Justice Committee

Meeting date: Tuesday, November 21, 2017

Official Report 613KB pdf

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Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill: Stage 1

Agenda item 5 is our sixth and final evidence-taking session on the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. I refer members to paper 3, which is a note by the clerk, and paper 4, which is a private paper.

I welcome to the meeting Annabelle Ewing, Minister for Community Safety and Legal Affairs, and the following Scottish Government officials: Hamish Goodall, civil law and legal system division; and Greig Walker, solicitor, directorate for legal services. I believe that the minister wishes to make an opening statement.

Good morning, convener and committee members. I am grateful for the opportunity to make some opening remarks. Before doing so, though, I felt it appropriate on this occasion to remind members of my entry in the register of members’ interests. It shows that I am a member of the Law Society of Scotland in that I hold a current practising certificate, although I am not currently practising.

We know from Sheriff Principal Taylor’s review of the expenses and funding of civil litigation in Scotland that the potential costs involved in civil court action can deter many people from pursuing legal action even if they have a meritorious claim. There is therefore a need for more certainty as to the cost of exercising their rights. Three major reforms proposed in the bill will make the cost of civil litigation in Scotland more predictable and therefore increase access to justice: sliding caps on success fees; allowing solicitors to offer damages-based agreements; and qualified one-way costs shifting.

The first major reform, the introduction of sliding caps on success fees, has generally been welcomed, and I am minded initially to set the levels at those suggested by Sheriff Principal Taylor in his report. The second major reform will allow solicitors to offer damages-based agreements directly rather than through claims management companies. Damages-based agreements are very popular as they are simple to understand; basically, the client pays nothing up front. Instead, they pay a percentage of the damages awarded or agreed to the provider of the legal services, with the solicitor responsible for all outlays in personal injury actions. As Sheriff Principal Taylor stated in his evidence, one solicitor-owned claims management company has entered into 17,600 new damages-based agreements in the past three years and 23,800 in the past five. That might go some way to explaining the rise in the number of claims in Scotland over the past five years, which others giving evidence have flagged up.

On the subject of claims management companies, I appreciate that concern has been expressed that the bill makes no provision for their regulation. I am therefore pleased to be able to tell the committee that appropriate amendments to the Financial Guidance and Claims Bill have been tabled at Westminster and are expected to be voted on later today at the bill’s third reading in the House of Lords. Claims management companies will therefore be regulated in Scotland more quickly than was first anticipated.

The third major reform is the introduction of qualified one-way costs shifting for personal injury cases, which will level the playing field as the vast majority of defenders are well resourced and the majority of pursuers are of limited means. Although very few claimants are pursued for expenses by successful defenders, there is always a risk that a pursuer might be liable for considerable expenses and possibly bankruptcy if they lose. Sheriff Principal Taylor confirmed that that is a real fear that stops too many meritorious claims from getting off the ground.

Qualified one-way costs shifting removes the risk as long as the pursuer and his or her legal team have conducted the case appropriately. The test of when the benefit of qualified one-way costs shifting can be lost has been the subject of varying views, as can be seen in the evidence that has been given. Defender groups have suggested that the bar is too high and pursuer groups have contended that the bar is too low. Both groups have expressed concerns that the provisions as drafted in section 8(4) will lead to satellite legislation. We will therefore consider amendments at stage 2 to make it clear that it is the tests envisaged by Sheriff Principal Taylor that are to be applied.

The bill also makes provision for third-party funding. Sheriff Principal Taylor recommended that all third-party funding be disclosed; however, only venture capitalists who have only a commercial interest in the case will be liable for awards of expenses. There have been concerns that awards will be made against trade unions and legal service providers. Trade unions do not have a financial interest in the proceedings, so they will not be subject to awards for expenses under the bill as drafted. We are considering whether an amendment is necessary to make it clear that providers of success fee agreements will not be subject to the provision.

