Chamber and committees

I thank members for their contributions to this short debate. I hope that it is clear from the debate that we listened to what was said by stakeholders, by the committee and by MSPs during the earlier stages. The changes reflect those views and, to my mind, they have improved the bill.

If the bill is passed today, it will put in place a modern and broad framework for judicial factors that sets out the essential features of the office and how it is supervised. That will bring clarity, accessibility and efficiency to the area, which we hope will mean that the option to appoint a judicial factor is utilised in a wider range of circumstances where it is not currently used because of uncertainty, complexity and cost.

I was happy to lodge amendments at stage 2 to implement almost all the committee’s recommendations. I will briefly touch on two issues in relation to missing persons and charities.

The committee recommended that a reference to missing people be added to the bill to make it clear that it may be used by those who are seeking to manage the estate of a missing person. The bill was deliberately drafted widely and it already allowed a judicial factor to be appointed in a wide range of circumstances, including over the estates of missing persons. However, having considered the strength of feeling across the Parliament at stage 1, I lodged an amendment that reflected the recommendation while ensuring that the wider policy in the bill would not be undermined.

The committee asked me to consider suggestions made by stakeholders in relation to the management of charity property by judicial factors. Before a judicial factor is appointed, and also at stages of a judicial factory, the bill requires intimation of documents to every person with an interest in the estate. The bill now requires that, when the estate is that of a charity, in addition to the standard requirement to intimate to persons with an interest in the estate, intimation is given to the Office of the Scottish Charity Regulator, and a notification is to be given to the general public by way of an advertisement.

The court and the accountant were also given powers to dispense with some of the intimation requirements and the notification requirements to the public where circumstances justify that. Overall, the bill is now better able to respond to cases involving charity property.

I will touch on two of the points that Michael Marra raised and that the Law Society of Scotland raised in yesterday’s briefing, regarding adults with incapacity and how that issue remains outside the judicial factors regime. The current judicial factors legislation, which the bill repeals, applies not only to judicial factors so-called but to other types of administrator, although guardians appointed under the Adults with Incapacity (Scotland) Act 2000 are expressly excepted. On the other hand, the bill applies only to judicial factors so called, whether they are appointed under the bill or other legislation. Section 47 of the bill makes that clear. Accordingly, the guardians appointed under the Adults with Incapacity (Scotland) Act 2000 remain outside the judicial factors regime.

The member raised the point about how to circumvent the safeguards for incapable adults, which is set out in the 2000 act and relates to the Law Society. Similar to the 2000 act, the bill includes a number of protections. First, anyone with an interest is required to be notified of an application for the appointment of a judicial factor and will therefore have an opportunity to present their position to the court if they wish. Secondly, all judicial factors are supervised by the accountant of court who has powers to issue directions to judicial factors and to investigate any concerns. The person appointed as the accountant also holds the appointment as a public guardian, which means that judicial factors and guardians are, in effect, supervised by the same person. Lastly, judicial factors have to account for their dealings with an estate, and they are required to regularly prepare accounts, which are audited by the accountant, and are held to be liable for any misdeeds. I consider that the safeguards in the bill are sufficient.

If the bill is passed today—I hope that it will be—I am clear that there is still work to be done before the provisions can be commenced. Not least, that work will involve working with the charity Missing People and others to prepare guidance for the families of persons considered missing who are applying for the appointment of a judicial factor.

Members will also be aware that I am in discussion with the UK Government seeking a Scotland Act order to extend certain provisions in the bill to allow judicial factors to manage properties in other parts of the United Kingdom. That work is progressing, and I will keep Parliament updated on future developments. Given the nature of the reforms that are proposed by the bill to the court process and the supervision of judicial factors by the accountant on behalf of the court, the bill will also require new and amended court rules. I am committed to that, and I will ensure that all necessary work to be done by the Scottish Government is done swiftly.

I thank the members who have contributed to today’s debate, the committee and its clerks and those who gave evidence to help to improve the bill. I thank my officials, who have put a lot of work into the passage of the bill, and, finally, the former commissioner to the Scottish Law Commission, Patrick Layden.

I commend the motion in my name.

No, thank you.

Amendment 1 agreed to.

Amendments 2 to 5 moved—[Siobhian Brown]—and agreed to.

Section 6A—Review of appropriateness of registration in the Register of Inhibitions

Amendments 6 to 10 moved—[Siobhian Brown]—and agreed to.

Section 27—Approval of judicial factor’s scheme for distribution of factory estate

Amendment 11 moved—[Siobhian Brown]—and agreed to.

Section 29—Termination, recall and discharge after distribution of factory estate

Amendment 12 moved—[Siobhian Brown]—and agreed to.

Section 30—Duty of Accountant to apply for appointment of replacement where judicial factor has died or ceased to perform duties

Section 31 sets out the process for the recall of a judicial factor’s appointment and the appointment of a replacement judicial factor. I understand that discussions between my officials and the Law Society of Scotland showed that there are some concerns about how section 31 would operate procedurally and that there could be some difficulties in replacing a judicial factor.

