Arbitration (Scotland) Bill: Stage 1
The next item of business is a debate on motion S3M-4465, in the name of Jim Mather, on the Arbitration (Scotland) Bill.
I am delighted to open the debate on the principles of the long-awaited Arbitration (Scotland) Bill. I say "long-awaited" because the possibility of legislation on arbitration in Scotland has been under consideration for at least 20 years.
For the benefit of members who are unfamiliar with the concept, it may be helpful if I take a moment to explain how arbitration works. It is a private form of dispute resolution that takes place outside the public civil courts and in which one or more arbitrators give a binding ruling on a dispute that the parties to the dispute have agreed to refer to arbitration for decision. When parties choose arbitration, they give up their right to go to court and court proceedings that arise from the dispute are suspended. Arbitration therefore complements other forms of alternative dispute resolution such as mediation.
The position of arbitration as the dispute resolution mechanism of choice for Scottish commerce has been eroded in recent years, partly as a result of the unsatisfactory state of the law, which is outdated and lacks a modern framework. Consequently, I believe that there is a clear need for the bill. We need to restore arbitration as an efficient and effective method of dispute resolution, which is attractive to potential users. The bill provides a modernised, codified law for Scotland that is in line with generally accepted international standards and aims to capture the best of international practice.
The Chartered Institute of Arbitrators has described the bill as a "landmark piece of legislation" and the commercial judges of the Court of Session have said that the bill will
"provide the framework within which arbitration in Scotland could flourish."
I have been told that arbitrators in other countries are
"amazed at the elegance and economy of this Bill".
This is a highly technical bill that has been developed in close consultation with stakeholders. From the outset, the level of engagement has been second to none. Indeed, our parliamentary draftsman has said that he has never known such detailed drafting suggestions to be made on a bill. I would therefore like to thank everyone who has been involved. The process of stakeholder engagement will continue over the summer. On 18 August, I will host an event with people who are interested in the technical detail of the bill and, on 6 August, I will hold a separate event with commercial organisations that operate consumer arbitration schemes.
To put the bill into a general context, I say that it supports the Government's key priority of developing and enhancing sustainable economic growth to generate wealth and prosperity in Scotland. To that end, particularly in the current economic climate, when businesses are increasingly choosing to resolve their disputes out of court to save time and money, we need methods to be available that will facilitate the speedy and effective resolution of those disputes at a viable cost. It is clear to us that the flexibility and specific utility of arbitration make it just such a method.
The bill will put the majority of the general Scots law of arbitration into a single statute. It aims to take an approach to arbitration that is consistent with the approach that is taken in the rest of the United Kingdom under the Arbitration Act 1996, where that is appropriate. Of course, we believe that we have taken every opportunity to augment and update the 1996 act in line with modern arbitral practice. Under the bill, the same rules will apply, in principle, to domestic, cross-border and international arbitrations that are seated in Scotland—in other words, to those arbitrations that are governed by the Scots law of arbitration. That approach has been welcomed by the vast majority of stakeholders.
The Scottish arbitration rules that will govern the conduct of arbitration are set out in schedule 1. We deliberately put the procedural rules in one place. During the consultation process, many consultees commented favourably on the fact that the rules were set out separately from the main body of the bill. That approach means that the rules can be read as a relatively self-standing code that can be used as a guide by practitioners and users. It also makes it easier to compare the rules with those of arbitral institutions and those that are agreed between parties. The rules are designed to be as accessible as possible to anyone who finds themselves involved in arbitration or who is considering using it.
Before I address some of the issues that the Economy, Energy and Tourism Committee raised in its stage 1 report, I will touch briefly on the potential economic benefits of the bill. At this stage, it is impossible to make a meaningful estimate of any future benefit to the Scottish economy but, in a recent discussion of the bill's potential economic benefits that I facilitated with about 30 enthusiastic and informed people, many matters arose, from the economic benefits to small businesses of pursuing bad debts using arbitration to the spin-off benefits for hotels, restaurants and the retail trade. I fully accept that, as the committee said, we should not
"overstate the economic benefits of this Bill"
particularly
"in terms of attracting high net-worth individuals to Scotland for international arbitration cases."
However, without the bill, it is likely that arbitration would continue to be badly neglected in Scotland and to perform at a relatively low level.
I very much welcome the detailed scrutiny that the committee provided in its stage 1 report, its broad agreement to the need for the bill and its support for the bill's primary objectives. I welcome the committee's comments on the bill's proposal that the United Nations Commission on International Trade Law model law for international commercial arbitrations should be repealed in Scotland. The bill, which is based on model law principles, will provide a comprehensive framework for arbitration in Scotland. It will fill in crucial gaps, such as the lack of powers on the part of the arbitrator to award damages, expenses or interest.
Nevertheless, the model law provides a valuable international baseline standard for arbitration, and we need to fully address the Scottish Council for International Arbitration's concerns that the bill should not unduly interfere with international arbitration. However, during the consultation, the overwhelming body of opinion was that the model law should be repealed. Those bodies that were in agreement with that proposal included the Royal Institution of Chartered Surveyors, the commercial judges of the Court of Session, the Chartered Institute of Arbitrators, whose members conduct international arbitrations across the world, and the Faculty of Advocates.
I am happy to give the assurance that the committee sought whereby, even if the model law is repealed, it will still be possible for parties to adopt it for their arbitration if they so wish. That is effected by section 8(4), subject to the mandatory rules, as the committee noted in its report.
Meanwhile, we are considering further how the mandatory rules will interact with the model law. I can confirm that every substantial provision in the model law has an equivalent in the bill and there is no conflict between the model law and the bill. The differences are relatively minor and are in details such as time limits for court appeals, express rules on immunity and the ban in rule 61 on pre-dispute liability on expenses to protect the economically weaker party. What we want for Scotland is the best of the model law, with the crucial gaps filled, and clarity delivered that those arbitrating internationally need have no fear of arbitrating under Scots law.
The committee suggested that the Government should reconsider the default nature of rules 45 and 46, which allow the arbitrator to award damages and interest, and consider making them mandatory instead. The Law Society of Scotland and the Faculty of Advocates thought that economically stronger parties may seek to persuade weaker parties to delete those rules from any subsequent arbitration. It should be borne in mind that a default rule in the bill can be overridden only with the agreement of both parties and that it otherwise applies as a matter of law. However, we recognise that the parties, for their own reasons, may not wish to have rules on damages and—particularly in the case of members of the Muslim community—interest.
Nevertheless, I am happy to confirm that we will discuss that and a number of other technical points that are set out in the committee's report at the meeting with stakeholders that I mentioned earlier, which has been arranged for 18 August. The aim is to engage further at that meeting with representatives of the Law Society, the Faculty of Advocates, the Chartered Institute of Arbitrators, the Scottish Council for International Arbitration, the commercial judges of the Court of Session, members and clerks of the Economy, Energy and Tourism Committee and others to address outstanding technical comments on the bill. I therefore hope that members will see that progress continues to be made.
