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Bankruptcy and Diligence etc (Scotland) Bill: Stage 1
Welcome to the 10th meeting in 2006 of the Subordinate Legislation Committee. I have received apologies from Gordon Jackson and Adam Ingram. I remind members to switch off their mobile phones and insert their cards into their consoles.
I was going to say exactly what you said, convener. I welcome the fact that the Executive has decided to rethink the matter in the light of discussions that have taken place in this committee and elsewhere. It is important, however, that we pay attention to the bill at stage 2, because I expect a number of changes to be made then. Given the amount of secondary legislation in the bill, it is important that we keep a close eye on it.
I am sure that the clerk will do so.
Section 17 is on the debtor's home and family. We considered that the negative procedure did not provide the correct level of scrutiny. The Executive has conceded that the debtor's home is of particular importance. It confirms that it will reconsider whether the negative procedure is appropriate in all circumstances and might lodge an amendment at stage 2. The points are similar to those raised on section 5.
The points are similar, but I sound a slight note of caution. The Executive says only that it will reconsider and that it might lodge an amendment at stage 2. I do not think that it has conceded the point fully. It is incumbent on us to pay attention to what the Executive decides to do at stage 2.
Ken, did you want to add to that?
No.
On section 18, "Modification of provisions relating to protected trust deeds", we expressed concern about the shift from primary to secondary legislation and the use of the negative procedure. The committee will wish to note that the draft regulations are out for consultation. It would appear that much of the content is likely to be technical and procedural, for which the negative procedure would seem appropriate. We have to consider whether we want to press our suggestion that the first set of regulations be subject to the affirmative procedure, with subsequent regulations subject to the negative procedure. It depends how strongly members feel about that.
We should continue down that road. Although the Executive says that the regulations will be largely technical, they will not be exclusively technical. At the very least the first set should be subject to the affirmative procedure.
Is that agreed?
Yes. I do not feel particularly strongly about it, but it is worth making the point again.
Similar points arise on the technical and procedural provisions in section 19, "Modifications of composition procedure". Are we content with the Executive's response that the negative procedure is appropriate?
We were concerned that the provision in section 22, "Modification of offences under section 67 of the 1985 Act", allows ministers, by order subject to the negative procedure, to amend the limits on borrowing by a debtor and that there is no restriction on the use of that power. The Executive does not consider the approach in the bill to be different from that in other legislation and gives the example of a power in the Debt Arrangement and Attachment (Scotland) Act 2002. Are we happy with the Executive's response and do we agree that the negative procedure is appropriate?
The legal brief accurately points out that the Executive is following precedent, but that does not make it right.
The legal brief also points out that although the approach is used in the 2002 act, the power in that act is much more limited than the power in the bill. The 2002 act is not a particularly good example. We should definitely draw the matter to the attention of the lead committee. I do not know whether we want to take further action. I am not entirely convinced by the Executive's argument that changes in circumstances would include social factors as well as variation in the value of money. I was not quite sure where it was going with that.
Why do we not report to the lead committee that we still have concerns, because the power in the 2002 act is more limited in its extent? The other issue, which Stewart Maxwell raised, is that the power is not limited to borrowing.
The Executive has said that there are other reasons why it would want to bring the power into play. I am not entirely convinced. Perhaps our having more information would have made the position clearer. The lead committee could consider the matter further.
We do not have time to ask the Executive for more information, so we will pass on the matter to the lead committee.
The Executive says that it expects debt advice to be given before sequestration. However, it is considering the issue and once the bill has been passed it may need to evaluate whether a time period should be introduced. The power is there for that reason.
Is that okay?
Members will recall that we had quite a few questions on section 43, "Scottish civil enforcement commission". The committee considered that the powers conferred in section 43 are very wide and questioned the use of the negative procedure and the absence of a statutory duty to consult. The Executive has undertaken to review the procedures for regulations under the section. Is the committee content with the Executive's response? Do we agree to recommend that the affirmative procedure is appropriate and to monitor any changes at stage 2?
I am pleased that the Executive has recognised the importance of that matter.
The other issue is consultation. The Executive provided reassurance that it would consult, but the question is whether we want that to be a statutory duty.
I thought that that was perhaps going too far and that it was not necessary to make it a statutory duty. The Executive has made it clear that it intends to consult—we will take its word on that.
So that reassurance is okay.
The information is of particular interest to the lead committee. The Executive's explanation on many of the next few sections is predicated on the fact that the new commission will be an independent body. That is why some of the detail is missing from the bill. That makes sense, but we should really be drawing the attention of the lead committee to what is quite an important policy issue.
Apart from passing our comments on to the lead committee, we shall leave those sections.
