Economy, Energy and Tourism Committee

Meeting date: Wednesday, February 22, 2012

Official Report 446KB pdf

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Land Registration etc (Scotland) Bill: Stage 1

Good morning, ladies and gentlemen. I welcome members, witnesses and our visitors in the public gallery to the sixth meeting in 2012 of the Economy, Energy and Tourism Committee. I remind everyone to turn off mobile phones and other electronic devices. We have received apologies from Rhoda Grant, who is not able to join us.

Agenda item 1 is continuation of our consideration of the Land Registration etc (Scotland) Bill. I am pleased to welcome Lesley Thomson QC, the Solicitor General for Scotland, who is joined by Danny Kelly, principal depute in the Crown Office policy division, and Ernie Shippin, deputy head of serious and organised crime division in the Crown Office. Thank you for coming. The principal purpose of having you here is to consider section 108, which has caused interest from a number of witnesses. Before we move to questions from members, I ask the Solicitor General whether she wants to say anything by way of introduction.

Good morning. I have nothing to say by way of introduction, but I am perfectly happy to assist by answering any questions.

As the convener said, the main purpose of this evidence session is to examine section 108. We have taken evidence from a number of organisations through written submissions and through oral presentations to the committee. One issue that is raising most concern is whether section 108 should be included. The Law Society of Scotland and other bodies have said that they do not think that it is appropriate or necessary to include the measure in the bill. I ask the Solicitor General to say why she thinks that it is appropriate to put it in the bill and whether other legislation addresses the issues that section 108 seems to address.

I am happy to do that. I support the inclusion of the offence in the bill, and I will briefly indicate the background to my support. I will not go into detail on the purpose of the bill, as the committee will have heard about that from many people, but my understanding of the basic premise is that we are looking for a modern, secure and accurate land register that provides a system of registration of property rights that gives certainty in relation to credit that is secured over property. That means certainty to every one of us as individuals and to businesses and the financial sector. That will inspire public confidence and be good news for the economy and for business all round. That is the background.

The other side of the equation, which is where I am coming from in my support for section 108, is that a modern and trustworthy system of land registration is attractive not only to ordinary individuals but, unfortunately, to the undesirable element of serious and organised criminality. It is well known that organised criminal groups seek to legitimise their proceeds of crime through money laundering; to legitimise their property by following all the steps that are required; and to legitimise their activities in any way that gives them the air of respectability that is accorded to those who operate in a genuine and businesslike fashion. It is important to emphasise that background of serious and organised crime because, in that environment, it is appropriate to be innovative and to take every opportunity possible to protect the legitimate system from those illegitimate activities.

I probably should not say that I have been in serious and organised crime for years, but I think that members will understand what I mean. Unfortunately, in my experience, those who make that type of illegal activity their business are innovative and focused and they know the law inside out. The challenge for law enforcement and prosecution is to be innovative. I see the offence in section 108 as another opportunity to add to the existing legislation and offences as part of the effort to disrupt and detect organised criminality.

You say that section 108 will “add to” existing legislation. Does the section add anything fundamental to the existing legislation on money laundering and proceeds of crime, or is including it a belt-and-braces approach?

It is more than a belt-and-braces approach, although there will be overlaps between the legislation on fraud, money laundering and proceeds of crime and the additional offence. The offence has an additional element, although it is not unusual to have different offences to cover the same criminal behaviour. For example, for acts of vandalism, there is the common-law offence of malicious mischief and the statutory charge of vandalism. It is not uncommon to have that choice. That gives the public a focus that there is a particular type of offending. In relation to applications to the land register, that is part of the purpose of section 108. There is a focus, which is the proposed new statutory criminal offence in relation to applications for registration. However, the offence goes further than that, because it includes the element of recklessness, although I am aware that concern has been raised about that in evidence from the Law Society.

