Chamber and committees

—we are approaching the matter in an evidence-based manner. [Interruption.]

Given the lack of notice of the decision from the UK Government, and in the context of the different approach to dog control, I and officials have been reviewing the evidence on the situation in Scotland. We have met a wide variety of stakeholders over the winter to consider the evidence and their views on what work would be best in the Scottish context and to consider any unintended consequences. I have met the Scottish Society for the Prevention of Cruelty to Animals, the Dogs Trust, the dog control coalition, individual clinical dog behaviourists, a victim of a dog attack, the Kennel Club, Blue Cross and the Edinburgh Dog and Cat Home. I met the Communication Workers Union this morning and Police Scotland on Thursday, and I have met the National Dog Warden Association. I have also instructed officials to undertake regional engagements with local stakeholders to look at ways for partners to work together to improve operational responses and enforcement and to aid community engagement to help to promote more responsible dog ownership. As I said in my first answer, the matter is under urgent review at the moment.

On a point of order, Presiding Officer. I would have voted yes, too.

No, I have nothing to add.

Amendment 1 agreed to.

Section 7—Removal of trustee by co-trustees

Amendment 2 moved—[Stuart McMillan].

Amendment 2A moved—[Stuart McMillan]—and agreed to.

Amendment 2, as amended, agreed to.

Amendment 3 moved—[Siobhian Brown]—and agreed to.

Section 8—Removal of trustee by beneficiaries

Amendment 4 moved—[Siobhian Brown]—and agreed to.

Section 12—Making of decision

Yes.

Section 12 is generally a default section that applies to a trust unless the trust deed provides otherwise. At stage 2, my amendment to this section was accepted. It provided that, in a public trust, a trustee should not be disqualified from taking part in the decision-making process because they are part of the section of the public that the decision is intended to benefit. Stakeholders have since pointed out that public trusts may be intended to benefit the public at large rather than a particular section of it. My amendments 5 and 6 take that into account and clarify the matter. Those amendments would not allow a trustee to participate in decisions in which they have a particular interest that is specific to them as an individual.

Amendments 14 and 15 pick up on a concern that was raised at committee at stage 2, amendments on which were voted on but defeated. Having discussed the matter further with the Law Society and the Scottish Law Commission, I decided to lodge amendments 14 and 15, which are slightly adjusted from those that were lodged at stage 2. My view is that the amendments deal with the issue that was identified by the Law Society without unnecessarily widening the protection that section 30 offers to beneficiaries.

Section 32 provides that, as a default provision, a trustee is personally liable for any loss to a beneficiary that arises from the trustee’s own acts or omissions or for any loss to a beneficiary that arises from a co-trustee’s breach of trust or breach of fiduciary duty in certain circumstances. Some questions have been asked about how section 32 interacts with other sections of the bill on trustee liability, and I think that that matter can be usefully clarified. Therefore, amendments 16 and 17 make it clear that a trustee’s personal liability under section 32 is to be read together with the bill as a whole. Section 32 will not impose an unqualified personal liability for losses that are sustained by a beneficiary as a result of a trustee’s actions or omission.

Amendment 18 is a minor amendment to ensure consistency of terms used in certain sections of the bill imposing personal liability on trustees. In some sections, the bill has been drafted using the term “private property”; in others, the term “personal property” is used. Amendment 18 means that the term “private property” will be used throughout the bill.

Amendment 19 replicates changes that were made to section 35(3) at stage 2 so that the bill is consistent.

Finally, amendment 20 is a minor amendment to ensure consistency in the drafting. Although the amendment substitutes some wording, it does not affect the underlying policy intention.

I ask the chamber to support the amendments in the group.

I move amendment 5.

Amendment 5 agreed to.

Amendment 6 moved—[Siobhian Brown]—and agreed to.

Section 17B—Charitable trusts: sale of property

I am sorry. Are we moving on to the next group?

