Seòmar agus comataidhean

I thank Maggie Chapman, and I acknowledge the concerns that the consumer panel has raised. We would not be able to get involved in the SLCC process—it will be up to its independent process to look at how the panel should be funded—but I am happy to work with the SLCC on that as we move forward.

Amendment 312 agreed to.

Section 52—Receipt of complaints: preliminary steps

I am pleased to have worked with Stuart McMillan on his amendments in this group, which amend the Legal Profession and Legal Aid (Scotland) Act 2007 to provide a more flexible power than currently exists for the SLCC to disclose information for the purpose of confirming receipt of a complaint, allowing the SLCC to proactively release information and providing the SLCC the ability to disclose the outcome of a complaint where it is in the public interest to do so. I support Stuart McMillan’s amendments 524, 526, 527, 533 and 534.

I turn to my amendments in this group. Amendment 535 will provide the power for the Law Society of Scotland and other legal services regulators—relevant professional organisations—to disclose information about complaints that they are investigating, but only if they consider it to be in the public interest. The information may identify a practitioner or a firm to whom the complaint relates, but it may identify the complainer only with the complainer’s consent.

Amendment 536 will amend section 52 of the 2007 act to allow information to be disclosed for the purpose of enabling or assisting any regulatory body that is specified for this purpose in regulations.

Mr O’Kane’s amendment 536A seeks to amend my amendment 536. The Law Society has referred only to paragraph (b) of section 52(3) of the 2007 act. We agree that that allows disclosure in cases where the body is compelled to disclose it. However, paragraph (a) of section 52(3) provides that information may be disclosed

“for the purpose of enabling or assisting the relevant professional organisation to exercise any of its functions in relation to such a complaint”.

The reference to functions includes duties and powers and therefore includes the power of a regulator under new section 51A to disclose information. Amendment 536A is therefore unnecessary, and I would urge members not to support it.

Amendment 338 will remove subsection (2) from section 53 of the bill, which amends section 13 of the 2007 act, which relates to service complaint reports, in consequence of the removal of section 13 by Stuart McMillan’s amendment 524.

Amendment 484 ensures that qualified privilege applies to information that the commission may disclose about complaints in consequence of amendment 533 in the name of Stuart McMillan and amendment 535 in my name.

Amendment 494 ensures that qualified privilege applies to information that regulators may disclose about complaints in consequence of amendment 535.

I therefore ask members to support my amendments, and the amendments lodged by Mr McMillan.

I will comment on Mr O’Kane’s contribution regarding amendment 536A. I understand and appreciate his intentions. In order to clarify the position and to address the concerns that he raised, I would be happy to adjust the explanatory notes to the bill to refer to the disclosure of information under section 51A of the 2007 act as an example of regulators’ functions mentioned in section 52(3)(b) of the 2007 act. I would be happy to discuss that with the member in advance of stage 3, if that would be helpful.

Thank you, convener. I know about Mr O’Kane’s concerns in that regard, which have also been raised by the SLCC. I am happy to discuss with him how we can move forward on the issue before stage 3, although I cannot commit to specifics at this stage.

Amendment 319 agreed to.

Section 55—Regulatory complaints against authorised legal businesses

Amendment 320 moved—[Siobhian Brown]—and agreed to.

Amendment 573 not moved.

I believe that Scottish Government amendments 273 and 642 achieve the intention behind Pam Gosal’s amendment 549 and Paul O’Kane’s amendments 555 and 641, given that our amendments relate to qualifying individuals and will also cover registered foreign lawyers where appropriate.

I know that the issue is very technical, so I am happy to have further discussions before stage 3 on how we can improve things.

Amendment 271 agreed to.

Amendment 272 moved—[Siobhian Brown]—and agreed to.

Section 38, as amended, agreed to.

Section 39—Requirement for legal businesses to be authorised to provide legal services

Amendments 47, 522 and 466 will make the necessary changes to legislation to reflect the change of name of the Association of Commercial Attorneys to the Association of Construction Attorneys. The association sought that change following the introduction of the bill, and that was approved under section 42 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.

Schedule 1 of the bill would make a variety of changes to the Solicitors (Scotland) Act 1980 with respect to the Law Society becoming a category 1 regulator and the move to entity regulation.

Amendments 5 to 37, with the exception of amendments 15, 24 and 27, are minor or consequential modifications to part 1 of schedule 1 and relate to the Law Society’s functions.

Amendment 24 removes paragraph 22 from part 2 of schedule 1 of the bill, because it is no longer required.

Amendments 412, 413 and 507 make consequential amendments, following a change of name in the bill from the “guarantee fund” to the “client protection fund”. Amendment 11 allows the client protection fund to provide grants, as well as loans, to judicial factors appointed, in order to mitigate the risk of any further pecuniary losses being suffered by the clients of such a person by reason of dishonesty. The amendment reflects engagement with the Law Society, which sought that addition.