Finally, I want to briefly mention the issue of group proceedings. As the committee will have seen, the proposal to introduce class actions to the Scottish courts has found broad support. I am convinced that the way forward is to introduce an opt-in system given that when introducing a new procedure in the Scottish courts it is prudent to select the option that will be easier and quicker to implement. However, that does not rule out introducing the opt-out procedure at a later date, and we will keep the issue under review.

That concludes my opening remarks. I look forward to the committee’s questions.

Thank you, minister. We will move straight to questions, starting with John Finnie.

Good morning, minister, and thank you for your opening statement. We are told that the bill’s objective is to increase access to justice, but a number of witnesses have suggested to us that such access is not a problem. Why is the bill necessary, and how will it improve access to justice?

It is important to go back to the bill’s first principles and reiterate what happens when someone tries to bring a personal injury action. The pursuer will want to know first of all what their solicitor will charge them, but it is also important for the pursuer to know their potential liability for the defender’s expenses if they lose. Such a situation introduces considerable unpredictability with regard to the bill for the pursuer in trying to assert what they view as their legal rights. The bill is designed to deal with each of those areas of unpredictability in turn and to increase the funding options available to a pursuer seeking to take a claim through the courts.

In terms of greater predictability and certainty as to what a pursuer’s solicitor could charge the pursuer, we have taken Sheriff Principal Taylor’s approach and proposed a sliding cap on the percentage that can be taken by way of a success fee from any award received. That will be done on the basis set out by Sheriff Principal Taylor in his report, which is a maximum cap of 20 per cent for the first £100,000, although the solicitor would not be required to charge the maximum; a proposed cap of 10 per cent for the next £400,000; and a proposed cap of 2.5 per cent for sums above £500,000. That gives clarity to the matter.

With regard to outlays in personal injury actions, we propose in the bill that they be met by the pursuer’s solicitor, which also provides clarity. As for the issue of liability for a defender’s expenses and what has been called the David versus Goliath asymmetric relationship between the pursuer and the defender in personal injury actions, our proposal, which again takes up Sheriff Principal Taylor’s recommendation, is for what is called qualified one-way costs shifting in personal injury actions. I know that the committee is now expert on that term of art, so I do not need to belabour the point.

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That is what we propose for personal injury actions, with the important word here being “qualified”. It is not an absolute but, assuming that the pursuer and their legal team have acted appropriately, the benefit of qualified one-way costs shifting should not be lost. It therefore gives predictability and certainty, and it removes the fear that by seeking to raise a court action the individual could be sequestrated if found liable for the defender’s expenses.

As for the desire to create some equity in funding between the pursuer and the defender, the vast majority of cases are, as I have mentioned, seen as a David and Goliath battle involving a defender, who is either an insurance company or backed by an insurance company, and we expect the key principles underpinning the legislation to reflect that fact.

Another issue that I should mention is that the solicitor profession will be allowed to enter into damages-based agreements for the first time. All in all, we feel that the proposals allow potential pursuers to consider carefully whether they wish to pursue their rights in the courts by way of a civil claim instead of not pursuing a case simply because of worries about the cost and potential sequestration.

Thank you for that detailed answer. I think that there will be specific questions from my now fellow experts on the subject, but I want to stick with the generalities. We have had a lot of anecdotal evidence about the much-used phrase “access to justice”, but there seems to be a dearth of up-to-date research on that. Will you commit to doing such research?

I have read the committee evidence carefully. The issue of statistics has come out in evidence; the number of claims recorded has certainly risen, but the number of cases being litigated has actually remained more or less the same since 2009-10. It is important to bear in mind that the civil justice statistics show a slight drop in the number of personal injury cases raised in 2015-16 compared with the figure in 2009-10. The number of personal injury cases before the court has remained more or less constant, although there has been an increase in claims, because many claims do not go anywhere or are settled long before they get to the courts.

