Chamber and committees

The effect of amendment 252 is to require an accredited regulator to review its regulatory scheme if directed to do so by the Lord President. It removes from the bill ministerial involvement in triggering the review process.

A regulator also has the power to initiate such a review itself. Where it does so and proposes a revision, amendment 251 requires it to provide a report of the revision to the Lord President, who can approve the revision, not approve it, or direct another revision to be made.

Amendments 253 to 259 and amendment 261 are consequential on the removal of the role of the Scottish ministers from the process.

Amendment 260 gives a new power to allow the Lord President to comment on an accredited regulator’s proposed revisions to its regulatory scheme and direct the regulator to take account of such comments before giving the Lord President a revised report containing any revision to the scheme.

Amendment 262 places a requirement on the regulator to publish its revised scheme.

Amendment 263 gives the Lord President the power to revoke or vary any direction that they have given.

I move amendment 251 in my name and ask members to support my other amendments in the group.

Amendment 251 agreed to.

Section 33—Review of regulatory schemes

Amendments 252 to 263 moved—[Siobhian Brown]—and agreed to.

Section 33, as amended, agreed to.

Section 34—Revocation of acquired rights

Amendments 264, 266, 265 and 267 to 269 moved—[Siobhian Brown]—and agreed to.

Section 34, as amended, agreed to.

Section 35—Replacement regulatory arrangements for authorised providers

Amendment 270 moved—[Siobhian Brown]—and agreed to.

Section 35, as amended, agreed to.

Sections 36 and 37 agreed to.

Section 38—Overview of Part

Yes, certainly. Amendment 41 makes it clear that the requirement to exercise regulatory functions in a way that contributes to sustainable economic growth applies only to the extent that to do so would not be inconsistent with the regulatory objectives, rather than, as the bill requires at present, only to the extent that it would not be inconsistent with the exercise of regulatory functions. The amendment addresses the Law Society’s concern that it is circular and confusing to require the exercise of regulatory functions only to the extent that that is not inconsistent with the exercise of regulatory functions.

Amendment 41 makes section 3(4)(b) clear that the duty to exercise regulatory functions in a way that would help to achieve economic growth applies only to the extent that that is not inconsistent with the regulatory objectives as set out in section 2(1).

Amendment 42 adds the Scottish Solicitors Discipline Tribunal as a named regulatory authority in section 3(5), which means that, as a regulatory authority, the SSDT is subject to the duties that are set out in section 3. Those duties relate to how the regulatory objectives are applied and to other regulatory authorities, including the Lord President and category 1 and category 2 regulators.

I thank Paul O’Kane for his comments. I know that the bill has been on a bit of a journey since it was introduced in April 2023. When we went into stage 1, committee members wanted to see all the amendments being made at that stage, so I hope that members will now appreciate the amount of work that has had to be done and the discussions that we have had with the judiciary and the Lord President to get us to where we are today. Thanks to my officials, a lot of work has been done in the background, and I think that we are in a better place today than we maybe were at this time last year. I thank Paul O’Kane for his comments on that.

Tess White asked about the SLCC’s comments on amendment 40. There has been a lot of engagement with stakeholders during the bill process. The purpose of amendment 40 is to clarify that, under section 3, the duty of the regulatory authority to exercise its regulatory functions in a manner which is compatible with the regulatory objectives and is considered the most appropriate to meet those objectives is not an absolute duty. The regulatory authority need only carry out that duty as far as practicable. The effect of amendment 40 will be to insert the words “so far as practicable” into section 3(1) of the bill, so that a regulatory authority need only apply the regulatory objectives so far as practicable. Amendment 40 reflects many discussions with the Law Society to get agreement and that is the conclusion that we have come to.

Amendments 51 to 72 bring the provisions relating to a category 1 regulator’s exercise of its regulatory functions by an independent regulatory committee established and maintained by the regulator, in line with the equivalent provisions in the Solicitors (Scotland) Act 1980, which apply to the Law Society’s committees. The amendments reflect engagement with the Law Society.

Taken together, the effect of amendments 51, 52 and 53 is to require rather than allow the regulatory committee to determine its composition, governance arrangements and priorities in accordance with the bill. Amendment 54 ensures that a regulatory committee can continue to delegate its functions.

Amendment 64 allows sub-committees to delegate any of their functions to an individual, such as a member of staff. Delegation to a sub-committee, or onwards to an individual, is subject to some exceptions relating to the regulatory committee’s function of making regulatory rules and decisions around complaints.