However, we also recognise that simply reforming the law on arbitration in Scotland will not in itself have the effect of increasing the use of arbitration domestically or attracting international arbitration business to Scotland. To a large extent, that will be up to arbitration practitioners and those who see benefits in using arbitration as a method of commercial dispute resolution. Meanwhile, the Government will play its part in seeking to advance the use of arbitration as it seeks to make it easier for parties, particularly commercial bodies, to access methods of dispute resolution that are time and cost efficient, particularly in these difficult economic times. I commend the bill to members.
I move,
That the Parliament agrees to the general principles of the Arbitration (Scotland) Bill.
I call on Iain Smith to speak on behalf of the Economy, Energy and Tourism Committee.
I am sure that members have been anticipating this debate with the same excitement with which the Economy, Energy and Tourism Committee anticipated receiving the bill. However, that enthusiasm did not prevent the committee from doing a thorough job of scrutinising the bill at stage 1, as I think can be clearly identified in our stage 1 report.
I put on the record my thanks to the other members of the committee. Perhaps, on this occasion, I should single out Gavin Brown, who made the slight mistake earlier on of admitting that he was previously a practitioner in arbitration. He therefore became the committee's expert witness, and much of the questioning of witnesses fell to him—we are grateful to him for that. I thank, too, our clerking team for the excellent job that they did in supporting the committee and drafting our report, particularly given the other pressures on the team from matters such as last week's business in the Parliament conference and our energy inquiry.
It would be fair to say that I was not entirely convinced that the bill fell within the remit of the Economy, Energy and Tourism Committee. If I got that wrong, it would be churlish of me not to admit it. However, I am afraid that, having gone through stage 1, I am still not convinced that the bill falls within the committee's remit. We recognised that there could be some economic advantage from the bill's provision of a modern arbitration process for domestic arbitration, which would clearly benefit business, and from the possibility that it could attract some international arbitration work. However, we felt that such matters were unquantifiable and were certainly not guaranteed to happen. I am therefore not convinced that there would be a clear economic advantage from the bill that would confirm that it should fall within the committee's remit. However, we recognised that there is a need for modernised arbitration legislation and that current law needs to be codified—I do not think that there is any doubt about that. Once enacted, the bill's provisions may encourage greater use of arbitration.
The committee tried to identify what economic advantages there might be. We were not helped by the fact that the policy memorandum and the financial memorandum contained an error—they said that the City of London attracts £3 billion-worth of arbitration business. However, later evidence from the bill team and the Chartered Institute of Arbitrators suggested that the figure should be nearer £250 million. That is a fairly substantial difference. The figure for the potential benefit to Scotland therefore fell from somewhere around £250 million to perhaps £25 million. Given the lower costs here, the figure might even be nearer £15 million. All the figures assume that we can attract 10 per cent of the business that is currently conducted in London. The committee cautions the Scottish Government not to overstate the economic benefits of the bill. I am glad that the minister acknowledged and accepted that point in his opening remarks.
The committee acknowledges the compelling arguments for the primary objective of the bill, which is to codify and consolidate arbitration law. We believe that that objective is probably the most important one in the bill—more important than the economic objectives. However, we felt that to achieve the primary objective, and to achieve any economic benefits, the law must be sound. The Faculty of Advocates warned against the potential for litigation that might result from, for example, poor drafting. The Faculty of Advocates said that an iron law of court practice is that poor drafting breeds litigation. We must therefore ensure that the bill, when it is passed, is as good as it can be.
Based on the evidence that we received, the committee identified a number of concerns over provisions in the bill. Those concerns will have to be addressed at stage 2. I welcome the minister's commitment to having a meeting on 18 August. I hope that many of the concerns will be addressed at that meeting, and that we will identify the amendments that need to be lodged for stage 2.
During our stage 1 inquiry, several issues were drawn to the attention of the committee. Schedule 1 covers Scottish arbitration rules, and the commercial judges of the Court of Session were concerned that some doubt would arise over whether the rules would form part of the law. I therefore welcome the minister's assurances that they will form part of the general law. Sections 6 and 8 will establish that the rules in the schedule are part of the general law of Scotland.
The issue of the UNCITRAL model law exercised the Law Society in particular. The Law Society has sent various communiqués to the committee on the issue. It seemed that not all of them said the same thing, which confirmed my belief that, if we put two lawyers in a room, we end up with three opinions and a very large bill. That is one of the reasons why people go to arbitration. I welcome the minister's commitment that he will try to ensure that the issues in relation to the UNCITRAL model law are clearly resolved before the bill reaches stage 3.
Important issues arose in relation to retrospective law and commencement. It appears that section 33 could, in effect, operate retrospectively, and doubt was expressed over whether it would or not. It is clear that the section would not apply to arbitrations that were entered into before the act came into force. However, concerns were expressed over the implications for contracts that include a provision for arbitration. If such contracts had been entered into before the act came into force, would clauses in the contracts be superseded by the act? Discussion with the legal profession will be required on that issue, so that we can have some clarification. At the meeting on 18 August, we will have to consider the consequences of provisions being applied retrospectively.
We had an interesting debate on whether rules 45 and 46, on damages and interest, which are currently described as default rules, should become mandatory rules. I think that the committee was persuaded, on balance, that the rules should be mandatory. However, we remain open to persuasion at stage 2. We are concerned that, in certain circumstance, the stronger party would be able to write out the rights to damages or interest. I found it slightly odd that, although in its evidence on rules 45 and 46 the Government argued that that was unlikely to happen as both parties had to agree on whether a default rule should be removed, the bill team told the committee that rule 50
"is intended to be a mandatory rule because, in a situation in which a small company pursued a debt against a larger company, rule 50 would allow the arbitrator to make a provisional award … If rule 50 were not mandatory, the larger company might seek to get the smaller company to agree that that rule would not apply."—[Official Report, Economy, Energy and Tourism Committee, 3 June 2009; c 2248.]
The suggestion is that, with provisional awards, a small company might be pressured into removing its rights, whereas that would not be the case with damages and interest. I am unconvinced by the Government's arguments on this issue and believe that we should look again at making those rules mandatory.
There was also some debate about sisting. The Faculty of Advocates pointed out that the right to arbitration might be invoked as a delaying tactic, and suggested that provision against such tactics be added to the list of circumstances in which a sist might be refused. We ask the Government to give careful consideration to that point, because we do not wish the sisting of legal proceedings to be used as a delaying tactic.