On that basis, I am not necessarily convinced that the world is very different now from how it was when Sheriff Principal Taylor was conducting his two-and-a-half-year review; his review was long and thorough and he had an impressive reference group who assisted him in his work. We also proceeded with a consultation on the bill, as we are required to do, in the first half of 2015; that was more recent, and at the time, more responses favoured proceeding with our key proposals than opposed them. We therefore feel that we have as reasonable a picture as we can get. At the end of the day, raising a civil action is a permissive choice on the part of the pursuer, and it is not something that we can anticipate in any great numbers.

When discussing in evidence whether there should be a delay to wait for the regulation of claims management companies through some vehicle—which is an issue that we will probably get on to—a representative of the Law Society of Scotland said that she would rather get on with the bill. I think that there is a feeling among key stakeholders that we just want to make some progress.

I would be grateful, minister, if you could answer specific questions quite briefly, as we will get into more detail in later questions.

Finally—and I shall make this brief—trade union respondents highlighted the fact that court fees would remain a barrier for members pursuing personal injury claims. They proposed a QOCS-like solution, in which court fees would be paid only at the end of a case that the defender lost. Will the Scottish Government commit to investigating that?

You might be aware of the on-going consultation on court fees, which started in October and is due to close on 12 January. Those who wish to look at that issue have the opportunity to do so.

If court fees are not on a pay-as-you-go basis, somebody else—the Scottish Courts and Tribunals Service and the Scottish taxpayer—will have to pay them. That is something to bear in mind. Sheriff Principal Taylor’s report quoted Lord Justice Jackson in England in making the point that 100 per cent cost recovery was never an accepted principle in the law of costs. It was felt that some discipline should be instituted in the system as a deterrent against frivolous claims and to keep costs to a minimum. As I have said, a consultation on court fees is on-going, and I imagine that some of those points will be raised in that context.

In your opening statement, you said that you were minded to approve the caps on success fees recommended by Sheriff Principal Taylor. Would that be done through secondary legislation?

We feel that that would be the better course than putting them in primary legislation, as it would give us the flexibility to keep them under review and to amend them in due course where appropriate. As I have indicated, we intend to proceed by way of secondary legislation, at the levels proposed by Sheriff Principal Taylor. Any such instrument would be affirmative, so there would be consultation on it.

Moving on to damages-based agreements and solicitors’ conflict of interest, I note that Sheriff Principal Taylor recommended that a solicitor be required to write to a client, outlining all the funding options and giving reasons for their particular recommendation. However, it is unclear how those matters will be taken forward. What additional steps is the Scottish Government taking to address the issue of conflict of interest in damages-based agreements? Would that happen through secondary legislation or with the Law Society of Scotland?

Damages-based agreements would be a matter for the Law Society, which would need to look at the practice rules that are applicable to members of the solicitor profession. I understand that, according to Professor Alan Paterson, the Law Society has set up a working group to look at the issue.

I know that your question was about damages-based agreements, but it is worth pointing out that with speculative fee agreements, which have been in place for 25 years now, it has been accepted that a theoretical conflict is possible and that that has not precluded the operation of such agreements in practice. I think, therefore, that it will be fairly straightforward to come up with practice rules that secure the objective that is being sought.

At a general level, what influence does the Scottish Government have over the Law Society in this area? Can you direct or influence it?

As the Law Society is a representative body, it would not be appropriate for me as minister to direct it on practice rules, but I regularly meet its representatives—its chief executive and president—for wide-ranging discussions. I am always happy to raise issues, but I do not think that it is for the Scottish Government to direct the Law Society on particular practice rules that it might be considering.

I want to ask about compensation for future loss, which we know can be important in meeting pursuers’ future care needs. Does the bill strike the right balance in allowing part of the award to be taken as a success fee?

I read that part of the Taylor review and the bill very carefully, and it is important to recall why Sheriff Principal Taylor felt that that would be a sensible way forward. It was considered that there was the potential to incentivise delay—in other words, people might seek to delay settling or bringing the case to a conclusion as more loss would be attributable to the past than to the future. It was felt that the proposed approach would make civil litigation more predictable, simplify the process and ensure greater access to justice. It was also felt that a lot of time could be spent trying to attribute past and future loss in the many cases, particularly those with settlements, that would not reach the £2 million mark to which Sheriff Principal Taylor referred, where the issue is very clearly about future loss.