Amendment 56 introduces a requirement on a regulatory committee to maintain and publish a document setting out its composition, governance arrangements, regulatory functions and procedures and any arrangements for the delegation of functions.

Amendments 57 and 58 limit the consultation requirement on the regulatory committee to consult the governing body of the regulator to only those cases where the committee is making a “material” change to its governance arrangements, rather than a less significant change to either its structure or governance arrangements.

Amendments 60 to 63 make changes to the rules and requirements relating to the composition, membership and procedure of regulatory committees, with amendment 59 making a minor technical change to clarify the meaning of section 53(3).

Amendment 65 removes the requirement to include in the annual report a summary of decisions to pay out professional indemnity insurance, to reflect concerns raised by the Law Society that it is the insurance provider and not necessarily the regulator that has access to that information.

Amendments 66, 67 and 69 increase the range of material that must be included in a category 1 regulator’s annual report to include information about the number of complaints and regulatory waivers. Amendment 68 is consequential on the transfer of the powers from the Scottish ministers to the Lord President under section 20, to take specified measures in relation to a category 1 regulator.

Following engagement with legal stakeholders, amendment 70 removes the requirement on a category 1 regulator or its regulatory committee to consult the Lord President when preparing an annual report. Instead, amendment 71 will require the regulator to send a copy of the report to the Lord President as well as publishing it.

Amendment 73 is clarificatory and makes minor changes to the interpretation provision in section 13(7), setting out how conduct and regulatory complaints are to be construed, and clarifying that a regulator’s “reporting year” means a 12-month period that coincides with the regulator’s financial year.

Section 14 of the bill requires a category 1 regulator to establish and maintain a compensation fund. It also gives the Scottish ministers the power, by regulations, to make further provision in connection with the fund or the fund rules. Reflecting engagement with legal stakeholders, amendment 74 will restrict the exercise of that ministerial power to cases where the Lord President, a category 1 regulator or the consumer panel has requested them to use it. The amendment specifies the information that must be included with such a request and sets out who must be consulted before such a request is made and when the Lord President’s agreement must be secured, as well as what information must be given to the Lord President when seeking their agreement.

Amendment 75 makes regulations that are made under the ministerial power subject to the affirmative procedure. It aligns with schedule 1, paragraph 6, which inserts section 43A, in respect of the Law Society of Scotland’s guarantee fund, into the Solicitors (Scotland) Act 1980. That is a delegated power that is subject to the affirmative procedure.

Section 16 requires a category 2 regulator to prepare and publish online an annual report on the exercise of its regulatory functions. The section also specifies the information that the report must include. Amendments 76 and 77 require additional information to be included in the report.

Amendment 78 makes a consequential change to section 16(2)(g) to reflect that amendment 112 changes section 20 of the bill to allow the Lord President rather than Scottish ministers to take specified measures in relation to the performance of a category 1 or category 2 regulator. Under section 16, the annual report must include details of the steps that are taken by the regulator to comply with any such specified measures.

Amendment 79 exempts the Faculty of Advocates as a regulator from the requirement to include a statement in the report that indicates whether it considers it has been assigned to the correct category in line with the adjustments to section 8.

Amendment 80 requires a category 2 regulator to consult the consumer panel when it is preparing an annual report in order to ensure that consumer interests are considered.

Amendment 81, which was included following engagement with stakeholders, makes it a requirement for a category 2 regulator to send a copy of its annual report to the Lord President in addition to publishing it.

Amendment 82 clarifies that a “conduct complaint” is to be construed in accordance with part 1 of the Legal Profession and Legal Aid (Scotland) Act 2007 in respect of a category 2 regulator annual report.

Amendment 83 changes the definition of a “reporting year” to mean, in relation to a category 2 regulator, a 12-month period that coincides with the regulator’s financial year.

The other amendments in the group expand on the information that a regulator must hold about members in its register, as required under section 17 of the bill. They also widen the definition of “professional liability” in the bill to bring it more in line with the definition in the Solicitors (Scotland) Act 1980.

Amendments 84 to 88 and amendment 90 expand the information that is required to be held by regulators on the mandatory register about its members. In order to provide further transparency about the outcome of disciplinary action, that includes information about the business address, any sanction resulting from disciplinary action, suspension and what is required after a period of suspension has been lifted. Those amendments were included following engagement with stakeholders.

