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.

In my contribution I have outlined, and will continue outlining, the concerns that are being raised, which are those that Mr Whitfield has outlined.

In particular, there is a sense that many established and well-known law firms, particularly trade union lawyers and those that support people with personal injury claims, may have issues with operations in Scotland because the bill has not clarified structures.

The minister is well aware of those issues and the potential implications for the legal services market if we do not get that right. As I said, those issues were raised during previous stages of the bill process and in correspondence from the Law Society, which has neatly explained why the bill, as drafted, should be remedied. The Law Society said:

“As a result, the provisions of Section 39 of the Bill as they stand conflict with the provisions of the 1980 Act. If RFLs”—

registered foreign lawyers—

“are included in the definition of ‘qualifying individual’, then Section 39(2) at the very least implies that one or more RFLs may form a legal business owned exclusively by RFLs, without any Scottish solicitor ownership, and that business would require and be capable of authorisation under the Bill, when that is not correct.

Conversely, if RFLs are not included in the definition of ‘qualifying individual’ and no separate provision is made for them, then Section 39 does not permit existing MNPs”—

multinational practices—

“to be authorised, which would prejudice the continuation of some of Scotland’s largest and most successful law firms, many of which are MNPs.”

In an attempt to tidy up the matter, the minister has indicated her intention to alter the explanatory notes on the definition of qualifying individuals. I am also aware of her correspondence with the Law Society only yesterday, in which she confirmed that she intends to adopt its draft text of a revision to the explanatory notes. It would be helpful to have on the record, without equivocation, that it is, indeed, the minister’s intention to adopt the Law Society’s text for a revision to the explanatory notes.

However, we are dealing with a central issue that has been a focus of concern since the bill was introduced, two years ago, so I am concerned that that letter of last night was the first time since stage 2 that the Government has directly laid out its position to the Law Society, which would be responsible for regulating all these matters and has repeatedly raised the issue.

As I have outlined, the matter is critical for the legal services market in Scotland, and so, despite that last-minute adjustment to the Government’s position, I will press my amendments to ensure that the matter is beyond doubt and to take what might be called a belt-and-braces approach. As things stand, I will move the amendments when they are called and I urge members to support them.

I move amendment 117.

Will Tess White give way?

I will deal with the more minor amendments in the group first, before dealing with the important issue of registered foreign lawyers.

Amendment 123 will make changes to section 42 to allow category 1 regulators to make rules about the effect of an authorisation of a legal business that is a partnership or another unincorporated body where the membership of the legal business changes or another legal business succeeds to the whole, or substantially the whole, of its business. It deals with an ambiguity in Scots law regarding traditional partnerships to ensure that, where there are changes to membership, there is a swift transfer of authorisation of interests of the business. I am grateful to the minister for her indication that the Government is willing to support amendment 123, which will be important in delivering justice and support to those who require it when there is such a change, as I have outlined.

Amendment 126 will remove section 44(2)(a)(ii), which currently requires practice rules of authorised legal businesses to have regard to “regulatory objectives”. Overarching regulatory objectives are applicable to regulators, and it is regulators who must adhere to them. Instead, legal providers must adhere to professional principles, which are already covered elsewhere in the bill, so the subparagraph is an incorrect reference that has to be removed from the bill. I am grateful to the minister, again, for indicating that she is minded to support amendment 126, which seeks to clarify and clear up the bill as drafted—and, subsequently, if it is agreed to, the legislation.

Amendments 124 and 125 would remove from section 44 a paragraph and a subparagraph that require practice rules to include the process for the making and handling of complaints. Given that complaints processes are currently set out in statute, there has been concern among stakeholders that the current provisions in section 44 might not be appropriate or, indeed, legally competent. However, the minister’s written explanation to me about the necessity of the powers that are provided to the SLCC to direct minimum standards has been very helpful for my understanding of the purpose of the subsections. If the minister will provide detail of that on the record in her contribution, I would be most grateful and, subsequently, minded not to move those two amendments.

I turn to my remaining amendments in the group, which are amendments 117 to 122 and 138, regarding qualifying individuals and the status of registered foreign lawyers. The issue is critical to the functioning of the legal services market in Scotland; it was debated extensively at stage 2 and we heard evidence on it at stage 1.