The first concern comes from the fact that, under section 31 as currently drafted, accounts must be prepared and sent to the Accountant of Court before a recall is granted. That raises a question of practicality, given that the estate must continue being managed in the meantime.

The second concern is that the original judicial factor’s appointment is not recalled until the appointing interlocutor for the replacement factor is issued, which means that two factors would be appointed over the estate, even though that might be for a short period of time. That raises questions about where the responsibilities and liabilities for the management of the estate would lie during that period.

Amendments 15 to 24 and amendment 26, all in my name, address those concerns. I ask members to support the other amendments in the group and I move amendment 15.

Of course.

I agree that the provisions are important. At this particular time I cannot give Martin Whitfield a definite timescale, but I will be happy to write to him to keep him updated on progress on that.

Just as important is that my stage 2 amendment also made it clear that it is competent to appoint a judicial factor to the estate of a missing person.

The bill also addresses other important issues. I will briefly remind members about some of its key provisions and what they are intended to achieve.

There is always a question as to whether the person who seeks a remedy from the court has a sufficient interest to justify raising legal proceedings. Under the current law, the usual rule is that the applicant must have an interest in the property over which the appointment is sought. The bill widens the scope in respect of people who may competently raise court proceedings, because it might be possible that a party might have an interest not in the property but in its maintenance. For example, if disrepair of one semi-detached property begins to have an effect on the other half of the building, the owner of that other half might be concerned about possible damage to their property. The bill gives the court flexibility to allow for a judicial factor to be appointed in such circumstances, where appropriate.

Currently, there is uncertainty as to what powers a judicial factor has by virtue of their appointment. When a judicial factor is appointed, the court will often provide in its decision that they are appointed with the “usual powers”. What the “usual powers” are in a particular case will depend on the purpose for which the factor has been appointed. That can lead to uncertainty for both judicial factors and the third parties who deal with them, and has resulted in some factors being reluctant to carry out certain actions. That uncertainty has led to litigation, which has often taken the form of a request to the court for additional powers, with the consequence being that the expense of such litigation is paid from the factory estate. The bill provides clarity by setting out that a judicial factor will have

“all of the powers of a natural person beneficially entitled”

to the property—which will be readily understood as empowering the factor to do everything that an owner of an estate could personally do.

At present, a judicial factory may be terminated by way of a formal court procedure or, in limited circumstances, by way of the less formal procedure of an administrative discharge. A judicial discharge comes with a level of formality that is not required in all circumstances, and the expense of such a discharge is paid from the factory estate. An administrative procedure enables matters to be brought to a conclusion more economically than a case in which an application is lodged with the court. The bill ensures that the procedure for administrative discharge is extended to all types of judicial factories.

The bill also makes clearer the role of the Accountant of Court in supervising judicial factors and the work that they undertake.

The bill will introduce a statutory framework that sets out clearly the essential features of the office of judicial factor and the broad parameters within which it should operate. It will be of benefit to all who are involved in any capacity in judicial factories.

I move,

That the Parliament agrees that the Judicial Factors (Scotland) Bill be passed.

Yes, sorry. I move amendment 13.

Amendment 13 agreed to.

Amendment 14 moved—[Siobhian Brown]—and agreed to.

Section 31—Resignation and applications for recall and discharge in other circumstances

Please bear with me, Presiding Officer. My apologies—my speaking note says that I just spoke to amendment 15. I am sorry.

Yes, Presiding Officer. I move amendment 15.

I thank members for their contributions to this short debate. I hope that it is clear from the debate that we listened to what was said by stakeholders, by the committee and by MSPs during the earlier stages. The changes reflect those views and, to my mind, they have improved the bill.

If the bill is passed today, it will put in place a modern and broad framework for judicial factors that sets out the essential features of the office and how it is supervised. That will bring clarity, accessibility and efficiency to the area, which we hope will mean that the option to appoint a judicial factor is utilised in a wider range of circumstances where it is not currently used because of uncertainty, complexity and cost.

I was happy to lodge amendments at stage 2 to implement almost all the committee’s recommendations. I will briefly touch on two issues in relation to missing persons and charities.

The committee recommended that a reference to missing people be added to the bill to make it clear that it may be used by those who are seeking to manage the estate of a missing person. The bill was deliberately drafted widely and it already allowed a judicial factor to be appointed in a wide range of circumstances, including over the estates of missing persons. However, having considered the strength of feeling across the Parliament at stage 1, I lodged an amendment that reflected the recommendation while ensuring that the wider policy in the bill would not be undermined.

