the Bill (lead committee) votes on whether it thinks each amendment should be accepted or not.
Depending on the number of amendments, this can be done during one or more meetings.
First meeting on amendments
Documents with the amendments considered at this meeting held on 25 September 2018:

First meeting on amendments transcript
The Convener
Item 2 is stage 2 proceedings on the Prescription (Scotland) Bill. I welcome Ash Denham, the Minister for Community Safety, and her officials. Good morning.
The Minister for Community Safety (Ash Denham)
Good morning, convener and committee.
The Convener
For the purposes of stage 2, members should have copies of the bill as well as the marshalled list and groupings.
Sections 1 and 2 agreed to.
Section 3—Statutory obligations
The Convener
Group 1 is on section 3 of the bill, the five-year prescription, and the exception from that for certain social security payments and tax credits. Amendment 3, in the name of Mark Griffin, is grouped with amendment 4.
Mark Griffin (Central Scotland) (Lab)
Amendments 3 and 4, lodged with the support of Citizens Advice Scotland, seek to reduce the prescription period for reserved and Department for Work and Pensions debts to five years. That will bring the period into line with the five-year prescription period for Scottish social security, a move that the Parliament backed earlier this year, to deliver greater dignity and respect in the Scottish social security system.
My colleague Neil Findlay has lodged similar amendments to reduce the prescription period for council tax debts.
The provisions are no silver bullet, but they go some way towards making sure that the Parliament is using its powers to bring fairness and to align with the principles that the Scottish Law Commission set out around the five-year rule.
I want to raise concerns about the DWP believing that it needs additional leeway to manage the recovery of its debts and about it not having its house in order. The issue was debated at length during stage 1 consideration of the bill, with very clear contributions from Mike Dailly and Mike Holmyard that the period must be reduced to five years. In their evidence, they put it to this committee that it is a simple matter of fairness: why should a claimant have just one month to challenge a DWP decision, but be liable for court action for 20 years?
Some of the points that the DWP raised must be challenged. I want to add some more detail to how the amendments fit into the jigsaw of recovery policy, as well as setting out some of the DWP practices that are operational today. In its written evidence, the DWP said
“The recovery of DWP benefit debt will often take longer than five years to recover due to the possibility of higher priority debts, multiple debts and the welfare considerations that limit recovery rates. The application of the five year prescription would reduce our ability to recover public money and could erode some of the safeguards we have in place to protect our customers from harsh or excessive recovery rates.”
The DWP appears to imply that the consequence of the five-year prescription period would be the recovery of multiple debts within a smaller window, which would directly affect claimants, who would be subject to more aggressive recovery procedures.
The amendments and the bill relate to recovery typically through the courts, which is a costly and lengthy option that is used infrequently. The DWP has other ways of recovering its debts, such as direct deductions from benefits, or if a person returns to work for some time, their state pension, as well as bank and direct earnings attachments. Those powers have no time limit, are unaffected by the bill or the Prescription and Limitation (Scotland) Act 1973, and are ultimately reserved. I say again that the amendments are not a silver bullet, but they would mean an improvement within the scope of the bill and the Parliament’s powers.
I am sure that the committee is aware that under current rules DWP recovery processes are not as virtuous as its evidence suggests. Under universal credit, the recovery rate can be as much as 40 per cent. We know that many are suffering such an excessive recovery rate, because so many advances have been requested: 20,000 in my region since full service roll-out. Secondly, by its nature, UC rolls multiple benefits together into one payment, so that when deductions are made to UC, multiple benefits are recovered at once.
I agree with the DWP evidence that there is a clear distinction for legacy benefits, but soon all in-work benefits will be rolled together and recovery will also be rolled together as soon as universal credit is fully rolled out. I therefore disagree with the DWP’s argument that it makes it harder to recover multiple debts from multiple sources of benefits when they will eventually all be rolled into one in-work benefit.
The DWP’s claims that the smaller window would require excessive recovery appear to be based on a misunderstanding. We know that the DWP would prefer recovery through its reserved powers, not through a costly court decree or document of debt. However, if it did exercise its rights under the proposed amendment, it would have five years to take action. I am advised by Mike Holmyard that, should the DWP secure a repayment on record through its reserved powers that will remain unchanged by any of my amendments, the five-year clock would restart. With every single payment that the DWP receives, the five-year clock would reset. Every time it sends a letter or starts enforcement action, the five-year clock would reset. The five-year limit on the time that the DWP has to recover the debt is not a hard five-year limit. It is a five-year limit on the DWP taking action to start the process or to take a single payment.
I hope that the committee agrees with me that if the DWP is not able to identify and begin recovery of its debt within five years, we should ask it to get its house in order and set up processes that would make that achievable, rather than leaving a 20-year period hanging over some people’s heads. Because the clock restarts when payment is made, the provisions in section 6 of the bill ultimately limit the recovery to a hard 20 years.
Amendments 3 and 4 would cancel the rule in the 1973 act that says that reserved social security debts can be pursued for 20 years, and it would change the rule to five years. That is far more reasonable than 20 years and, crucially, it is in line with the position of this Parliament in relation to our own Social Security (Scotland) Act 2018.
Amendments 3 and 4 would not prevent the DWP from using its reserved powers to make deductions from reserved benefits, because the power to do that lies in reserved law. The DWP’s right to pursue the debt through other civil mechanisms—through earnings attachments or direct deductions—would be preserved. The powers over recovery would be aligned in practical and operational terms, because near consistency with the six-year limitation rule in England, not to mention a far better administrative process, would be established.
I want to make it clear that amendments 3 and 4 do not propose to remove child support or maintenance debt from the 20-year rule. Child support or maintenance is not social security that is paid by the state, although the DWP administers it. The maintenance is recovered by the DWP from the absent or non-resident parent and is provided to the parent who provides care. Retaining the power to recover that vital support until the child is an adult is a goal that all of us should seek to preserve.
We have a chance to use Scottish powers of prescription, not to impede the DWP’s work to protect the public purse or to make a constitutional point, but to deliver greater dignity and respect. I hope that the committee will support amendments 3 and 4.
I move amendment 3.
The Convener
Thank you, Mark. Do any committee members want to come in?
Tom Arthur (Renfrewshire South) (SNP)
Good morning, Mr Griffin, and welcome to the committee.
I would like to clarify one or two points. You said that you had support from Citizens Advice Scotland. What direct engagement have you had with the DWP in composing amendments 3 and 4?
