The next item of business is a debate on motion S4M-11664, in the name of Fergus Ewing, on the Legal Writings (Counterparts and Delivery) (Scotland) Bill.
I call on Fergus Ewing to speak to and move the motion. Mr Ewing, you have 10 minutes.
I note that the Labour front-bench spokesperson is not here.
15:29
I am pleased to open the debate on the general principles of the Legal Writings (Counterparts and Delivery) (Scotland) Bill. I thank everyone who gave evidence in writing and in person, and I thank the Finance Committee and the Delegated Powers and Law Reform Committee for their detailed scrutiny of the bill at stage 1. In particular, I welcome the Delegated Powers and Law Reform Committee’s support for the bill’s general principles.
As many members are aware, this is the first bill to have been considered under the new Scottish Law Commission bill procedure. When the Parliament decided in May last year to accept recommendations for changes to its standing orders to allow certain Scottish Law Commission bills to be referred to the Delegated Powers and Law Reform Committee, it recognised the commission’s valuable role in reforming the law of Scotland.
It was intended that the new process would go some way towards increasing the implementation rate of commission reports. In my view, the process is working well. I have been impressed with the way in which the committee has taken on its new role and I hope that this will be the first of many bills to be considered in this way. I note the committee’s recommendation in its stage 1 report, that
“the Scottish Government takes steps in order to ensure appropriate research has been undertaken”
to provide statistical evidence to the committee in connection with Scottish Law Commission bills in future. The committee has my response to the stage 1 report.
A key objective of the Scottish Government is sustainable economic growth and business competitiveness. We want to ensure that Scotland is an attractive place for business. The reforms in the bill might be modest and technical but they will, in no insignificant fashion, promote business and economic growth and modernise Scots law.
The bill does two main things. First, it enables documents to be executed in counterpart, which will put beyond doubt that such execution is permissible in Scots law—a matter about which there is currently great uncertainty—and will give the legal profession and the business interests that it represents the necessary confidence to use Scots law for transactions.
Secondly, the bill makes provision for the facility to deliver—I use the word “deliver” in its legal sense—traditional documents electronically. Any document that is created on paper may become legally effective by being delivered by electronic means such as email or fax.
I was pleased to note that the Delegated Powers and Law Reform Committee supports the general principles of the bill and, in particular, those two key provisions.
The provisions have the potential to help people who are involved in complex transactions in which the parties and their legal advisers can be in different countries or even on different continents and meeting might be impossible or highly impractical. The provisions also have the potential to help anyone in Scotland who is conducting a transaction that involves a number of parties who are unable to get together, for practical reasons, for example because parties live in remote rural or island areas.
For the avoidance of doubt, let me say that the consequence of the current uncertainty in this area is that practitioners sometimes choose not to use Scots law to govern a document. There is a consistent view that that is common, happens regularly, and might happen at the outset of a transaction or just before the transaction is finalised. I am talking about not just multinational and multijurisdictional transactions but transactions that are entirely Scottish in their make-up and for which, for want of clarity about the use of execution in counterpart, the decision is made to use another law. When Scots law is not used, there is often the knock-on effect of consequential litigation not being conducted in Scotland.
The committee recognised that the current uncertainty about whether execution in counterpart is competent under Scots law appears to have led to a drift away from transactions being concluded under Scots law, with parties opting to conclude under the law of a different jurisdiction—for example, English law—where execution in counterpart is recognised.
A number of people who gave evidence to the committee described the bill as being capable of addressing that drift. A clear benefit of the bill will be that, in circumstances in which Scots law should be used but is currently not used because of doubt over the legality of executing in counterpart, parties will now have the confidence to use Scots law.
Scots law requires some documents to be delivered—again, in the legal sense—to take full legal effect. In the same way as doubt exists around whether execution in counterpart is valid under Scots law, there are conflicting authorities on whether a paper document may be legally delivered by its electronic transmission to the grantee or a third party such as a solicitor or agent for one of the parties.
That question arose from the 1990s onwards mainly in respect of purported delivery by way of fax of documents relating to land. One of the bill’s principal aims is to resolve that uncertainty, particularly but not only as it impacts on transactions completed by way of execution in counterpart. The bill does so by saying that delivery of a copy of a paper document or a copy of part of that document by electronic means constitutes delivery; beyond that, it does not attempt to alter the law on delivery.
During the stage 1 evidence sessions, the Faculty of Advocates levelled some criticisms at the bill. The Faculty’s concerns were around increased potential for fraud and, what was more likely in its view, error associated with execution in counterpart particularly if, as the bill allows, only the signature pages of documents are exchanged between parties as part of that process. We have considered those concerns very thoroughly and have concluded that the bill will do nothing to increase the prospects of fraud or error as a result of executing in counterpart and exchanging only the signature pages of the document.
That view was shared by other stage 1 witnesses, and the committee noted that the majority of those giving evidence at stage 1 expressed the general view that fraud and error would always occur to an extent and that the bill was unlikely to lead to an increase in either fraud or error. The committee was particularly thorough in its examination of this issue, and I note that it is not persuaded that the bill will lead to any increase in instances of fraud and error.
In summary, this is a small but important bill that will provide certainty in relation to execution in counterpart and electronic delivery of traditional documents in Scots law. Importantly, the approach has been to ensure that the legislation is permissive and as flexible as possible. Inherent in that flexibility is the ability of the parties to a transaction to set out how the process will work for them. The bill has been very warmly welcomed by the majority of the legal profession and there have been some very positive and encouraging articles about the bill in the press and in other publications.
I firmly believe that the bill creates a light-touch yet helpful framework for a variety of transactions. We in the Scottish Government are confident that the bill will meet a clear and pressing demand from those likely to be affected by it, and we cannot overestimate the value in bringing clarity, flexibility and certainty to the law.
I move,
That the Parliament agrees to the general principles of the Legal Writings (Counterparts and Delivery) (Scotland) Bill.
I call on Nigel Don to speak on behalf of the Delegated Powers and Law Reform Committee—around seven minutes or so, please.
15:38
I genuinely welcome the opportunity to speak on behalf of the Delegated Powers and Law Reform Committee on the Legal Writings (Counterparts and Delivery) (Scotland) Bill, which is, of course, of particular significance as it is the first to be known as a Scottish Law Commission bill following changes to standing orders last year that provided that certain SLC bills might be referred to the Delegated Powers and Law Reform Committee.
The Scottish Law Commission plays a vital role in recommending reforms and in updating and improving Scots law. However, until recently the implementation rate of the commission’s proposed bills has been low. The new process, which we are undertaking for the first time, will allow such bills to be given the consideration that they deserve and will allow important reforms to be implemented.
I pay tribute and give my thanks to the parliamentary staff who, a couple of years ago, did the background work that considered whether we should change our standing orders. I also pay tribute to Christine Grahame, who of course is the convener of the Justice Committee, and Bruce Crawford, who was the Government minister responsible at the time, for providing the political impetus that enabled us to change the standing orders to ensure that SLC bills go forward.