It is important to point out that safeguards in this respect have been written into the bill. You talked about striking a balance, and such a balance has been recognised as necessary here. In the event that the future loss element of damages in a case exceeded £1 million, the safeguard would be that the court’s approval would be required to treat that as a lump sum from which the success fee could be taken. Alternatively, with settlements, the safeguard could be to require an independent actuary to conclude that the payment should be made by way of a lump sum.

Lord Justice Jackson, who took an equivalent look at the costs and funding of litigation in England and Wales, concluded that the future loss element should be ring fenced. I understand from his evidence to the committee and his report that Sheriff Principal Taylor thinks that Lord Justice Jackson might have got cold feet after making that decision and felt that he might have responded to particular lobbying. I think that we have struck the right balance between two imperatives, and that is how we have drafted the bill.

Do you see any merit in the solution suggested by the Faculty for Advocates of a taper in the amount that can be taken as a success fee?

We have a quite straightforward taper. In claims of more than £500,000 up to £1 million, which will—quite rightly—not require court approval or independent actuarial approval, the rate will be 2.5 per cent. That is quite a good safeguard, and our approach is more straightforward than that suggested by the Faculty of Advocates.

My questions are on qualified one-way costs shifting. Your response on that to John Finnie’s earlier question was interesting because we heard in evidence about one of my fears. We hear about the David and Goliath scenario, but in personal injury cases the pursuer may not always be up against a larger body. Evidence from the Faculty of Advocates suggests limiting QOCS to cases in which the defender is insured or is a public body. How do you respond to that? Have you taken cognisance of it?

I noted with interest that debate and what Sheriff Principal Taylor said in his evidence at the end of October. He made the important point that if there is a straw man—a defender who is not the insurance company or is not backed by an insurance company—what is the point of raising the action? No money will be recovered. That is a factor to bear in mind.

The fundamental objective of introducing qualified one-way costs shifting is to introduce predictability to the cost equation for a person who is considering taking an action and enforcing their rights. The predictability element for a person who has a no-win, no-fee and damages-based agreement is that if they lose, they do not pay anything. If they win, the arrangements are—as we know from the provisions of the bill—that the pursuer would meet the outlays. For the predictability objective of the bill, it is important that we maintain that position.

It was suggested by Sheriff Principal Taylor that, if we were to seek to make any qualification, that may not preclude circumvention by the defender, such as a defender who should get insurance but who has chosen not to, or who seeks a much bigger excess than in the normal commercial approach.

It is important to remember the evidence that was cited in Sheriff Principal Taylor’s report, which referred to work that had been done for Lord Justice Jackson’s report: of the sample of tens of thousands of cases, only 0.1 per cent involved cases in which the defender had recovered expenses. It is important to bear that in mind.

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Finally, there is qualified one-way cost shifting in England and Wales, which was introduced in legislation in 2012. The UK Government tabled post-legislative scrutiny of that legislation at the end of October, during which no significant concerns were raised about QOCS. Taking all those factors into account, we have struck the right balance in the bill.

I thank you for highlighting the post-legislative scrutiny in England and Wales because I was not aware of that.

We also heard from witnesses about their concern that the tests for losing the QOCS protection lacked clarity and may lead to further litigation. What are the minister’s thoughts on that? There was a particular concern that the tests do not implement the Taylor recommendation on Wednesbury unreasonableness.

We have listened to the evidence that was presented in the recent submissions, and we intend to reflect further on the matter for stage 2. We want the bill to be as clear as possible, and we accept that clarity could be improved. Regarding the general thrust of amendments, which have still to be framed, our commitment was to introduce the test as it was envisaged by Sheriff Principal Taylor, which would have regard to the Wednesbury case. Suggestions have been made in evidence to the committee about phraseology; I am not in a position to say exactly what it will be. We are definitely seeking to implement what Sheriff Principal Taylor had in mind, in that regard.