Mark Griffin
I have had no direct contact with the DWP; I simply reviewed the evidence that it provided to the committee.
Tom Arthur
Do you recognise that the Scottish Parliament has no jurisdiction over the DWP? Although many members would find it desirable for the DWP to get its house in order, as you described it, we have no means of making that a reality, as the functions of the DWP are reserved to Westminster.
Mark Griffin
It is true that those functions are reserved, but if we impose a five-year prescription period, I hope that that would mean that the DWP would get its house in order and collect the debts in question within a five-year period, instead of leaving them to spin on for 20 years. There is a practical step that we can take.
Tom Arthur
You hope to incentivise behavioural change by the DWP, but you concede that that is not guaranteed.
Mark Griffin
If the DWP did not act, it would lose the ability to collect debt beyond five years.
Tom Arthur
You spoke about the courts being a last resort. I presume, therefore, that court action within five years would be incentivised, whereas, under 20-year prescription, other methods could be explored and exhausted beyond five years, before court action was taken. Do you accept that that is correct?
Mark Griffin
No. The advice that I have been given by external advisers, who have also advised the committee, is that as soon as any effort is made to recover the debt, the five-year period starts again. There is a hard limit at 20 years. In effect, the DWP could leave debt uncollected until four years and 11 months, start again and have another five-year roll-over period, and then start again at four years and 11 months. It could do that four times, until the hard limit of 20 years kicked in. Any time the DWP took a payment or sent a letter to someone who was in debt to the agency, the five-year period would reset and start again.
Tom Arthur
You have said that you want the DWP to get its house in order. I presume that, if you wish there to be an expedited process, additional resources would have to be applied to the pursuance of debt. Would you concede that point?
Mark Griffin
Very few debts are pursued through legal action. The vast majority of them are pursued by reducing the benefits that people currently receive or by making deductions from earnings. Therefore, I do not think that what I propose would have a massive impact and result in a need for greater expenditure by the DWP.
Tom Arthur
Setting aside the scale of the issue, the corollary of your argument is that there would have to be an expedited process—that is what you would define as the DWP getting its house in order. Ergo, if there is to be an expedited process, some additional resources would have to be provided. Surely that is logical.
10:15Mark Griffin
Yes, I accept that. As far as I can see, however, the extra expense would be minimal. We would be amenable to those extra resources being required if five-year prescription removed the 20-year sentence hanging over people’s heads, when they have only one month to pursue wrongdoing on the part of the DWP.
Tom Arthur
But we need to be clear that what you propose could lead to the DWP prioritising resources for the pursuance of debt.
The Convener
I will cut in here, because we need to have more of a debate and less of a cross-examination of Mr Griffin. If you have any substantive points to make, Mr Arthur, please do so.
Tom Arthur
I thank Mr Griffin for taking my questions. I certainly sympathise with the intentions of amendment 3, but I am concerned about the possible unintended consequences, some of which the DWP highlighted in its submission to the committee earlier this year.
The bill is a fairly short piece of legislation with a clear purpose, which is to clarify the law of prescription. Far greater consideration and consultation would be merited before issues of reserved benefits could be looked at. For that reason, I will not be able to support amendment 3.
The Convener
I thank Mr Griffin for taking those questions. He will have a chance to respond once the minister has made her remarks.
Ash Denham
I will begin by addressing amendment 3. If it is Mark Griffin’s intention to remove the exception for obligations to repay reserved benefit overpayments from section 3 of the bill, I point out that amendment 3 is unnecessary. Amendment 4 would achieve that effect, because the exception would be removed from the bill and the obligations would therefore fall to be caught by the new general rule. Reserved benefit overpayments do not explicitly need to be listed in paragraph 1 of schedule 1 to the 1973 act, which amendment 3 seeks to provide for.
I turn to the intent of Mark Griffin’s amendments. Section 3 of the bill provides that all statutory obligations to make payment will prescribe after five years, with a few exceptions. One of those exceptions relates to obligations to repay overpayments of certain reserved benefits, including social security and tax credit overpayments. That exception preserves the status quo for those reserved benefits.
In its response to the SLC consultation, the DWP made the point that recovery of social security overpayments often takes place over a long period of time and that it would be concerned if the five-year prescription period were to apply rather than the 20-year prescription period. That point was also made to the committee at stage 1. The DWP’s view is that having a 20-year prescription period for the recovery of reserved benefit overpayments allows it to protect the most disadvantaged in our society from harsh recovery methods.
Mark Griffin
Will the minister take an intervention on that point?
Ash Denham
I will do so once I have finished my remarks.
I will give an indication of the scale. Over the past few years, the DWP has recovered an average of around £120 million per annum from debts that are more than five years old.
In its evidence to the committee, the DWP made it clear that making recovery of reserved benefit overpayments subject to five-year prescription would impose greater hardship on the most vulnerable members of society. It informed the committee that it had a public duty to protect public funds and collect arrears. It seems clear that changing the prescription period by reducing it would result in the DWP taking more money more quickly from those who would be least likely to be able to afford it. Any move to a five-year prescription period would impact on the DWP’s ability to recover debts in circumstances in which recovery rates have been reduced on account of hardship or in which the customer has a number of debts and recovery of later debts is on hold while the earlier debt is recovered.
Ultimately, the DWP’s policy in respect of reserved social security payments is a matter for it, and the bill is about prescription generally. It is not the place to make any substantial policy changes in other specific areas. For those reasons, I urge Mark Griffin not to press amendment 3 and not to move amendment 4.
The Convener
Mr Griffin, you indicated that you had a question for the minister. I will allow you to ask it. After that, you will have the chance to wind up.
Mark Griffin
Minister, you have repeatedly talked about the DWP’s view on why five-year prescription is not appropriate and the impact that that could have on claimants in debt. What is the Scottish Government’s view? Why does it think that it is appropriate to have five-year prescription for Scottish social security debts but, on the other hand, agree with the DWP that five-year prescription is not appropriate for its debts?
Ash Denham
The Scottish Government’s position is that we have accepted the Scottish Law Commission’s view on the matter. We believe that it is a matter for the DWP and that, more widely, the bill is about prescription to improve clarity. Therefore, it is not the place for such a change, which would be more far reaching. I have much sympathy with the intention behind the amendments, but it would not be appropriate at this stage to change things in that way without appropriate consultation, as that change would be far reaching.
On Scottish social security, the benefit of devolution is that the Scottish ministers can decide to make changes or to make a system that is completely different from the United Kingdom system and fits the Scottish context. That is why the systems are different.