We must do what we can to ensure that Scottish law is up to date and competitive. During the passage of the bill, it has been interesting to see what other jurisdictions have been making of this process. I believe that some of them might even be envious of the process that we now have in the Scottish Parliament.
I thank all those who provided written and oral evidence on the bill. In addition to receiving written submissions, we heard from legal, business and academic representatives over five oral sessions. The detailed evidence that was received was greatly appreciated by the committee.
As the minister says, the bill has two key provisions: that execution in counterpart should be clarified as being a valid process in Scots law; and that paper legal documents should be deliverable, in the legal sense of the word, by electronic means. Execution in counterpart is the process by which documents can be given legal effect by each party signing separate but identical copies of a document rather than the same single physical document. The bill seeks to remove the current uncertainty as to whether that is a valid way of creating legally effective documents in Scots law. In providing for the delivery of paper legal documents by electronic means, the bill aims to resolve any doubt as to whether a document is legally effective if it has been faxed or emailed rather than delivered by traditional means.
Evidence to the committee suggested that there is widespread support for the provisions among the legal, business and academic sectors. The current system for signing contracts under Scots law is generally considered to be inefficient and burdensome, with parties having to go to great lengths to ensure that a single document is signed by them all. To achieve that, they must organise signing ceremonies whereby all parties are required to gather at an agreed place at an agreed time in order to sign a single document. Alternatively, the document is sent to each party sequentially for each signature to be attached one by one.
By making it clear that documents may be executed in counterpart under Scots law, and by allowing for traditional documents to be delivered electronically, the need for such procedures is completely removed. It therefore follows that the process for agreeing a contract may be much more efficient and straightforward, as each party can simply sign their own copy before delivering it to the others.
In the committee’s view, one of the main benefits of the bill is its potential to increase the number of contracts that are made under Scots law. The committee heard that a perceived inability to execute documents in counterpart often leads parties who would otherwise have drawn up their contracts under Scots law to state within a document that it will be governed by another legal system, such as the English legal system, allowing them to avoid processes such as the aforementioned signing ceremony.
Many witnesses argued that, by providing for execution in counterpart, the bill could lead to an increase in the number of contracts that are contracted under Scots law. However, we should not get carried away about that. The bill is unlikely to bring an influx of contracts to Scotland from those who would otherwise have no reason to use Scots law. Parties choose which law will govern their contract for a variety of reasons, and the committee also heard that English and New York law are dominant internationally and will, in all likelihood, continue to be so.
For some, however, the inability to execute a document in counterpart is the determining factor in their choice of law. The committee heard examples of contracts that were switched to English law at the 11th hour when it became apparent that all parties would be unable to gather together to sign a single document. It could be argued that, by allowing for execution in counterpart, the bill will encourage such parties to use Scots law rather than switch to another form of law. The committee therefore considers that the bill has the potential to stop the drift away from Scots law of contracts that would otherwise have been made under our law.
In addition to assessing the potential benefits of the bill, the committee considered its potential challenges. In its evidence to the committee, the Faculty of Advocates suggested that the bill’s provisions could lead to an increase in the incidence of fraud or error. The faculty was particularly concerned that the bill allows parties to exchange signature pages as opposed to whole documents. It considered that that would increase the likelihood that the content of the document could be altered.
The faculty’s view was not, however, shared by other witnesses. Having considered all the evidence, the committee was not persuaded that the bill will lead to an increase in the incidence of either fraud or error. In reaching that conclusion, the committee took account of the lack of evidence of instances of fraud or error in other countries in which execution in counterpart and electronic delivery of documents are already commonly practised. Further to that, the committee noted the existing safeguards that are in place in our law to both prevent and deal with fraud and error. At the same time, the committee encourages the Scottish Government to continue to ensure that the potential for fraud and error is accounted for and to consider how such risks could be reduced further.
The committee therefore recommends that the general principles of the Legal Writings (Counterparts and Delivery) (Scotland) Bill be agreed to.
Thus far, the new system for implementing Scottish Law Commission bills appears to be working well. I agree with the minister on that and am grateful for his comments. I look forward to the continued progress of the bill and to scrutinising further bills under this welcome process.
15:45
I welcome this afternoon’s debate and thank the Delegated Powers and Law Reform Committee and its clerks, together with the witnesses and those who submitted evidence during the consultation process, for their contributions and their scrutiny of the bill.
I would be surprised if the bill did not carry the support of all members; it certainly has the support of the Scottish Conservatives, because it is a bill that seeks to improve contract law by making some important changes to the way in which legal documents can be signed and brought into legal effect in Scotland. In doing so, as the minister stated, it focuses on the signing of counterparts—identical copies of a document—rather than the same physical document, and on electronic delivery of scanned documents.
At present, as various respondents to the consultation made clear, there is considerable uncertainty about whether documents can be executed in counterpart under Scots law, despite that being deemed to be more efficient. That is because—depending on the type of transaction—the current preference of legal practitioners is to follow the often time-consuming and cumbersome practice of holding a signing ceremony or to go through the round-robin process, both of which ensure that the same document is signed by all the parties involved. In addition, those options can at times be excessively costly, inefficient and impractical, particularly if the transaction is multijurisdictional in nature and the relevant parties are in separate locations.
Location is a key issue in our increasingly globalised society. That was highlighted in the Weir Group’s written submission, in which the company stated that 90 per cent of its contracts involved multiple parties and locations. Furthermore, the bill’s provisions will, crucially, bring Scots law into step with other legal systems and will modernise out-of-date processes that have caused delays and ambiguity.
For example, in England and other jurisdictions such as New Zealand, Australia and America, legal documents can be executed—that is, brought into legal effect—if they are signed in counterpart. The University of Glasgow’s Dr Ross Anderson made a very perceptive comment when he said that it is
“crucial that Scotland stops exporting transactions that are carried out by the ordinary people of Scotland and by Scottish businesses and companies, and which relate to assets in Scotland.”
That underscores the pressing need for change. After all, it is unacceptable that
“we cannot persuade our own citizenry to use our law”.—[Official Report, Delegated Powers and Law Reform Committee, 7 October 2014; c 5.]
As Dr Anderson remarked, that “reflects poorly” on its content.
Given that that is the case, the bill’s proposed changes are extremely positive for the development and application of Scots law, for legal practitioners and for those who seek to use Scots law. However, as Robert Howie QC emphasised during his evidence to the committee, it is important to manage expectations and to understand that the bill is not being presented as a panacea that will automatically lead to an increase in the number of contracts that are made under Scots law. Nigel Don emphasised that point.
In particular, in commercial and other transactions, it is often the legal jurisdiction that takes precedence, rather than the associated processes. In many cases, New York and English law are likely to continue to be widely used. That is recognised in the Delegated Powers and Law Reform Committee’s stage 1 report, which makes the assessment that the bill will put Scotland in a more equitable position with other jurisdictions rather than emphasise a potential competitive advantage over them.
