Economy, Jobs and Fair Work Committee

Meeting date: Tuesday, November 21, 2017

Official Report 548KB pdf

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Subordinate Legislation

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Land Registration etc (Scotland) Act 2012 (Amendment) Order 2017 [Draft]

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Registers of Scotland (Digital Registration etc) Regulations 2017 [Draft]

We resume the meeting, and I welcome Keith Brown, Cabinet Secretary for Economy, Jobs and Fair Work, and those with him: Graham Fisher, Stephanie Brown and Chris Kerr. We will consider first the draft Land Registration etc (Scotland) Act 2012 (Amendment) Order 2017 and thereafter the draft Registers of Scotland (Digital Registration etc) Regulations 2017. I invite the cabinet secretary to make a statement on the draft land registration order.

I will be brief and refer to both draft instruments at the same time, if that is okay. I thank the committee for the chance to appear here today to answer questions about the draft instruments.

Members will be aware that the draft land registration order makes two minor procedural amendments to the Land Registration etc (Scotland) Act 2012. The amendments are procedural and are intended to improve the process for registration of title of land.

The Scottish Government’s vision for delivering user-focused, collaborative digital for its public services is a key enabler to government providing wide-ranging easily accessible digital public services for the people of Scotland. Registers of Scotland is developing a range of digital services that will provide online delivery of land registration in a way that meets the needs of its customers and provides value to the people of Scotland.

The draft regulations are designed to facilitate the new digital services, which signal another important step in Registers of Scotland’s digital transformation and its aim to become a fully digital business by 2020. The draft regulations provide a framework to support the eventual mandatory use of the digital services, with a minimum six-month notice period applying and consultation with Scottish ministers being required before such mandatory use can come into effect. That will assist in ensuring that Registers of Scotland is delivering the most efficient and effective land registration services to the wider Scottish economy.

The draft regulations give effect to proposals set out in Registers of Scotland’s consultation document “Digital transformation Next steps”, which set out detailed proposals for changes to the land registration requirements to facilitate the introduction of new digital registration services, including a fully digital transfer of title service. The reaction to that consultation was very positive, and respondents expressed strong support for the proposal to streamline and simplify the existing paper registration services. It is worth noting that the Registers of Scotland digital discharge service, which was launched earlier this year, has already proved popular with solicitors and lenders and has considerably reduced the processing time for dealing with applications for discharges. Given that, I am confident that the extension of the digital services will provide value for the people of Scotland.

As the convener mentioned, I am joined today by Stephanie Brown and Christopher Kerr from Registers of Scotland, and Graham Fisher from the Scottish Government legal directorate. We are happy to try to answer any questions from the committee.

Thank you. I will start with a couple questions on the draft land registration order. To cut to the chase, the draft digital registration regulations have the effects that the cabinet secretary talked about, but regulation 8 relates to the draft land registration order. In a sense, regulation 8 relates to altering the land register rules to reflect what will be in the draft land registration order—I think that those accompanying the cabinet secretary are nodding in agreement with that.

The regulation to which you refer makes the change together with the change in the order, but one in relation to the notification by the applicant for a prescriptive claimant and one in relation to notification by the keeper of the registers of Scotland. Those are two slightly different things, but they certainly work together.

Thank you for that clarification.

The particular issue that I am interested in with regard to the draft land registration order is the 60-day period being reduced to a seven-day period. Am I correct that there has not been consultation on that aspect?

There has not. The reason for that is that we think that the change is one of the minor procedural changes that I mentioned and that there are substantial safeguards in place. The 60-day period can be far longer than is necessary if those who have been given notice have already responded to say that they have no objection. It is also true that further into the process both the keeper and the Queen’s and Lord Treasurer’s Remembrancer are able to make checks on an application. We therefore thought that because there are sufficient safeguards and the change is sufficiently minor and procedural, there was no need to consult on the matter.

Might I refer back to when there was a consultation on the Land Registration etc (Scotland) Act 2012? I think that those with you, cabinet secretary, will be familiar with that consultation. The compilation of the responses to that was issued in March 2014. I am looking at that consultation report on the 2012 act, and specifically what it says about questions 42 and 43, which related to the prescriptive claimant and the 60-day notice period.

The report says that the period should be 60 days. The consultation took place in 2012 and 2013 and the report says:

“Respondents, including the Queen’s and Lord Treasurer's Remembrancer, the Council of Mortgage Lenders and Faculty of Advocates, overwhelmingly agreed with the proposal and that 60 days is an appropriate period. The Keeper will therefore include policy to this effect in draft regulations to be considered by Scottish Ministers.”

It is clear that the consultees considered 60 days to be the appropriate period. Do you understand that I and other members of the committee are concerned about the period being altered now without a consultation?