Mark Griffin
Given the minister’s comments on amendment 3 and the necessity for it, I am happy to go away and consider it ahead of stage 3. I think that the minister has overrelied on DWP evidence on the issue rather than considered the principles at the heart of the Scottish Government’s policy on dignity and respect.
The minister mentioned that one of the beauties of the devolved system is that we are able to take different decisions. That also applies to the Prescription (Scotland) Bill. We are able to take different decisions on prescription. However, I am happy to seek the committee’s agreement to withdraw amendment 3, and I will not move amendment 4.
Amendment 3, by agreement, withdrawn.
The Convener
The next group of amendments is on five-year prescription and the exception for council tax. Amendment 5, in the name of Neil Findlay, is grouped with amendments 6 and 7. Neil Bibby is poised to speak to all the amendments in the group and move amendment 5.
Neil Bibby (West Scotland) (Lab)
It is important to say first of all that it is not Neil Findlay’s or my intention to reduce the amount of money that councils have access to. We will continue to argue for sustainable and meaningful solutions to the chronic underfunding of Scotland’s local authorities.
Although I did not hear the evidence directly, the evidence that I have seen for removing the exemption of council tax from the five-year prescription rule is compelling, and many stakeholders have supported the removal of the exemption. I know that members of the committee will be aware of that.
The Law Society of Scotland has given a number of reasons why the current exemption in the bill is problematic. The non-payment of council tax attracts a high penalty charge of around 6 per cent, which could act as a disincentive to the collecting council, as returns from the penalty will rise above the rate of inflation, so in effect the value grows on non-payment. Practitioners have identified potential situations in which people might, in good faith, believe that they have paid the council tax, and joint liability compounds the issue, because it means that a person could have paid their share of it, but could face a claim for payment—again with significant interest—because a joint tenant has not paid his or hers.
It could prove prejudicial to the interests of justice for such high penalties to be incurred many years later if no steps to collect the tax or enforce an order have been taken in the interim. In many cases, the uncollected sums are quite small and it might be expected that if the council has not sought to enforce within five years, there will be little appetite in practice to pursue people many years later.
Mike Holmyard from Citizens Advice Scotland told the committee that the position is unfair and cited problems with obtaining sufficient and adequate evidence from both the debtor and local authority collection systems. He explained that the way in which council tax is collected exacerbates debtors’ difficulties in understanding their council tax debt and said that Citizens Advice Scotland advisers are seeing clients who have built up council tax debts over 10, 11 or 12 years, apparently without the council having taken action to collect the debts. Clients cannot understand how a council can go from apparent inaction to drastic action that will have an impact on a property that they own. A five-year prescriptive period would force all creditors to try actively to enforce their debt and might put off the need for, say, sequestration by councils.
There is a wider point to be made about the cost of living and the affordability of council tax. According to StepChange Debt Charity Scotland’s recent report “Scotland in the Red: Personal debt in Scotland Jan-Dec 2017”, increasingly clients are getting into debt because they are falling behind on essential bills, with council tax in particular a growing problem. Of those who contacted StepChange, 41 per cent were in council tax arrears, up from 37 per cent in 2013. The amount of council tax arrears has also increased drastically, by 45 per cent, from £1,368 in 2013 to £1,981 in 2017, making such arrears a much larger proportion of average debt.
As members will know, my party has called on the Scottish Government to scrap and replace the council tax as it promised to do in 2007. Until then, we need to have a wider debate about meaningful reform of local government tax-raising powers.
I move amendment 5.
Tom Arthur
I do not have any specific questions for Mr Bibby, but I just want to pick up on a few points and highlight a couple of areas.
Mr Bibby talked about councils being incentivised to delay seeking repayment due to the accrual of interest. Interestingly, in its evidence, the Convention of Scottish Local Authorities highlighted the potential for behavioural change if we moved to a five-year period of prescription, as it would incentivise individuals to try to get beyond that period so that they were no longer liable for taxes. Another significant point that COSLA raised about the autonomy and status of local government was that such a move would remove the parity between taxes owed to the Crown and taxes owed to local government.
I have two other practical concerns. First—and this comment is analogous to comments on the issues raised in Mr Griffin’s amendment—additional resources might, or indeed would, be required to expedite the debt collection process. Mr Bibby alluded to local government’s financial circumstances; indeed, the submissions from local government allude to the fact that additional resources would be required to expedite the process—resources that could be better spent elsewhere.
Secondly, I note that this is a short bill with the very specific purpose of clarifying the law of prescription. Throughout stage 1 and in its inquiries, the committee has explored a range of areas and interests that the bill has provoked. What has become very clear is that, although areas such as council tax and the role of the DWP merit further consideration, this bill is not the place for that. Instead of seeking to piggyback on legislation that was not designed for such measures, members who have an interest in these areas should consult on and explore them further and bring forward more substantive proposals that have been constructed as a result of substantial consultation and engagement.
10:30Ash Denham
On amendment 5, I make the same point to Mr Bibby and Neil Findlay that I made to Mark Griffin with regard to his amendment. If the intention of amendment 5 is to remove the exception for the obligation to pay council tax from section 3, it is unnecessary, because amendment 6 on its own would have that effect and for the same reasons.
The bill does not seek to change the position of council tax. Its aim is simply to maintain the status quo as we understand it. Local taxes form a substantial source of income for local authorities, and they pay for essential services such as education, housing and roads. The Scottish Government accepts the considered view of the Scottish Law Commission on this matter.
At stage 1, COSLA told the committee how a 20-year prescription period for recovering arrears allows local authorities to quickly begin the recovery process at minimal cost to taxpayers, all the while protecting those who owe arrears by entering into long-term arrangements. All of that would be jeopardised by changing and shortening the prescription period.
I note that the committee has written to all 32 local authorities seeking further information on that point and has received responses from 26 of them. It is important to note that not one of those agreed that changing the prescription period was appropriate. Instead, they were all adamant that no change to the status quo should be made.
Among the points that the local authorities made was the fact that the policy reasons that justify the exception of taxes payable to the Crown from the five-year prescription apply equally to taxes that are payable to local authorities. That is, there should be no distinction between taxes that are owed to central Government and those that are owed to local authorities. Highland Council said:
“It would ... place local authorities at a disadvantage to HMRC and ordinary creditors ... It is inconceivable to believe that this is actually what is at stake.”