That was helpful. Thank you.

Sheriff Principal Taylor recommended that QOCS protection should be lost in an additional scenario—when a case is summarily dismissed. He sees that as a protection against spurious claims. Is that something that you have taken into consideration and will you look at that?

Yes, we will look at that. Sheriff Principal Taylor made a fair point and we will reflect on how best the suggestion can be implemented.

I would like to carry on along the same lines as Mairi Gougeon. The bill does not deal with tenders. When he appeared before the committee, Sheriff Principal Taylor suggested that the bill should make it clear that failure to beat a tender would mean an exemption from QOCS. Does the minister accept that recommendation? If so, will she lodge amendments to deal with it?

Tenders are normally dealt with as a matter of court rules. I understand that the costs and funding committee of the Scottish Civil Justice Council has been reflecting on the matter and will have a meeting on 4 December. We will get a better idea of what its thinking is on potential court rules to deal with tenders in relation to QOCS after that meeting.

Can I take that as meaning that there will potentially be an amendment?

It is clear there is a desire for a clearer picture of what would happen when a tender is not beaten and the impact vis-à-vis QOCS. Thus far, the issue of tenders has been dealt with by way of court rules; the relevant court rules body is examining the matter, and we will be interested to see what it proposes further to the work that it is doing.

Defender representatives who appeared before the committee suggested that QOCS would encourage a compensation culture. They highlighted additional steps that could be taken to protect against that, including fixed costs and pre-action protocols. The situation is different in England and Wales, according to the review to which the minister alluded. Can she outline whether the Scottish Government will take action? Did she consider such steps in drafting the bill? If so, why were they not included?

Sheriff Principal Taylor’s report refers to fixed costs and recommends that they be introduced for the new simple procedure—the amalgamation of summary cause procedure and small claims procedure. He also feels that that should be given time to bed down to see whether it will work in practice.

There is a mandatory pre-action protocol in place for claims up to £25,000 in the sheriff court. Pre-action protocols are a matter for court rules—the Scottish Civil Justice Council is the body that is designated to deal with such matters under the Scottish Civil Justice Council and Criminal Legal Assistance Act 2013. It is open to the council and its subcommittees to consider extending the mandatory pre-action protocol to different levels of claim threshold.

On compensation culture, it is fair to say that not all witnesses suggested that there is such a culture in England and Wales, and they do not feel that the bill will lead to such a culture. It is important to reflect that part of the evidence, too.

I will remain on the subject of compensation culture. Witnesses from several NHS boards suggested that there could be an increase in claims—which is, in some ways, the point of the legislation. Some boards have suggested that they do not have insurance to cover such claims and some have suggested that the increase in costs for clinical negligence claims would be very difficult to cover. Ultimately, an increase in budgets as a result of an increase in claims could have an impact on healthcare delivery. Do you have anything to say to those NHS boards about what I suggest are their legitimate concerns?

I am not aware of any NHS boards that do not have insurance. That would be quite worrying. I will check that with my colleagues, but I had thought that all boards would have insurance in place.

There are many factors. The committee is aware of the damages bill that was referred to in the programme for government, which we intend to introduce early in 2018. One of the elements of that bill will be to address mandatory periodical payment orders—that is where there is a catastrophic case in which it is necessary to make an arrangement for future caring arrangements and loss. Periodical payment orders allow that to happen, and the provision in the forthcoming bill will make that mandatory—in other words it will override the views of the parties to the case. At the moment, both parties need to consent to a PPO being granted.

Members will recall that the bill already provides for the fact that where there is a future-loss element and a PPO is recommended, the damages cannot be taken from that element of the future loss. That is an important safeguard.