We had a lot of discussion about anonymity and confidentiality, particularly on court proceedings that might result from arbitration. The commercial judges of the Court of Session argued that although there are good reasons for invoking confidentiality in, for example, children's cases, in other cases such a move would appear to conflict with the principles of open justice to which the courts now strive to adhere. The Government should review that point.
The Law Society made a fair point that we should not routinely refer points of law to the courts and that any such referral should be made only if the arbiter has made a legal error. Essentially, arbiters should deal with the legal questions in the first instance.
There was a lot of debate on the meaning of section 22, which deals with arbitral appointments referees, and concern was expressed that the way in which the bill is worded might give the impression of a closed shop. I wonder whether the minister will take another look at clarifying the wording of that section because, having reread the policy memorandum for this afternoon's debate, I am even less convinced by it and feel that what the Faculty of Advocates, in particular, has highlighted might indeed be an unintended consequence of the bill. I also ask the minister to address the question whether the mandatory and default designations for rules 50 and 51 should be the other way round.
Although the committee is satisfied that the bill should proceed, it is concerned by the number of significant drafting faults in it that will have to be addressed at stage 2 and we welcome the minister's commitment to consult the Faculty of Advocates, the Chartered Institute of Arbitrators, the Law Society and others at the meeting on 18 August.
With the caveats that I have outlined, we support the bill's general principles. I should also make it clear that the committee is available to assist the Government in ensuring that this important legislation is passed. There is no rush and the minister should take all the time he needs to get the amendments and the bill's provisions right. After all, this is a once-in-a-lifetime opportunity to get arbitration law right; I certainly cannot see the Parliament coming back to it in the near future.
This morning, we heard about the range of benefits provided by our devolved Scottish Parliament. Not only does it make radical new laws on land ownership and public health, but it clears the backlog of more modest legislative reforms that everyone agrees are necessary but have simply fallen off the end of the queue for legislative time at Westminster.
The modernising of arbitration law is one of those necessary reforms that are not politically contested and do not make front-page news but which nevertheless offer real benefits. Instead of being designed by legislators with a specific purpose in mind, Scotland's arbitration system has evolved from centuries of judicial practice. Although this bill has attracted more dispute at stage 1 than some might have predicted, none of that controversy was about the objective of reform or the proposition that reform is required. Everyone agrees that it is important to clarify and consolidate arbitration law.
Nevertheless, there has been controversy. It is just as well that the Parliament's committees are able to thoroughly scrutinise even relatively routine measures to ensure that any problems can be identified and resolved, because, as we have already heard, a number of such issues have arisen with this bill.
One of the first issues that arose in the Economy, Energy and Tourism Committee was what the economic potential of the bill might be. The allocation of scrutiny of the bill to that committee depended on the argument that economic benefit was the primary purpose, but it soon became apparent that there was no reliable or agreed basis for estimating what volume of international business a codified modern Scottish arbitration system might attract. Indeed, the minister conceded that very point today.
It is not so long since committee members heard ministers justify their pledge to create 16,000 green jobs in Scotland by quoting a figure that was used in a UK Government report and then dividing it by 10. In support of the Arbitration (Scotland) Bill, we saw some figures for potential economic benefits that, it turns out, were based on the same approach. How much international arbitration business can a modern arbitration law bring to Scotland? It seems to me that, "Take the £250 million a year for London and divide by 10," is not a very scientific approach and not one that would survive much scrutiny for long. As the convener said, the financial memorandum accompanying the bill proposed a different figure for the amount of business going through the City of London, which simply added to the confusion.
If the bill is indeed an economy measure, it is a pity that we have had to do without any proper estimate of what economic benefits it might bring. If attracting international business is the primary economic purpose of the bill, it is a shame that some of those fundamental issues are still to be resolved.
Perhaps the most fundamental issue is the question whether to repeal the UNCITRAL model law, which is the current provision on which international arbitration business in Scotland and many other jurisdictions is based. The minister proposes repeal of the model law. The Chartered Institute of Arbitrators believes that he is right to do so, but the Scottish Council for International Arbitration believes that repeal will
"discourage international business from coming to Scotland."
The Law Society believes that
"parties to arbitration should be permitted the option of applying the UNCITRAL Model Law if they so wish".
In the Law Society's view, the only way of ensuring that that is the case is to remove the repeal provision from the bill. Frankly, it is not enough for the minister to say that the bill says that there will be access to the model law because of section 8(4) if the Law Society is right that that is contradicted by the proposal to repeal section 66 of the Law Reform Act 1990. That is not a minor disagreement; it goes to the heart of what the bill seeks to achieve. It reflects different judgments about whether access to the model law or adoption of a single set of arbitration rules will have the most appeal in the global marketplace and how to ensure that Scotland achieves the best of both worlds. It is not the only outstanding issue.
The convener mentioned retrospective effect. Future arbitrations might well arise from contracts that have already been agreed on the basis of the current system as understood by the parties to those contracts. The parties to such contracts need to be clear about where they stand and again it appears that relevant stakeholders have not yet been persuaded of the Government's approach to the issue.
Confidentiality of proceedings is one of the attractions of arbitration and needs to be protected under any changes to the law. The issue arises of how the bill can at the same time protect confidentiality if a party to an arbitration goes to court on a point of law, and adhere to wider principles of open justice. If neither the Faculty of Advocates nor the commercial judges of the Court of Session are comfortable with those provisions, it is clear that ministers have more work to do to get them right.
It is important that ministers meet their commitment to consider how the bill might affect consumer arbitration schemes that operate currently in the context of UK arbitration law and to meet those organisations that run such schemes. The minister said today that he will do that in August. The bill is about business and the law, but it must not have unintended consequences for consumers.
I hope that ministers will explore the possibility of having an anonymised digest of outcomes of arbitration cases, like the one that is published monthly in the Netherlands, to ensure that any precedent about which consumers should know is not missed.
The bill should be considered as work in progress with significant amendments still required because it is not yet fit for purpose. I hope that the minister will be able to respond positively and clearly enough to show that progress will be made to deliver the bill that all parties want to see.
I begin by declaring that I used to be a practising solicitor. I am retained on the roll of solicitors by the Law Society of Scotland and I have been involved in a number of arbitrations, although I do not stand to benefit personally from the bill. Despite the many good points in the bill and the enthusiasm of the minister, I have no intention of returning to arbitration, in either the near or the distant future.
I thank the clerks to the Economy, Energy and Tourism Committee, who did an excellent job in pulling together the stage 1 report under difficult time constraints.
The Scottish Conservatives fully support the principles of the bill. There is much to be said for codifying arbitration law. Arbitration has been with us in Scotland for many hundreds of years. Some people suggest that it predates our court system. Despite the court system then coming into use, arbitration remained popular. Over a period of several hundred years, case law developed in a fairly piecemeal fashion, with a couple of statutes along the way. The benefit of the bill before us is that it pulls the law together, codifying it in one statute. It modernises and tidies up the law in various areas, and it produces a more dynamic offering. If arbitration is to be successful, a more dynamic offering is definitely required.
