Chamber and committees

I, too, press the minister on the concerns that have been expressed by the Law Society and others regarding amendments 34, 38 and 42. Throughout the bill process, the Government and members across the Parliament have been trying to strike the right balance between effective and efficient regulation and the interests of consumers and their protections.

I am concerned that introducing the appeal mechanism that is provided for in amendment 34, on top of existing and other court actions, for situations in which a regulator has intervened in a failed firm and given directions to safeguard client interests, could delay the ability to act at speed. Tess White gave the example of a client filing to complete an urgent conveyancing transaction when it might be impossible to complete that transaction. That is a serious issue. I am sure that many of us are familiar with the circumstances of being in a chain and needing speed when involved in conveyancing. Has the minister weighed the potential consequences for consumers? Why does she feel that the proposed additional right of appeal is so critical?

On amendment 38, I ask what consideration the minister has given to the unintended consequences of the catch-all mechanism that she has created for triggering safeguarding mechanisms under proposed new section 46A of the 1980 act, given that there are reasons for cessation of practice, such as retirement, that do not necessitate safeguarding mechanisms being triggered.

Similarly, on amendment 42, I worry about the practicality of requiring all sole practitioners who cease practising to prepare and submit interim accounts and to notify all clients within 21 days, when a date for cessation is often not determined until well after the fact.

Regarding the appeal rights and directions from the regulator for which amendment 42 provides, I refer members to the arguments that I outlined earlier in relation to amendment 34.

As they stand, I am concerned that the amendments, both individually and together, are unnecessary. I think that they are impractical and contrary to the interests of consumers, and members on this side of the chamber are minded to oppose them.

The minister discussed the Law Society’s view and the exchange of letters that happened yesterday. She mentioned unintended consequences a number of times, but it is not clear from my discussions with the Law Society what those would be. It is concerned that it does not have clarity on what the minister has referred to. Indeed, it is keen that we take what I have described as a belt-and-braces approach by putting the issue at the forefront of the bill.

Although I intend still to move forward in that regard, I understand and respect what the minister said about her revision to the explanatory notes and her willingness to accept the Law Society’s wording on the issue, which will go some way to finding the compromise that we are looking for. However, given the significant concerns that have been raised by the Law Society in its correspondence, I will press amendment 117.

I am pleased to speak in the debate on behalf of Scottish Labour and confirm that we will support the bill at decision time this evening.

As we have heard already in contributions, the process has been long for all involved—not merely this afternoon, although I appreciate that for colleagues it might have felt like two years when, in fact, it has been only two hours. We have been at the bill for two years, and it has been more than a decade since some stakeholders who have been calling for reform of the regulatory system began working for it. On that point, I thank all the organisations and individuals who have engaged on the bill, not least the Law Society of Scotland, the Faculty of Advocates, the Scottish Legal Complaints Commission and many others, including people who have experience of complaints against solicitors in Scotland. Their time and efforts have certainly moved the bill into a much better place than where it started.

It would be remiss of me not to reflect on why the bill has taken so long to come to its conclusion. As we have heard, the bill was controversial when it was introduced, as the Scottish Government attempted to take control of legal services regulation through ministerial powers. Such was the significance of the threat to the independence of the judiciary and the legal profession, which is a fundamental tenet of a well-functioning democracy, the senior judiciary was left in the unprecedented position of speaking out on the proposals. It might be the first time in the Parliament’s history that the senior senators of the College of Justice have come to give evidence on a piece of legislation that directly related to their functions and the function of legal services in Scotland.

I am sure that many, in and outwith the chamber, were baffled that a policy could be formed and a bill introduced that so fundamentally threatened the profession’s independence, when there were no calls or recommendations for such a position to be taken.

I recognise that the minister listened to the depth and breadth of concern about the proposals and lodged significant amendments at stage 2 to reverse that position. However, I think that serious learning remains to be done by the Government about how it took that position in the first place.

I pay tribute, though, to the minister. She came into office part way through the bill process and inherited the bill in the condition that it was in. She has sought to listen and engage and has been constructive and co-operative through the stages of the bill—certainly with me. I genuinely appreciate her time and engagement and that of her officials and the wider bill team.

I continue to have some concerns about the stage 3 consideration process that we have just completed. The fact that an issue as significant as the status of registered foreign lawyers and multinational practices was left to the final day of the bill’s passage to be resolved is quite concerning and shocking. We are talking about the ability of some of the biggest law firms in the United Kingdom to operate in Scotland and about—as I said in my remarks on the amendments—thousands of jobs and tens of thousands of clients. The Law Society and others have been highlighting those issues for the two years since the bill was introduced. It is my understanding that, although the Law Society is the regulator and the body responsible for administering the legislation, there have not been detailed discussions with it on those matters preceding the correspondence that was issued last night, which I referred to earlier.

I believe that, ultimately, over the course of stages 2 and 3, the bill has been brought to a better place. It will provide tangible improvements to the legal system and legal services and much-needed additional protections to consumers and the public.

I am disappointed that the Conservatives will not join us in supporting the bill this evening, although I appreciate that they are speaking of their concerns about what it means for consumers. I point out to Tess White and others that an independent regulator is not being widely called for by people involved in the process, particularly the Faculty of Advocates, which I referred to earlier, but also the Law Society and others. If an independent regulator were answerable to the Lord President, I do not think that it would be an independent regulator. There is a challenge in the position that the Conservatives have arrived at. I believe that their previous position was to support the tenets of the bill and not to support an independent regulator.