Paragraph 6(6) of schedule 1 inserts a new section into the 1980 act to enable the Scottish ministers to, by regulations, adjust section 43 and schedule 3 of the 1980 act in respect of the circumstances when claims can be made and the maximum amount of any grant payable, and in connection with administrative matters.

Amendment 15 restricts the exercise of that regulation-making power only to those cases in which the Scottish ministers have received a request from either a regulator, the Lord President or the consumer panel to do so. Before making such a request, the requester must have consulted the regulatory committee, the Lord President and the consumer panel and must also have secured the Lord President’s agreement to making the request. The provision sets out what information must be provided to the Lord President when seeking their agreement and requires the requester to publish certain documents.

Amendments 461 to 465 make minor and consequential modifications to enactments in connection with regulatory objectives, professional principles and new regulators in part 1 of schedule 3 of the bill.

I move amendment 47 in my name and ask members to support the other amendments in the group.

Amendment 47 agreed to.

Amendments 48 to 50 have been lodged in response to concerns raised by the Delegated Powers and Law Reform Committee and legal stakeholders that section 8 might be used to alter the categorisation of the Law Society of Scotland or the Faculty of Advocates.

The amendments reduce the breadth of the delegated power to be conferred by section 8(5). As amended, that power will allow Scottish ministers to alter only the category of a regulator that is assigned by the bill, for example by making a significant change to a regulator’s composition or the way that it operates. The power will not capture the Law Society or the Faculty of Advocates. As an additional safeguard, the regulation-making power may only be exercised at the request of the Lord President. Amendment 49 is a technical amendment to add a more specific cross-reference to the power.

I move amendment 48 and ask members to support the other amendments in the group.

Amendment 48 agreed to.

Amendments 49 and 50 moved—[Siobhian Brown]—and agreed to.

Section 8, as amended, agreed to.

Section 9—Exercise of regulatory functions

The sections on special rule changes relate to the practice rules and provide regulators with the powers to waive practice rules in defined circumstances for the purpose of promoting innovation or avoiding a regulatory conflict by removing an unnecessary rule or making a rule less onerous, where a regulator considers that to be necessary or appropriate. The waivers are not intended to be permanent, so the bill incorporates transparency and accountability to the Lord President in the process.

The intention of my amendments in the group is to retain the system of special rule changes that are set out in the bill as introduced, but to remove some elements, including the requirement to produce a dedicated report every year, and to introduce more flexibility in other areas in response to concerns that have been raised by the Law Society. The proposals for changes were reached following engagement with the Law Society, which feels that some provisions in sections 21 to 24 do not allow for enough flexibility in relation to the granting of waivers.

Amendment 179 will add to the conditions that are already set out in section 21 a condition that a regulator can give a direction to its member or members “only if” the regulator

“is satisfied the direction is compatible with the regulatory objectives.”

Amendments 180 and 181 will add additional circumstances in which a direction may be given—that is, where the regulator considers that a direction is

“necessary or appropriate in the circumstances.”

Amendment 182 provides that a direction may not disapply or modify a requirement under the bill “or any other enactment”. That will ensure that regulators will continue to meet their obligations in respect of the provisions in the bill or any other enactment.

Amendments 185 and 186 will add to the list of things that a direction must specify, including the period of time for which the direction is to have effect. Amendment 188 will remove the requirement that a direction ceases to have effect after five years.

Amendment 183 will limit the duty of a regulator to consult the Competition and Markets Authority before giving a direction that could restrict, distort or prevent competition to a significant extent to circumstances where the direction that is being given is for the purpose of enabling a new or alternative way of providing or regulating legal services to be piloted.

Amendment 184 will make changes to the bodies to which a copy of a direction is to be given and in what circumstances.

Amendment 187 will place a new requirement on a legal services provider to whom a direction relates to inform the regulator of any changes in circumstances.

Amendment 189 will limit the circumstances in which the Lord President may revoke a direction to the directions that have been given by a regulator, on the basis that it was desirable for the purpose of enabling new or different ways of providing or regulating legal services to be piloted. Amendment 190 will remove the duty to give notice of doing so to the Scottish ministers.

Amendment 191 will remove section 23 of the bill, with the effect that the regulator’s duty to prepare a report on each direction will be removed. Amendment 194 will make a consequential change to section 24. Section 24 of the bill requires a regulator to establish and

“maintain a register of ... Directions”

given under section 21 and sets out what documents the register must contain.

Amendments 192 and 193 will remove the need to include a copy of the application for, or application to amend, the direction.

Amendment 196 will add a requirement to specify

“whether the direction is to have effect for an indefinite period.”

Amendment 195 will make a technical change to denote the placement of the new subparagraphs of section 24(2)(b).

Amendments 197, 198 and 199 will make minor technical changes.