If the bill is truly to meet its goals, arbitration must become faster and cheaper, and those two factors are directly related. Arbitration was popular in the past as it was fast, cheap and confidential, and because parties were able to remit their dispute to a man of skill. Over the past couple of decades, arbitration has become very slow. As a consequence, it is now sometimes more expensive than going to court. In going to court, people do not have to pay directly for the services of the judge; they do have to pay directly for the services of an arbitrator, however.
Parts of the bill will make the process faster. I like rule 23 of the Scottish arbitration rules set out in schedule 1. It puts a positive obligation on the arbitrator; it imposes a duty to
"conduct the arbitration … without unnecessary delay, and … without incurring unnecessary expense."
That sets out how the arbitrator should go about their business.
The ending of the stated case procedure, which was brought into force in 1972, should unblock many arbitrations in the future. The stated case procedure allows parties to go to the Court of Session on a point of law before the arbitration can proceed. It is a great idea in principle but, over the decades, many spurious applications have been made to the courts, thereby delaying arbitrations by months and, in some cases, years.
Those two measures, together with the fact that a bill is actually proceeding, might help to produce a culture change in arbitration in Scotland, which could itself speed the process up.
Despite all those things, I ask the minister and his team to do absolutely everything in their power between now and stage 3 to find anything else that they can to speed up arbitration. The bill, and arbitration in Scotland, will stand or fall on whether we can make the process faster and cheaper. If we can, arbitration could have a pretty bright future in Scotland, both domestically and in terms of bringing in international arbitration. If the bill does not do that, I will be seriously worried about the future of arbitration.
We have heard about the economic aspects. There is no doubt in my mind that the bill will bring economic benefit. It can save court time, and I think that there will be an increase in the uptake of arbitrations. At the moment, there are only 50 commercial arbitrations a year in Scotland, and about 250 consumer-related arbitrations. As well as the economic benefit, I am sure that there will be an increase in the number of international arbitrations that come here. The important point, which every member has touched on in the debate so far, is how big the economic bonus will be. I take the minister's point—he said that it is important not to overstate the case—but I think that it was overstated in the financial memorandum. There is obviously a big difference between £3 billion, which arbitration was originally believed to be worth to the City of London, and the figure of £250 million, which is probably what it is actually worth to the City. The 10 per cent figure is a nice easy way to calculate what arbitration might be worth to Scotland, but 10 per cent of the value of arbitrations conducted in London will not simply gravitate to Scotland. That will take a great deal of effort, time and, no doubt, investment, because London is a well-established international centre of arbitration. I am sure that we will get some arbitrations just by passing the bill, but a great deal of effort will be required if we are serious about getting anywhere near 10 per cent.
The minister mentioned the two additional meetings that need to be held. There were two blind spots in the Government's consultation process. Not enough work was done with consumers, especially on low-cost arbitrations, which function fairly well in practice at the moment. I am concerned about the impact of foisting 25 mandatory rules on such arbitrations. I am not sure that that issue was taken fully into account, because the bill looks as if it was drafted with commercial arbitrations in mind. I welcome the minister's commitment to pursue the matter and look forward to seeing the results of the meeting to which he referred.
There will also be a meeting with legal experts to examine the drafting and some unintended consequences of the proposals. For example, the bill will give the arbitrator a power akin to interdict. Breaching an interdict that is issued by a court of law is a criminal offence, but we do not know whether breaching an interdict-type measure handed down by an arbitrator will be an offence.
We see what the Government is trying to do in the confidentiality provisions. However, if after the arbitration there is a question of law to be determined by a court and the court breaches the confidentiality rule, either intentionally or unintentionally, what will the consequences be? What action can be taken against a judge if confidentiality is breached? Has the matter been thought through?
Various other rules have been mentioned. Rules 45 and 46 concern the power to award damages and the power to award interest from the due date. There is a disparity in bargaining power—especially in the world of construction, which is the source of many arbitrations—between the employer or person funding the project and the contractor, and between the contractor and the subcontractors. When projects go out to tender, it is easy for the stronger party to say to people that they have no chance of getting the job unless they agree to a default rule being scrubbed out completely. The Government recognises that unfair bargaining power in rule 50. Why does the same argument not apply to rules 45 and 46?
The issue of commencement is important. Clearly, the bill will not apply to arbitrations that are already under way. Will it apply to contracts that have been signed but for which no arbitration has begun? Under the bill as it stands, it appears that those contracts would be affected, which would be a retrospective application of the law. The general principle in Scots law is that retrospective application is undesirable. Where we apply the law retrospectively, we must have strong reasons for doing so. When the parties signed up to their contracts, they agreed an arbitration clause and a set of rules, but the bill would impose at least 25 mandatory rules on them.
We support the general principles of the bill, but there is work to be done. So far the Government has shown itself to be willing to move and to do that work. I look forward to considering the bill at stage 2.
This is a technical bill that has engaged the interest primarily of the legal profession, rather than the trade associations or industry bodies that are the usual suspects that appear before the Economy, Energy and Tourism Committee. We have taken evidence from some eminent legal brains. It was quite a change for committee members to watch witnesses arguing with one another about aspects of the bill. That was more than entertaining—it was enlightening, because it showed in which ways the bill probably needs to be improved.
As we have heard, there was cross-party support on the committee for the general principles of the bill. We recognise that the existing legislation on arbitration is cumbersome and often quite elusive, as so little of it is codified in statute; it is a deterrent to using arbitration as a means of dispute resolution in Scotland. Without a reform of the law, the use of domestic arbitration would most likely continue to dwindle and Scotland would remain unable to compete with other jurisdictions for international arbitration cases. However, as I said, the committee has a number of reservations about the delivery of the policy objectives of the bill. The two main areas that members will no doubt dwell on are the issues of minimising expense and ensuring that the process is efficient, and the economic benefits.
A key argument in favour of the bill is that it would minimise the expense associated with arbitration and ensure that the process is efficient. I agree with other members that that appears to be vital. As Gavin Brown eloquently explained, the bill must make arbitration cheaper and quicker.
While clear and consolidated legislation may make the law more accessible, the main provisions in the bill to promote the more efficient and cost-effective resolution of disputes are mandatory rules 23 and 24. However, I wonder whether there is a need for more than a duty on the tribunal and the parties to conduct arbitrations
"without unnecessary delay, and … without incurring unnecessary expense."
In evidence to the committee, a number of witnesses referred to the tactics that parties will resort to in order to ensure that they achieve the result that they want. That raises the question of what remedies are available when an arbitration has not been conducted as quickly or as cheaply as possible, which is an important point for the Government to bear in mind when it considers what amendments it might introduce at stage 2. The legislation needs to speed up arbitration and make it cheaper for the parties concerned.