I accept that section 108 is more than a belt-and-braces approach, but what evidence is there to indicate that it must be included in the bill? The committee has tried to examine the issue by asking the Law Society and others to find out whether there have been any cases of reckless behaviour—as defined in the bill—by solicitors in dealing with property transactions. Can you point the committee to any such evidence to show why you and others feel that section 108 has to be in the bill? Can we have practical examples of how the current legislation and workings of solicitors and others in the field have led you to believe that section 108 must be included to capture those individuals who are involved in criminal activity? Are we simply trying to put people off ever attempting to carry out bad practice when doing property transactions?

Section 108 is trying to do both, and there is absolutely nothing wrong with our seeking to deter or put people off, although I understand that that is not your main point.

Is there an evidence base of much of this type of offending going uncaptured? No, I am not saying that there is a big evidence base for that, but a minority of instances have come to the attention of law enforcement agencies and the keeper that indicate that there is a certain type of activity in the category of recklessness, or the turning of a blind eye, or wilful blindness, that could be prosecuted under the proposed new offence, but cannot be prosecuted at the moment.

Section 108 targets mortgage fraud, which is a crime of intent. Someone has to intend to do something. There could be quite a lot of scope to such a crime. A lot of people could be involved and it might be difficult to show where everyone is placed in relation to proof of the crime. The proposed new offence will provide that those who might be involved at the stage of application for registration in the land register will be under an additional duty not to act recklessly. In other words, they will be under a duty not to act with an utter disregard for the consequences or with wilful blindness.

I was interested to hear you refer to mortgage fraud. Current United Kingdom legislation is, I assume, sufficient to deal with mortgage fraud and many of the mortgage companies are also monitoring what happens. You did not talk about money laundering, although you mentioned it earlier. How will section 108 assist with legislation on money laundering? Do you have any examples of what you see as money laundering? In the committee’s pre-meeting briefing, one of my colleagues referred to someone coming along with a suitcase of money to buy a house and making a purchase based on the fact that they have the cash. How would that be viewed by a solicitor? How does a solicitor deal with a client who comes along and says, “I want to purchase a property. I’ve got £150,000 in this briefcase”? How would those circumstances be dealt with under the proposed new section? Could it mean that a solicitor, acting in good faith by accepting that the client has enough cash to purchase a property and going ahead with the purchase, could be accused of acting recklessly?

10:15

No solicitor who acts in good faith will be accused of acting recklessly. No solicitor who makes a genuine error or mistake can be accused of acting recklessly. The term “reckless” is well understood in the criminal law of Scotland. It is understood at common law and it is statutory. It involves an objective test and it will not cover people who act genuinely and who honestly follow the guidance and so on.

The money laundering legislation—the Proceeds of Crime Act 2002, supplemented by the Money Laundering Regulations 2003, which were reconsidered and revamped in 2007—is designed to ensure security for the movement of money through the financial sector and for all those who are involved in that. It places duties on a wide variety of people, including solicitors, to carry out their activities in a way that does not facilitate any aspect of money laundering.

The regulations give clear indications of the areas that are targeted, which relate in the main to identification of the client. People should know who their client is, know who they are dealing with and know what their business is. There is a lot of excellent guidance for solicitors from the Law Society of Scotland on ensuring that they comply with the legislation, which indicates what identification procedures solicitors need to follow to meet customer due diligence, if they are in contact with the client, or enhanced due diligence, if they are not in contact with the client.

Section 108 is additional to that—it is a further step in relation to the point at which contact occurs with the land register, when property rights will be legitimised and a state guarantee of property rights will be given. If the offence remains in the bill, it will indicate that all people, including solicitors, require to take into account an additional element, which is not merely intending not to make a misleading or false statement, but not being reckless.

If the offence came into play, I expect that the normal, honest and genuine solicitor would re-examine the practices and guidance that are in place in their firm under the regulations in the light of the new offence, which imposes an additional duty not to be reckless or wilfully blind at a particular point in a transaction, and would ensure that their practices did not allow wilful blindness. I have seen some of the larger firms’ guidance on money laundering, which contains phrases such as “not turning a blind eye”. Some solicitor firms already operate under such guidance.