Although the legal community is generally supportive of the bill, there has been some criticism. Both the Faculty of Advocates and the law firm Freshfields Bruckhaus Deringer have pointed to several drafting issues that may merit further consideration at stage 2. The faculty has also expressed concern that, under the proposed changes, parties might execute different versions of a document due to either error or fraud, although other witnesses suggested that that is a moot point and that fraud can occur under the present arrangements. However remote the possibility is, it is important to bear it in mind and to ensure that sufficient safeguards are put in place as the bill moves to the next stage.
The bill will have a positive impact on Scots law and will help to ensure that individuals and businesses that seek to undertake transactions in this jurisdiction do not experience obstacles or delays. I therefore confirm again that the Legal Writings (Counterparts and Delivery) (Scotland) Bill and the stage 1 report have the Scottish Conservatives’ support.
15:52
I start by apologising to you, Presiding Officer, to the minister and to members for my late arrival in the chamber this afternoon.
I am pleased to open this stage 1 debate for Labour. As other speakers have done, I welcome the general principles of the Legal Writings (Counterparts and Delivery) (Scotland) Bill, which is important for businesses here.
To date, there has been confusion about whether execution in counterpart is legally binding in Scotland. The bill clarifies that signing in counterpart is a valid way of executing a contract in Scotland under Scots law. That is one of the most important elements of the bill.
I also commend the second key element. The provision that paper legal documents will be deliverable by electronic means, including email and fax, will increase efficiency and flexibility and will make it easier for businesses to contract in Scotland under Scots law.
It is encouraging that the bill largely follows the recommendations of the Scottish Law Commission, which noted that the current law is not serving businesses’ needs in the modern electronic age, when it has been more difficult for parties in different locations to enter commercial transactions. I am sure that the law firms will be pleased to see that their taxi bills for sending their young trainees between offices with contracts will be significantly reduced as a result of the bill.
The bill could be viewed as an inevitable technical change to how contracts are concluded, but it is crucial to note that today’s debate brings to the fore a far more significant matter: it signifies a moment of modernisation that we can grasp and use to enter a new phase of digital progression and business innovation.
Let us look at the sections of the bill that allow contracts to be signed in counterpart. They mean that parties will not have to be in the same location at the same time to sign a contract. Put simply, the bill requires counterparts of the document to be supplied and delivered appropriately. Although the ability to sign in counterpart existed before, the clarification and reinforcement under the bill will make forming contracts—and therefore doing business—much easier.
As the Conservative spokesperson and the minister said, that will also prevent businesses from moving to English law at the last minute. None of us wants that for businesses in Scotland, but the practice was becoming increasingly common when all parties could not be present in the same location at the time of signing.
The bill will bring Scots law into line with many other international jurisdictions, as Margaret Mitchell said, including England and New York, which are the two biggest legal centres in the world. Crucially, they do more business than anywhere else. The bill will make it more attractive to do business in Scotland.
In its submission to the Delegated Powers and Law Reform Committee, Dickson Minto WS said:
“The Bill becoming law would represent an immeasurable improvement to the process of the execution of documents in Scotland. The Bill will provide greater flexibility to businesses and improve the speed at which transactions are completed.”
Thus, signing contracts using counterparts will not only increase efficiency, but will make it easier to form, deliver and execute contracts in Scots law.
The second part of the bill addresses electronic signatures, which will improve the efficiency of the contractual process, make the important signing of the document the centre of the process, and dispense with matters such as location, calendars, travel and accommodation costs.
Digital modernisation is key for Scotland. We have discussed the matter many times in the chamber. We can see why when we look at countries such as Estonia, which is now widely recognised as being one of the most tech-savvy nations in the world. It made innovation policy a political priority and paired it with initiatives including giving its population free access to wi-fi. Similarly, Finland’s recovery from its deep depression of the early 1990s was achieved by putting technology innovation at the heart of its response and by maintaining spend on technology in the face of wider cuts.
The Legal Writings (Counterparts and Delivery) (Scotland) Bill paves the way for time and cost savings for businesses entering contracts in Scotland, whether it is a business that provides services to another business or a business that provides services to individuals who are buying houses.
An interesting innovation that the Law Society of Scotland has been working on illustrates the legal world’s keenness to embrace what the bill outlines. That innovation is a smart-card secure scheme, which registers the secure digital signature and then allows practising solicitors to sign documents and contracts entirely electronically, and to receive signatures from others knowing that they have come from a trusted professional system. An increasing number of solicitors are registering with that scheme. The aim is that roll-out will be completed by November next year. That scheme and the proposals in the bill allow us to go forward with confidence about avoiding fraud and error as much as possible.
As well as making business easier, the bill will bring numerous other benefits. I hope that, together, we can build on them with consensus across the chamber.
Labour is pleased to support the principles of the bill at stage 1, and we look forward to its passage through Parliament.
We now turn to the open debate. Speeches should be of about seven minutes, please. There is time in hand.
15:58
Thank you very much, Presiding Officer. You are generous with the time.
I add my thanks to those of the convener of the Delegated Powers and Law Reform Committee, Nigel Don, for the assistance that the committee received when we scrutinised the bill.
As we have heard, the bill is a first for the Parliament, and going through the process has been very interesting. There have not been many time constraints placed on it, which is probably of great benefit in this instance. I am sure that when more bills from the Scottish Law Commission go through the Delegated Powers and Law Reform Committee, the timescales will reduce slightly—or greatly.
The bill has been non-contentious but, as with any bill, there have obviously been elements on which there has been conflicting evidence. As we have heard, the evidence that we received from the Faculty of Advocates in particular certainly seemed to be at odds with the evidence from other interested parties. That was helpful because it provided an opportunity for further debate as the committee went through the bill process. It certainly helped with our private discussions when we were putting together our report, and it allowed us to question the bill and its stated aims a bit more.
I believe, however, that the bill will be a welcome addition for businesses in Scotland. We heard from a number of people evidence that some business transactions end up taking place under other jurisdictions’ law—predominantly English law, and sometimes New York law. Scotland has lost business as a consequence of a system that does not provide flexibility. The bill will not change the world, but it aims to rectify that problem by making this aspect of Scots law more flexible and competitive so that more business can take place in Scotland. At the very least, the bill will make it easier and cheaper for transactions to take place under Scots law, which we all welcome, I am sure. The committee was not sure how much additional business will be retained in Scotland, but we all believe that it will happen and that aiding businesses in this country will result in economic benefit.
Paragraphs 158 to 174 of the Delegated Powers and Law Reform Committee’s report discuss an electronic repository. That is an idea that first came to my attention a couple of years ago when I was a member of the Economy, Energy and Tourism Committee and we were scrutinising the Land Registration etc (Scotland) Bill. The concept of an electronic repository for storing legal documents independently received some attention then and again when we were going through this bill. The DPLR Committee supported the concept and the suggestion that it should be maintained by Registers of Scotland. That element—an independent body maintaining the electronic repository—is important. We certainly considered an electronic repository to be a useful tool for storing records of contracts. It could also be a means of executing documents by way of electronic signature, which my colleague Stewart Stevenson was keen to highlight regularly as we scrutinised the bill.