Local authorities continue to recover a significant amount of arrears each year. More than £2 billion-worth of council tax debt is currently owed across Scotland, and £1.2 billion of that relates to debts that are more than five years old. Obviously, that is money that would be spent on local services. Making the prescription period for those debts five years would likely force a change in the way that councils recover that debt, to the detriment of not only the debtor but all those who use our local services. Local authorities have told the committee that they would have to depart from the summary warrant process, meaning more costs for the debtor and a diversion of local authority resources to the collection of arrears.
The 26 local authorities that have responded to the committee are all deeply concerned about the impact that shortening the prescription period from 20 years to five years would have on their funding. They are concerned not only about the ability to recover arrears that are already owed to them, but also about the fact that reducing the prescription period might create an incentive for those who wish to avoid paying their taxes in the first place to do so.
If council tax is subject to the five-year prescription period, all taxpayers will suffer as they will have to pay an increased amount of council tax just in order to maintain the current level of services.
Finally, as I said in relation to the earlier amendment, this bill is about prescription generally and, therefore, is not the place to make any substantial policy changes in specific areas. Any change to the current position would need wider consultation, particularly in light of the views that have been expressed by many local authorities and COSLA, not to mention the issues in relation to Scottish Water that have been raised with the committee.
Because of the reasons that I have set out, I urge Mr Bibby not to press Mr Findlay’s amendments.
Neil Bibby
We have gone over many of the arguments that we heard in relation to earlier amendments. I simply repeat the fact that these amendments were developed from the evidence that we received from the Law Society and Citizens Advice Scotland. I accept what Tom Arthur said about the concerns of COSLA, and we will continue to address those. A small amount of additional resource might be required, but I do not accept that it would be substantial. I agree with COSLA and Tom Arthur that council resources are limited—indeed, councils are chronically underfunded—and we will continue to make the case for that to be addressed.
Given the minister’s remarks about amendment 5 not being necessary, I will seek to withdraw it. However, I will move amendments 6 and 7.
Amendment 5, by agreement, withdrawn.
Amendment 4 not moved.
Amendment 6 moved—[Neil Bibby].
The Convener
The question is, that amendment 6 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Bibby, Neil (West Scotland) (Lab)
Against
Arthur, Tom (Renfrewshire South) (SNP)
Bowman, Bill (North East Scotland) (Con)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Simpson, Graham (Central Scotland) (Con)
The Convener
The result of the division is: For 1, Against 4, Abstentions 0.
Amendment 6 disagreed to.
Amendment 7 moved—[Neil Bibby].
The Convener
The question is, that amendment 7 be agreed to. Are we agreed?
Members: No.
The Convener
There will be a division.
For
Bibby, Neil (West Scotland) (Lab)
Against
Arthur, Tom (Renfrewshire South) (SNP)
Bowman, Bill (North East Scotland) (Con)
McMillan, Stuart (Greenock and Inverclyde) (SNP)
Simpson, Graham (Central Scotland) (Con)
The Convener
The result of the division is: For 1, Against 4, Abstentions 0.
Amendment 7 disagreed to.
Section 3 agreed to.
Sections 4 to 6 agreed to.
Section 7—Property rights: 20-year prescriptive period and extension
The Convener
We move on to technical and consequential amendments. Amendment 1, in the name of the minister, is grouped with amendment 2.
Ash Denham
Amendment 1 addresses a point that was raised by the Faculty of Advocates. The faculty and others raised concerns about the section 7 extension of the 20-year prescription period for some property rights, in particular servitude rights, as the committee highlighted in its stage 1 report. The faculty made the point that the drafting of section 7 suggests that, when a creditor raises court proceedings in relation to a property right before the expiry of the 20-year period and the proceedings extend beyond the 20-year period, the period in relation to that right ends when the proceedings end, with the consequence that the property right is extinguished.
Amendment 1 ensures that, where the creditor is successful in the court proceedings—for example, by obtaining a declarator of the existence of the right—they should not be denied the property right by the 20-year prescription coming to an end at the end of the court proceedings. Instead, the amendment ensures that, where the creditor’s claim is successful, the property right is deemed to have been exercised or enforced. The outcome is that a new 20-year prescription period will start to run.
On amendment 2, recent changes to the devolution settlement have given the Scottish Parliament legislative competence over a range of benefits payments. The recent Social Security (Scotland) Act 2018 created a legislative framework that underpins a system of devolved benefits, creating a process in which people are given the assistance to which they are entitled. At the same time, the 2018 act makes it clear that those receiving devolved benefits are under an obligation to repay overpayments of those benefits in certain circumstances. That obligation is subject to the five-year prescription period, and that is achieved by section 66 of the 2018 act, which amends schedule 1 to the 1973 act.
The bill inserts a general rule into schedule 1 to the 1973 act that all statutory obligations to make payments will be subject to the five-year prescription period, and that will cover the obligation that is contained in the 2018 act that I have just described. One of the main purposes of the bill is to increase clarity and legal certainty, and having two provisions that achieve the same outcome in an already crowded schedule 1 to the 1973 act does not achieve that aim.
I move amendment 1.
Tom Arthur
The purpose of the bill is to bring greater clarity, and the amendments contribute to that, so I welcome them.
The Convener
Minister, you can wind up if you wish.
Ash Denham
I have nothing further to add, but I thank the committee for its consideration and I invite members to agree to the amendments.
Amendment 1 agreed to.
Section 7, as amended, agreed to.
Sections 8 to 15 agreed to.
After section 15
Amendment 2 moved—[Ash Denham]—and agreed to.
Sections 16 and 17 agreed to.
Long title agreed to.
The Convener
That ends stage 2 consideration of the bill. I thank the minister and her officials for attending.
I suspend the meeting briefly.
10:40 Meeting suspended.10:40 On resuming—
25 September 2018
Additional related information from the Scottish Government on the Bill
Revised explanation of the Bill (Revised Explanatory Notes)
Stage 3 - Final amendments and vote
MSPs can propose further amendments to the Bill and then vote on each of these. Finally, they vote on whether the Bill should become law
Debate on the proposed amendments
MSPs get the chance to present their proposed amendments to the Chamber. They vote on whether each amendment should be added to the Bill.
Documents with the amendments considered at this meeting on 8 November 2018:

Debate on proposed amendments transcript
8 November 2018
Final debate on the Bill
Once they've debated the amendments, the MSPs discuss the final version of the Bill.

Final debate transcript
The Deputy Presiding Officer (Christine Grahame)
The next item of business is a debate on motion S5M-14665, in the name of Ash Denham, on the Prescription (Scotland) Bill at stage 3.