It is excellent that the Executive has agreed to lodge an amendment on that.
Yes. The amendment at stage 2 will introduce a requirement that the code be laid before the Parliament. However, the Executive does not agree that a requirement to consult should be contained in the bill, so the situation is similar to before. Are we happy with the reassurance that the Executive will consult?
Generally speaking, yes. It is only a mild concern, and I know that there is a balance to be struck, but I would like the Executive to have been a bit stronger on the expectation that the independent commission will consult. We should perhaps say that there is a straightforward expectation that it will do so. I am slightly concerned about whether there might be enough room for the commission to say, "It was agreed that the requirement to consult would not be in the bill and there is no demand from the Parliament or the Executive for consultation, therefore we do not have to consult." I would like to have heard an unequivocal message from the Executive on that—there is still room for such a message. We should pass it on to the lead committee that we would expect there to be consultation.
Is it agreed that we should pass it on to the lead committee that we would expect the commission to consult?
On section 52, "Appointment of messenger of court", the Executive was asked to comment on the fact that the rules made under section 52(4) will not be incorporated in a statutory instrument. Are members content with the Executive's response?
Yes. Basically, the Executive is saying that that has never happened before.
On section 53, "Annual fee", the committee asked the Executive to explain the reasoning behind the requirement that ministers should approve the exercise of the commission's power to make rules under section 53(1) requiring every messenger of court holding a commission to pay an annual fee. Are members content with the Executive's response? Are they content that the rules in that section are to be made by the commission rather than the Executive, and not by way of statutory instrument subject to procedure?
On section 55, "Regulation of messengers of court", the Executive was asked to comment on the power to make regulations relating to functions of messengers of court, subject to a negative resolution. The Executive considers that the choice of the negative resolution procedure is appropriate. Any ideas to the contrary? Are we satisfied with the consultation requirement?
Members will see the comment about the regulatory impact assessment in the Executive response. The response says:
The committee asked the Executive how it intends to deal with the timing difficulties that arise on the commencement of section 56, "Messengers of court's professional association". Are we content with the Executive's response and that the provision should be subject to the negative procedure?
On section 62, "Disciplinary committee's powers", the committee was concerned that the Executive has proposed to take a power to amend the level of a fine by statutory instrument, subject only to the negative procedure. The Executive has responded that it will reconsider the power and decide whether to lodge an amendment. We will keep an eye on that.
As has been discussed, in relation to previous, similar provisions.
The committee asked the Executive about the use of the power in section 70, "Land attachment", and why the affirmative procedure was not considered appropriate. Are members happy with the response? Paragraph 45 of the Executive's response says that it
My problem with that section is not that I necessarily disagree with the Executive—or agree with it for that matter—but that I do not know what sudden, emergency change in conveyancing practice would cause the Executive to have to use the negative rather than the affirmative procedure. I do not know enough about conveyancing practice to say whether that would be the case, but it seems a weak reason for using the negative procedure. I am not convinced by it.
We cannot do any more about it at the moment, but we could raise it with the lead committee that, apart from the Executive's argument that it may need to act quickly, we have no further information. It is difficult for us to know whether the situation referred to by the Executive would be the case. The lead committee might want to take that further by finding out a bit more about how the situation would work in practice.
Yes. I would hope that the lead committee would take note of what we are saying and would find out more background from the Executive. It could question the minister on the point and ask him for a practical example of what emergency conveyancing practice change is likely to occur that would result in the need for such speedy changes elsewhere.
We should possibly keep an eye on the matter for stage 2. I hope that we will get a bit more information and find out whether we need to consider the use of the affirmative procedure.
Yes.
Is that okay?
The Executive now agrees that the power in section 79, "Effect of debtor's death after land attachment created", is somewhat wider than may commonly be seen, but it hopes that the committee can accept it. The rules under the section will be made as statutory instruments not subject to a procedure. The matter is essentially considered to be appropriate for court rules, as the committee will remember.
A similar point is raised a couple of sections later. In effect, we are asking the courts to consider these complicated matters. The question is whether we are happy to leave them in the hands of the courts rather than have them brought before the Parliament. Bearing in mind the fact that the question is one of technical court procedures, I am happy with the explanation that we have been given.
I agree. I am content that that is a sensible way to proceed.
Okay. We will leave that matter there.
We should draw the lead committee's attention to it.
To the Executive's explanation, yes.
It is debatable whether the affirmative procedure should be used, rather than the negative. We should draw the matter to the lead committee's attention, and it can make a decision about how much importance we should place on the power.
Yes, I think we should do that. We will report the Executive's explanation to the lead committee and see whether it wishes to follow up any issues.
To be honest, I cannot remember what our original comments were.
It was very technical.