However, the committee thought that two main issues required to be addressed. The first was that sufficient safeguards need to be in place to ensure security. In the fast-moving world of information technology and software development, that could be a challenge, but it is not insurmountable. Secondly, the committee took the view that if an electronic repository is to be created, there should be no obligation for parties to use it—it should be their choice. We heard evidence of examples where a firm might cease trading and its documents might no longer be available. We have also heard today about some activities that have taken place in the past that have not been thoroughly legal, to say the least. We were very much aware that although we might well be talking about a very small number of cases, the situation could create large problems. That was one of the strongest supporting comments for a central repository.
The bill is an important piece of the jigsaw of facilitating a more modern business legal system, and it aids the Scottish Government’s digital economy policies. Scottish business transactions will be more efficient and there will be a positive environmental impact as business representatives will no longer need to travel all over the world to sign contracts.
I welcome the bill and I am sure that it will have a positive impact on the legal side of things and on business in Scotland. It will mean a better economic return; a more prosperous Scotland can come from that. I welcome the general principles of the bill.
16:04
This is the first time that a recommendation of the Scottish Law Commission has been taken forward in this way, with the bill being brought to Parliament by the Delegated Powers and Law Reform Committee. The bill that the committee is asking Parliament to consider is one that my Labour colleagues and I are inclined to support at stage 1.
Not only do I believe that the general principles of the bill are sound, but I believe that the work of the SLC and the committee demonstrates that there is a clear need to modernise contract law in Scotland. In supporting the bill, I hope that Parliament can give clarity—as has been asked for before—on the concepts of counterparts and delivery, and that it can produce a legal framework for contracts that reflects changes in technology and business practice. I also hope that we can make a wider contribution to the Scottish economy.
I congratulate the SLC on its work on the bill. It has undertaken an informed and extensive consultation. Its work has highlighted the need for the bill and has demonstrated that there is support for reform across the legal, academic and business communities. In its work, the SLC identified two problems with commercial and contract law in Scotland, which it believes could be dealt with through Parliament’s new approach to law reform. First, it highlighted the need for clarity in respect of counterparts. It was not clear whether a legal document could be brought into effect if it was signed in counterpart. In other words, the commission was not clear whether it is acceptable under current Scots law for different parties to sign identical copies of a contract instead of signing the same physical copy of the document.
Secondly, the SLC called for clarity in respect of the law on delivery. It is not clear whether a paper document, such as a traditional written contract, can be said to have been delivered if it is sent and delivered electronically.
The view of the SLC is that the current law is not fit for purpose because the letter of our law in Scotland is at variance with common practice and with contract law in neighbouring jurisdictions. The SLC even found evidence that businesses are sometimes choosing to use English law instead of Scots law to govern agreements because counterparts are permitted under English law. That disincentive to using Scots law, coupled with legal uncertainty over methods of delivery, may well be doing harm to our economic competitiveness.
By allowing the use of counterpart signatures as an option to execute a contract, and by allowing contracts to be delivered electronically, we could help businesses to make time-cost savings and reduce travel and accommodation costs.
We should bear in mind that a limited number of people within a business will be authorised to sign legal documents on behalf of the company. I also emphasise that the costs to businesses that are outlined by the SLC are costs that they would not face in jurisdictions where contract law has already been modernised and where laws take sufficient account of technological change.
Just as we want to be clear about what the bill will do to modernise our laws in respect of counterparts and delivery, let us also be clear about what it will not do: it will not mandate use of electronic signatures, and it will not change the law on fraud. In both civil and criminal law, the existing rules on fraudulent signatures will remain in place. The bill will not change the standard of proof that is required in relation to execution; the general rules on whether a person who claims to have signed a document has actually done so will remain the same.
The bill will not alter general contract law. Issues such as whether a contract has been formed and the rules on breach of contract, damages and so forth will not be affected by the bill. It will not create an electronic repository for legal documents. Although that was a recommendation of the SLC, it is an area of work that the Scottish Government is keen to pursue once the bill has been passed.
The bill will simply bring the law up to date. It will allow for contracts to be signed in counterpart, as is acceptable in other jurisdictions, and it will allow for paper contracts to be delivered electronically.
With the bill, we have an opportunity to remove a disincentive to conducting business using Scots law, and to make it easier for parties to enter commercial contracts and transactions. With small but significant changes that are largely uncontroversial, we can bring contract law up to date and make it fit for purpose. It is for those reasons that I intend to support the general principles of the bill.
16:09
I am pleased to have the opportunity to speak in the debate, because the work of the Delegated Powers and Law Reform Committee is seldom properly recognised. It is unlike any of the other committees of the Parliament, because it does not deal with policy. As a consequence, few visitors and even fewer journalists attend its public meetings—a bit like now in the chamber. We members of the committee are therefore perhaps the least scrutinised of the scrutinisers in the Parliament.
I feel for the committee given its lack of interest from the public, but does the member feel that that is inevitable and that perhaps some of the most valuable work that is done in the Parliament is not the most seen by the public or the most exciting?
I absolutely agree with Mr Mason. Indeed, I hope to make that point while I have the opportunity to speak about the committee.
The Delegated Powers and Law Reform Committee, as it is now known, still mainly deals with subordinate legislation, which is where our legislative teeth are often found buried rather than on the face of bills, although that is where they are most often looked for.
The committee is sometimes thought to be a dry one that deals with a dry subject, but I have found it to be otherwise. I have found its focus, clarity of thought and discipline to be demanding and instructive. I have found that the words in our Scottish statutory instruments are often words of power, and they are weighed by the committee in an almost poetic search for intent and purpose. I have sometimes said in the committee that it reminds me of a remark that is attributed to Oscar Wilde, who said that he had worked very hard on his latest poem one day—in the morning, he took out a comma and, in the afternoon, he put it back in again.
I have found the committee’s deliberations on appropriate levels and forms of scrutiny, clarity of meaning and the width and breadth of powers to be at times almost philosophical. Despite the best intentions of generations of lawyers, the language of our law is much more than the language of mere mathematics, because it often goes beyond logic and is capable of carrying objective and subjective meaning. That is where the challenge for and interest in the committee often lies. We filter our legislation through the finest of sieves.
It has been interesting to see the committee’s approach to its first piece of primary legislation—the Legal Writings (Counterparts and Delivery) (Scotland) Bill. I pause at this point to pay tribute to our clerks and legal advisers, who brought the same disciplined and painstaking approach to bear as they do to all our work. I commend them not just for their grasp of the law and impeccable skills of reasoning but for a most important ability—the ability to explain their thoughts in plain terms for us, the laypersons, who in the main make up the committee.
I am very much enjoying the member’s speech and I am grateful that he is heaping praise on those who do much of the work for us. Does he share the same enthusiasm for the work of the Scottish Law Commission? It gave us a remarkably precise and careful description of what was involved, complete with drawings, which I still remember. That seemed to be exactly the way to describe law.