Before I invite Ash Denham to open the debate, I call the Cabinet Secretary for Justice, Humza Yousaf, to signify Crown consent to the bill.
The Cabinet Secretary for Justice (Humza Yousaf)
For the purposes of rule 9.11 of the standing orders, I advise the Parliament that Her Majesty, having been informed of the purport of the Prescription (Scotland) Bill, has consented to place her prerogative and interests, in so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.
The Deputy Presiding Officer
Thank you.
16:32The Minister for Community Safety (Ash Denham)
I am pleased to be here today to open the debate on the Prescription (Scotland) Bill. I thank members of the Delegated Powers and Law Reform Committee for their work in considering the bill and I thank the clerks for supporting them. I also thank David Johnston QC and Gillian Swanson, whose work at the Scottish Law Commission informed the bill.
The aim of the bill is to increase clarity, legal certainty and fairness in the law of negative prescription. In civil law, the doctrine of negative prescription serves the vital function of setting time limits for when obligations and rights are extinguished. That serves the interests of individuals where, after a certain lapse of time, it is fairer to deprive one person of a right rather than to allow it to trouble another, and it serves the public interest because litigation begun promptly encourages legal certainty.
The law of negative prescription cuts across many policy areas; we saw that today when we discussed amendment 2, in the name of Mark Griffin. Negative prescription is just one piece of a jigsaw, but it is an important piece. It is worth bearing in mind that the intentions of the bill are to resolve certain issues in negative prescription law that have caused difficulty in practice. The intention is not to make changes in specific policy areas.
So what does the bill do? We have already heard what section 3 does not do, so I will begin by explaining what it does. It extends the five-year negative prescription to cover all statutory obligations to make payments that are not already subject to that rule. The new general rule significantly simplifies the law in that area, because there are currently some such obligations that are not subject to five-year prescription, and it means that the list of specific obligations does not have to be continually updated. However, as we know there are exceptions to the new rule—such as for taxes, council tax and Department for Work and Pensions overpayments—that maintain the current position.
Negative prescription is about the extinction of obligations after they become enforceable, but it is difficult for someone to say that there is an enforceable obligation unless they know who to enforce it against. If they may be entitled to damages, it is only fair that if they do not know who is responsible, the clock should not start to run until they know—or can reasonably be expected to know—who caused the loss, injury or damage. Section 5 of the bill does just that for five-year prescription, because it makes little sense for the prescription clock to start running when the creditor is aware of the cause of their loss but does not know who is responsible for it. If it is fair to creditors that the five-year clock will not start until they discover the identity of the person responsible, it is also fair to defenders that the 20-year clock does not carry on against them indefinitely.
It is a feature of the current law that both the five-year and the 20-year prescriptive periods run from when an obligation becomes enforceable. For obligations to pay damages, that means when the loss, injury or damage occurs. As a result, a long period of time can pass after an act or omission before the 20-year period starts to run. Another feature is that the 20-year prescription period can be interrupted and the clock reset, so it is possible for a very long time to pass before an obligation finally prescribes. The bill will address both of those features by making the 20-year prescription, in relation to obligations to pay damages, begin on the date of the defender’s act or omission, and also making it a true long stop by preventing that period from being interrupted. Where proceedings are on-going when the 20-year period expires, the prescriptive period will be extended until the proceedings are finished. I am grateful to the committee for its work in clarifying how such an extension would apply to property rights.
As time is running out, I will briefly mention some of the miscellaneous provisions that are set out in the bill. First, once a dispute has arisen, the bill allows parties to agree to extend the five-year prescriptive period once only, for a maximum of one year. That is so that they can negotiate an end to their dispute without the need to resort to legal proceedings, meaning that they can avoid the expense of protracted litigation.
Secondly, the bill seeks to take account of claims that are made in sequestrations and company administration receiverships, both of which are not covered by the definition of “relevant claim” and so cannot stop the prescription clock.
The approach that is taken in the bill is not one of wholesale reform. It is, after all, one piece of the wider jigsaw that is Scots law. The focus is on areas that have been identified by the Scottish Law Commission as causing difficulty in practice, and it is such areas that the bill addresses.
Prescription plays an essential part in Scots law, in balancing the interests of creditors on the one hand and debtors on the other. I believe that the bill strikes a fair balance overall, redressing cases of unfairness for creditors and debtors while also serving the wider interests of fairness, justice and certainty.
I move,
That the Parliament agrees that the Prescription (Scotland) Bill be passed.
16:38Graham Simpson (Central Scotland) (Con)
Until this point, the Prescription (Scotland) Bill has made its way through the parliamentary process barely noticed. Members can be thankful to the DPLR Committee for doing the heavy work on the bill and protecting them from its intricacies, and I thank the committee’s clerks. Members would have been none the wiser about the bill until Richard Leonard brought it to the First Minister’s attention earlier today. No doubt a nation will now be watching the debate agog, thanks to Mr Leonard.
The bill may not have set the heather on fire until today, but it is important nonetheless. Gordon Lindhurst spoke at length—well, it certainly seemed that way—during the stage 1 debate, and—[Interruption.]
Gordon Lindhurst (Lothian) (Con) rose—
Graham Simpson
I give way to Mr Lindhurst.
Gordon Lindhurst
In fairness to me, now that my contribution—or non-contribution—has been mentioned, does the member agree that it would be helpful if, given the question of the five-year and 20-year prescription periods, the minister were to clarify what she meant when she suggested that a 20-year period might, in fact, be meaningless because of some Scots law concept of delay? That would, if anything, make the argument for Neil Findlay’s amendments, which have already been rejected.
The Deputy Presiding Officer
That intervention was somewhat lengthy, but I will give you some of your time back, Mr Simpson.
Graham Simpson
I think that I agree with Mr Lindhurst, Presiding Officer. You can see why his catchphrase is a dry pause. [Laughter.] This Scottish Law Commission bill aims to amend the law relating to the extinction of civil rights and obligations by the passage of time. [Interruption.] Is Mr Lindhurst okay back there?
The bill concerns only negative prescription, which is the time limit within which a person who is aggrieved must raise their claim in court. If the time limit is missed, the ability to pursue the claim is lost. The bill would amend the current law found in the Prescription and Limitation (Scotland) Act 1973, which says that some legal obligations are affected by five-year prescription, some are affected by only 20-year prescription and some are never brought to an end by prescription. In other words, there are some cases where people have five years in which to take action and others where they have 20 years. It is important that the right balance is struck.