I understand that.

Given the digitisation of the records, a much reduced number are involved. As I understand it, there is substantial support for the change from the legal fraternity. Perhaps those who were involved in 2012 could comment on that.

The reason for the 60-day period was to give people who were notified by a potential prescriptive claimant sufficient time to check their title deeds and take legal advice before responding. The change that is being proposed is applicable only in cases where the party has already done that and has responded to the prescriptive claimant to say that they have no objection.

In this new scenario, a 14-day turnaround period could apply. Is that sufficient time to allow people to respond, react and deal with the issues?

If they need longer, the 60-day period is still there. They can take 60 days if they feel that they need 60 days. The period will be shortened if they have reached a conclusion within the 60-day period and have responded to say that they do not have any objections.

What about others who might be affected by this change who are not aware of what is going on and have not been notified?

Our view is that there are three levels of check on that. The first is that the applicant must satisfy themselves that they have notified everyone who appears to have an interest under sections 45(1)(a) and (b), and under section 45(1)(c) where the notification to the QLTR takes place. In cases where notification goes to the QLTR, the QLTR must also satisfy itself that the applicant has not missed anyone. In the third stage, the keeper does the same. The keeper will check that no one who should have been notified has failed to be notified. In cases where anyone who it appears from the history of the title should have been notified has not been notified, the application will be rejected and it will go back to the start of the process. In cases where multiple parties are notified, each one would have to say that they were content or did not object before the 60-day period would be reduced.

Perhaps Andy Wightman would like to come in at this point.

I have a few questions on the draft order. The prescriptive changes are contained in both the draft order and the draft regulations. I understand that the draft regulations are about applications, and the changes relating to prescriptive claimants at the application stage could probably more logically be in there, whereas provision on the keeper’s job could be in the draft order. However, it makes it difficult to consider the legislation when both draft instruments are dealing with the same policy questions. Why were the changes put in two different instruments?

That was done purely for technical reasons. It is unfortunately not possible to combine orders and regulations. The Interpretation and Legislative Reform (Scotland) Act 2010 does not accommodate that, or we would certainly have done it that way.

That is a fantastic answer. Thank you. It answers my question precisely.

On the prescriptive claimants question, where did the initiative come from to make that change? Who thought it was a good idea? Where did it start?

The issue was first observed by Registers of Scotland operational staff dealing with applications, in conjunction with the parties making the applications. The parties making the applications found it difficult to understand why there was a stand-still period when everyone who had an interest had indicated that there was no objection. Since then, the proposed changes have been discussed with the Law Society of Scotland, which had no objection to them.

Registers of Scotland has an obligation, I think under the 2012 act, to maintain a constant review of the services that it provides and to improve them. It would have looked at this matter under that kind of standing injunction.

12:30  

On the substantive policy question, the 2012 act makes changes to prescription that are broadly welcomed in terms of tightening everything up, but it is, nevertheless, still an area of contention. One problem is that the applicant and the keeper both have responsibilities to make reasonable inquiries—let us put it that way—within the timescales.

However, there may be people who have an interest who have not been approached by either of those parties. There is no guarantee that either the applicant or the keeper will have full knowledge of the potential parties who may have a claim to the land. One of the reasons for having a 60-day period—albeit that that comes on the back of a year’s uncontested possession—is to allow other voices to come out of the woodwork. I am a little unclear about why we would want to reduce that period, given that it was part of the original safeguards. I take the point that Chris Kerr made in response to the convener’s question—that the period can be reduced only in uncontested cases—but part of reason for that period is that it is a last-gasp option, so people who have not been consulted can put their hand up and say, “What about me?”

As we said earlier, further checks are made through the QLTR and subsequently the keeper to ensure that everybody who should have been has been notified. Mr Wightman is right to say that we have the year period beforehand, but there is also a 10-year period after that, when objections and challenges can come forward.

I make the point that the change applies to a reducing number of cases—It is only those in which those who have been notified have raised no objection—and we think that it is a proportionate response to that. If, over the course of that 10-year period, somebody feels that they should have been consulted or notified and was not, they have the chance to come forward. It is not a done deal as soon it is carried out.

However, anyone coming forward in that 10-year period will be coming forward afresh, against a title that has already been recorded and has precedence over their title, if there is broad equivalence in the claim.

As I understand it, ownership is not achieved until that 10-year period has passed—it can still be challenged. With the different levels of checks, and given the number of cases that there are, we think that it is a proportionate position to take in relation to the risk.

Did the motivation for the change in the prescriptive provisions that are contained in the two draft instruments come from a relatively small number of people who asked why they had to wait for another 40 or 50 days?