I am happy to agree with Nigel Don. I note that the Scottish Government has said that, because of the work and consultation that the Scottish Law Commission did, it is not necessary to do further consultation. That is the stamp of approval on the work of the Scottish Law Commission and particularly the way in which it has approached the bill.
I ought to say a few words about the bill, although I see that I am beginning to run out of time. By facilitating execution in counterpart and the electronic transmission of documents, the bill simply brings an aspect of Scots law up to date. In 2014, the part of our law that is within the bill’s scope will once again become fit for purpose.
The merits of the bill are self-evident—they are obvious. The committee was unanimous on that, as were almost all our witnesses. Only the Faculty of Advocates perplexed us by maintaining that the bill would give rise to an increase in fraud. We were perplexed only in so far as we made a genuine attempt to understand the argument. In the end, we were not persuaded. The bill neither adds to nor removes the possibility of fraud.
It is not a bill of grand and sweeping intent. It is not radical. It is not controversial. It is perhaps not even all that exciting. However, I commend it to members, because modest improvements are often worth while and important.
16:16
Mike MacKenzie is being grossly unfair to the committee. Only this morning, we had a piece of secondary legislation on food, and the table in the schedule to that instrument told me that corned beef must have 120 per cent meat in it. I will let members go and read for themselves the instrument, which will go to the policy committee shortly. The figure was correct, as it turned out. I would never have known that had I not been on the Delegated Powers and Law Reform Committee.
How can it be 120 per cent?
No, no—this is not the place. John Mason needs to go and read the relevant instrument. I can tell him that the figure is on page 7 and the explanation is in small print—six-point print—on page 10, if he can understand it when he gets there. He should believe me that it is interesting.
The point is that we deal with the minutiae, and the minutiae on contracts often have profound effects for business and life in Scotland and beyond.
Over the years, I have dealt with a number of contracts. I quickly jotted down the jurisdictions in which I have signed contracts and found 10, ranging from Delaware to Norway. I have been in San Francisco only once in my life and that was simply to sign a contract. I was in the United States for a grand total of 14 hours and slept for 10 of them because that was overnight.
A friend of mine got up in the morning, got the plane down to Heathrow, got on Concorde, met somebody airside at Kennedy airport, signed a contract, got back on the same Concorde, flew back to Heathrow, got the plane back to Edinburgh and was home an hour earlier than usual, but what a waste of time and effort it was to go all that way to sign a contract. This modest little bill will have profound and useful effects.
Jenny Marra mentioned Estonia. I am surprised that she did not namecheck Skype, which was written by software engineers there. That country has considerable things to offer in the electronic world.
The bill will move us a little bit towards electronic signatures and electronic repositories. The Law Society is producing its electronic card, which will go out to everybody in about a year. It remains the case that the card will be shared among people in a firm, so there will not be individual certainty about who might have used it to sign something electronically. The bill takes the issue forward with its emphasis on electronic signatures but does not take it all the way.
Does Stewart Stevenson agree that the Scottish Government is due praise for implementing across the Highlands and Islands the backbone for a fibre optic broadband system that will allow such technological improvement to our law to take place? Does he also agree that the United Kingdom Government requires to do more work to roll out 2G, 3G and 4G across the Highlands and Islands and the rural parts of Scotland?
I can give Stewart Stevenson an extra minute or two to his seven minutes, to make up for the interventions.
That would be helpful, Presiding Officer, although I might need about an hour to deal with the scope of that intervention. I note that the Irish Government has this very day committed itself to delivering 30 megabit broadband to every location in Ireland, so perhaps we have a little bit to travel. I would welcome 2G, 3G, 4G or any G at home; I currently have none. It is very important.
I will return to the subject of the bill—I am sure that you would wish me to do that, Presiding Officer—and electronic signatures. Electronic signatures are useful in a variety of ways, as they enable people to sign a document and if anything in the document is changed—even if a dot or comma is missing or a single letter is changed—the signature becomes invalid. That kind of technological approach will give us certainty in the future.
Lawyers are quite reasonably conservative—with a small “c”—about adopting technology. It is very straightforward to describe public-key cryptography, with the appellation of Rivest, Shamir and Adleman—the three American mathematicians who developed the system that we generally use today. In fact, it was developed by Government Communications Headquarters some years earlier but kept secret. It is a system of cryptography that can be described on a single page, but it takes a lifetime of study to understand. It involves the multiplication of two very large prime numbers together and then a matrix formation, so that we can have one key for locking—for signing—and a different, secret key for unlocking. Keys do not have to be shared with anyone. That is the essence of a secure system.
The system is not new. Mary, Queen of Scots used the system; she had a little casket with which she corresponded with her lovers. After putting a message in, she used a key to lock the lock and then sent the casket to her lover. He locked another lock with his private key and sent the casket back to her. She then unlocked her lock and sent the casket back to him. He unlocked her lock and at last he could access the message. The key was never shared with anyone. That is exactly how electronic signatures work, except that instead of physical keys that the owners keep secret we use electronic keys.
As a mathematician, I find prime numbers particularly interesting. They come up time and again. Some of this technology has been described in “The Simpsons”. Most of the team that writes “The Simpsons” are mathematicians, which might surprise members. Eighteen years ago, Homer Simpson referred to Belphegor’s prime. Belphegor is one of the seven princes of hell in John Milton’s “Paradise Lost” and was charged with helping people to make ingenious inventions and discoveries. Belphegor’s prime number is 31 digits long: it is 1 followed by 13 zeroes, followed by 666—which is why it is Belphegor’s prime—followed by 13 zeroes, followed by 1. Of course, it is also symmetric: it is the same read either way around. Prime numbers are exciting and interesting, as well as being useful for electronic signatures.
There is an opportunity for Scotland beyond what we are doing today, such as encouraging Registers of Scotland to develop a secure repository based on such technology, with contracts held there during their development and people able to access them securely to sign, annotate or amend. That gives us security against the failure of companies, so that contracts do not get lost over the years to come; it gives us security of control and access, with everyone working off the same document; and it could give us significant commercial advantage.
Scots law has been around for a long time. It has stood the test of time. The Scottish Law Commission has usefully helped us to make progress and to bring us up to the mark of other jurisdictions. The debates and the discussions, as well as the information from witnesses that we have had in the committee, show us that we can do more. I hope that we take the opportunity to do that and that we pick up the challenge of secure signatures and encryption because, in mathematical terms—members can look this up—this is an NP, or non-deterministic polynomial time, problem. No one knows how to solve it, no one has yet broken such a key and no one shows any sign of doing so.
16:26
The debate has been interesting—perhaps much more interesting than many of us had expected when we came into the chamber. It is impossible to follow or to compete with Stewart Stevenson’s tales of transatlantic adventures, da Vinci code-style mathematical problems and—this was an interesting addition to the debate—“The Simpsons”. We always enjoy Mr Stevenson’s ability to spice up a debate of this nature.
It has been a pleasure to be part of the Delegated Powers and Law Reform Committee as, through its first considerations under its new responsibilities, it has considered the bill. The bill has proved to be a good candidate to initiate that new role because, as we have heard, there has been a great deal of consensus around the legislation and, although it is narrow in its compass, it will have a beneficial effect for legal practice.