I have a general concern. At our previous meeting, I told a story about going to my bank, with which I have three accounts, to open another account last June. The bank told me that, because of the money laundering legislation, I needed to go in with my passport, my driving licence and a utility bill. I said, “Look—I opened an account with you only a month ago, when I went through that whole rigmarole. I don’t have that with me. I live in a rural area and it takes me half a day to come in to see you. Are you sure that’s necessary?” The person who was dealing with the matter was my cousin. Not only have I dealt with the bank in that rural area for many years, but I know almost every member of staff there.

Such requirements are an impediment. In the spirit of helpfulness, my cousin said, “Don’t worry, Mike—just e-mail me scans of your passport, driving licence and so on.” I said, “Look—I appreciate that you’re trying to help me, but I’d really rather not do that, because I’m much more worried about the problem of identity theft. E-mails can easily go astray, and I might inadvertently hand somebody an identity theft kit.”

I am led to believe that, despite the legislation that has been put in place, money laundering is increasing, not decreasing, although the burden on ordinary people doing ordinary business has increased significantly.

I am struggling to understand what extra precautions my solicitor would have to take if I were to buy a house in future, to ensure that he is not accused, under section 108, of inadvertently or otherwise assisting me in what may be illegal activity.

You are not planning this illegal activity, are you? [Laughter.]

No. It is a hypothetical question.

I doubt he would be telling you if he was.

You make a very good point, because often the people who we are trying to catch are two or three steps ahead of the rest of us and it is the honest person who is penalised. That is what gives me concern. The Law Society has made representations to us expressing their concern about the position of solicitors and I am equally concerned about the ordinary member of the public, the honest person who is going about the legitimate business of buying a house.

There seems to be no merit in making one part of the process much simpler, which is what the bill is about, if at the same time other aspects of the process are made more difficult. I recently talked to a colleague—an MSP—who was in the process of buying a house. He was having difficulty arranging the mortgage. It was not that he was not able to repay it or any of those things; it was the paperwork and the detail attached to the process that caused the difficulty.

My concern is that section 108 might make the process more difficult. Can you tell me specifically what steps an honest solicitor with an honest client would have to take to safeguard themselves from being accused, somewhere down the line, of having acted improperly?

In the situation that you are talking about, in which you are a client well known to your solicitor and your single transaction moves in the normal fashion—you are buying another house and it is for the right price and so on—your solicitor will already have sufficient information about you from dealing with you in the past and you are not doing anything unusual in the circumstance of buying another house.

However, let us take a scenario in which you are undertaking a transaction with your solicitor who knows you very well but, instead of buying one house, you are buying half a dozen houses, the price is more than would be expected and the mortgage is coming from a variety of companies, some of which he does not know. In that scenario he would not be entitled, without any further inquiry into the situation, to think, “Ach, I’ve known him for years and he’s a good guy—I’ll let him get on with this.” It is about a solicitor paying attention to the unusual and not turning a blind eye to it, either by applying knowledge to a different situation or for business reasons in current financial circumstances. It is about focusing on that particular aspect.

You make a number of assumptions—

I did not mean to be rude—

Your comments were not taken in that way at all. It is sometimes useful to speak in this manner, because it sheds light on issues that are more difficult to grasp when the discussion is a bit more abstract.

I suggest that we consider two scenarios. Let us say that I fall out with my solicitor, for whatever reason. I feel that he is no longer acting for me as assiduously as he once did, so I decide to change solicitor. I am therefore not well known to the next solicitor who I phone up and ask to represent me. Beyond my giving him my passport and doing the usual things, what extra steps would he have to take?

In the second scenario, I come into some good fortune and decide that I want to invest in property, because I think that that will be a good long-term investment, and buy half a dozen or so houses—perhaps at a property auction or whatever. What extra steps would the solicitor have to take to assure himself that I was honest and legitimate?

A solicitor in that environment would need to take whatever steps he thought were appropriate to make those inquiries in order to satisfy himself. You are talking about the steps that a reasonable and competent solicitor would take. In deciding what steps to take, a solicitor can get all sorts of advice from the Law Society of Scotland.