Amendment 89 allows the regulator to decide what additional information the register may contain, as it considers appropriate.

Amendments 91 and 92 widen the definition of “professional liability” as set out in section 18(7) on professional indemnity insurance to include former legal services providers and cover other services, in addition to legal services, which form part of the professional practice of the solicitors or qualifying individuals within the legal business that provides the legal services. The definition draws on some elements of the definition in the 1980 act.

I move amendment 51 and ask members to support the other amendments in the group.

Amendment 51 agreed to.

Amendments 53, 52 and 54 to 58 moved—[Siobhian Brown]—and agreed to.

Section 9, as amended, agreed to.

Section 10—Regulatory committee: composition and membership

Amendments 59 to 62 moved—[Siobhian Brown]—and agreed to.

Section 10, as amended, agreed to.

Section 11—Regulatory committee: lay and legal members

Amendment 63 moved—[Siobhian Brown]—and agreed to.

Section 11, as amended, agreed to.

Section 12—Regulatory committee: convener, sub-committees and minutes

Amendment 64 moved—[Siobhian Brown]—and agreed to.

Section 12, as amended, agreed to.

Section 13—Annual reports of category 1 regulators

Amendments 65 and 66 moved—[Siobhian Brown]—and agreed to.

Section 20 currently allows Scottish ministers to intervene in the event of concerns being raised that a regulator is failing to exercise their regulatory functions in a way that is compatible with the regulatory objectives, and to take certain specified measures. Amendments 112 to 116 and 118 to 120 have the effect of transferring that power from the Scottish ministers to the Lord President. Although the regulation-making power allowing the Scottish ministers to specify intervention measures that may be taken other than those already provided for is retained in section 20(6), amendment 122 ensures that both the Lord President and other stakeholders have a greater role in the process. That amendment provides that the Scottish ministers can exercise the regulation-making power only at the request of the Lord President, who must, before making such a request, consult regulators, the consumer panel and other persons considered appropriate, as well as adhering to certain publication requirements. Those provisions will ensure an appropriate level of stakeholder involvement in the exercise of the delegated power.

The amendments to section 20 have been welcomed by both the Law Society and the senior judiciary in their recent correspondence to the committee. The amendments alter the sanctions available, with amendment 117 removing the ability to impose a financial penalty from the measures available to the Lord President.

Amendments 68, 121, 146, 310 and 311 make consequential changes to provisions in the bill. Amendment 123 makes a small technical change.

Section 19, together with section 20, provides an important mechanism so that there is a process for review of regulatory performance if concerns are raised about a regulator not upholding the regulatory objectives, with a process allowing specified intervention measures to be taken following such a review.

Amendments 93 and 94 reflect the change of powers to the Lord President that have already been discussed.

Amendments 95 to 99, 101 and 106 to 111 make further changes to alter the bodies that may seek a review of the performance of a legal services regulator, the criteria for a review, the process for conducting a review and the types of things that a performance review can include.

Amendment 99 makes a technical change to clarify that a regulator must provide information about performance when requested to do so by the Lord President in connection with a performance review or a decision as to whether to conduct such a review. Amendment 100 requires that information to be provided within 28, rather than 21, days.

Amendments 102 and 104 insert new provisions into the bill to impose duties on persons other than the relevant regulator in relation to information that they hold relating to the performance of that regulator. That will ensure that the Lord President has all the necessary information available when conducting a review.

Amendment 105 allows the Lord President, when a regulator has failed to provide the information within 28 days, to add such a failure to the existing review. However, the regulator must be given an opportunity to respond to the Lord President’s proposal.

Amendment 103 requires the Lord President to consult such bodies as are considered appropriate in conducting a review of performance.

Amendment 109 requires the Lord President to also send a copy of the report to the relevant regulator and to any requesting body, and amendment 110 requires the Lord President to inform a body that has requested a review of any decision not to conduct such a review.

Amendments 98, 101, 106, 107, 108 and 111 make consequential changes.

Amendment 459 inserts new section 86A into the bill. The new section allows the Lord President to make rules in connection with the exercise of their functions under part 1 or 2 of the bill. Before making rules, the Lord President must consult the consumer panel and each category 1 and category 2 regulator.?

The Lord President is required to publish the rules, once finalised. That transparency provides a check on the exercise of the Lord President’s power.?

I will move on to discuss technical amendments that reflect the substantive changes that have been made to sections 19 and 20 in relation to powers being with the Lord President.