As others, including the minister and the convener, have done, I reflect on the fact that dealing with bills introduced by the Scottish Law Commission will be beneficial generally to legislative reform in the Parliament. For too long, bills that had been the subject of considerable consultation and a great deal of work by the commission were not taken forward and were left to gather dust. The commission was left reliant on members coming forward to take up the bills individually, as my colleague Bill Butler did successfully in the previous session with the Damages (Scotland) Act 2011, which I am sure that the minister remembers.
Unfortunately, that was a relatively isolated example. Too many bills on important issues, which could have been equally as beneficial as the one that we are considering, were not progressed, so it is good that with our committee’s parliamentary consideration, we can look forward to more progress with such legislation.
I join others in congratulating the convener and the committee clerks and advisers on their stewardship of the process. I have perhaps not found as many moments of philosophy and poetry in the committee’s deliberations as Mike MacKenzie did. I congratulate him on doing so. He clearly sees debate over the definition of quantities of corned beef in a different light from me. However, it is important to recognise the committee’s good work, so it is right to say that this is an opportunity to reflect on that. In this process, the committee’s work will be beneficial not just to Parliament but to the quality of law.
As others have said, the evidence that we took was almost unanimous in its support for the bill’s proposals. During our deliberations, I asked witnesses about the potential for fraud, to which members have referred, and the Faculty of Advocates expressed concerns, particularly in its oral evidence. All other witnesses were clear that they did not see the legislation opening up greater potential for fraud in transactions.
As we heard from witnesses, if individuals are determined to commit an act of fraud in such transactions, they will find a way of doing so, regardless of whether the bill is passed. We have not heard evidence of a higher number of examples of fraud or error in England since execution in counterpart and the electronic delivery of documents were allowed there. The issue was best summed up by those who said that it will neither reduce nor increase the risk of fraud if we pass the bill.
The other issue that I pursued with witnesses when we took evidence on the bill was the use of pre-signed signature pages, in relation to which specific concerns were raised about the potential for fraud. Witnesses raised concerns not about the legislation itself but about the concept of the use of pre-signed signature pages. As the policy memorandum makes clear, the bill does not change the existing position on that, but nor does it prevent a pre-signed signature page from being attached to a different document, provided that it can be shown that the party concerned clearly authorised or mandated that in advance, or subsequently ratified what had been done, with full knowledge of the content of the new document.
Witnesses expressed some unease about the use of pre-signed signature pages in general. When I asked Dr Ross Anderson of the University of Glasgow about this issue, he said:
“As a solicitor, I would never use them. ... It seems to me that the authorisation that has been given by the client in that situation is essentially a power of attorney to the solicitor to sign the document ... I find the use of pre-signed signature pages odd.”
However, he also acknowledged that the bill might be taking the approach that it is
“simply to reflect some of the practices that are going on in England and ... to be facilitative for cases that may arise.”—[Official Report, Delegated Powers and Law Reform Committee, 7 October 2014; c 9-10.]
The committee has reached the right conclusion on this issue, given that the legislation is intended to aid flexibility for legal practice in Scotland. We concluded that, although there might be misgivings about the use of pre-signed signature pages, which we recognise and mention in our report, there might also be circumstances in which their use is justified.
It would be wrong to overestimate the economic impact of the legislation for our legal services industry, but I think that it is beneficial, even if it is narrow in its effect. It is right that we heed the advice of the Law Society that the existing practice of signing contracts under Scots law is in need of updating. The society informs us that parties to a contract are switching to English contract law at a later stage because it is more convenient for the execution of contracts. If by passing the bill we can ensure that contracts can in future be concluded under Scots law, clearly that would be beneficial for our important legal services industry, and that is why it is right to support the bill today.
16:33
As members will notice, I was not a member of the Delegated Powers and Law Reform Committee, and I think that I am one of the few back benchers speaking today who has not been very involved in this subject. However, I spent some time this morning reading about it.
It had been suggested that it would be useful to have somebody from the Finance Committee speaking on this subject, but I do not think that there are a huge number of financial issues in the bill. It struck me that we could have had somebody from the Education and Culture Committee, the Public Petitions Committee, the Justice Committee or the Health and Sport Committee—or one of the various other committees—speaking on the subject.
However, it seems clear to me that the process of signing documents has become somewhat outdated, so I very much welcome this move to improve the system for executing and delivering documents. I have often been part of one of those round-robin processes in which one hard copy gets posted to somebody for signature, who eventually gets it signed, possibly with a witness, and returns it to the firm of solicitors, which then sends it out to the second person for signature—and so the process goes on. Clearly, all that takes a considerable amount of time. We all expect things to happen a little bit faster these days.
On that point, I make the general point that there are other areas of legal process that could do with a bit of modernisation. I very much welcome the fact that a relative outsider is becoming the Cabinet Secretary for Justice. Perhaps he will come forward with more proposals about how to update and improve the legal process. Other professions and trades have to meet very tight deadlines nowadays, such as auditors in my profession who have to complete a company audit within a small number of days. It seems to me that sometimes there is not a strong enough emphasis on deadlines that could be in place for court cases and other legal processes. The bill is clearly a step in the right direction in that area.
There are two arguments that most convince me of the need for legislation, having looked at the committee’s report. One is that Scots law could be losing out to other jurisdictions and the other concerns the potential cost savings, and time savings, that could result from the updated procedures.
On the second of those points, I suspect that we must accept that the potential cost savings are estimates, and time will tell whether they have been over or underoptimistic. The Faculty of Advocates certainly seemed to take that view, as quoted in paragraph 73 of the committee report:
“Most of the contracts that are made under Scots law are smaller-scale contracts, which are made not in Glasgow, Edinburgh or Aberdeen but in small towns around Scotland. In such cases, we suspect that the saving of cost and the convenience that are envisaged as a result of the electronic execution and exchange of counterparts, instead of simply having people come into the office to do all that, will be limited.”—[Official Report, Delegated Powers and Law Reform Committee, 30 September 2014; c 22.]
Does John Mason feel that the new legislation might help to meet our climate change targets? Mr Stevenson’s worldwide journeys merely to sign contracts may not be necessary in future.
If it cuts down air travel, that is very much to be welcomed. Clearly, travelling anywhere takes time, even if it is locally and by car. However, I am a little bit doubtful about one of the suggestions that I noted in relation to the bill, that less paper might be used, which I accept would also help the environment. Throughout my working life, I have heard many suggestions that less paper would be used in offices. Sadly, that has not tended to be the case. My suspicion is that, if there are six people signing a document, we will still end up with six copies, if not more, all signed by different people.
The other argument that convinces me that the bill is important is the suggestion that Scots law could be losing out, although I accept that parties to some contracts will always prefer to use the law of a larger jurisdiction, such as England or the United States. I noted the evidence given by Tods Murray, which is quoted in paragraphs 46 and 47 of the committee report, and which I thought was quite convincing. It states:
“It has been suggested that the lack of a law on counterparts can cause damage to the reputation of Scots law internationally. Tods Murray’s written submission suggested that—
‘The existing Scots law, particularly the lack of counterpart execution as a valid form of execution, can cause problems in terms of transaction logistics and requirements as well as giving a poor impression of Scots law and Scotland generally as a place in which to do business.’”