To go back to some of the points to which I alluded in my opening remarks, if a client goes to see a lawyer and there is no prospect of recovering any money, the lawyer will not take on the case. A lawyer is also an officer of the court and is subject to various rules and regulations, including on not clogging up court time with vexatious cases. The mandatory pre-action protocol will also help in that regard. Finally, the benefit of cost shifting can be lost, although only in certain circumstances—it is not an absolute. We should bear all those factors in mind.

Perhaps my question was not sufficiently clear. I am saying that NHS witnesses have told us that there will be more clinical negligence claims, greater cost to the NHS and more pressure on budgets. Do you have a response to that?

Starting from first principles, if someone has a right to bring a claim, they have a right to bring a claim: it will be for the parties to settle in advance or for the courts to determine the rights and wrongs of the case. I am sure that Liam Kerr would not suggest that if there has been a wrong and a failure to act, there should be no remedy for the citizens of Scotland. If one has a right, one should be entitled to seek enforcement of that right through the courts and so have access to justice.

As I said, the periodical payment element in the proposed damages bill will have a role to play in that the success fee cannot be taken from the PPO. That will help matters.

Good morning, minister. In respect of regulation of claims management companies, will you make a commitment that there will be no gap between the bill’s provisions coming into force and a regulatory regime for claims management companies being put in place?

I am not in a position to do that. As I said at the outset, we have tabled amendments to the UK Financial Guidance and Claims Bill that will be considered in the House of Lords today. If they are agreed to and the legislation is passed, an arrangement will be set up by way of secondary legislation. I am not in charge of UK Government secondary legislation and have no control over its timing, but I expect that, if there is a gap, it will not be unduly long. However, it is important to note that when it becomes clear that regulation is imminent, that will have a significant impact on the pretensions of claims management companies, in that regard.

I think that the point, minister, is that you have control over secondary legislation here.

Absolutely—I have control over that. What I am saying is that there are two pieces of the picture: what happens with secondary legislation in London and what happens with it here. However, I also make the point that even if there were to be a short gap, there would nonetheless be a clear signal that regulation was coming down the line, which I think would be a big game changer.

Claims management companies have been recognised as a significant source of nuisance calls. We should bear it in mind that it has been determined that there is a significantly greater number of them in Scotland than in the rest of the UK. The Taylor review made recommendations including banning cold calling and having a requirement that only regulated bodies can receive referral fees. What steps are you taking to implement those recommendations?

I imagine that the Law Society of Scotland’s working group would wish to look at referral fees. The regulated bodies that are claims management companies will be a matter for the regulatory system under the Financial Conduct Authority, assuming that the regulations in question are passed and the legislation as a whole is passed at Westminster.

On Scottish Government action, jurisdiction over cold calls and texts is still reserved to Westminster, but the Scottish Government has been active in the area: we have set up a nuisance calls commission and we have been considering a number of pragmatic measures that can perhaps help. I believe that the Scottish Government has also set aside some funding to assist with call-blocking units for vulnerable groups.

There has therefore been activity on the issue on the part of the Scottish Government, but referral fees are a matter for the Law Society and, I presume, the FCA.

I want to explore third-party funding in more detail. I am grateful for the comments on that in the minister’s opening remarks. You will know from our evidence sessions that trade unions in particular have expressed concern that they will be caught by the provisions on third-party funding. If I understood your previous remarks correctly, you intend to lodge amendments on the matter. Can you give us more detail on how the amendments will be framed so that there is absolute clarity on who will be caught by the legislation on third-party funding?

I am afraid that I cannot give you chapter and verse on what the amendments will say, because they are still to be drafted, as far as I am aware. However, we will seek to lodge amendments on third-party funding at stage 2 to address the concerns that Mary Fee has referred to, because we accept that we need to provide more clarity in that regard.

As far as trade unions are concerned, the current language of the bill’s provisions on third-party funders would not catch them. However, we will reflect on all the points that have been made about third-party funding in order that we are 100 per cent sure that our reading of the matter is correct. We feel that there is also an obvious lack of clarity in the bill in respect of legal services providers, so we will look at that, too. However, we understand the points that have been made: it is absolutely not the Government’s intention to catch trade unions or legal service providers in the third-party funding provisions. We want to ensure that the provisions will apply only to venture capitalists and commercial third-party funders.