Most of the bill is not controversial. As we have already heard about and debated the areas that are, I do not propose to go over them again. However, I want to give the chamber another example of why the bill is so important—and it is not related to council tax or benefits. I am talking about the case of Morrison v ICL Plastics. It stemmed from the tragic explosion at the Stockline plastics factory in Glasgow in May 2004, in which nine employees were killed and many were left seriously injured. The case centred on a nearby business, David T Morrison and Co. It had suffered significant damage from the explosion, and when it sued ICL Plastics, which owned Stockline, for its loss, ICL defended the claim on the basis that it had already prescribed. In essence, Mr Morrison was told that he was too late to receive justice.
The case revolved around the interpretation of the existing legislation and the start date of the loss, injury or damage. Morrison believed that the start date was in 2013, when it found out that the explosion was ICL’s fault; however, ICL argued that the start date was in 2004, when Morrison’s had initially suffered the loss, and the Supreme Court found in favour of ICL by a majority of three to two. Because it allows the pursuer to know who caused the loss before the prescription period begins, the bill will mean that, in the future, people like David Morrison who are trying to seek recompense for damage that they have suffered due to negligence will not be told that it is too late. That is a welcome change to the law, and we therefore support the bill.
16:43Daniel Johnson (Edinburgh Southern) (Lab)
Prescription might be a technical area of law, but it undoubtedly has very direct and real human consequences. It is right that we reform the law not only to protect people from the unreasonable pursuit of debt, but to protect some of the most vulnerable people who are in the most difficult of circumstances.
Labour will therefore support the bill and what it sets out to do. However, let me be clear that it is far from perfect. We sought to amend it to make it fairer and more just, so we are disappointed that the Government did not support our amendments. That was a missed opportunity.
I want to thank the many people and organisations who have shared their insights and experience, which have undoubtedly been of use in informing the debate. I also thank the DPLR Committee and its clerks. In particular, I want to acknowledge the work of the Scottish Law Commission, which prompted the bill’s introduction in the first place.
Prescription encourages people to enforce their rights promptly before it becomes too difficult for the person or organisation that is defending the claim to gather appropriate evidence. Delay can cause the quality of evidence that is needed to defend a court case to deteriorate. Bills and bank statements can be damaged or destroyed, for example. Who here keeps their bank statements for more than a couple of years, let alone for 20 years? Witnesses might also die or become untraceable, or might simply not recall the facts.
An unduly long time limit might lead to people being pursued for debts after a length of time that anyone would consider to be unreasonable, which could leave people vulnerable to high penalties many years after they first incurred the debt, and when they might not even be aware, or have received notice, of those debts.
The Prescription (Scotland) Bill therefore makes positive changes, including the test of discoverability, which will ensure that three criteria must be fulfilled before a five-year prescription period begins. The changes are positive and will make a real difference, but that is also why the Government’s failure to back our amendments is so disappointing, because that failure renders the approach inconsistent.
As the bill stands, council tax and benefit payments that are administered by the Department for Work and Pensions are exempted from the five-year prescription period, making them subject to the 20-year period. The bill makes it clear that it is unreasonable for individuals and private companies to be subject to a 20-year prescription period. If it is unreasonable for individuals and private companies to pursue debts in those circumstances, does the Government believe that it is acceptable for state bodies, whose very existence and purpose is to support people, to be exempted from a five-year prescription period? If five years is right for Scottish social security debt, surely it is a reasonable period for United Kingdom social security debt.
That inconsistency—that double standard—at best encourages and facilitates bad practice and inefficiency from the state, which should be leading by example, not looking for get-out clauses. It is deeply unfair that people can be pursued for up to 20 years for a debt of which they were unaware, and charged interest. That is why we proposed to reduce the amount of time that local authorities have in which to notify people that they are in debt before that debt expires. We do not believe that it is too much to expect our public bodies to be able to organise their finances in that reasonable time.
Recognising that that would be a significant change to the bill, we offered a compromise. We offered the Government a delay of five years in the introduction of a five-year prescription for council tax debt—a grace period that would have given local authorities 10 years to get their affairs in order. But, no. Given the evidence, the argument for removing the exemption from the five-year prescription from council tax is compelling. That is why Citizens Advice Scotland, StepChange Debt Charity Scotland, Money Advice Scotland and the Law Society of Scotland support it.
I turn to the advice that the Government sought. Not too long ago, people were being hounded for historical poll tax debt. Why, then, is the Scottish Government enabling historical injustices to be repeated? Why is the Scottish Government taking its cues from the UK Government? Let us be clear. We are talking about debts that have been accrued through the public benefits system from, among other things, the roll-out of universal credit, so why on earth are Scottish National Party ministers seeking advice from a Government as reviled as the current Tory Government at Westminster is, in a policy area where that Government is wilfully impoverishing people, and why are they writing to ask for advice from Esther McVey—the very minister who is responsible for so much of the damage that is being done through the roll-out of universal credit? That is shocking. The SNP should be ashamed that it is taking its policy cues from that shameful Conservative Government.
To conclude, I say that the bill contains many good measures and we will be supporting it, but it is undoubtedly a missed opportunity.
16:48Liam McArthur (Orkney Islands) (LD)
I know that time is short, and I do not want to speak for long. However, the controversy surrounding the amendments that were debated earlier makes it worth my while to set out some thoughts on the core issue of dispute. Before I do that, I join other members in thanking the Scottish Law Commission for its work, and the DPLR Committee for the scrutiny that it carried out so diligently. I record the Scottish Liberal Democrats’ support for legislation that will, I believe, help to modernise and to bring greater clarity to the law on prescription.
Establishing a cut-off point for claims to be raised or rights to be asserted has the advantage of providing certainty and giving individuals and businesses a chance to organise their affairs and plan for the future. People who pursue a claim, debt or obligation will also benefit from the enforced discipline of making a claim in good time.
On the proposed exemption for council tax and business rates from the five-year prescription, I accept that the case may be more nuanced than has been suggested. We have heard some of that debate being played out this afternoon. CAS and others that work to support people who find themselves in financial difficulty have concerns about the exemption, as does the Law Society of Scotland. I agree that councils—like other organisations—must do everything possible to pursue debt in a timely fashion, but I struggle to accept that the 6 per cent penalty charge that attaches to unpaid council tax would act as a disincentive on the collecting council. I cannot see a council adopting a strategy—in effect, that is what it would be—to delay collections deliberately in order to increase penalty charges.