That latter statement is what really struck me. Although contracts may account for only a small part of what is happening in Scotland, if there is the impression that Scottish business as a whole is not up to date, not efficient and not doing things in the best possible way, I would be extremely concerned about that, quite apart from the whole legal process.
As a non-lawyer, I have to ask where Scotland is positioning herself in the global market. The legal system is not just another product such as whisky or cheese. It is much more than a product, but it is a product nonetheless. If Scotland is to compete on quality with the best food and drink, top-of-the-range engineering and one of the cleanest environments in the world, similarly we want one of the best legal systems in the world. From that perspective, I do not see today’s debate as being of narrow interest only to the legal profession. It has a much wider economic impact. If this Parliament cannot fight the corner of Scots law, I do not know who can.
I note the committee’s study of the potential for fraud and error in paragraphs 106 to 129. I was going to read some of that more extensively, but I will not do that.
Please draw your remarks to a conclusion.
I am happy to do so.
Paragraph 110 of the report points out that fraud and error can “always occur”. I experienced that myself some years ago, when a rogue photocopier salesman forged my signature on an agreement to buy a new copier.
As noted in paragraph 111 of the report, the minister acknowledged that there is an existing risk, and that raises the question of how we deal with risk. I suspect that there are parts of the legal profession that want no risk whatsoever, but I do not believe that that is what we are aiming for. As in other areas of life, we want to manage and minimise risk, but we must weigh up the practicalities and costs of reducing risk beyond a certain level.
I am afraid that you really must close now.
Therefore, I will close.
We come to the closing speeches.
16:40
I thank members for the quality of this afternoon’s debate. It is clear that the Legal Writings (Counterparts and Delivery) (Scotland) Bill has achieved cross-party support, and I reaffirm that the Scottish Conservatives are supportive of its general principles at stage 1.
There are, however, three points that I wish to address. The first point is the potential benefits of the bill to the business community, legal practitioners and those individuals who seek to use Scots law for transactional purposes. As we heard in evidence from the minister, Fergus Ewing, and from Margaret Mitchell, there is uncertainty in Scots law at present as to whether execution in counterpart is permissible. That uncertainty has acted as a deterrent for businesses and the legal profession.
In addition, parties are often unable to undertake the time-consuming, impractical and costly signing ceremonies that are currently required. Further, it is unclear whether a traditional paper document can be delivered electronically. As a result, in many cases the relevant parties have opted instead to use English or New York law to remove any doubt, which has been to the detriment of Scots law.
The proposed legislation will help to ensure that those who wish to operate under Scots law can do so, by removing many obstacles and constraints. Although we must manage expectations regarding the potential increase in transactions under Scots law that may arise from the bill, the evidence suggests that measures to put execution in counterpart on a statutory footing will give businesses and ordinary individuals the confidence to stop exporting contracts to English law and elsewhere that would otherwise be governed by Scots law. That is an extremely positive and welcome development.
I turn to the risk of fraud, which has been raised by other members and by the Faculty of Advocates. The faculty commented that execution in counterpart could lead to different parties signing different versions of a document, either knowingly or unknowingly. Furthermore, the faculty expressed concern that parties will be able to exchange signature pages, as opposed to counterparts in their entirety.
Expanding on those concerns, Robert Howie QC explained:
“If one permits execution by the exchange of the back pages of a contract, each signed by a particular party, plus the front page, it is all too easy for the rogue or fraudster to amend the critical stuff in the middle of the sandwich.”—[Official Report, Delegated Powers and Law Reform Committee, 30 September 2014; c 22.]
Further, the faculty touched on the possibility that such a scenario could lead to an increase in instances of parties coming to court in order to resolve disagreements over the content of the documents. For large transactions, where millions of pounds are at stake, the potential for deception should not be ignored.
However, on balance, and based on the evidence that we heard over a number of sessions, it seemed to me—and to committee colleagues—that the potential for fraud and error is no greater than that which already exists under the current system in Scotland and in jurisdictions where execution by counterpart is commonplace, such as England and Wales, where incidents of fraud are relatively few. Nevertheless, it is worth while bearing in mind the faculty’s concerns as the bill moves through its various stages in Parliament.
The bill does not include the SLC’s recommendation that a central electronic repository should be established. However, that idea was broadly supported by witnesses in their evidence to the Delegated Powers and Law Reform Committee, and we felt that the concept should be explored further—always providing that adequate safeguards could be put in place and that the technology used would be suitable, adaptable and enduring.
I therefore welcomed the then Minister for Energy, Enterprise and Tourism’s update earlier this month, when he indicated that the keeper of the registers of Scotland has expressed interest in exploring the creation of an electronic repository for the execution and preservation of documents. I understand that preliminary discussions between Registers of Scotland and the Scottish Government will be set in motion early next year. We will await the outcome of the discussions with keen interest. We are particularly interested in knowing whether new legislation will be required to bring the initiative into effect, given that it might allow for the execution of documents as well as their preservation.
I reiterate that the bill is helpful and will benefit the business community in Scotland, as well as the legal profession and individuals who seek to carry out transactions under Scots law. That is very much to be welcomed.
I thank everyone who gave evidence to the committee, particularly the people who appeared in person and the Scottish Law Commission. I also thank the committee clerks. I look forward to the bill becoming law.
I commend Mike MacKenzie, who managed to get through about four minutes of his speech without referring to the bill at all. Stewart Stevenson should beware; his role as the Parliament’s best filibuster might be under threat.
16:46
This has been an interesting and, at times, entertaining debate. I thank members for that.
When I saw that we were to discuss the bill this week, I thought that the debate might not be highly popular or populated, but then I remembered the importance of the issue. I have been lobbied on electronic signatures by constituents who think that the proposed amendment to Scots law is central to their businesses and will make it easier and less costly for them to conclude contracts. They think that it will make it easier for them to get more clients and more business, thereby contributing to Scotland’s economy. My having been lobbied on the issue during my short time in the Parliament shows that the bill is important for our business community and our economy.
Only a couple of weeks ago I spoke to a lawyer who told me that despite having struck a deal three weeks earlier he was still waiting for the contract to be delivered from one solicitor’s office to the next and so on, to ensure that all parties to the contract had signed up appropriately before the deal could be set in motion. In our fast-moving technological world, such a process seems to be very slow, so I congratulate the minister on introducing the bill so that processes can be neatly and more quickly concluded.
Members mentioned climate change. I was glad to hear that people might cut down on flights, and I am sure that Patrick Harvie and the new minister Aileen McLeod will be glad of the contribution to the climate change targets. However, I am not convinced that there will be less paper in legal offices around the country. Anyone who has been in front of a lawyer’s desk will know how much paperwork lawyers seem to have in their offices. There is a challenge to the legal community in that regard. The Parliament is allowing it to go electronic, and so it should do.