It came from a relatively small number of people, but the number of applications has also been relatively small. Since the 2012 act came into force in December 2014, there have been 17 successful prescriptive claimant applications. The headline numbers are small and, therefore, the number of people affected is also small.

That relatively small number is those people who are most involved in the process, but the change has been supported by others who are involved—not people from Registers of Scotland, but people who interact with the process. Reducing the period makes the process more efficient, so that those people do not have to wait for those extra 40 or 50 days when they know that everyone who has been notified has already said that they have no objection. With the safeguards that I have mentioned, we think that that is a proportionate way to do it.

We are trying to improve the service and make it more efficient through digitisation. I think that there is a quote somewhere that says that we move faster in these things than we have ever done before—we are never going to move as slowly again. It is a progression. We are making the change not just for the sake of it, but because it seems an efficient way to go about it. If there is a 50-day period that is not being used, when everybody who has been notified has said that they have no objection, the change seems to introduce a more efficient way to go about things. I imagine that it would naturally occur to those most involved in the process that there is the need for a change.

I want to understand this correctly. If a relevant person is notified and says that they do not object, the keeper then notifies them, because the title is uncontested, and they then have a further seven days. However, they could change their mind. Is seven days long enough for them to instruct someone, such as a lawyer, to do something?

We think that it is. The process involves no more than telling the keeper that they object—they do not have to justify that or go into detail. When they have taken the initial decision, they will have taken sufficient legal advice and will be aware of the title position. If they change their mind in response to the keeper’s notification, all they have to do is say that they object. It is a very straightforward process and they should not require any additional legal advice at that stage if they have come to a different conclusion.

If there were rival prescriptive claimants—if, say, the local community had an interest—that seven-day period might be considered very short if people needed to be notified and allowed to lodge an alternative claim.

There can be only one prescriptive application at a time because of the year’s possession requirement—multiple parties cannot be in possession at the same time unless they are looking to take title jointly and in common. There cannot really be competing applications in that respect.

I want to ask about the digital regulations. The convener wrote to you on 7 November and you replied on 10 November. That was about the trial that ran to October 2017. You said that, by

“October 2017, almost 8% of all discharges received by RoS were submitted via the service”,

with

“81% of respondents rating it as satisfactory or very satisfactory.”

That raises the question of what the other 19 per cent of respondents thought. Did they raise any particular concerns?

The other 19 per cent responded that they were neither satisfied nor dissatisfied with the service. We had two further potential responses in the survey, which were “dissatisfied” and “very dissatisfied”, neither of which was selected by any of the respondents.

That feedback forms one element of the engagement activity that we undertake with our customers. We also have direct engagement. Since our service has gone live, we have attended 57 events. We spoke at 14 of those events and had stands at 21 of them. The aim of all of that was to reach as many of our users as possible in order to find out what types of service would be of value to them.

We recently introduced some additional functionality for that particular service. A change will take effect on Thursday that was made in direct response to customers’ feedback that they would like a dashboard function so that they can control their work from within the service. The latest feature of the dashboard will be made available to them on Thursday.

We are expecting Registers of Scotland to do rather a lot at the moment, because creating a land register by 2024 is a major target. Are we overloading it?

As was said in answer to Andy Wightman’s question, the initiative came from Registers of Scotland. That being the case, I do not think that we are overloading it. Having visited the office, I know that land registration by 2024 is a big challenge but that the change would help with the workload rather than be a hindrance.

As there are no further questions, we will move to the formal debate on the motion. Does any member wish to speak in the debate?

The burden of proof on changing the law always lies with those who are proposing the change. There has been no consultation on the prescriptive claimants provisions and, given the controversial nature of prescriptive claimants, I am nervous that there may be unforeseen consequences. I am not entirely happy with the notion of changing the law relating to timeframes on the basis of a very small number of cases.

I do not doubt that the change to the timetable might be valid, but I do not think that the case for the change has been made in the wider context of the potential risks that it might throw up. The prescriptive provisions in the 2012 act are a significant enhancement of what went before—I have no doubt about that. However, I am nervous about interfering with them on the back of what appear to be comments from people who just want things to go a little bit faster. Therefore, I am not minded to support the new provisions.

As Mr Fisher has identified, the prescriptive provisions are contained in both bits of legislation that we are considering today—for legal reasons, they have to be. However, that means that I am not minded to support either instrument.

I do not find the other measures in the Land Registration etc (Scotland) Act 2012 (Amendment) Order 2017 to be objectionable, and I do not find all the rest of the Registers of Scotland (Digital Registration, etc) Regulations 2017 to be objectionable either.

