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Redress for Survivors (Historical Child Abuse in Care) (Payments Materially Affected by Error) (Scotland) Regulations 2021 [Draft]
Item 2 is evidence from the Deputy First Minister and Cabinet Secretary for Covid Recovery, John Swinney MSP, and his officials, on the draft regulations. I welcome the Deputy First Minister to the committee. Mr Swinney is accompanied by Lisa McCloy, head of the Scottish Government divisional development and legislation unit; and Claire Montgomery, a solicitor in the Scottish Government legal directorate.
I invite Mr Swinney to speak to the draft regulations.
Thank you, convener, and thank you to the committee for inviting me to speak in support of the affirmative instrument that is before you.
Section 97 of the Redress for Survivors (Historical Child Abuse in Care) (Scotland) Act 2021 makes provision for the recovery by the Scottish ministers of payments other than redress payments that were made due to a “relevant error”. The payments to which section 97 applies include those made in respect of expert reports, payments made by way of reimbursement of costs and expenses, and legal fees in connection with a redress application or a proposed application.
A “relevant error” can be either an error that occurs when making the payment—for example, an administrative mistake—or an error that ministers consider materially affected the decision to make the payment. That situation may arise in a case where the decision to make the payment was simply wrong, or where that decision was right but the information on which it was based was incorrect or misleading.
The draft regulations provide for reconsiderations of decisions to make the payments mentioned in section 97(2) of the act where an error, as defined in regulation 2, may have been made. The reconsideration is to be conducted by a panel of at least two members of Redress Scotland. Before it takes place, the beneficiary of a payment will be given eight weeks to make written representations to the panel. If the panel finds that the decision was materially affected by error, it must redetermine it on the basis of how it would have been decided had the error not been made.
We hope that, in practice, the process will rarely be used. It will be invoked only in cases in which there is cause to believe that there has been material human error or it is thought that a decision to make a payment may have been materially affected by error because it was based on misleading or incorrect information.
It is important to note that, when there is an error in making a redress payment, it does not follow that all decisions to make payments linked to it are materially affected by error. For example, legal fees may have been paid to a solicitor in making a redress application for a person who is offered a redress payment. If it later comes to light that the application was fraudulent and no redress payment should have been made, the decision to pay the solicitor’s legal fees will not be referred for reconsideration unless it is suspected that the solicitor had also fraudulently claimed the fees.
In the interest of fairness, the draft regulations include a right to review the outcome of a reconsideration process. If a review is requested, it is to be determined by a panel of Redress Scotland that is different from the one that conducted the reconsideration. A person who requests a review is able to provide further information and written representations to the review panel.
As the committee will be aware, the importance of sound processes and fraud prevention measures was considered throughout the development of the 2021 act. That is why we have put in place measures to ensure that appropriate financial recovery is available where payments have been made in error. The draft regulations supplement that work and set out the detail of how potential errors in non-redress payments will be considered.
I seek the committee’s support for the draft instrument, which is part of our preparations towards launching the scheme.
I am happy to answer any questions.
Thank you, Deputy First Minister.
Do members have any questions or comments on the draft regulations?
Thank you, and good morning to the Deputy First Minister and his officials.
The opening statement explained that the reason why the regulations set out a process assuming that errors might be made is that there is a recognition that fraudulent applications may be made, which possibility cannot be entirely ruled out. It is fair to say that every MSP recognises the need for the payments to be made to victims of appalling sexual abuse. That is not in dispute, nor are the provisions that payments to professionals do not require to be repaid in the event that, unwittingly, there has been a fraudulent application.
I will ask the Deputy First Minister a series of questions in that area, and perhaps he can flesh out his answer in correspondence. Has modelling been carried out to try to elicit the quantity of applications that might be in the fraudulent category? Is the threshold for supplying evidence that is sufficient to establish entitlement to trigger a payment perhaps lower than the standard of satisfying the balance of probability test in court? Is the Deputy First Minister satisfied that the threshold is pitched at the right level?
I am afraid that I do not have detail to back this up, but there have been schemes in other parts of the United Kingdom. Has the DFM considered with those Administrations—or have his officials done so—how we can learn from their experience, in order to minimise error and fraud and ensure that we achieve what we all wish to achieve without loss to the public purse through fraudulent applications, given the obvious risks that might give rise to them?
I hope that I have set out the questions clearly. I gave in-principle notice to the DFM that I was planning to raise those issues.
Mr Ewing has put to me three substantive questions, all of which are absolutely legitimate.
On the first question, we have not undertaken any modelling of expectations of fraud. We have undertaken modelling of the number of applications that we consider it likely that we will have to deal with in the scheme. That modelling information is enhanced by our experience of the advance payment scheme, which has given us a sense of the likelihood of applications coming forward. Therefore, there has been modelling, which has underpinned the financial memorandum for the scheme. The modelling also influences the discussions and dialogue that we have with providers of care, to whom we are looking to provide financial contributions to the scheme.
We have not carried out modelling of the likely quantity of cases that might be affected by error. The reason is that the instrument is about creating a proper architecture for financial control and giving financial assurance about the operation of the scheme. An entirely new scheme is being created, so we have to ensure that we have the appropriate financial architecture in place. The instrument is one element of that architecture.
Mr Ewing’s second point is about the threshold of evidence. During the committee and chamber deliberative processes relating to the act, we discussed the issue extensively. The question is finely balanced, because the redress scheme is available to members of the public who have suffered abuse but who are likely to be unsuccessful in pursuing a claim through the civil courts.