The Convention of Scottish Local Authorities’ concern that introducing five-year prescription would
“dis-incentivise payment and lead to a decline in in-year collection”
seems credible and worthy of our consideration. Even with the grace period that was suggested by Daniel Johnson, it could also inhibit current work to collect outstanding debt at a time when every council in Scotland is having to deal with budget cuts.
On balance, my party was not persuaded by the case that was put forward by Neil Findlay. Of course, we will be interested in the outcome of any future consultation on the specific issue.
However, today, I confirm that the Scottish Liberal Democrats will support the bill at decision time.
16:51Ash Denham
I thank all the members today for their speeches in what has been an important debate. I have listened to what has been said and I welcome the support offered for the provisions of the bill by members of parties from across the chamber.
In closing the debate, I will pick up on a few of the provisions that have been discussed this afternoon, which aim to bring clarity, legal certainty and fairness to the law of negative prescription in Scotland.
As has already been mentioned, section 3 of the bill extends the five-year negative prescription to cover all statutory obligations to make payment that are not already subject to that rule, with some exceptions. That general rule provides a more straightforward means to establish whether an obligation prescribes after five years or after 20 years.
We have already spent a lot of time this afternoon discussing some of the exceptions to the general rule, so I will not go over them again. It is enough to say that there are some exceptions to the rule—obligations that are primarily of a public nature—and that they maintain the status quo.
Section 5 is an important section because it has caused some anxiety among practitioners. The bill seeks to restore a more equal balance between a pursuer and a defender where damages are sought. It does that by laying out a three-part test that, when met, begins the five-year prescription clock. That clock will now not start until pursuers discover the identity of the person responsible for the loss, injury or damage caused or could reasonably be expected to have identified the person responsible.
Equally, the 20-year prescription clock does not carry on indefinitely against defenders. That creates a fine balance between the rights of a pursuer seeking to enforce their obligation and the duties of a defender to undertake their obligation.
In the case of obligations to pay damages, the 20-year prescriptive period begins on the date of the act or omission giving rise to the claim. It makes the 20-year prescription no longer amenable to interruption either by a relevant claim or by a relevant acknowledgment, while allowing the 20-year prescriptive period to be extended in cases where a relevant claim has been made during the prescriptive period and where, by the end of that period, that claim has not been finally disposed of and proceedings are on-going.
Finally, I want to mention the extension of the five-year negative prescriptive period by agreement that the bill allows. The provision recognises the need to balance the interest of legal certainty with a way of resolving disputes that does not require going to court in the first instance. Such agreements can be entered into only after a dispute has arisen and would allow the prescriptive period to be extended by a maximum of one year. I was glad that the committee recognised the merit of such agreements at stage 1.
I again thank members who contributed to today’s debate. I am pleased to hear members express their support for the principles of the bill, which aims to provide fairness, clarity and certainty to areas of the law of negative prescription that have caused practical difficulties in their operation.
The bill’s provisions protect those who have a claim from running out of time in which to proceed with it, change the current situation of possible perpetual liability, including for people who have historical council tax debt, and make clearer which obligations prescribe after five years.
I commend the motion in my name.
8 November 2018
Final vote on the Bill
After the final discussion of the Bill, MSPs vote on whether they think it should become law.

Final vote transcript
The Presiding Officer (Ken Macintosh)
There are three questions to be put as a result of today’s business. The first question is, that motion S5M-14666, in the name of Nicola Sturgeon, on the motion of remembrance, be agreed to.
Motion agreed to,
That the Parliament acknowledges that the First World War had a devastating impact around the world, including on our nation, in which no community was unaffected; recognises the importance of honouring all those who have lost their lives in armed conflicts; notes that 2018 marks the centenary of the First World War Armistice; commends the work of the Scottish Commemorations Panel and partner organisations, which have developed a fitting programme of events to commemorate Scotland’s Armistice centenary, both nationally and for communities; notes that the centenary of the Armistice will be commemorated with a National Service for Scotland in Glasgow Cathedral; recognises the many other organisations and community groups in communities across Scotland that will be delivering commemorative events that inform people about Scotland’s involvement in the First World War while helping them recognise the effects of the war on their local communities and the wider world and its lasting impact on life today, and calls on the nation to come together and pay its respects on 11 November 2018 to ensure that those who suffered so much will never be forgotten, and in the hope that conflicts such as the First World War might end.
The Presiding Officer
The next question is, that motion S5M-14665, in the name of Ash Denham, on the Prescription (Scotland) Bill, be agreed to. In this case, we must have a vote because we are passing an act of Parliament, so I ask members to press their buttons now.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baillie, Jackie (Dumbarton) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Ballantyne, Michelle (South Scotland) (Con)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Campbell, Aileen (Clydesdale) (SNP)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Corry, Maurice (West Scotland) (Con)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Golden, Maurice (West Scotland) (Con)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greene, Jamie (West Scotland) (Con)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harper, Emma (South Scotland) (SNP)
Harris, Alison (Central Scotland) (Con)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kerr, Liam (North East Scotland) (Con)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lindhurst, Gordon (Lothian) (Con)
Lochhead, Richard (Moray) (SNP)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McArthur, Liam (Orkney Islands) (LD)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Rennie, Willie (North East Fife) (LD)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Scott, John (Ayr) (Con)
Scott, Tavish (Shetland Islands) (LD)
Simpson, Graham (Central Scotland) (Con)
Smith, Elaine (Central Scotland) (Lab)
Smith, Liz (Mid Scotland and Fife) (Con)
Smyth, Colin (South Scotland) (Lab)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Tomkins, Adam (Glasgow) (Con)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Whittle, Brian (South Scotland) (Con)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
The Presiding Officer
The result of the division is: For 111, Against 0, Abstentions 0.
Therefore, the motion has been agreed to unanimously, and the Prescription (Scotland) Bill has been passed. [Applause.]
Motion agreed to,
That the Parliament agrees that the Prescription (Scotland) Bill be passed.
The Presiding Officer
The final question is, that motion S5M-14602, in the name of Bill Kidd, on a complaint against Annie Wells, be agreed to. Are we agreed?
Members: No.
The Presiding Officer
There will be a division.