I was half hoping for a little lecture on Roman law from the minister this afternoon, given how learned he is in the matter. When I read the bill and the briefings on it, I was reminded of my interest in the legal concept of delivery. The Scots law concept of delivery, whereby something is not simply handed over but delivered with the intention of making things happen, has its origins in Roman law. Therefore, it is interesting that in 2014 we are debating whether email or facsimile, which we do not even use any more, constitutes delivery according to that ancient legal concept. There was still ambiguity in our law about delivery until the bill came forward.
To illustrate how cautious professions can be, in 1881 the Bank of Scotland installed its first telephone, five years after the invention was first demonstrated, but the bank’s board took the decision to do so on condition that the telephone not be used to conduct business. I suspect that some of that attitude is still around in our professions today.
Indeed—that is very true. The attitude is that, if something is to be binding, it must definitely be on paper. The minister will probably be able to explain the ancient concept of delivery far better than I can.
This has been a useful debate on the bill, which covers the important aspect of counterpart signing for contracts and, in a very modern and up-to-date sense, delivery. Tackling the barriers of inefficiency for business means that businesses can enter into contracts and work better together to improve the economic landscape of Scotland.
I am very pleased that the committee is supportive of the bill’s general principles. I congratulate the committee, the clerks and the convener on taking the bill through stage 1. I wonder whether the minister can indicate in his closing remarks whether the Government is likely to lodge amendments at stage 2 to address the questions that were raised during evidence to the committee at stage 1.
The bill is a very good piece of legislation that will help business. I think that we have all outlined some practical examples in that regard. I am very pleased that there is consensus on the bill across the chamber.
I call on Fergus Ewing to wind up the debate. Minister, you have until 5 o’clock.
16:53
In 15 years in the Parliament, I cannot recall there having been a debate in which there has been such a marked absence of any significant controversy. However, that is perhaps a reflection of the fact that the Scottish Law Commission, headed up by Paul Cullen—Lord Pentland—and his staff, did an excellent job prior to the legislation being submitted to the Parliament.
It is also a tribute to the work of the clerks of the Delegated Powers and Law Reform Committee, the Parliament as a whole and the members of the committee, ably convened by Nigel Don, who earlier led the debate for the committee. That solid hard work and application has produced at stage 1 a piece of legislation that appears to lack significant criticisms so far as the committee’s conclusions are concerned.
I should accept Jenny Marra’s invitation to comment on some of the key questions. She is quite right on that, although she is quite wrong that I am an authority on Roman law. My recollection is that, despite the excellent tuition of the learned professors and lecturers at the University of Glasgow, I only barely scraped a pass at that.
Members: Oh!
It has taken several decades to confess that, but better late than never.
Many members asked whether I think that the suggested electronic document repository would be helpful—John Scott alluded to that—and I believe that the idea is worth exploring. Following my appearance before the Delegated Powers and Law Reform Committee at stage 1, I wrote to the keeper of the registers of Scotland seeking a general update and a firmer timescale by which he would be in a position to have preliminary discussions. They should take place early next year. Of course, we have the books of council and session, as members will be aware, in which documents can be registered for preservation and execution. That is a very useful facility that is available to Scots lawyers.
Views on electronic signatures were mooted during the debate, not least by Stewart Stevenson. The use of such signatures is still in its early stages, and market conditions will effectively dictate whether more use is made of them in the future. The bill will not restrict growth in that area.
What are the benefits of the bill? It is difficult to be clear about whether the benefits will be significant, but most members are confident that it is a valuable piece of legislation. Jenny Marra said that she had been lobbied on it, and Margaret Mitchell and John Mason gave some examples of potential benefits. There will be circumstances in which it will be possible for Scots law to be used in the future, as a result of the bill, in which it cannot be used presently.
The bill may also cut down the costs of travelling to meetings and the time that busy people have to spend travelling. Jenny Marra referred to Dickson Minto and the evidence from Colin MacNeil, and John Mason referred to the evidence from Tods Murray. It is fairly likely that there will be financial benefits and time benefits from the bill.
I was reflecting on the matter before the debate. Does the minister believe that there might be an increase in the amount of business that is done in Scotland as a result of the bill, or does he believe that the bill will simply make the existing business a bit easier?
I think that it will be a bit of both. I am happy to agree entirely with everything that Jenny Marra says—I do not think that I have ever uttered that sentence before in the chamber.
The serious issue that John Scott quizzed me on in the committee was the evidence from the Faculty of Advocates signifying that the bill may lead to a greater risk of fraud or error—I think that it said that error was more likely. We spent a considerable amount of time on that, and I spent a considerable amount of time with Scottish Government officials who provided me with some excellent briefing material on the subject. We concluded that the bill will not change the substantive law.
Fraud exists because there are criminals in the world. The problem is not unique to execution in counterpart, which has been used for decades in England with apparently no ill effect. Clients also place their trust in solicitors, which tends to minimise the possibility of such things happening. Professor Rennie also made the point that, since 1970, documents have been signed on the last page only.
For those reasons, after having looked carefully at the evidence from the Faculty of Advocates, I was persuaded that there is no increased risk. However, to pursue a belt-and-braces approach—which is always sensible for a minister—I am writing to the Faculty of Advocates to ask whether, in the light of reading the Official Report of the debate, it has any further comments to add. I will copy my letter to the Lord Advocate and the president of the Law Society of Scotland, to boot.
Reference has been made to some of the lighter comments in the debate. In the short time that is available, I will turn to those. Mr Stevenson gave us not so much a speech as a travelogue that took us from Delaware to Norway and around the globe sustained by an improbable diet of overstrength corned beef. He also ensured that Mary, Queen of Scots made an unexpected entrée into the debate—something of sub-tangential relevance equalled only by his reference to Homer Simpson.
Does the minister accept that, in Mr Stevenson’s speech, the one obvious and current element that was missing was the contribution of Turing to cryptography?
I am sure that he will put that right in due course. Mr Stevenson is the human equivalent of Google or Wikipedia, the difference being that, while we ask Google or Wikipedia for information, Mr Stevenson just provides it whether we want it or not. [Laughter.]
The only difference is that, occasionally, Wikipedia is correct.
Members: Ooh!
I am not sure that everyone would agree with that. Would Mr Murphy? The debate is fairly livening up.
Mr MacKenzie regaled us with a terrific speech that he admitted was wholly irrelevant. He stood up for the Delegated Powers and Law Reform Committee, the predecessor of which was the Subordinate Legislation Committee. I volunteered for that committee in 1999 and so boring were my contributions that, to get away from me, one of the committee members actually resigned from the Parliament and the clerk left for employment elsewhere.
You have 20 seconds left, minister.
It was Donald Dewar who said, prior to devolution, that Scotland was the only country in the world that had its own legal system but lacked a legislature. We are indebted to the Scottish Parliament for the work that everyone has done to reform our law, which—prior to the Parliament’s reconvening—was something that we could not do for ourselves.
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