Assuming that the Executive is right and that it is indeed just a matter of
All the explanations that we have got back from the Executive about the various powers raise policy matters. We will be leaving it to the lead committee to take up some of those points now.
Like Ken Macintosh, I cannot remember the exact point that we made, but the Executive's explanation seems reasonable on the face of it. The only potential question that I had was about regulations making alterations
The response definitely says:
Yes. Perhaps that is more the focus of our concern, rather than the point about the
Let us raise that concern with the lead committee. We can suggest that it might pursue that aspect—the value of land—in particular and ensure that it is happy with it, because you are correct: it is also included.
Yes.
We should say that, if it is just a matter of the movement in money that is to be considered, without any policy change—in other words, the power cannot be used to change the actual limit substantively—that is fine. We would be concerned if it were otherwise. The Executive is saying that the power will be used only to reflect inflationary pressures, fluctuations in land values and whatever else. That is appropriate. However, I get the impression that the power could be used to alter fundamentally the value that is ascribed. That is why we might be worried about it. I cannot remember the details of our initial discussion, but if that is indeed the case, we should perhaps seek a little more reassurance from the Executive that there are limits on the use of the power.
We cannot get anything further from the Executive at this stage, so we must pass the matter on to the lead committee so that it can double-check that point.
We do not usually have a problem with matters concerning the value of money. However, questions around the value of land might turn out to be slightly different. It might be the same thing, but it is odd that the two aspects have been separated out in that way. It is important for the lead committee to take that up.
The response says:
That is the question. Perhaps a fuller explanation from the Executive in the first place would have dealt with the matter.
Yes.
We need to pass that point on and draw the lead committee's attention to it.
We can advise the lead committee that it would be useful to get further explanation on the matter.
Yes.
Are you happy with that, Ken?
Yes. The point is that the provision concerns the
Yes. It is also a question of what "relatively minor" means. We should say that we have doubts about various parts of that answer from the Executive.
The Executive is arguing that it wishes to
The Executive states in its response:
This is a bit like our earlier discussion on conveyancing. I do not know enough about this area of law, but does an affirmative instrument delay procedure so much as to cause problems? I cannot see that; I do not see that as an argument. The Executive's argument is weak on that point. We also have to bear in mind what the legal brief says on the matter:
We should pass on to the lead committee our remaining concerns about the powers in section 116, as they involve the changing of definitions. We are not convinced by the quickness argument with regard to negative instruments. As the legal advisers have told us, an affirmative resolution does not take all that long.
It does not. I can understand the argument with regard to primary legislation, but we never argued that. I just do not understand where the Executive is going with this need for speed.
Do we agree to say to the lead committee that we think that the affirmative procedure should be used rather than the negative procedure?
May I just say, convener, I am sure that it will be clear to members that the reason why I am being quiet today is that I am on a learning curve?
A steep one.
Indeed. However, do not take my silence to mean that I am not paying attention. I am trying to pick this up as I go along.
We will question you later.
I expect to be given a short exam that I will fail with flying colours.
The committee asked the Executive to explain why subordinate legislation rather than primary legislation is appropriate with regard to section 117, "Residual attachment". The Executive has explained why it considers subordinate legislation to be appropriate and has undertaken to reconsider the appropriate form of procedure with a view to deciding whether to lodge an amendment in that regard at stage 2.
The power in section 130, "Effect of death of debtor", is similar to the powers that are conferred under section 79, in relation to which the same issue was raised. In essence, the issue is how many powers are being given to the Court of Session.
My feelings on this issue are similar to my feelings about section 79. We agreed that the suggested way of proceeding was relatively sensible.
Are members content with the situation with regard to section 130?
The issues that are raised with regard to section 133, "Interpretation" and section 134, "Certain decrees and documents of debt to authorise inhibition without need for letters of inhibition" are the same as those that were raised about section 116. Shall we say, therefore, that we have concerns about the issue?
We suggested that it might be worth using an affirmative procedure in section 116 rather than a negative procedure. If the argument is that the reason for the Executive's decision is, as Stewart Maxwell said, the need for speed, we should say that our argument is not about that. We are concerned with the appropriate procedure.
Do we agree to give the same response on this issue as we gave in relation to section 116?
The committee asked why powers are conferred on ministers in section 135, "Registration of inhibition", rather than on the Court of Session. The Executive says in response:
I do not have a big problem with this section. My only problem is that I thought that complexity was the reason for the Executive arguing that the matter should go to the Court of Session. It seems as if the same argument is being used, but that the opposite outcome has been reached as a result.
I think that the argument that was used in relation to section 79 and section 130 is that those rules apply only in court. In this case, however, we are talking about a public register. It will not only be lawyers who will read these things; it will be us poor mugs.