Section 17B was added by Jeremy Balfour’s amendment 47 at stage 2. That amendment allows a charitable trust to sell heritable property—such as an old church building or a town hall—at less than best value if the purchaser is another charitable trust. At stage 2, I expressed my concerns about the drafting of section 17B and the concerns of the Office of the Scottish Charity Regulator.

Amendments 7 to 10 and 12, in my name, are an attempt to bring the section more into line with similar provisions in the bill on trust law and to link the section more closely to charity law. First, my amendments make sure that the charitable trust selling the property must have the power to do so and that charity trustees must have regard to their statutory duties under charity legislation. That will help to prevent situations where charitable trustees sell heritable property that is essential to delivering the trust’s purposes.

Those amendments also seek to widen the scope of section 17B so that all kinds of charities in Scotland and elsewhere in the UK can benefit from Jeremy Balfour’s amendment. Currently, the purchasing charity must take the legal form of a trust, but only 12 per cent of registered charities in Scotland do so at present. My amendments will allow a charity registered in Scotland or elsewhere in the UK, taking any legal form, to benefit from the section. I understand that charities often work across different jurisdictions in the UK, and this provision will be of benefit to them. The amendments also include a power to broaden the provision out in the future.

Amendment 11 is a transitional amendment that applies section 17B to all charitable trusts created after the section comes into effect and is without prejudice to any current common law position.

I pay my thanks to Jeremy Balfour for engaging constructively with me on this issue, and I ask the chamber to support all the amendments in the group.

I move amendment 7.

Section 61 is about the alteration of trust purposes and attempts to balance the truster’s wishes against the wishes of beneficiaries before an application can be made to the court to alter trust purposes. When the bill was introduced, the section did not apply to private purpose trusts or public trusts, but, after consultation with the Scottish Law Commission about the policy behind the section, it became clear that it should apply to private purpose trusts.

When the section was amended at stage 2, the exception for public trusts was removed unintentionally. That is contrary to the intention behind the section, which is that the trust purposes of public trusts should not be altered by way of an application under section 61. Amendment 22 resolves both of those issues.

I move amendment 22.

Amendment 22 agreed to.

We could look at that in the future, in future legislation. At the moment, because we could not get it in time for stage 3, this is a sensible approach that allows us to address the situation that was raised by the committee. If we had done nothing, it would have been a lost opportunity.

Negative procedure is appropriate for making the regulations, as they will allow illustrative provision to be provided only as an example of what the court could allow in connection with the delegation of trustee functions.

I move amendment 13.

Amendment 13 agreed to.

Section 30—Provision purporting to limit liability for, or indemnify for, breach of fiduciary duty

Amendments 14 and 15 moved—[Siobhian Brown]—and agreed to.

Section 32—Trustees’ personal liability for beneficiary’s loss

Amendments 16 and 17 moved—[Siobhian Brown]—and agreed to.

Section 35—Damages for loss resulting from trustee’s act or omission in ordinary course of administration

Amendment 18 moved—[Siobhian Brown]—and agreed to.

Section 38—Trustees’ liability in relation to certain obligations

Amendment 19 moved—[Siobhian Brown]—and agreed to.

Section 41—Abolition of restrictions on accumulation and on creation of future interests

Amendment 20 moved—[Siobhian Brown]—and agreed to.

Section 49—Protectors

I thank the members who have contributed to the debate. There is a general consensus that the law on trusts is outdated, and the changes that are proposed in the bill will make a significant and positive difference for those who use trusts in Scotland. I hope that it is clear that we listened carefully to what was said by stakeholders, the committee and other MSPs during stages 1 and 2.

Trust law may sound remote and dusty, but it is important to recognise that it impacts many of us. Trusts have an everyday utility. To put it simply, they are an important means of managing assets for people. For example, payments from the clients of a travel agent or a solicitor may be held in a form of trust. A person may set up a trust to control and protect their family assets, or a trust may be used when someone is too young to handle their affairs or when someone has suffered a serious personal injury. As the number of blended families increases, trusts can help to manage assets between complicated and sometimes difficult family relationships.