Amendment 147 enables the Lord President to direct a new regulator, or any regulator that acquired rights for its members to provide legal services—other than rights to conduct litigation and rights of audience—under the 1990 act, to change its regulatory scheme in the manner directed by the Lord President. In other cases, the amendment provides that the Lord President can ask Scottish ministers to make regulations to make provision to change the regulatory functions or the way in which those functions are exercised.

Amendments 148 to 152 are consequential or technical amendments, as are amendments 156 to 178, with the exception of amendment 169.

Amendment 169 requires the Lord President, when proposing to remove all the regulatory functions of either an accredited regulator or of a body that has acquired rights for its members to conduct litigation and has acquired rights of audience, to give notice of that intention to authorised providers and to consult them.

I move amendment 68 and ask members to support the other amendments in the group.

Amendment 68 agreed to.

Amendments 69 to 73 moved—[Siobhian Brown]—and agreed to.

Section 13, as amended, agreed to.

Section 14—Compensation funds

Amendments 74 and 75 moved—[Siobhian Brown]—and agreed to.

Section 14, as amended, agreed to.

Section 15 agreed to.

Section 16—Annual reports of category 2 regulators

Amendment 76 moved—[Siobhian Brown]—and agreed to.

There has been a lot of engagement with the Lord President regarding waivers, so we would have to engage further with him if we were going to change anything, going forward. I suggest to Mr O’Kane that, as we move to stage 3, I would be happy to look at how we can strengthen the provision to make him feel more comfortable.

Amendment 179 agreed to.

Amendments 180 to 188 moved—[Siobhian Brown]—and agreed to.

Amendment 543 not moved.

Section 21, as amended, agreed to.

Section 22—Powers to amend or revoke directions

Amendments 189 and 190 moved—[Siobhian Brown]—and agreed to.

Amendment 544 not moved.

Section 22, as amended, agreed to.

Section 23—Reports on directions

Amendment 191 moved—[Siobhian Brown]—and agreed to.

Section 24—Register of directions

Amendments 192 to 199 moved—[Siobhian Brown]—and agreed to.

Amendment 545 not moved.

Section 24, as amended, agreed to.

Section 25—Right to provide legal services

Amendments 455 and 456 amend respectively the new offences of taking or using the title of lawyer, or of pretending to be a regulated legal services provider. The amendments will increase public protection with regard to the term “lawyer”, as false use of the term will now be an offence without also having to commit intent to deceive. Likewise, a person can no longer falsely advertise that they are regulated.

Public polling by the Government and the Law Society has shown support for the title of lawyer being given the same protection as solicitor. That was considered important in order to protect the consumer, who might not understand the distinction between the two when seeking legal services from a regulated professional.

The committee has also heard anecdotal evidence of solicitors being struck off and subsequently providing unregulated legal services to the public under the title of lawyer. We view that there is a public protection concern in such cases.

Amendment 457 makes changes to section 84 to make it an offence for a person who is not a member of the Faculty of Advocates to, without reasonable excuse, take or use a name, title, addition or description implying that the person is a member of the faculty. Currently, a person commits an offence only if the person pretending to be an advocate does so with intent to deceive, and the amendment means that there is no longer any need to prove intent to deceive for the offence to be committed.

Amendment 250 widens the offence of pretending to exercise acquired rights to include any false claim of authorisation without a reasonable excuse, not just those made with the intent to deceive.

Amendment 458 alters the power for the Scottish ministers to make regulations to amend section 32 of the 1980 act to make provision for, or in connection with, its being an offence for an unqualified person to draw or prepare certain documents or provide certain other legal services.

Instead of being able themselves to initiate the regulation-making power, Scottish ministers will be able to exercise such a power only following a request to do so from the Lord President, a regulator or the consumer panel. Prior to making a request, the requesting body must consult the bodies in the list other than itself and secure agreement with the Lord President. The amendment seeks to add an approval mechanism for the Lord President before the Scottish ministers can seek to make regulations in that area.

I move amendment 250 in my name and I ask that members support all amendments in the group.

Yes, after engagement, we decided that amendment 40 is the right way forward.

Amendment 1 agreed to.

Amendments 2 to 4 moved—[Siobhian Brown]—and agreed to.

Section 1, as amended, agreed to.

Section 2—Regulatory objectives

Amendments 38 and 39 moved—[Siobhian Brown]—and agreed to.

Section 2, as amended, agreed to.