If the offence is to be included in the bill, I would anticipate that the Law Society—despite its opposition at this stage to the inclusion of such an offence—would review the circumstances and consider what additional advice it should give to its membership on what must be done.

I will make one further point, which I did not address earlier when you were describing your unfortunate experience of being asked questions in the bank. I sympathise, as I have been there—in fact, I was in that exact situation in 2003 or 2004 when I was going around the country lecturing on money-laundering legislation. I had to bite my tongue when I was asked to provide information. To a certain extent, that inconvenience should provide reassurance that those who are involved in serious and organised criminality or in terrorist financing do not have an easy time in getting in to our financial sector or—if the offence is included in the bill—on to our property register.

I have one final, brief question on the difficulty that I have with the offence. I ask you to imagine—I know that it is a big imaginative leap—that I am a hardened and practised liar. My solicitor makes what he believes to be reasonable inquiries, and I just tell him lies, because I am involved in criminal activity. What steps must he take—beyond what he currently has to do—to reasonably assure himself that I am not a criminal?

He must take the steps that are currently in the guidance. If the offence comes in and there are additional steps, he must take those steps. If you are asking whether solicitors can protect themselves against every wicked lie that is out there, I would say that they cannot. I would not expect anyone to be able to protect themselves against those who are as deceptive and devious as you are saying that you would be in that situation.

However, there is an area in between, and it is suggested that solicitors must go that wee bit further in what they are doing and that a duty not to act recklessly should be imposed. It is important to take every opportunity to ensure that criminality does not seep any further into legitimate areas, and property is a very important legitimate area in that regard.

Okay—thank you.

I know that Chic Brodie is desperate to get in—Stuart McMillan has a follow-up question on that point, but Mr Brodie has been very patient. John Park also has a question on the same point, but I will let in Mr Brodie as he caught my eye first.

Thank you, convener, and good morning, Solicitor General, Mr Kelly and Mr Shippen.

A large element of the offence seems to involve the issue of recklessness and whether solicitors are acting in good faith. Can you comment on the minister’s views on the number of people who were engaged in money laundering and mortgage fraud, including solicitors? Have you any indication of whether there is a growth in illegal activities among some solicitors?

The second part of my question also relates to recklessness. I can understand that someone may be—as the thesaurus says—careless, irresponsible, precipitate, rash or negligent perhaps once or maybe twice. Is there any possibility of monitoring whether someone is being negligent more often than you would expect?

It would be simple for somebody—if they were plausible—to say that they had been careless or foolhardy but had acted in good faith. What is the check and balance? How do you know whether a solicitor has been careless or has acted in good faith? What criteria persuade you that a solicitor has acted in good faith?

10:30

Section 108 does not deal with people who do not act in good faith; it deals with people who have been intentionally false or misleading or who have been reckless.

Forgive me, but some of the debate has concentrated not on the intention behind the activity but on the recklessness of it. Somebody could be reckless but be acting in good faith. Where does recklessness cross the boundary into intentionality?

Sorry—I understand where you are coming from. There is disagreement between where I think recklessness sits in the criminal law of Scotland and what has been said by the Law Society. I want to set out my position in relation to recklessness, so please bear with me—I might take a wee while to do that. We need to distinguish between people who act genuinely, people who act carelessly and people who act recklessly.

Recklessness is a well-recognised concept in Scottish criminal law. It is recognised both at common law, in relation to culpable and reckless conduct, and in a wide variety of statutes. When I read some of the evidence that has been given to the committee, I was concerned that there is perhaps not sufficient information about how often the concept of recklessness is used in the common law of Scotland, so I found a number of examples of recklessness across the piece to give the committee an idea. The most common of those, which probably everybody would recognise, is vandalism, whereby somebody wilfully or recklessly destroys or damages the property of another. In 2009-10, about 3,600 people behaved in that fashion, so it is a well-understood concept.

