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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 16 June 2025
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Displaying 405 contributions

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Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

I would like to move us on to sections 16 and 17, which are on the trustees’ powers of investment. Yvonne Evans and others have suggested that, partly because of Scotland’s increasing emphasis on net zero goals, that sections 16 and 17 should be amended to explicitly allow trusts to make environmental, social and governance investments, particularly when those might underperform compared with other investments. We have heard mixed views on that. Does the bill allow trustees to do that already?

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

I want to take us back briefly to the question about the definition of “incapable”. I remember that the committee heard another view. As I have said, the suggestion was made to us that, rather than having a new, albeit similar, definition in the bill, the bill could refer to the Adults with Incapacity (Scotland) Act 2000 so that, as that is updated, the definition in the bill would automatically be updated. However, STEP Scotland raised a potential concern with us about tying the definition to that act, because

“Scots law applies to trustees of Scottish trusts even if they are not Scots law jurisdiction persons.”—[Official Report, Delegated Powers and Law Reform Committee, 16 May 2023; c 34.]

That means that, if we have the definition in the bill, we would at least be clear that it applies to trustees of Scottish trusts.

Have you considered that suggestion? Should we be concerned about it, or would it not cause issues? Would it be quite straightforward to simply link the definition to the 2000 act?

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

It sounds as though you are considering making a change to the bill along the lines that have been suggested. Do you think that there are any policy drawbacks to making that change?

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

Thank you.

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

Minister, does the default position that you have explained—that is, that individuals would not be personally liable but that there would be exceptions—mean that the Government does not propose to amend section 65 in any way?

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

But you are not currently proposing anything.

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

But, at this stage, you are not sure which way the balance will go.

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

Do you see that as a potential issue and that who the definition applies to could be unclear?

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

Sections 65 and 66 relate to expenses. The Law Society, as well as other legal stakeholders who appeared before the committee, raised concerns about the current policy underpinning section 65, which sets out principles for determining how legal bills are paid for in trust cases. Specifically, it provides that trustees will be personally liable for those expenses in certain situations, including when the trust fund does not have enough resources to cover them.

The Law Society has said that section 65 will deter people from becoming trustees and might lead trustees to unfavourably settle or abandon legal proceedings for fear of personal liability, which would mean their having to pay out from their own funds. We also heard from various legal stakeholders that obtaining trustee insurance for personal liability is not straightforward.

Having heard those views, do you share the concerns about section 65?

Delegated Powers and Law Reform Committee

Trusts and Succession (Scotland) Bill: Stage 1

Meeting date: 6 June 2023

Mercedes Villalba

Good morning, minister. I want to move us on to section 75 of the bill and discuss definitions of “incapable” and “mental disorder”. The committee has heard a number of views on future proofing the bill and its interaction with capacity law, in the context of possible reforms stemming from the Scottish mental health review, and it has been suggested to us that the bill cross-refer with the Adults with Incapacity (Scotland) Act 2000 with regard to the definition of “incapable” instead of its having its own, very similar definition. Do you agree with that? Would that provide an effective mechanism for allowing incapable adults to offer a view on situations that affect them, or would changes to trust law ultimately still be required after any reforms to capacity law?