Paul O’Kane’s amendments 543, 544 and 545 would remove most of the special rule changes provisions—sections 21, 22 and 24—from the bill. Unfortunately, I cannot support them. Mr O’Kane’s amendment 556, which is to be debated with group 12, would not be a full replacement for the special measures approach that will be taken through sections 21 to 24, because it would apply only in relation to legal businesses, and not to all legal services providers. That would leave a gap in respect of the Faculty of Advocates and the Association of Construction Attorneys.

The provisions apply not only to the Law Society but to all current and future regulators of legal services in Scotland. The provisions would allow rules to be disregarded where that could bring innovation that could benefit consumers or make a rule less onerous for a legal services provider. The Lord President and the Law Society have been consulted on the Scottish Government amendments. I have listened to the Law Society’s comments and I have sought to address its concerns.

I also consider it important to retain transparency and oversight by the Lord President, following engagement with the senior judiciary. The senior judiciary consider that it is appropriate for the Lord President to have oversight of special rules changes and to have powers to revoke certain types of directions.

I will move amendment 179 and I ask members to support my other amendments in this group. I ask Mr O’Kane not to move his amendments 543 to 545. If he does, I urge members not to support them in favour of retaining the special rule changes arrangements in the bill.

I move amendment 179.

Sections 25 to 27 of the bill would allow a body to apply to the Lord President and the Scottish ministers together to become a new regulator of legal services, being accredited to authorise persons to acquire the right to conduct litigation, the rights of audience in courts and the right to provide other types of legal services. The provisions will replace and modernise similar provisions that are contained in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990.

Following engagement with the Lord President about the concerns that have been raised by the senior judiciary at stage 1 on the role of the Scottish ministers in the regulation of legal services, I gave an undertaking to the committee that I would lodge an amendment to the effect that it would be the responsibility of the Lord President acting alone to consider any application by a body wishing to enter the legal services sector as a new regulator. Amendment 200 will do just that and amendments 211, 212 and 213 will make consequential amendments.

Amendment 209 will insert proposed new section 26A into the bill to give Scottish ministers the power to specify in regulations the additional regulatory matters that must be dealt with in a draft regulatory scheme. However, Scottish ministers will be able to exercise that power only if they have received a request to do so from the Lord President, an accredited regulator or the consumer panel, following a period of consultation with the specified bodies. Except where the Lord President is the requester, the Lord President’s agreement to the request must be obtained.

To address concerns that were raised by the senior judiciary, amendments 201, 203, 206, 207 and 210 will make changes to the application requirements in respect of the draft regulatory scheme that must accompany an application for accreditation. Amendments 202, 204, 205 and 208 are consequential amendments.

The purpose of amendments 214 to 224 and 227 is to remove the involvement of Scottish ministers from consideration of an application and the accompanying draft regulatory scheme, which will leave it to the Lord President alone. The amendments will also introduce additional requirements for consultation and transparency.

Amendments 225 and 226 will place an additional duty on the Lord President, when considering a draft regulatory scheme, to consult the Scottish ministers as well as the Competition and Markets Authority, the consumer panel and other persons who are considered to be appropriate. Amendments 228 to 231 are consequential amendments.

Amendment 232 will impose a new requirement, in proposed new subsections 29(2A) and (2B), on the Lord President to publish the decision on an application under section 25 by a prospective regulator seeking accreditation.

Amendment 233 will remove the requirement for Scottish ministers to make regulations to give effect to the draft regulatory scheme.

Amendment 234 will require an applicant to give effect to and publish an approved regulatory scheme. Amendment 235 will make a consequential amendment. The committee will be aware from correspondence with the Lord President and the Law Society that the amendments are welcomed by the senior judiciary and the legal profession.

I ask members to support my other amendments in the group, and I move amendment 200.

Amendment 200 agreed to.

Amendment 201 moved—[Siobhian Brown]—and agreed to.

Section 25, as amended, agreed to.

Section 26—Regulatory scheme

Amendments 202 to 205 moved—[Siobhian Brown]—and agreed to.

Amendments 546 and 547 not moved.

Yes, certainly. Amendment 41 makes it clear that the requirement to exercise regulatory functions in a way that contributes to sustainable economic growth applies only to the extent that to do so would not be inconsistent with the regulatory objectives, rather than, as the bill requires at present, only to the extent that it would not be inconsistent with the exercise of regulatory functions. The amendment addresses the Law Society’s concern that it is circular and confusing to require the exercise of regulatory functions only to the extent that that is not inconsistent with the exercise of regulatory functions.

Amendment 41 makes section 3(4)(b) clear that the duty to exercise regulatory functions in a way that would help to achieve economic growth applies only to the extent that that is not inconsistent with the regulatory objectives as set out in section 2(1).

Amendment 42 adds the Scottish Solicitors Discipline Tribunal as a named regulatory authority in section 3(5), which means that, as a regulatory authority, the SSDT is subject to the duties that are set out in section 3. Those duties relate to how the regulatory objectives are applied and to other regulatory authorities, including the Lord President and category 1 and category 2 regulators.