The concept of recklessness is used in section 30 of the Wildlife and Natural Environment (Scotland) Act 2011 in relation to information that is given about deer culling. It is also used in section 3 of the Computer Misuse Act 1990 in relation to any unauthorised act that can be carried out recklessly. It is used throughout the Sexual Offences (Scotland) Act 2009 in relation to a number of offences. Under section 2, for example, a sexual assault by penetration can be committed recklessly. The fact that the concept of recklessness is used in circumstances ranging from the provision of information on deer culling right through to sexual assault by penetration shows the wide scope, understanding and familiarity with the term “reckless” that already exist in Scots law.

Importantly, in relation to the type of offence that we are discussing, section 26 of the Charities and Trustee Investment (Scotland) Act 2005 is on “False or misleading information etc.” Section 26(1) states:

“It is an offence for a person to provide any information or explanation to OSCR ... If ... the person providing the information or explanation knows it to be, or is reckless as to whether it is, false or misleading in a material respect”.

That is pretty similar to the type of situation that we have with the land register and is a useful example for comparison, because many trustees in such a situation will rely on lawyers and accountants to advise them what “reckless” means.

My difficulty, which is probably down to lack of understanding, is that in such cases someone might say “Well, I filled that in, but I was acting in good faith.” It could be argued then that there was no intention to commit a criminal offence. Is it not a grey area if someone says that they acted in good faith but you say that they did not, that they were reckless and that they must pay the penalty for being reckless—as per custom and use in Scots law? As Solicitor General, do you feel that the definition is clear? It might be clear in your mind and in the minds of some lawyers, but I question whether it necessarily covers the spectrum of legal activities by solicitors across Scotland. I do not know whether you understand my difficulty. Where is the clear distinction between being careless or reckless and acting in good faith?

There is a clear definition in Scots law—both common law and statutory law—in relation to being reckless. There is case law on that. There is an objective test for whether it would be sufficient for someone to say, “I was acting in good faith”. The test that would be applied is not whether someone stated that they acted in good faith but whether a reasonable, competent solicitor had behaved recklessly in the circumstances.

You have used terms such as “careless” and “good faith” in seeking to get to the core of the examples. I fully understand that, but what we are talking about here is reckless behaviour, which is wilful blindness to or an utter disregard for the consequences of an action.

Thank you.

Good morning. I want to return to Mike MacKenzie’s point. Having listened to the evidence this morning, I remain quite open-minded about the issue. However, I am still unclear about what exactly a lawyer or solicitor would have to do in the future that is different from what they do now to ensure that they operate within the law. For us, that is the fundamental issue. It is all very well for us to have this discussion in Parliament and to take the bill through in the way that we are doing, but what specifically would have to happen to ensure that people in the legal profession, and those who seek a legal service, protected themselves? I give you the opportunity to answer that, Solicitor General, because your exchange with Mike MacKenzie has left me unclear about the issue.

If you are asking me for examples today, that is not where we are. The exact same situation arose when the money laundering legislation came in. Any organisation that thinks that it will be subject to a new form of criminal control looks at what it currently does to see whether it needs to change anything. Following the money laundering legislation, people took a real look at activities in order to comply with the legislation and there was a lot of guidance and advice.

All that I am saying today is that what we have before us is an additional piece of regulation. Solicitors are already well regulated. The upside is that they are used to being regulated, so new regulation does not add anything in that regard. However, solicitors would have to ask not just whether their practices ensured that they complied with the money laundering legislation and the due diligence and enhanced due diligence that are included in that, but, now, whether those practices covered not acting recklessly. That is the difference.

I suspect that the Law Society of Scotland would say that its members are complying or likely to comply because of the steps that they already take and the hurdles that they already have to jump. It comes back to the issue of whether section 108 is going to make a difference. It will give you another lever for prosecution, but what does it mean on the ground? I think that that is the nub of the issue.

On the ground it means that those who are involved in a professional capacity in an application to the land register have to be sure that their practices are not reckless. Recklessness is a concept that is well understood in Scots law, and there is an objective test. Also, a defence is provided within section 108 itself.