Perhaps I could go back a stage. I have made a mistake—I should have asked the cabinet secretary to move the motion before inviting Mr Wightman, or anyone else, to speak in the debate.

Motion moved,

That the Economy, Jobs and Fair Work Committee recommends that the Land Registration etc (Scotland) Act 2012 (Amendment) Order 2017 [draft] be approved.—[Keith Brown]

We now move to the debate part of the process. We will take it as read that Andy Wightman’s comments form part of the debate. Does anyone else wish to speak?

I have some sympathy with Andy Wightman’s points, especially if the proposals could lead to any disadvantage to the community. It might take a bit of time for people to get moving, and seven days seems, on the surface, to be quite a tight timeframe. On the other hand, as only 17 applications have been made since 2014, I am reassured that we are talking about only a tiny number of cases. Indeed, as there have not been a lot of problems since 2014 and the 60 days have not been required regularly, I am a bit more relaxed about the situation. Perhaps the cabinet secretary can reassure us that communities will not be disadvantaged by the proposals.

Having heard what has been said, my concern remains that the reduction from 60 days to seven days leaves too short a period. Those with experience of dealing with the registers, and Registers of Scotland itself, will know that that is an extremely tight turnaround time. I am not sure that I have been persuaded by the efficiency argument for making the change. We are talking about a 10-year prescriptive period, so is the difference between 60 and seven days material when it comes to making efficiencies?

The seven-day period will kick in only after people have had the chance to object, and I have said that Registers of Scotland would have no objection to the measure. The seven days is an additional protection. I think that that meets some of the concerns, or at least those that have been expressed by Mr Mason.

I have talked about the protections that are in place. First, a claim often goes through the QLTR and the keeper, who is an objective judge of whether the right people have been notified at that stage. In addition, there is the subsequent 10-year period in which it could become evident that someone has not been notified, if that is the case. Those layers of protection for what is not only a small number but a decreasing number of prescriptive claims, as digitisation progresses, are a proportionate way in which to ensure that there is increased efficiency. We regularly, and rightly, look to increase efficiency in public services, although not at the expense of people’s rights—and the proposal does not infringe on people’s rights.

Given the protections that are in place and the fact that no one will be confronted with a seven-day period in isolation—it will apply only to those who have made their views known—this is a proportionate way in which to improve public services and to make them more efficient.

The question is, that motion S5M-08842 be agreed to. Are we agreed?

Members: No.

There will be a division.

For

Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)

Against

Baillie, Jackie (Dumbarton) (Lab)
Halcro Johnston, Jamie (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)

The result of the division is: For 4, Against 5, Abstentions 0.

Motion disagreed to.

12:45  

We move to the debate on the next instrument. The cabinet secretary has already spoken on the draft Registers of Scotland (Digital Registration etc) Regulations 2017.

Motion moved,

That the Economy, Jobs and Fair Work Committee recommends that the Registers of Scotland (Digital Registration, etc) Regulations 2017 [draft] be approved.—[Keith Brown]

Does anyone wish to comment?

I very much welcome the regulations. Digitisation is the future, notwithstanding some of the problems that there have been in the public sector with digital projects. Digitisation helps to speed things up and provides better-quality information to everyone who uses public sources of information, such as Registers of Scotland.

I am content with the regulations, but my problem is with legislative drafting issues. Regulation 8 relates to prescriptive claimants. As I indicated in the previous debate on the first instrument, I am not convinced that a sufficient case has been made to change the law. Again, the change may be perfectly innocent, but I do not see what the case is and I am concerned about unforeseen consequences. I am minded not to support the motion, but only because of the drafting of regulation 8.

That is my concern, too. As has been indicated, the proposed changes have been placed in the same instrument for technical reasons. If it had been possible to separate out the changes, that might have resulted in a different approach to matters. Does the cabinet secretary wish to respond?

No. I have made my arguments for the proposals.

The question is, that motion S5M-08844 be agreed to. Are we agreed?

Members: No.

There will be a division.

For

Arthur, Tom (Renfrewshire South) (SNP)
Beattie, Colin (Midlothian North and Musselburgh) (SNP)
Martin, Gillian (Aberdeenshire East) (SNP)
Mason, John (Glasgow Shettleston) (SNP)

Against

Baillie, Jackie (Dumbarton) (Lab)
Halcro Johnston, Jamie (North East Scotland) (Con)
Lindhurst, Gordon (Lothian) (Con)
Lockhart, Dean (Mid Scotland and Fife) (Con)
Wightman, Andy (Lothian) (Green)

The result of the division is: For 4, Against 5, Abstentions 0.

Motion disagreed to.

I thank the cabinet secretary and those who have come with him.

12:48 Meeting continued in private until 12:58.