If it is possible for an individual to pursue their claim through the civil courts—and if it is their judgment that the claim is strong and valid—they should do so, and sufficiency of evidence will be a critical factor in that respect. The scheme is predicated on a lower standard of proof than that in the courts, but that standard is still of sufficient credibility to enable a judgment to be made in each case. That has to be accepted in good faith, but, if we find that that is not the case, we will need remedies, and the regulations are therefore appropriate in that respect.
Lastly, we have engaged extensively with a range of schemes across not just the United Kingdom but the world to identify any lessons to be learned from their administration and organisation, and we have taken a lot of that learning into the design of the legislation that the Parliament has considered and passed. The provisions under consideration are our assessment of the legitimate provisions that must be in place to ensure that the scheme is robust and workable.
Are you satisfied with that, Fergus?
Yes. The Deputy First Minister has answered my questions very fairly and along the lines that I expected.
I have one follow-up question, but, again, I am not sure whether the DFM will be able to answer it off the cuff or whether he will have to go away and consider it. I have not researched the 2021 act myself, but am I right in saying that a fraudulent application is not the subject of a specific statutory offence in that legislation but that, where there is proof that such an application has been made, fraud charges could be pursued under common law?
Should we try to deter fraudulent applications by making it clear that the full force of the law will be applied in appropriate cases and to deal with those disgraceful incidents in which people have taken advantage of a Government scheme that is intended for genuine victims and have tried to defraud the state out of the money for those victims? If the DFM has not already discussed the matter with the law officers, will he do so to ensure that we are fully prepared to take action in what I hope will be the small number of cases where this sort of thing has happened?
We have two experts on hand to answer that question.
It is always helpful to have experts to hand, convener.
I would make two points in response to Mr Ewing’s question. First, a further instrument that will come to the committee in due course will look at circumstances in which there might be recovery of redress payments. The instrument under consideration does not affect that matter, but the further instrument will deal with recovery of such payments in cases where concerns have been raised. As I have said, that will come before the committee in due course.
Secondly, if it is suspected that an application has been made fraudulently, the matter will be dealt with under common-law powers on the handling of fraud issues. The matter could potentially be referred to Police Scotland for consideration as a criminal offence, in line with common-law powers.
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Will the time that elapses between an error being identified and a payment being made be taken into consideration in deciding whether it had materially affected the claim?
That will be the case. The regulations contain a power of discretion as to whether consideration should be given to the response to a potential error that has emerged. In other words, there is no obligation in the regulations to take such a course, but there is provision for consideration of any steps that might be taken in that respect. Of course, the issue that Mr Mundell has raised would be material to such a consideration.
That is helpful. For some individuals who might be impacted, it would be distressing for their claims to be revisited for what might, in their mind, be relatively minor errors. I understand that the Scottish Government and Redress Scotland have to satisfy themselves that things have been done properly, but a survivor might have a somewhat higher threshold with regard to errors, given that they would have to re-engage with the process. I simply ask that we be mindful of that.
I completely understand Mr Mundell’s point, but I can clarify that the regulations that are before the committee relate not to redress payments to survivors but to legal fees and psychology reports and other relevant circumstantial reports where costs might have been incurred in error. The other instrument that I mentioned in my answer to Mr Ewing will look at the question that Mr Mundell has raised, and we will have an opportunity to air some of these issues again when those regulations come before the committee.
Could survivors be contacted under the provisions in the regulations that we are considering today?
That is unlikely. I cannot rule it out in all circumstances, but it is more likely that it will be solicitors, psychologists or providers of some form of service who will be in question. However, as Mr Mundell has pointed out, due consideration must be given to the potential impact on survivors of any reawakening or reconsideration of a particular case. Mr Mundell has actively participated in the debates on the redress legislation, but we all know the damage that has been done to survivors and how difficult and challenging they find this process, and I want to assure the committee that I do not view the application of the regulations with any automaticity. We have to exercise the regulations with care, and one of the issues that has to be considered is the very valid point that Mr Mundell has just put to me.
So, it is unlikely that the process will be activated without consideration being given to trying to claim back some of the compensation moneys that have been paid to survivors.
No—in fact, I would say the opposite, convener. It might be that there was an error in the process that requires specific action to be taken in relation to the process, not necessarily to the payment that has been made. However, there could of course be a relationship between the two.
But this process would be initiated entirely by Redress Scotland.
Yes, that is correct.
And when the forthcoming regulations come before us, we will be able to ask how those powers will be initiated.
That is correct. We expect to lay those regulations shortly and will perhaps put them before the committee some time in the new year.
We look forward to you coming back at that time to discuss those issues, which are probably at the forefront of the minds of the survivors of these historical cases.
As colleagues have no more questions, I thank the Deputy First Minister for his responses to the issues raised by the committee.
We move to agenda item 3. I invite the Deputy First Minister to move motion S6M-01889.
Motion moved,
That the Education, Children and Young People Committee recommends that the Redress for Survivors (Historical Child Abuse in Care) (Payments Materially Affected by Error) (Scotland) Regulations 2021 be approved.—[John Swinney]
I see that no member wants to speak, but I am duty bound to ask the Deputy First Minister whether he would like to wind up.
I think that I have said all that I need to say this morning, convener.
Motion agreed to.
The committee must now produce a report on the draft instrument. Are members content to delegate responsibility to the deputy convener and me to agree that report on behalf of the committee?
Members indicated agreement.
I thank the Deputy First Minister and his officials for their attendance, and I suspend the meeting briefly to allow them to leave the meeting.
09:50 Meeting suspended.