From a general economic perspective, disputes have a negative effect on the Scottish economy. We all recognise the impact that consumer and commercial disputes have on individuals and businesses, especially as many of the smaller disputes remain unresolved. A modern, accessible arbitration system should offer an additional means of resolving disputes more quickly and cheaply, thereby benefiting the Scottish economy. As has been pointed out, that was the practice in the past—particularly in the 19th century—and it worked perfectly well. Additionally—I suspect that this is a point that colleagues on the Justice Committee would recognise as important—if arbitration flourishes as a result of an improvement in the legislation, it could result in a reduction in pressure on the courts.
One of the key economic arguments behind the introduction of the bill has been that it will allow Scotland to compete internationally as a location for major arbitrations. From the evidence presented to it, the committee learned of the value that arbitration brings to major cities throughout the world. Even a limited number of international arbitrations would be of value to the Scottish economy. However, it cannot be taken as a given that a modern arbitration law will, of itself, attract large-scale international arbitrations to Scotland. Although the committee is aware of the intention of the Scottish branch of the Chartered Institute of Arbitrators to promote the bill should it complete its passage through Parliament, it is also of the view that more might be necessary to deliver any significant economic benefits to Scotland. The aim of attracting 10 per cent of the value of arbitrations carried out in London is laudable, but I suggest that a coherent marketing strategy, as well as a considerable period of time, may be necessary to achieve that.
Members have dealt with several nitty-gritty issues, over which I will not tread again. We are generally agreed that we want amendments at stage 2 that will tackle the issues already raised. In conclusion, while I welcome the central purpose of the bill, I do so with a note of caution. We need to get the legislation right for it to be successful and for it to establish arbitration as a quick and economical means of resolving disputes in Scotland. I look forward to the minister's response to the concerns that have been outlined.
The Arbitration (Scotland) Bill is the final bill that we will consider before the recess. Yesterday, I had the pleasure of seeing people from a secondary school in my constituency who were visiting the chamber. Over lunch, they admitted to me that they had found the detail of the Climate Change (Scotland) Bill rather dry compared with the vaulting ambition of our cause. I hesitate to think what they might make of this afternoon's proceedings on arbitration.
As members have said, the principle of modernising arbitration in Scotland has been widely supported. The fact that the practicalities and the detailed provisions of the bill attracted more controversy than the Economy, Energy and Tourism Committee expected at the outset has also been alluded to. Scotland's legal luminaries have not spoken with one voice on the topic.
In his opening speech, the minister made it clear that the bill is not a party-political bill. Indeed, any party that is represented in the chamber might have proposed it. However, the evidence that was gathered at the pre-legislative stage, which is reflected in the committee's report, suggests that significant amendments are required for stage 2. No member of the committee questioned the Government's good faith with respect to the bill, and no one doubted that the Government had conducted the right sort of consultation involving the right interested parties. However, the relevant issue that remains is whether the bill as it stands is fit for purpose.
I profess no special expertise in the matter and I am not a lawyer; indeed, during the committee's consideration of the bill, I was often delighted to be seated next to Gavin Brown, who is a lawyer. His grasp of the matters at hand, compared with my meagre insights, was encyclopaedic. However, even committee members who were complete novices in such matters reached the unanimous view that, without being amended, the bill will simply be adequate as opposed to truly good. It is an adequate bill as it stands because it risks producing unforeseen and unintended consequences. Those risks require to be addressed before stage 2.
I welcome the commitment that the minister has already given to give up part of his summer holidays to have further consultative meetings, but the issues that are highlighted in the committee's report give food for thought and require work to be done on them at this stage. I also welcome the assurances that he has already offered on the status of the model law and the interaction between it and the bill, but the committee is anxious that further work should also be done on section 33, including on whether it will have retrospective effect; on the need to clarify further the bill's relationship with the Arbitration Act 1996; and on the importance of not doing anything to undermine very small-scale consumer arbitrations—Gavin Brown made points about that. The committee also thinks that further work should be done on whether rules 45 and 46, which have been mentioned, will inadvertently open the door to one party's having unfair bargaining powers; on the risk that the sisting of legal proceedings will be used as a delaying tactic; and on the need for the principles of openness in our general approach to legal matters not to be infringed by the confidentiality in proceedings that people often seek when they are involved in arbitration.
I realise that all those points are technical. I was encouraged by the minister's opening remarks about the draftsman thinking that the bill had attracted some of the most detailed comments that he had ever known in a legislative process. I would put it at the furthest frontier of what members might be expected to adjudicate on.
In that spirit, I welcome the further consultation events that the minister announced today. Meetings in the latter half of the summer are welcome, but I hope that he will ensure that some of the work that needs to be done is undertaken early. The convener of the committee made it clear that we probably have only one chance to get things right. We are not talking about simple matters. The Scottish legal community is not speaking as one on the outstanding issues.
The existence of ministers' direct political accountability to the Scottish Parliament is the difference between the pre-devolution approach to Scottish law making and the approach that is now taken, with powers being vested in the Parliament. That remark should be viewed in the context of the debate that we had in the chamber this morning. I do not expect the minister to take a personal interest in resolving each of the technical issues that the committee has noted and put forward for consideration today. Indeed, I hope that he has some time to enjoy his particularly beautiful constituency in the weeks ahead; I certainly intend to frequent it with my family later this summer. However, I hope that before the minister departs for Argyll, he will ensure that the necessary work is under way and that the opportunity of the 10-week recess is grasped to allow thorough consideration of the issues that have been raised.
If the minister ensures that that is the case before he leaves, he will be ensuring that what is currently an adequate piece of legislation will become a thoroughly good piece of legislation. If the Parliament achieves that, the vision for which the bill is reaching—for Scotland to become a future centre for international arbitration—can and will be realised.
I am delighted to speak in this debate as a member of the Economy, Energy and Tourism Committee. It is my first official outing to speak on a bill that is going through the committee, and I am sure that it will not be my last. I thank the committee clerks: since I became a member of the committee, only a few months ago, their help and assistance has been invaluable.
As we have heard, there was a debate about which committee was to examine the bill. I will not go over that ground, apart from saying that we are where we are, and we have to deal with it. I am sure that I am not being unkind to my committee colleagues in saying that none of us, apart from Gavin Brown, is an expert on the existing arbitration laws. Gavin Brown's legal expertise proved invaluable during the evidence sessions, and allowed those mere mortals with no legal background to understand the bill in more detail, so I thank him for that.
Before I move on to the issues around the bill, it is important to note that the committee acknowledged that the Scottish Government conducted a transparent and accessible consultation. We were satisfied that the Scottish Government had sought to engage with as many stakeholders as possible in developing the bill.