Good morning, Solicitor General. I will pick up your comments to Mike MacKenzie, when you said that there is already advice from the Law Society of Scotland, and John Park’s question about what activities or actions a lawyer should undertake.

I go back to Mike MacKenzie’s house buying example, although I will change it slightly. Mike goes to his lawyer and says that he has come into some money and wants to invest it by buying a couple of properties. A few months later, he goes back to his lawyer and says that he wants to buy another couple of properties. He does the same thing a few months after that. He does it in a piecemeal fashion, and the lawyer thinks, “He’s obviously come into more money than I thought.”

At some point, the lawyer starts to hear rumours about Mike and his activities. As a result, the lawyer starts trying to establish the truth behind the rumours, and realises that Mike is laundering money through the purchase of properties. Mike comes back and says that he is going to buy another couple of properties. By this time, the lawyer knows that, although on the face of it what Mike is doing is legal, the money is ill-gotten gains. What should the lawyer do at that point to ensure that he or she is not accused of being reckless under section 108?

If the lawyer reaches a point in their dealings with a client when there are suspicions of money laundering, that is when they are under a duty to report. That has been the legal position for a number of years, and lawyers are well familiar with it. If a lawyer has reasonable suspicion that their client is facilitating the passage of illegitimate money through the system by means of money laundering, they have a duty to report that and a duty to stop it.

Recklessness in relation to such activity is not what section 108 is about. Section 108 specifically relates to the point at which an application is being made to the land register. In your scenario, the suspicions that form in the lawyer’s mind are based on behaviour that would already have been brought to a halt under the money laundering measures.

The additional duty and onus come in at the stage at which property is being registered and an application is being made to the keeper. The offence is not intended to be wider than that.

10:45

Given the wide range of views that we have heard on the issue, is there not a case for going back and consulting on it in more depth and, perhaps, including it in the next criminal justice bill that comes along?

In my view, no. I do not mean that to sound abrupt, but it is extremely important that every single opportunity is taken to prevent serious and organised criminality despite the inconvenience and additional measures that are then imposed on others. The bill represents an opportunity to deal with the matter at the point when the land register is being dealt with, and the keeper has indicated that the offence would be of assistance.

When it comes to serious and organised criminality, those who are best placed to know how widespread and insidious it can be are those on the law enforcement side. The provision is supported by the Crown and the Association of Chief Police Officers in Scotland—I think that the Scottish Crime and Drug Enforcement Agency feeds into ACPOS, which is the reason why it has indicated its support—as an additional tool. It is a small measure that will not be used in a huge number of cases, but it will be helpful in relation to both deterrence and detection.

The provision will flag up offences in relation to the land register, but it is specifically designed to ensure that solicitors do not act recklessly in the sense of opening a door for those who are involved in criminality to walk through. That is it in a nutshell.

When is it intended to commence the section?

I do not have information on that, I am afraid.

It seems to me that to leave it for the next criminal justice bill might not cause a delay in bringing the offence into operation.

I do not have information on commencement. The importance of having the offence in the bill is that it is within the legislation that covers the issue that it relates to, and the offence relates to the land register.

As I understand it, commencement is at the minister’s discretion, as the bill stands. What is your view on the proposal that the offence be made subject to the affirmative procedure in the Parliament, pending the issuing of guidance to lawyers and others on what practical steps they might take to avoid committing an offence? You have heard the concerns that members have expressed this morning. Do you agree that making the offence subject to the affirmative procedure would be a practical step?

I think that that is a matter for the minister.

We work closely with the Law Society—indeed, I am a member of it.

So am I.

The Law Society is extremely supportive of the fight against serious and organised crime and the putting in place of measures in relation to mortgage fraud and measures to catch the small number of solicitors who become involved in criminality. Should the offence be introduced, I would be happy to discuss with the Law Society what practical guidance and advice should be given. That would be done in any event, but it might give us an opportunity to get rid of some of the myths that surround the belief that genuine, honest solicitors might unwittingly find themselves caught up in this.