I hope that it is clear that the bill matters to all those who are involved in trusts in Scotland, whether as a truster, a beneficiary or a trustee. It will make things simpler and fit for modern-day purposes, which will be of great benefit to those people.

However, if the bill is passed today, as I sincerely hope it will be, there is still a lot of work to be done before its provisions will be capable of coming into effect. During the stage 1 evidence sessions, we heard how important it is, given the significant value that is involved and the fact that there is a sizeable pensions industry in Scotland, that pension trusts are included in the reforms. Work has been under way for some time to engage with the UK Government on the necessary section 104 order under the Scotland Act 1998 to ensure that we will not be left with a black hole in the law and that pension trusts here will benefit from the reforms. There is more work to be done, and we are committed to doing it.

I mentioned earlier Jeremy Balfour’s amendment that relates to cohabitation. Although I was happy to support that, I made it clear that we would not plan to bring that part of the bill into force until such time as the other issues that are encountered by people who attempt to apply for financial provision on the death of a cohabitant are considered further and, if necessary, addressed. I have written to the committee setting out my intention to consult on those issues as part of a wider consultation on the recommendations in the Scottish Law Commission’s report on cohabitation, and I intend that consultation to be published by the summer of 2024.

Throughout the bill’s passage, questions have been raised about wider reforms to the law of succession. The bill was never the legislative vehicle for such reforms. The Scottish Law Commission has produced reports on the issue and we have subsequently consulted on several occasions. It was clear that there was no agreement on the matter among stakeholders and, given that the area of intestate law has potential to impact on us all, it is very important that we take time to get it right. Over the past couple of years, we have been pleased to fund work, which has been carried out under the auspices of the Scottish Civil Justice Hub, to gather data and evidence, including on public attitudes, and to carry out research that can be used to inform policy. This is not an area of law that has been forgotten. On the contrary, work is on-going, and I am happy to keep the committee updated on progress.

Importantly, the bill incorporates powers so that we have the tools and the flexibility to ensure that provisions can be kept up to date. For example, the committee recommended in its stage 1 report that it would be desirable to consider flexibility in the bill to alter the types of trust applications that may be considered by the sheriff and those that may be considered by the Court of Session. The Scottish Government therefore lodged a stage 2 amendment to allow the Scottish ministers to vary the definition of “court” so that either the sheriff court or the Court of Session may consider different types of trust applications.

Another example is the definition of “incapable”. The bill sets out the circumstances in which a person is to be regarded as incapable for the purposes of the bill, and it aligns the definition with the wider incapacity legislation in Scotland. In recognition of the significant and far-reaching changes that have been recommended to mental health legislation and the fact that the precise nature of future changes cannot be anticipated, the bill was amended at stage 2 to provide Scottish ministers with a power to amend the definition of “incapable” to ensure that there is sufficient flexibility to allow trust law to keep pace with the evolving understanding of incapacity.

I will turn to a few points that were made during the debate. Oliver Mundell, Bill Kidd and Martin Whitfield raised the importance of public awareness. I know from discussions with my officials and the Law Society of Scotland that the organisation intends to publicise the changes that the bill will bring about to its members, who are likely to comprise a significant number of professional trustees and professional advisers to Scottish trusts. I am happy to work with the profession to agree what further guidance or awareness is necessary.

Rhoda Grant and Martin Whitfield mentioned the importance of people making wills and powers of attorney. In our positions as MSPs, we should all be highlighting that to our constituents wherever possible. Moving on to section 19, Martin Whitfield asked about good causes. I note that there have been discussions with the law firm CMS Cameron McKenna Nabarro Olswang about covering ring-fenced assets. That is a specific example that relates to section 19.

In conclusion, I repeat my thanks to all those who gave evidence to help to improve the bill during the parliamentary process. I commend the motion in my name to the Parliament.