I welcome the powers that I have worked on with the minister that have now been included in the bill. I highlight to the minister, however, that amendment 42 not passing and the related subsequent or previous amendments passing might cause some challenges in the legislation. It would be useful if, in a return to Parliament or in her summing up, she clarified how she intends to take that forward, given that it will be a challenge in the statute book. The post-legislative scrutiny would be a helpful vehicle to seek to deal with those issues. We need to understand what issues will remain in that space, and I hope that she will use the post-legislative scrutiny to do that.

I think that the bill will provide major, overdue regulatory changes for the benefit of consumers and practitioners alike. It will simplify a system that is too complex and will make proactive a system that is too reactive. Consequently, we will support the bill, as amended, this evening.

I am aware that the minister is in her peroration, but I am keen to get some clarity on the issue of amendments that we debated, particularly those around safeguarding. She knows the significant issue that the Law Society of Scotland pointed to and which I raised in relation to matters such as conveyancing and there not being sufficient time to be able to finalise a house sale. Obviously, the Parliament agreed to amendments 34 and 38 but disagreed to amendment 42. It would be useful if she could put on the record her intention of how to deal with that, because there is a consequential lead-on from those amendments.

On the theme that the member has raised, the judiciary’s concern was about maintaining its independence in the processing of complaints. Does she envisage that an independent regulator would be answerable to the Government or the Lord President of the Court of Session?

I appreciate that there are competing views and issues in this space. That position has perhaps been counterbalanced by the view of the Law Society of Scotland and others on what needs to be done so as not to place that onerous burden on to regulators, as I have outlined. I recognise what Maggie Chapman is saying, and I take it on board. I am keen to hear what the Minister for Victims and Community Safety has to say about those issues.

I want to be clear that my amendments in this group should not restrict the ability to raise a conduct complaint about other matters that would fall outside the exercise or discharge of regulatory functions. Additionally, solicitors who are engaged in the delivery of regulatory and disciplinary work for a legal services regulator should not and would not be immune from criticism or accountability. Indeed, parties on either side of a regulatory matter are entitled to express their disagreement with the substance and manner of the arguments that are made by solicitors who work on regulatory matters.

I note that the minister has said that she is aware of the issues and that she is happy to continue to engage on the matter with the Law Society and other stakeholders, as would be necessary. I wonder whether she would be willing to make a further commitment on the record on that today, as well as outline the potential steps that she believes are open to the Government to act on the issue in the future, if that is needed and if an agreed position can be found. If she can provide some of those assurances on further remedies in this area, I might not be minded to press or move my amendments—and I am cognisant of Maggie Chapman’s point as well. I reserve the right to push the amendments, however: I believe that the issue is important with regard to the functioning and capabilities of regulatory processes and, consequently, our public interest.

I move amendment 116.

Colleagues might have been missing the sound of my voice. I am very grateful to the minister for her indication that she will not move her amendment 91 and is instead minded to support my amendments 127, 128 and 136.

My amendments deal with the issue of cost recovery by regulators when collecting a financial penalty that has been imposed on a business. Although the penalty is payable to the Scottish ministers, it is the regulators that collect it, so they will incur costs. It does not seem reasonable or fair for the rest of the legal profession—and, by extension, the consumers who consume legal products—to cover the costs of that process.

My amendments would allow regulators to recover reasonable costs and build in flexibility to discontinue or resume collection where it becomes unreasonable or unfeasible to collect the financial penalty.

I believe that, by collaborating on these amendments, we have put together a set of provisions that would bring more natural justice to the process for both lawyers and consumers.

I move amendment 127.

Tess White spoke about the challenges that the bill presents, particularly with regard to the independence of the judiciary. However, I am not sure whether she is supportive of having an independent regulator, so it would be useful if she could clarify that. Does she recognise what the Faculty of Advocates said in its evidence to the committee, which was that it considers that to be

“a hare that was ... shot long ago”?

I think that our exchange of views on the issues raised by this section of the bill has been useful, and I am grateful to Maggie Chapman and the minister for their comments. Given the minister’s assurances, I choose to withdraw amendment 116.

Amendment 116, by agreement, withdrawn.

Section 18—Professional indemnity insurance

I am pleased to speak to amendment 116 and to my other amendments in the group. As we begin today’s proceedings, I set out my thanks to all stakeholders for their engagement and briefings in advance of stage 3 and throughout the bill process, as well as my thanks to the minister and her team, who have largely been co-operative and responsive to many of the concerns through what has been a long process. Although I sense that we might still end up with some disagreement today, we will certainly start off in a positive vein.

I will speak first to amendment 116. Section 7 sets out the meaning of regulatory functions. However, section 7 does not specifically detail that administering any compensation fund that is required under section 14 of the bill will be a regulatory function. The existing fund, which is maintained by the Law Society of Scotland under the Solicitors (Scotland) Act 1980, is a crucial consumer protection, and the administration of that fund—the guarantee fund—is currently defined as a regulatory function under the 1980 act. I note that the minister told me in writing in advance of this afternoon’s proceedings that she considers that the issue has already been covered in the bill. If she could set out in her remarks how that is the case and the Government’s full position that it is a regulatory function, that would be most helpful to me and, I am sure, to colleagues in the chamber. I might not then press amendment 116.

Amendments 129 and 139 to 141 seek to restrict the conduct complaints that are brought against solicitors in relation to them discharging regulatory functions on behalf of regulators, as defined in the bill. The concern behind the amendments is that an increasing number of spurious conduct complaints are being brought against solicitors discharging regulatory functions, which has a real impact on their ability to carry out those functions. In my opinion, that can be to the detriment of the public interest. The time spent dealing with such complaints places a burden on the regulator, and such conduct complaints can drive risk-averse behaviours by those exercising regulatory functions. It can also impact on the regulator’s ability to recruit and retain solicitor members of regulatory staff. All of that leads to a slowing down, with difficulties in completing regulatory processes.