The committee asked me to consider suggestions made by stakeholders in relation to the management of charity property by judicial factors. Before a judicial factor is appointed, and also at stages of a judicial factory, the bill requires intimation of documents to every person with an interest in the estate. The bill now requires that, when the estate is that of a charity, in addition to the standard requirement to intimate to persons with an interest in the estate, intimation is given to the Office of the Scottish Charity Regulator, and a notification is to be given to the general public by way of an advertisement.

The court and the accountant were also given powers to dispense with some of the intimation requirements and the notification requirements to the public where circumstances justify that. Overall, the bill is now better able to respond to cases involving charity property.

I will touch on two of the points that Michael Marra raised and that the Law Society of Scotland raised in yesterday’s briefing, regarding adults with incapacity and how that issue remains outside the judicial factors regime. The current judicial factors legislation, which the bill repeals, applies not only to so-called judicial factors but to other types of administrator, although guardians appointed under the Adults with Incapacity (Scotland) Act 2000 are expressly excepted. On the other hand, the bill applies only to judicial factors so called, whether they are appointed under the bill or other legislation. Section 47 of the bill makes that clear. Accordingly, the guardians appointed under the Adults with Incapacity (Scotland) Act 2000 remain outside the judicial factors regime.

The member raised the point about how to circumvent the safeguards for incapable adults, which is set out in the 2000 act and relates to the Law Society. Similar to the 2000 act, the bill includes a number of protections. First, anyone with an interest is required to be notified of an application for the appointment of a judicial factor and will therefore have an opportunity to present their position to the court if they wish. Secondly, all judicial factors are supervised by the Accountant of Court, who has powers to issue directions to judicial factors and to investigate any concerns. The person appointed as the accountant also holds the appointment as a public guardian, which means that judicial factors and guardians are, in effect, supervised by the same person. Lastly, judicial factors have to account for their dealings with an estate, and they are required to regularly prepare accounts, which are audited by the accountant, and are held to be liable for any misdeeds. I consider that the safeguards in the bill are sufficient.

If the bill is passed today—I hope that it will be—I am clear that there is still work to be done before the provisions can be commenced. Not least, that work will involve working with the charity Missing People and others to prepare guidance for the families of persons considered missing who are applying for the appointment of a judicial factor.

Members will also be aware that I am in discussion with the UK Government seeking a Scotland Act order to extend certain provisions in the bill to allow judicial factors to manage properties in other parts of the United Kingdom. That work is progressing, and I will keep Parliament updated on future developments. Given the nature of the reforms that are proposed by the bill to the court process and the supervision of judicial factors by the accountant on behalf of the court, the bill will also require new and amended court rules. I am committed to that, and I will ensure that all necessary work to be done by the Scottish Government is done swiftly.

I thank the members who have contributed to today’s debate, the committee and its clerks and those who gave evidence to help to improve the bill. I thank my officials, who have put a lot of work into the passage of the bill, and, finally, the former commissioner to the Scottish Law Commission, Patrick Layden.

I commend the motion in my name.

I thank all the members of the Delegated Powers and Law Reform Committee for their attentive and valuable work in scrutinising the Judicial Factors (Scotland) Bill.

The bill is a Scottish Law Commission bill: I thank the commission for its considerable work—not only on this project, but on all the other projects that it undertakes to simplify and improve our laws. I am committed to introducing bills to implement its proposals. This is the third SLC bill to be introduced in this session of Parliament, with the fourth, on the termination of commercial leases, being due shortly.

A judicial factor is a person who is appointed by the court to gather, hold, safeguard and administer property that is not being properly managed. Examples include the winding up of a partnership when the partners are unable to agree on how the partnership will operate, and when a child is due to receive funds in excess of £20,000 and/or when the child’s estate is large or complicated, which might be the case after a personal injury damages award, for instance.

If it is agreed to this afternoon, the bill will put in place an updated and comprehensive framework that will bring clarity, accessibility and efficiency to this vital area of the law. There are only about 50 judicial factors currently appointed to manage someone else’s property, and only a handful of applications for appointments are made each year. To my mind, that reflects the fact that applications are a last resort. However, despite the small numbers, for those who are involved with judicial factors in one way or another, the bill will make positive changes.

The appointment of a judicial factor to manage the property of a missing person was closely scrutinised by the DPLR Committee, and for very good reason. Although such appointments have been made in the past, they have been rare, despite 15 people in Scotland each year being declared long-term missing. There will be various reasons that are individual to each case for why an application for appointment is or is not made, but the bill will remove one potential obstacle, which is the difficulty that is caused by the outdated and complex law.

The bill aims to bring the law together in one place to make it easier for users of the legislation. Not only is that the case, but one of my amendments from stage 2 has committed the Scottish ministers to producing and publishing guidance for such an appointment. I will work with the charity Missing People and other stakeholders, including the Office of the Accountant of Court, to help to prepare that guidance.

The Delegated Powers and Law Reform Committee has already suggested a number of points that should be covered in the guidance, and I will make sure that they are included. Just as important—