If we do not get definitions of the status of registered foreign lawyers correct, in order to provide legal certainty that they are permitted to part-own authorised legal businesses as part of multinational practices, that could have a particularly concerning impact on the legal services market in Scotland. The ownership structures of some of our largest and best-known law firms could be threatened by the implementation and interpretation of the statute.

It is difficult to overstate the level of concern that that has caused within the legal profession, because it is a significant issue that many lawyers feel has been left in the balance for the past two years. We are talking about the ability of some of the UK’s largest law firms to operate here in Scotland, which concerns thousands of jobs and tens of thousands of clients.

I recognise what the minister is outlining, but does she recognise the letter that came from the Lord President and his view that his office should be the final port of recourse before a complaint potentially has to go to judicial review? Does she share my concern that judicial review can be costly and slow things up even more?

I thank the minister for her co-operation and, indeed, collaboration on amendments 11, 22, 23 and 90, in my name.

Amendments 11 and 90 would provide relevant professional organisations that are considering initiating a complaint against a practitioner or an authorised legal business with the power to give notice to the practitioner, or the practitioner’s firm, or the authorised legal business, requiring production or delivery of the document specified in the notice relating to the complaint. Those amendments would allow lawyers who work for the Crown Office and Procurator Fiscal Service to be exempted from any requirement placed on them to provide information, to prevent interference with their prosecutorial functions and independence.

Amendments 22 and 23 would expressly provide the Law Society of Scotland with discretionary powers to disclose information where it was in the public interest to do so.

I believe that all my amendments would be extremely important for ensuring the swift resolution and advancement of complaints and also for ensuring that there is strong transparency around their resolution. I believe that they would represent good news for achieving transparency and proactive regulation.

Also in this group is my amendment 135, which would permit relevant professional organisations to appeal SLCC directions on minimum standards to the Lord President, for his determination. I whole-heartedly agree with the minister that the SLCC’s ability to direct minimum standards would provide for a strengthening of the consumer voice and, it is to be hoped, would lead to improved practices within the complaints process. I note that members of the profession have widely accepted that view.

However, I think it reasonable to consider that, like any person or organisation, the SLCC is not infallible and therefore might issue guidance that did not account for certain circumstances. Such guidance could be impractical or simply wrong. Even if the processes that include consultation with affected stakeholders were observed, wrong or impractical conclusions could be drawn and evidence could simply be ignored.

In those instances it would seem fair to give the profession a mechanism to voice its concerns to a third party. My amendment 135 would require that it be put before the Lord President for final consideration, at which point he could uphold the direction, either in part or in full, or vary it.

The Lord President has indicated his agreement with that position, in principle, in a letter that he sent to the Equalities, Human Rights and Civil Justice Committee ahead of stage 3. In it, he stated that the senior judiciary’s view was that the bill should be amended so that the Lord President is given a power to approve the SLCC guidance, which sets minimum standards before they are imposed on a regulatory body. The Lord President approves the practice and disciplinary rules of the Law Society and the Faculty of Advocates. If minimum standards from the SLCC are to be included in rules which the Lord President approves and the Lord President does not agree with these rule changes because the SLCC minimum standards are not workable or appropriate, the senior judiciary thought it would be unlikely that the Lord President would approve those rules.

I note that, without my proposed mechanism, in particularly egregious examples, the only avenue that would be available to relevant organisations would be to seek judicial review. That would be significantly more costly and more time consuming than any costs or delays that might result from the ability to refer guidance to the Lord President for a final direction.

It appears that the minister and I are at odds on that point. However, it seems to me that amendment 11, in my name, would provide a reasonable safeguard.

I have nothing further to add, and I press the amendment.

Amendment 127 agreed to.

Amendment 128 moved—[Paul O’Kane]—and agreed to.

Section 54—Commission process relating to complaints

I will broaden the question out to other witnesses, too. In your experience, do councils consider writing off council tax debt for women in particular who are leaving a financially abusive relationship, or are we not seeing enough progress on that at a council level? In addition, in your view, do we need bigger legislative change in order to make that provision?

Erica Young, do you want to comment from a Citizens Advice Scotland point of view?

No, convener; I said that I would indicate if I wanted to come in.

Of course.

That has been a really helpful start to the session, and there is plenty for the committee to consider.