Section 3—Application of the regulatory objectives

Amendments 40 to 42 moved—[Siobhian Brown]—and agreed to.

Section 3, as amended, agreed to.

Section 4 agreed to.

Section 5—Power to amend the regulatory objectives and professional principles

Amendment 43 moved—[Siobhian Brown]—and agreed to.

Section 6—Meaning of “legal services” and “legal services provider”

Amendments 44 and 45 moved—[Siobhian Brown]—and agreed to.

Section 6, as amended, agreed to.

Section 7—Meaning of regulatory functions

Amendment 46 moved—[Siobhian Brown]—and agreed to.

Section 7, as amended, agreed to.

Section 8—Regulatory categories

Following engagement with Tess White on amendment 638, I am content to support her provision and I will not be moving my corresponding amendment 508. Similarly, I am content to support Paul O’Kane’s amendment 639. We may have to revisit the issue at stage 3 to ensure that the revised provisions work fully with the wider legislation and make any adjustment to reflect the intention.

However, I require to move amendment 27, which is consequential to the Government’s principal amendment 508, in order to allow the debate on this group to take place. I will seek members’ permission to withdraw amendment 27 at the end of the debate.

The Government is willing to support amendment 638 rather than our amendment 508, and I would urge members to support amendments 638 and 639.

I move amendment 27.

Good morning. I will make a few remarks before we turn to amendment 1. We have an extraordinarily large number of amendments before us, so I intend to keep my remarks as short as possible to provide the committee with the information that members need while ensuring that we can proceed in a timely manner to deal with them all. I am happy to answer any questions that members have.

I also want to thank all those who have engaged with the bill and supported the development of the amendments that I have lodged. I want to take the opportunity to note the constructive engagement that I have had, in considering all the amendments, with the Lord President and the senior judiciary, the Law Society of Scotland, the Faculty of Advocates, the Scottish Legal Complaints Commission, the consumer panel of the Scottish Legal Complaints Commission and the bodies that are represented on it.

Draft amendments were shared with the senior judiciary, and I have reflected carefully on their comments. I note the comments of the Lord President in his letter to the committee on 23 December, in which he notes:

“Our significant ... concerns have been addressed”

and that

“the senior judiciary are broadly content with the amendments lodged”.

I also welcome the comments of the Law Society in its letter to the committee on 10 January, in which it shares that view. I hope that the committee and stakeholders are reassured by those comments and that they can support the amendments.

I acknowledge that the bill has attracted differing views from stakeholders; we have had to balance those differing views as we aim to modernise the regulatory system. If the amendments that are proposed at stage 2 are agreed, the bill will achieve the right balance, by delivering the priorities of the stakeholders and a modern, more flexible regulatory system.

I turn to amendments 2 and 43. The Law Society of Scotland, the Faculty of Advocates and the senior judiciary raised concerns at stage 1 about the provision in the bill that conferred powers on the Scottish ministers. The Scottish Government absolutely recognises the importance of an independent legal profession and is committed to upholding that independence. The intention has been that the bill would protect the independence of the legal profession while introducing greater transparency and accountability with regard to the profession’s duty to work in the public interest.

I wrote to the committee in September 2023 to say that I would lodge amendments to remove the references to the Scottish ministers that caused concern, and I confirmed that again in my response to the stage 1 report. Amendments 2 and 43 are the first of a number of amendments that remove that provision, and the committee has been provided with a list that highlights those amendments. As this is the same change throughout the whole bill, I will not repeat the reasoning in each group.

Amendment 43 will remove section 5 of the bill, which would have conferred a delegated power on the Scottish ministers to amend the objectives of legal services regulation and the professional principles to which persons providing legal services should adhere. Amendment 2 is consequential to that change.

Amendment 3 makes a change to section 1, removing the reference to the ministerial powers in sections 19 and 20. It is consequential on amendments to those sections that have the effect of transferring the powers under those sections from the Scottish ministers to the Lord President.

Amendments 1, 4, 38 to 41 and 46 are technical amendments to clarify the language in places in part 1 of the bill. Amendment 42 adds the Scottish Solicitors Discipline Tribunal to the list in section 3(5) of named regulatory authorities to which the regulatory objectives apply. Following discussion with Scottish Mediation, amendments 44 and 45 clarify the meaning of the term “legal services” to ensure that the definition does not include alternative dispute resolution activities.

I ask members to support the amendments in this group.

I move amendment 1.