With regard to the economic benefits of the bill, I am a great believer in the KISS—keep it simple, stupid—management method, but I fully appreciate that that will not always be possible; it will not always be an option; and it will not always be wanted by those who have vested interests. However, in the case of this bill, it is possible, it is an option and the legal profession appears to want it.
The evidence that the committee has received shows that there is consensus that a new consolidated arbitration bill may provide economic benefits. Increased economic activity is welcome, and will hopefully lead to Scotland becoming a commensurate player in arbitration. It will be difficult for Scotland to compete directly with the established arbitration centres of London, New York and Geneva, but I am sure that there will be increased opportunities for arbitration in Scotland.
The committee suggests that it will be difficult to quantify the value of the potential arbitration business. We also suggest that it is important that the Scottish Government does not overstate the economic possibilities of the bill and, as has already been mentioned, we question the figures that relate to London in the financial memorandum. The figure of £3 billion in the financial memorandum can be compared with the figure of £250 million that the committee received in evidence. Those figures are obviously slightly different, and we must have clarity from the Government about which is the more accurate.
It is important that marketing of Scotland as an arbitration centre be fully established. We took the view that the Scottish Government should re-examine its position on the marketing of arbitration. Once the bill has passed through the Parliament, in whatever shape or form, it should be incumbent on all the stakeholders to market the improved service. I appreciate that the judiciary and the legal system are totally independent of the Parliament and political interference, but as the bill is about business opportunities, the Scottish Government could look at marketing for the next stages of the bill.
Another issue centres on rule 24 and the general duties of the parties. Rule 24 is a mandatory rule that calls for the parties to arbitration to deal with it "without unnecessary delay" or "unnecessary expense". Those are laudable aims, and I am sure that the committee members agree with them in principle, but we have some questions about how realistic those duties are. We heard contrasting evidence about time limits and their worth and the realistic—or unrealistic—possibility of their being enforced. Personally, I have some sympathy with the arguments for enforcing time limits, particularly if they can reduce the cost of arbitration. However, I fully appreciate the arguments of those who say that a one-size-fits-all approach will not work. Every arbitration case will be different, and the parties involved will be of differing sizes and financial statuses, so there is a legitimate argument for time limits not to be introduced. Paragraph 79 of our report highlights our position quite clearly and our final point therein legitimately queries how those duties can be enforced. I look forward to the Government's response on that in due course.
I have enjoyed my short time on the committee and the collegial way in which we have dealt with issues. I have been in the Parliament for only two years, but I have enjoyed that approach on the three committees on which I have served and I hope that that will continue to be the case. However, I was a touch disappointed with one aspect of our deliberations. Paragraph 128 of our report states that the bill is
"not yet fit for purpose".
There was a division in the committee about that paragraph. At the time, I argued that almost every bill that has gone through the Parliament has been amended at some point—yesterday, we spent a whole day in the chamber dealing with amendments to the Climate Change (Scotland) Bill—and I am sure that that will continue to be the case, even in the distant future when the Scottish National Party is no longer in power. Bills will continue to need to be amended, whether substantially or not. I suggest that saying that a bill is not fit for purpose creates a dangerous precedent and downplays the Parliament more than the Government of the day.
In this morning's debate about the future of the Parliament, all parties said that they want it to have more powers. However, with more powers comes added responsibility—that applies to MSPs as well. I gently suggest that MSPs should watch their language from time to time, and I think that having that phrase in the report is quite dangerous. Everyone on the committee appreciated that the bill needs to be significantly amended, and we were unanimous on that in our report. However, we should be careful about our language, particularly when we are dealing with a bill that is not, as Wendy Alexander and Lewis Macdonald have already mentioned, party political.
With that, I commend the committee's report to Parliament. I look forward to the bill making progress through Parliament.
Miraculously, I have changed from being the convener of the committee to being the Liberal Democrat spokesman, in which role I would just like to say that I agree with everything that the convener of the committee said in his opening remarks.
I will not take up too much of the chamber's time, which might be a worry to those who have yet to speak. As has been said, this is not a party-political bill; it is a bill whose aims are supported across the chamber.
It is worth reminding ourselves of the bill's policy objectives. Its primary objectives are: to clarify and consolidate Scottish arbitration law, filling in gaps where they exist and providing a statutory framework for arbitrations that will operate in the absence of agreement to the contrary; to ensure fairness and impartiality in the process; and to minimise expense and ensure that the process is efficient. I do not think that anyone could disagree with any of those objectives.
One of the key issues that we must discuss is to do with the Scottish arbitration rules, which are set out in schedule 1 to the bill. Which rules are mandatory and which are default? I assume that the purpose of the mandatory rules is to protect each party and ensure that a party that might have a slightly stronger bargaining position cannot undermine the fundamental rights of the other party by seeking to remove certain rules. In relation to rules 45 and 46, an issue arises that is very much about the need to ensure that both parties in an arbitration are protected. I strongly recommend that the mandatory aspect comes into play in relation to those rules.
The construction industry is often mentioned in that regard, but suppliers to major supermarkets are another example. We know from our experiences as constituency members, and from debates and reports, that suppliers to major supermarket chains feel that they are in a weak position when bargaining because much of their business relies on their contracts with the supermarkets, which are very strong. When an arbitration agreement is reached between a supplier and a supermarket, the supermarket is in a strong position to say, for example, that it will not agree to a damages clause and to ask for that to be struck out. In signing the contract, the supplier might feel that they have to agree because they are not in a position to bargain.
When we consider the arbitration rules at stage 2, it is important that we think carefully about the rules that are currently default and those that are mandatory. We must ensure that we make mandatory all those rules that are required to protect the rights of weaker parties. However, we should not have unnecessary mandatory rules; we should have default rules wherever appropriate. As Gavin Brown rightly pointed out, we do not want to discourage arbitration by having rules that are so rigid that they are inappropriate, certainly for minor consumer arbitrations.
There are concerns about the phraseology in the bill. One concern that came across to the committee was that, because the bill is lifted largely from the Arbitration Act 1996, which applies in England, as drafted it includes language that might not be appropriate in the Scottish context. It is important that, at stage 2, we ensure that all the language is appropriate in the Scottish context. I had a particular example that was drawn to our attention by the Faculty of Advocates, but I cannot find it at the moment.
The Liberal Democrats will certainly support the general principles of the bill. I am not necessarily looking forward to stage 2, but I am sure that the committee and the Government will work hard to ensure that we come back at stage 3 with a bill that is fit for purpose and which we can all support.
In the 10 years for which I have been a member of the Parliament, I have not been a member of the Economy, Energy and Tourism Committee or any of its previous guises. Until today, that has been a matter of regret, but now that I have discovered the amount of work that has been necessary on the bill so far, I am perhaps glad that I had the Climate Change (Scotland) Bill to deal with instead.
