Chamber and committees

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.

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.

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.

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