To be fair, we want the documents to be as clear, user-friendly and simple as possible.
I would want the other stuff to be as clear and user-friendly as possible, too.
Obviously, lawyers do not need that protection.
I accept the argument that we are talking about a public document and not rules of court. However, I thought that it was curious that the same argument, which related to the complexity of the issues, led to a different outcome. As I said, however, I do not have any real problem with the issue.
Are we agreed on the power in section 135?
I welcome Murray Tosh to the meeting.
Section 156 is similar to section 151 and section 135. Do we agree to proceed in the same way on section 15D(2)(d) of the Debtors (Scotland) Act 1987, "Application for diligence on the dependence"?
Also in section 156, section 15H of the 1987 act relates to the sum that is attached by arrestment on the dependence. The committee asked the Executive to comment on the choice of procedure in relation to the power that is set out at subsection (2)(b), as it considered affirmative procedure to be more appropriate for this power, which amends a figure in primary legislation.
We move to section 160, "Interim attachment" and proposed new section 9C(2)(d) of the Debt Arrangement and Attachment (Scotland) Act 2002, "Application for a warrant for interim attachment". The committee questioned the form of the instrument. In response, the Executive refers to its general comments on the topic at paragraphs 6 to 9. We covered this issue under the general point on regulations versus orders.
Members will remember that the Executive explained in detail why it was using regulations in some parts and orders in others. A rationale had been arrived at, which seemed acceptable.
I bow to your greater knowledge, convener.
I am going only on what the reasoning seemed to be and the fact that our legal advisers seemed to think that the position was reasonable.
Given that we said that the affirmative procedure would be appropriate in such a circumstance, we should say so again at this point. However, we should also say that we accept the other part of the argument, which is to do with tailored procedure.
We discussed the issue in relation to section 116 and I do not think that I would change my opinion in the light of what the Executive has said. The Executive has mentioned that the use of the open procedure should be confined to constitutional acts; that has been mentioned before and clearly we do not agree. We did not agree with that point the last time that it arose either. The open procedure might have been used in constitutional acts, but that does not mean that it must be confined to such use.
Okay. We will continue to recommend the use of the affirmative procedure in this case.
I can understand the Executive's argument. If we look at it one way, the change is relatively simple. However, it could have a fairly substantial impact on the individuals who will be affected by it. On balance, we should stick with the original recommendation. That would give parliamentarians more of an opportunity to question the minister on the reasoning behind the change that the Executive is suggesting, especially given the impact that it might have on individual constituents.
Is that agreed?
It might be better to be cautious.
Absolutely. We should draw the argument to the attention of the lead committee.
Okay. We will recommend the use of the affirmative procedure.
The Executive says that there are precedents.
Yes. Section 39 of the Debt Arrangement and Attachment (Scotland) Act 2002 provides ministers with an identical power over expenses of attachment.
No.
We will accept the Executive's explanation.
I do not think that it is a matter of consistency. There are differences. Rather than saying that we will always choose the one way, there seems to be more of a case this time for the Executive's argument. The argument and points raised do not seem to me to be unreasonable.
The legal advice certainly says:
Under the power in section 198, "Information disclosure", the first set of regulations is subject to the affirmative procedure, while subsequent regulations are subject only to the negative procedure. Due to the sensitivity of the powers, the committee thought that all regulations should be subject to the affirmative procedure.
I am trying to think back. We agreed that the first set of regulations will be important and that the regulations should be agreed using the affirmative procedure. However, we did not necessarily accept that all future changes would be minor. The second set of regulations, which could be completely new, could be equally as important as the first one; as a result, the affirmative procedure should always be used. That is what I remember of the discussion, and I do not think that the Executive has said anything that changes my opinion.
That is exactly what we said—you are correct—and our legal advice is exactly the same. The subsequent regulations might be minor, but that might not always be the case. Perhaps we should err on the side of caution.
The legal brief suggests that some kind of open procedure might be suitable. Some of the earlier debate was about changes to the regulations and how a lot of them might be very minor—we are not trying to bind the Executive's hands on that point—but we were concerned that major changes could be made and that using the negative procedure every time would not be appropriate. Perhaps this should be a case of horses for courses and the Executive should choose the correct procedure for the changes.
We will go with that and suggest that an open procedure might be appropriate. We are not convinced that all subsequent regulations will be minor. Is that agreed?
In section 202, "Ancillary provision", the committee was concerned that the Executive appeared to be seeking to extend the effect of such provision. The Executive has confirmed that the power is not as open-ended as the delegated powers memorandum seemed to suggest. Are we happy with the reassurances that the Executive has given us?
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Executive Responses