That is helpful. I think that the committee would encourage you to explore that further with the Law Society. Perhaps the minister could write to the committee before the provision is commenced, assuming that it is in the bill as passed, to set out what has been achieved in that respect.

I am perhaps beginning to regret some of our conversation so far. Given the interest that solicitors have in what we are discussing, if I attempt to buy a property in the future some of them might decline to act for me—or might even report me. There is a wee bit of humour there, but I am making a serious point. Given the difficulty of disproving the negative, if I were to find myself in such a situation, how would I be able to prove otherwise to a solicitor who had somehow formed the impression that I was not a trustworthy individual, perhaps after hearing a rumour or watching the committee proceedings? The same could apply to anyone else.

I am beginning to get the feeling that you think, perhaps with great merit, that there are some solicitors—albeit a tiny number—who aid and abet organised crime. Why are you not able to prosecute them under the current law? Is there a loophole that the section is intended to sew up? If not, why bother?

Yes, there are solicitors who aid and abet—assist and participate in—criminality; yes, it is a small number; and yes, we will prosecute when there is sufficient evidence. The section is directed at mortgage fraud, which is a crime of intent, and the additional factor here is the element of recklessness. Although the burden of proof would not change, the offence created in the bill would, in certain circumstances, be a better—easier—offence to use. It is a small additional element.

I am slightly uncomfortable with this. I accept that there is a wee bit of a conundrum, but if there is evidence that solicitors are operating illegally or improperly, why are you not prosecuting them under the current law? Are you unable to do so?

If there is sufficient evidence that someone is involved in criminal activity they will be prosecuted under the current law. I am not indicating that the section will solve general prosecutorial problems in relation to fraud. It introduces an additional offence, with an additional duty in relation to recklessness, which might make prosecutions possible in circumstances in which they are currently not.

Can you give me a hypothetical example of a case in which you are pretty sure, although you cannot be certain until the outcome of the prosecution, that illegal activity is taking place, but you are frustrated because the current law does not allow you to prosecute, whereas section 108 would?

An example would be a case in which we could not prove intent under the current law but could show recklessness. Recklessness is different from deliberate intent, in that it means behaving in a fashion that shows utter disregard for the consequences, or turning a blind eye. It is a slightly lesser test than intent.

Thank you.

I do not really have a question. I want to support the request that the Solicitor General get together with the Law Society.

In his evidence, the Minister for Energy, Enterprise and Tourism stated that the director of interventions at the Law Society had advised him that

“in her professional opinion the biggest issue in bringing fraudsters and their solicitors to account is that the Crown has difficulty prosecuting mortgage fraud.”—[Official Report, Economy, Energy and Tourism Committee, 8 February 2012; c 974.]

I do not want to return to intentionality or recklessness, but can we get some commonality of view on how we can more easily prosecute mortgage fraud under section 108?

I think that that was a rhetorical question, Solicitor General.

Yes.

When we had the minister before us, he said that he would be happy to look again at the exact wording and scope of section 108. Does the Crown Office have a view on how the wording might be improved, for example to restrict the offence to fraud or for the wording to apply only to genuine mistakes?

The offence is targeted not at genuine mistakes, but at deliberate, misleading or reckless behaviour. To ensure that the section targets what I have indicated this morning, I am more than happy to look at the wording.

That is fine. The concern about genuine mistakes was raised by the Law Society, which felt that the wording did not cover genuine mistakes. There is a discussion or argument about the extent to which a genuine mistake might be considered reckless under the definition. We welcome your assurance that you are happy to look again at the wording.

I make it clear that if the section would lead to someone who had behaved honestly or had made a genuine error being caught, the wording would need to be tightened, because that is not the intention. The minister and I would be happy to look at that.

Thank you, Solicitor General. You have been very helpful. I also thank your officials, who have got off lightly with regard to answering questions.

I suspend the committee for a couple of minutes.

10:55 Meeting suspended.

11:02 On resuming—