Anyone who has been a member of Parliament for any time will realise quickly that there is a requirement for arbitration. I am sure that other members will have come across situations in which disputes were dealt with inappropriately, and ultimately were not resolved, as a result of the difficulty in accessing civil justice faced in a dispute by a party that does not have the deep pockets that are necessary to pursue an issue through the courts. Anything that moves us forward on that is desirable. Although I have come late to the process—in fact, I had the opportunity to study the papers in advance of the debate only today—I believe that the issue is fundamentally important.
The consolidation, fine-tuning and streamlining of the arbitration rules in Scotland have a great deal to offer. As we have heard, they offer a great deal to those in Scotland who can benefit from them. I am interested in the argument that there might be a potential economic benefit, not only in relation to indigenous arbitrations, but from the fact that, conceivably, an industry could grow up around international arbitrations. We would all welcome that if it were to come along, but I was glad to hear the minister downplay its significance in his opening speech. The dispute over the figures could have led to confusion. During the debate, members have united around the idea that the numbers are perhaps not as big as we originally hoped that they might be.
A number of members have referred to several measures that have still to be taken. Of course we need to ensure faster and cheaper arbitration, but more work with consumers will be necessary to ensure that we understand the advantages of low-cost arbitration to everyone. The concern is with ensuring that a modern and accessible arbitration system is in place and that we can take advantage of all that it has to offer.
The Conservatives will fully support the bill's principles and will take the opportunity to contribute as much as possible to its advancement at later stages. Members have mentioned in the debate—and I have been told in private about—the importance of Gavin Brown to the bill's progress. I am very grateful that the impending expansion in his family has not yet happened; otherwise, we would not have had the benefit of his presence today. That would have been sad for many members—and absolutely terrifying for me.
Several members have suggested that a series of advantages might accrue from the bill. Strictly for the opportunity to close in a lighter vein, I mention Iain Smith's suggestion that suppliers to supermarkets might benefit from the arbitration system in the future. I am delighted to hear that that opportunity might come along. It might not be enormously significant, but every little helps.
I am still laughing at that comment.
The bill is important. As MSPs, we can normally judge a bill's importance by the number of Scottish Government officials who are sitting at the back of the chamber for the debate. A fair few of them are up there this afternoon, which suggests that we are discussing an important bill.
I record my thanks to the Economy, Energy and Tourism Committee's convener, the other committee members and the clerks, who have done a massive job and a huge amount of work to bring us to the current position and allow us to have an informed discussion this afternoon.
I confess that, in a previous life as a trade union official, I was involved in arbitration in a different field—industrial relations. As members know, in the 1980s and 1990s, arbitration provided a way to obtain union recognition agreements in a lot of inward investment projects. I was involved frequently in the use of one type of arbitration—pendulum arbitration. For my own research, I looked on the internet for a definition of that. The definition says:
"Pendulum arbitration, otherwise known as final offer arbitration … is a type of interest arbitration in which the arbitrator chooses one of the parties' proposals on each"
of the disputed issues.
"For example, in the case of labor collective bargaining, a trade union may demand a wage increase of 7% and the management may offer 3%. The arbitrator … has to choose between awarding a 3% or a 7% increase."
I probably achieved a 3 per cent increase more often than a 7 per cent increase—to the extent that I would be looking to enrol in a witness protection scheme if I had to return to some parts of England in the near future.
As I have experience of arbitration—albeit in a different field, as I said—I welcome the opportunity to participate in the debate. The committee's report says that Lord Hope has described arbitration as
"the method of procedure by which parties who are in dispute with each other agree to submit their dispute to the decision of one or more persons, described as ‘arbiters', rather than resort to the courts of law."
That makes the process sound easy. However, my experience and what Gavin Brown described show that some expertise is needed. It is obvious that the legal framework needs to be more robust and supported, so that we can make more of the opportunity that we have.
I warmly welcome the objectives of the bill. Its clarification of arbitration law through the provision of a statutory framework is absolutely essential. Its underpinning aim of ensuring fairness and impartiality in the arbitration process is also to be welcomed. As Gavin Brown said, the bill also aims to minimise the expense of arbitration. Again, if arbitration is quick, it will be cheaper and much more attractive for people to go down that route.
The bill contains little with which we would argue. Lewis Macdonald summed up the position when he said that modernising arbitration law is one of those necessary reforms that are not politically contested but offer real benefits to Scotland. Our only concern is that we perhaps need a more vigorous examination of what the arbitration industry could mean for Scotland. In the Parliament, we regularly use as a rule of thumb that we might get from London 10 per cent of what is given to the rest of the United Kingdom. However, we need to look at the levers and support that may be available to ensure that the industry develops here in Scotland. If that area is not considered during the passage of the bill, perhaps the Scottish Government should consider doing work on it separately.
I recognise that some ebb and flow takes place in the amount of spare capacity that can be generated within our courts system, but I am a little concerned that dealing with arbitration might be seen as a desirable option for existing legal practitioners rather than—as has been suggested in today's debate and in evidence to the committee—just retired professionals. We need to ensure that we do not get into the position that has perhaps arisen in the national health service, whereby doctors and other professionals may operate privately in a way that removes capacity from the system. I would like a little bit more clarity from the minister on whether the Scottish Government is considering that issue.
Alex Johnstone said that he would have been absolutely terrified if Gavin Brown had not been here this afternoon, but I think that Gavin Brown would have been even more terrified, because he would have been somewhere else. Having twice been there myself, I know that this afternoon's debate must have a certain attraction for him.
Gavin Brown, whose expertise is acknowledged, highlighted that Scotland could be an attractive place for arbitration. He said that, if we can reform the law to put in place something that people can work with, we have potential for an industry. Anyone watching our debate this morning on the Calman commission's report might have said that we needed someone to come in and separate the different parties—at least, to separate the unionist parties from the Scottish National Party. I do not know how much of an advert that was for arbitration in Scotland, but I certainly agree that the Scottish legal profession is renowned around the world. I think that arbitration has great potential here in Scotland.
Although the industry has potential, the main thing that we are looking for from the minister—he has already given some assurances this afternoon, but perhaps he could say a little more in summing up—is that he must shift the balance away from trying to build an industry and first build a workable piece of legislation. I hope that an arbitration industry will flow from that. We need to get the legislation right. As the bill is not a political issue, the Scottish Government will have a lot of cross-party support in the Parliament to ensure that we get a workable piece of legislation. We look forward to seeing progress as the bill moves forward.
In keeping with the bill's progress to date, this debate has been very constructive. Everyone is conscious of the bill's importance for the professions, businesses and citizens, as well as the Scottish economy.
