Chamber and committees

It is the Scottish Government’s view that there should be a default time period that must elapse before the proposed jurisdiction can be exercised. The 25-year limit was chosen because that section of the bill is intended to deal predominantly with long-term trusts and the problems that can arise in relation to those.

The SLC considered that 25 years provided an easily workable default route that represented a short generation. A default time limit also helps to avoid the risk that family members who are unhappy with a trust might mount an early application to have the trust’s terms altered before any material change of circumstance has occurred.

The 25-year limit cannot be extended by a truster, but a truster can shorten that limit or do away with it altogether. I have heard evidence from stakeholders on the matter and, although some have suggested that 25 years is too long, none have suggested an alternative time period.

I will consider any recommendations that the committee makes in its stage 1 report, including any alternative recommended time limit.

Not at this stage, no.

I thank Mercedes Villalba for her question. The bill uses a familiar definition of “incapable” that is very similar, but not identical, to the one found in the 2000 act. The committee has, rightly, pointed out that significant and far-reaching changes have been recommended for mental health legislation.

I agree that it would be undesirable for the meaning of “incapable” in trust law to differ from the usual widely understood definition, and I see merit in making sure that the bill does not diverge from the general law on capacity and that it keeps pace with any changes in that area. As a result, I am willing to work with the committee and the SLC to explore how that can be done. I have also asked my officials to look at possible solutions, whether that be adopting the definition of “incapable” used in the adults with incapacity legislation by conferring a regulation-making power on Scottish ministers to alter the definition of “incapable” in this bill or by some other means.

With information duties, there is a balance to be struck between the interests of the trustees and those of the beneficiaries. Many of the issues that were raised about the burden placed on trustees were also raised when the policy was being developed. The SLC has considered those competing interests at some length in developing the provisions, and the information duties in the bill attempt a compromise.

I recognise that requiring trustees to inform beneficiaries or potential beneficiaries about their position under a trust could add a burden of work to trustees. However, against that, beneficiaries could have a fundamental role in a trust in holding the trustees accountable. They cannot do that if they are not properly informed.

My view is that the bill strikes an appropriate balance between the ease of administration for the trustees and enabling beneficiaries to hold them to account. Beyond that, the information duties contained in it can be tailored for individual trusts. A truster is permitted to limit the duty to provide information requested by the beneficiaries subject to certain safeguards and the bill allows for some flexibility.

The Scottish Legal Complaints Commission has said that many complaints are made because beneficiaries are not clear on what they have or do not have the right to expect. We welcome the clear provisions on the duty of trustees to pass information to the beneficiary and on what the beneficiary is entitled to expect or request.

The bill strikes an appropriate balance. However, if the committee has another view and would like to make a recommendation, we will consider it.

Michael Paparakis can give you the history on that.

I will bring in Michael Paparakis, if I may.

All those aspects need to be considered. My officials will go away and consider those carefully, and we will come forward with something as we progress the bill.

I am willing to work with the committee on the definition of “incapable”. The definition of “incapable” in the bill is focused on the decision-making abilities of trustees because, ultimately, the essence of trusteeship is about making decisions to the benefit of others. Therefore, the bill does not reflect the adults with incapacity legislation, as the grounds for assessment in that legislation do not align with the trustees’ functions. Instead, the definition of mental disorder is based on the definition in England and Wales, in section 1 of the Mental Health Act 1983, as amended by the Mental Health Act 2007. That appears to have been on the basis that the English and Welsh definition of mental disorder was at the time more up to date than that used in the Adults with Incapacity (Scotland) Act 2000. I am willing to work with the committee and to take on recommendations to define “incapacity”.

Complete codification of any area of law is never a straightforward task. The SLC considered codification of the law but ultimately rejected it. Its view, as Lord Drummond Young told the committee, was that some areas of the law are better left out of statute—for example, the somewhat abstract dual patrimony theory that underpins trusts and the law around express or implied trusts.

The bill reforms all the parts of Scots trust law that have traditionally been dealt with by statute, and it consolidates and modernises nearly all the statutory trust areas. I am content that the SLC, after extensive consideration of the issue, has identified the right approach in the bill, which focuses on reforming those parts of the law that create problems in practice.

I understand the view that comprehensive codification would make it easier for a layperson to access and understand the legislation. However, as the SLC suggested in its evidence, in other jurisdictions where codification has taken place, the statutory law is seldom absolutely comprehensive.

At this stage, no, we are not. Setting out a statutory style in primary legislation is not necessary or helpful, because, as I have said, it can become outdated and difficult to update. The original 1921 act had only two straightforward styles. A style might give the layperson a misplaced sense of confidence that their do-it-yourself trust deed is fit for purpose when that might not be the case. Style books are produced and maintained by professionals based on their experience of contemporary practice, and the SLC was right not to attempt to take on that task.