For
Adam, George (Paisley) (SNP)
Adamson, Clare (Motherwell and Wishaw) (SNP)
Allan, Alasdair (Na h-Eileanan an Iar) (SNP)
Arthur, Tom (Renfrewshire South) (SNP)
Baillie, Jackie (Dumbarton) (Lab)
Baker, Claire (Mid Scotland and Fife) (Lab)
Beamish, Claudia (South Scotland) (Lab)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Bibby, Neil (West Scotland) (Lab)
Brown, Keith (Clackmannanshire and Dunblane) (SNP)
Campbell, Aileen (Clydesdale) (SNP)
Coffey, Willie (Kilmarnock and Irvine Valley) (SNP)
Cole-Hamilton, Alex (Edinburgh Western) (LD)
Crawford, Bruce (Stirling) (SNP)
Cunningham, Roseanna (Perthshire South and Kinross-shire) (SNP)
Denham, Ash (Edinburgh Eastern) (SNP)
Dey, Graeme (Angus South) (SNP)
Doris, Bob (Glasgow Maryhill and Springburn) (SNP)
Dornan, James (Glasgow Cathcart) (SNP)
Dugdale, Kezia (Lothian) (Lab)
Ewing, Annabelle (Cowdenbeath) (SNP)
Ewing, Fergus (Inverness and Nairn) (SNP)
Fabiani, Linda (East Kilbride) (SNP)
Fee, Mary (West Scotland) (Lab)
Findlay, Neil (Lothian) (Lab)
Finnie, John (Highlands and Islands) (Green)
FitzPatrick, Joe (Dundee City West) (SNP)
Forbes, Kate (Skye, Lochaber and Badenoch) (SNP)
Freeman, Jeane (Carrick, Cumnock and Doon Valley) (SNP)
Gibson, Kenneth (Cunninghame North) (SNP)
Gilruth, Jenny (Mid Fife and Glenrothes) (SNP)
Gougeon, Mairi (Angus North and Mearns) (SNP)
Grahame, Christine (Midlothian South, Tweeddale and Lauderdale) (SNP)
Grant, Rhoda (Highlands and Islands) (Lab)
Gray, Iain (East Lothian) (Lab)
Greer, Ross (West Scotland) (Green)
Griffin, Mark (Central Scotland) (Lab)
Harper, Emma (South Scotland) (SNP)
Harvie, Patrick (Glasgow) (Green)
Haughey, Clare (Rutherglen) (SNP)
Johnson, Daniel (Edinburgh Southern) (Lab)
Johnstone, Alison (Lothian) (Green)
Kelly, James (Glasgow) (Lab)
Kidd, Bill (Glasgow Anniesland) (SNP)
Lamont, Johann (Glasgow) (Lab)
Lennon, Monica (Central Scotland) (Lab)
Leonard, Richard (Central Scotland) (Lab)
Lochhead, Richard (Moray) (SNP)
Lyle, Richard (Uddingston and Bellshill) (SNP)
MacDonald, Angus (Falkirk East) (SNP)
MacDonald, Gordon (Edinburgh Pentlands) (SNP)
Macdonald, Lewis (North East Scotland) (Lab)
MacGregor, Fulton (Coatbridge and Chryston) (SNP)
Mackay, Rona (Strathkelvin and Bearsden) (SNP)
Macpherson, Ben (Edinburgh Northern and Leith) (SNP)
Maguire, Ruth (Cunninghame South) (SNP)
Marra, Jenny (North East Scotland) (Lab)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)
Matheson, Michael (Falkirk West) (SNP)
McAlpine, Joan (South Scotland) (SNP)
McArthur, Liam (Orkney Islands) (LD)
McDonald, Mark (Aberdeen Donside) (Ind)
McKee, Ivan (Glasgow Provan) (SNP)
McKelvie, Christina (Hamilton, Larkhall and Stonehouse) (SNP)
McNeill, Pauline (Glasgow) (Lab)
Neil, Alex (Airdrie and Shotts) (SNP)
Paterson, Gil (Clydebank and Milngavie) (SNP)
Robison, Shona (Dundee City East) (SNP)
Ross, Gail (Caithness, Sutherland and Ross) (SNP)
Rumbles, Mike (North East Scotland) (LD)
Ruskell, Mark (Mid Scotland and Fife) (Green)
Smith, Elaine (Central Scotland) (Lab)
Smyth, Colin (South Scotland) (Lab)
Stevenson, Stewart (Banffshire and Buchan Coast) (SNP)
Stewart, David (Highlands and Islands) (Lab)
Stewart, Kevin (Aberdeen Central) (SNP)
Swinney, John (Perthshire North) (SNP)
Todd, Maree (Highlands and Islands) (SNP)
Torrance, David (Kirkcaldy) (SNP)
Watt, Maureen (Aberdeen South and North Kincardine) (SNP)
Wheelhouse, Paul (South Scotland) (SNP)
Wightman, Andy (Lothian) (Green)
Yousaf, Humza (Glasgow Pollok) (SNP)
Against
Ballantyne, Michelle (South Scotland) (Con)
Bowman, Bill (North East Scotland) (Con)
Briggs, Miles (Lothian) (Con)
Burnett, Alexander (Aberdeenshire West) (Con)
Cameron, Donald (Highlands and Islands) (Con)
Carlaw, Jackson (Eastwood) (Con)
Carson, Finlay (Galloway and West Dumfries) (Con)
Chapman, Peter (North East Scotland) (Con)
Corry, Maurice (West Scotland) (Con)
Fraser, Murdo (Mid Scotland and Fife) (Con)
Golden, Maurice (West Scotland) (Con)
Greene, Jamie (West Scotland) (Con)
Hamilton, Rachael (Ettrick, Roxburgh and Berwickshire) (Con)
Harris, Alison (Central Scotland) (Con)
Kerr, Liam (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Mountain, Edward (Highlands and Islands) (Con)
Mundell, Oliver (Dumfriesshire) (Con)
Rennie, Willie (North East Fife) (LD)
Scott, John (Ayr) (Con)
Scott, Tavish (Shetland Islands) (LD)
Simpson, Graham (Central Scotland) (Con)
Smith, Liz (Mid Scotland and Fife) (Con)
Stewart, Alexander (Mid Scotland and Fife) (Con)
Tomkins, Adam (Glasgow) (Con)
Whittle, Brian (South Scotland) (Con)
The Presiding Officer
The result of the division is: For 84, Against 27, Abstentions 0.
Motion agreed to,
That the Parliament notes the 6th Report, 2018 (Session 5) of the Standards and Public Appointments Committee Complaint against Annie Wells MSP (SP Paper 408) and agrees to impose the sanction recommended in the report that Annie Wells MSP be excluded from all meetings of the Parliament and all meetings of its committees for the first five sitting days after this motion is agreed.
8 November 2018