There will be a clear definition of who you are meant to be catching and not catching. Will you also make it clear what the requirements on third-party funders are compared to those for general funders?

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On your first point, as I say, the drafting is still to be done. I fully understand the concerns that exist, which will be reflected in the drafting.

On your second point, transparency was to be an obligation on all third-party funders, so that the court and the other side would know what was going on in relation to the funding, but there was a concern that the issue had been conflated a bit with the liability issue. We will look again at that matter and hope to make it absolutely clear that transparency is an erga omnes obligation, whereas the liability issue is for the commercial funders of the venture capitalists.

Why does the Scottish Government consider the employment of court auditors by the Scottish Courts and Tribunals Service to be a better guarantor of independence than the use of self-employed auditors?

Is it a better guarantor? It would at least provide the same guarantee of independence.

My reading is that the issues tend to be about accountability. For example, the freedom of information process is not available at the moment, so there are issues of transparency to consider as well as the need to ensure better consistency. A number of practitioners are concerned that the situation can be a bit of a lottery and say that clear guidance would be helpful.

On the status of the auditors, we advocate that there should be salaried positions in the Scottish Courts and Tribunals Service. Auditors should not make a private profit out of a public service, which is the position at the moment.

The provisions that we have introduced will ensure greater transparency and consistency in this very important part of the court process.

Can you offer us an assurance that the current sheriff court auditors will be able to work under their present regulations and arrangements until they choose to retire or until they reach a specific age?

I am not sure whether the member’s point is to do with the security of tenure, because the auditor of the Court of Session has security of tenure and that has been explained in the documents that we have submitted. The auditor of the Court of Session will remain in tenure until he reaches 65—which I think will be in 2022—or earlier if he decides to go sooner. The position is not the same for the sheriff court auditors, but they would be perfectly able to apply to be a salaried auditor in the Scottish courts and tribunals system. That option would be open to them. We will not be able to get new auditors in place, trained up and operating overnight, so there will be a bit of breathing space. As I say, they will be entitled to apply to become salaried auditors.

There will be some overlap until the new system is in place.

Yes, there will be transitional provisions. We are dealing with existing situations, and we must reflect that in the work that we are doing here.

As the minister did, I remind the committee that I am a registered Scottish solicitor.

Good morning, minister. I have a number of questions about part 4 of the bill, which is on group proceedings. We have heard a variety of evidence, including last week, on the matter. You mentioned that an opt-in system would be easier to implement and more efficient in the short to medium term. You also said that you would be open to looking at an opt-out system in the future. Will you explain why the Scottish Government has chosen to reject the option of an opt-out procedure at this stage?

The debate on group proceedings has gone on for many decades. I had not appreciated that until I did all my homework—I think that the figure of 30 years was mentioned in that regard. We are keen to make progress, and it was considered that it would be more straightforward to start with an opt-in system.

It is a new procedure for the courts in Scotland, because we do not have group proceedings as such at the moment. We felt that the prudent and more pragmatic course of action would be to start with an opt-in system, which is more straightforward as there is a defined group of claimants—that is not the case with an opt-out system—so we will proceed on that basis. I think that it was Paul Burns of the Legal Services Agency who remarked that, although his preference would be an opt-out system, if it was going to take five years he would rather start with an opt-in system so that we could make some progress. The fact that it is more straightforward to start with an opt-in system is driving our pragmatic approach.

Scotland is a smaller jurisdiction than some of the others that, by way of comparison, have been mentioned in reference to the issue. Court rules will need to be drawn up, which is not an overnight process. However, it will be more straightforward, over a shorter period of time, to come up with a package of court rules that deal with opting in than it would be to try to come up with a package of rules for opting in and opting out. That would take much longer given how long it has taken for a final conclusion to be arrived at for various court rules. There will be a consultation on the court rules, so there will be an opportunity for people to comment.