Let me put on record that it has been a real privilege to work with the professional team behind the bill. It has been an eye-opener working with people on the justice side of things, but it has also been very constructive working with practitioners in the profession—as I will mention later—as well as with ex-practitioners who have moved across.
I join other members in saying how grateful I am for Gavin Brown's expertise. His recycling of his skills as an arbitration practitioner has been exceedingly welcome. In line with his colleagues, he has generated a very positive attitude towards the bill.
Equally, it is fair to say that, given our experience in other lives, we have brought a lot of common sense to the proceedings. Economy, Energy and Tourism Committee members have been good at eliciting the evidence that has got us here. I will perhaps talk more about that in a moment. The positivity about the bill's potential for Scotland, and the need for it, is shared by the majority of the consultees.
In making its recommendations, the committee has done comprehensive work. We are determined to press ahead, and we assure members that, even if the model law is repealed, it will still be possible, subject to mandatory rules, for parties to adopt the model law for their arbitration if they so wish. That assurance is built in.
On the commencement date, we are happy to work with members to make it clearer how the bill will apply to existing contracts.
On consolidation and consumer protection measures, we have written to what is now the Department for Business, Innovation and Skills. We have to bear it in mind that provisions in the UK Arbitration Act 1996 protect consumers from being bound by arbitration clauses in low-value contracts. Rules 45 and 46 are open to discussion. We will pick up that issue in the meeting on 18 August.
The issue of sisting legal proceedings as a delaying tactic is open to discussion, and we will follow it through. Likewise, we will follow through the implications for the Scottish pleading system and we will make minor modifications to address the issue of anonymity and confidentiality. I was taken by Lewis Macdonald's comment on the practice that is unfolding in the Netherlands, which sounds pretty interesting.
We have sound suggestions from practitioners about what we can do to emulate what London is doing to avoid overburdening the courts. We have to revisit the drafting on disciplining arbitrators. We will consider provisional awards in the light of detailed examples being provided by the Law Society of Scotland. All the recommendations that have been made are under close scrutiny and focus.
I have heartfelt sympathy for the convener of the Economy, Energy and Tourism Committee's inability to be convinced instantly that the bill fell within the committee's remit. However, it is commendable that the committee has taken on the bill, recognised its worthy purpose, adopted the primary objective of codifying the law and seen economic benefit built into that.
I am sorry about the false pass that the committee was given regarding the £3 billion in the financial memorandum. That inaccurate figure was given in good faith by the Chartered Institute of Arbitrators, based on figures provided by International Financial Services London. The figure was corrected in written evidence. However, I have to say that £250 million is still a number to salivate over. I believe that we will get our fair share of that, and we might go beyond it with the new proposition in Scotland.
We had a meeting in the Parliament to brainstorm with the practitioners. We have now had the committee report and the debate. We have the prospect of meetings on 6 August and 18 August. That is an interesting and transparent approach that others might wish to emulate. I certainly hope that it will aid stages 2 and 3—I am pretty sure that it will. In essence, we are providing an opportunity to healthily voice concerns and have a more structured debate. When we have the people in the room, we will be able to reconcile some of the issues and proceed at a good rate. The committee's report and this debate give us the scope to add structure and demonstrate a more methodical approach, whereby we can debate, test and balance proposals. The focus on getting things right, to which Wendy Alexander referred, is a big prize for all of us.
It is down to the industry to make what it can of the economic benefits. The enthusiasm exists, as I see from unsolicited inputs from the profession. A considerable amount of non-chargeable, cerebral work is being done to refine how we go forward.
The bill will complete the repertoire of Scottish legal services. It will make Scotland an even more compelling place in which to do business. It might also bring forward developments in the resolution of differences, such as mediation. William Ury from Harvard's negotiation team was in Scotland this week. He is the author of a couple of interesting books on negotiation and mediation, and his visit helped us to make considerable progress.
The not-fit-for-purpose sobriquet has been applied to the bill, but it is a work in progress. The scepticism is healthy, and I intend it to be useful. We have an opportunity to exceed expectation and reconcile the different viewpoints. In reaching consensus, we will ensure that we wash out any unintended consequences.
I appreciate Stuart McMillan's commonsense approach to the debate. When he spoke about the nature of the process, it took me back to my old tools of trade. The phrase "debugging the computer programme" came to mind. We are in a natural, perfectionist, elusive process—particularly given that this is the first pass—but cohesion is beginning to emerge. We are very close to converting the bill from adequate to Wendy Alexander's goal of thoroughly good. The follow-on events will be helpful in that regard. The considerable flow of suggestions from other sources is nothing short of astounding. There is a determination on the part of arbitration practitioners, the legal profession, members of the Faculty of Advocates and others to play their part in helping us to get to a better place.
The issue that is close to my heart—and which is clearly also close to Gavin Brown's heart—is making the process faster and cheaper. That will be the net effect of the bill. As I keep telling people, for example in the industrial sessions that we ran, it is all about the flow.
Recently, I read a wonderful book in which the opening gambit was:
"It takes less time to build a Lexus than it takes to snag an equivalent BMW."
The key factor is whether we can identify a Lexus approach to arbitration—the slick and fast approach.
Only one of the witnesses who gave evidence called for a time limit. In the end, they were outvoted by the rest, the reasons for which I understand. I am aware that the proposal that I am about to make was not tested in evidence—indeed, I think that it was not suggested at any stage. However, there might be merit in devising a banding system. In such a system, the arbitrator's first job would be to work out roughly how much was at stake. If the amount was less than £50,000, a time limit—and perhaps a cost limit—could be applied. If the amount was in the range of up to £1 million—I am making up the numbers as I go along—another band, timetable and costing would apply. If the amount was beyond £1 million, the process would be completely open-ended. That might be a way of getting sanity in terms of small-scale cases and providing an open-ended position for larger ones.
I am grateful to the member for his suggestion. I think that he has just invited himself—somewhat elegantly—to the event on 18 August.
The position that we are now moving towards was summed up by John Park. Our aim is to form the bill into a workable act. We want to draft legislation that allows us to build the arbitration sector of our economy.
I look forward to running the events over the summer. We have the trade event on 6 August, which we will augment through invitations to business organisations, Consumer Focus Scotland and any other person or organisation that members think should be there. I am keen to hear the nominations for who should attend.
I am also keen to see a committee presence at the session on 18 August. The event that we held on 30 April was terrific. We generated an element of cohesion, collaboration and good will in the room, the result of which was a new focus on many ideas. The session took us beyond the already considerable consultation on the bill. We have a big opportunity, and I would be extremely surprised if we did not emerge from those events with a much greater focus on the speed and cost of the process.
Another positive aspect will be our attempts to motivate practitioners to advertise the greater speed and cost-effectiveness of arbitration. This country's adoption of a frugal and speedy attitude to arbitration will be advertised to people in and furth of Scotland as we proceed with the bill.