Chamber and committees

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.

I will bring in Michael Paparakis to answer that question.

We will look at that further and get back to the committee.

The Scottish Government consulted back in 2016, and the changes that will be made by the bill received the backing of an overwhelming number of consultees. I understand that the Law Society has made a drafting suggestion that, in its view, would resolve the problem that has been identified. My officials are currently considering that. However, any test could come with its own set of problems.

The committee has heard from stakeholders that certainty is an important feature of Scots succession law. The provision provides certainty, and the definition of separated spouses risks creating unwelcome uncertainty. Any definition risks—however remote some might consider the risk to be—disinheriting spouses who are living apart only because they are prevented from living together. That might include couples in which one of the spouses is in long-term care or prison. Separated spouses can already avoid that problem altogether by preparing a new will, updating their current will or preparing a separation agreement. The change that will be brought about by the bill will be limited to cases in which there is no will and no children. The suggested change would be at odds with the position under the law of succession, whereby a will that is not changed following a couple’s separation will continue to be given effect up until the parties’ divorce.

There are unanswered policy questions about the proposed alternative approach. For example, it is not clear whether a separated spouse would still inherit some of the estate—but only after the deceased’s parents or siblings—or whether the separated spouse should not inherit anything.

As I have said, my officials are considering the issue at the moment.