That is our thinking behind putting in the opt-in procedure at this point. As the member said, we will keep the opt-out approach under review, but it is important to start somewhere and to make progress on that basis.

That pragmatic management approach is important. What is striking in the evidence is that the opt-in procedure is more accessible for communities but there might be an administrative burden when it comes to consumer and environmental cases, so it is reassuring that the Government will keep an open mind on that. I agree that the opt-in procedure was welcomed last week. There was also a sense that an opt-out system would be preferable in the longer term.

Witnesses also highlighted that funding group proceedings could be a problem and that, historically, it has been a problem. Does the Scottish Government plan to develop any support mechanisms to tackle that, perhaps with a specific fund?

The funding arrangements would be legal aid or success fees; that is the general approach. There would be a requirement to amend the current legal aid rules, and the on-going legal aid review might have certain views on that.

Going back to the general view of opt-in and opt-out approaches, it seems to me, from reading the evidence, that every stakeholder supports an opt-in system. That includes the Law Society of Scotland, which changed its mind on the issue. The one stakeholder that has not supported opting in and prefers opting out is the Which? organisation. It is important that the weight of stakeholder agreement suggests that, for pragmatic reasons, stakeholders would accept proceeding with an opt-in system in the first instance, although that is not how they would wish to proceed in the long term.

You mentioned that the detailed rules on group proceedings will be developed by the Scottish Civil Justice Council. Will the Scottish Government have any control over that process?

It will not have control as such, because there is separation from the courts. However, we will have input to that process. We have representation on the Scottish Civil Justice Council and its various sub-committees, and there is wider representation on the Scottish Civil Justice Council of consumers and various other stakeholders. We will have input into the process, but we will not control it, as it is not appropriate for us to control the courts because of the separation of powers.

Nevertheless, in the interests of access to justice, it is important to provide some reassurance to us and to stakeholders. There have been calls to develop a group proceedings element in Scots law for over 35 years, but it is happening only now. Although we welcome that, if the Government will not have—rightly, due to separation of powers, as you say—direct control over the process, are you confident that the latest initiative will not be bogged down in detail or kicked into the long grass?

I do not believe that it will be kicked into the long grass. People want it to happen, and now is seen as the moment for us to really get a shiftie on—sorry, that is perhaps not appropriate language for the Official Report.

As we have done before, we will issue a policy note that will give a clear idea of the Government’s general sense of direction and its thinking on the matter. I am happy to reflect on whether there might need to be some other language to that effect in the bill to give a clearer steer. The matter will definitely not be kicked into the long grass; we want it to happen and the stakeholders want it, too.

Liam, do you have a declaration to make?

Yes. Forgive me, minister. Before I put my questions to you, I intended to declare an interest as a solicitor with a current practising certificate with the Law Society of England and Wales and with the Law Society of Scotland.

There is one final question. The Delegated Powers and Law Reform Committee raised concerns about the unusually wide scope of section 7(4), which will enable amendments to be made to part 1 through secondary legislation. Can you provide specific examples to explain why the modification of part 1 under that delegated power is necessary and proportionate?

I know that officials are aware of those issues. I do not know whether Hamish Goodall would like to say something now or whether we could write to the committee on the matter. [Interruption.] I am getting advice that it is quite a technical issue, so perhaps we could write to the committee.

The unusually wide scope of that section is certainly of concern.

We are happy to write to the committee, which we will do in short order.

We will be happy to receive that advice.

As there are no further questions, that concludes our consideration of the bill. I thank the minister and her officials for attending.

Our next meeting will be on Tuesday 5 December, when we will take closing evidence from the minister on the Offensive Behaviour at Football and Threatening Communications (Repeal) (Scotland) Bill and consider a draft report on stage 1 of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. As we did not complete the stage 2 amendments on the Domestic Abuse (Scotland) Bill, we will complete those on 5 December, too.

Meeting closed at 12:42.