Official Report 932KB pdf
The next item of business is a debate on motion S6M-15783, in the name of Siobhian Brown, on the Judicial Factors (Scotland) Bill at stage 3. I invite members who wish to speak in the debate to press their request-to-speak buttons.
15:02
I thank all the members of the Delegated Powers and Law Reform Committee for their attentive and valuable work in scrutinising the Judicial Factors (Scotland) Bill.
The bill is a Scottish Law Commission bill: I thank the commission for its considerable work—not only on this project, but on all the other projects that it undertakes to simplify and improve our laws. I am committed to introducing bills to implement its proposals. This is the third SLC bill to be introduced in this session of Parliament, with the fourth, on the termination of commercial leases, being due shortly.
A judicial factor is a person who is appointed by the court to gather, hold, safeguard and administer property that is not being properly managed. Examples include the winding up of a partnership when the partners are unable to agree on how the partnership will operate, and when a child is due to receive funds in excess of £20,000 and/or when the child’s estate is large or complicated, which might be the case after a personal injury damages award, for instance.
If it is agreed to this afternoon, the bill will put in place an updated and comprehensive framework that will bring clarity, accessibility and efficiency to this vital area of the law. There are only about 50 judicial factors currently appointed to manage someone else’s property, and only a handful of applications for appointments are made each year. To my mind, that reflects the fact that applications are a last resort. However, despite the small numbers, for those who are involved with judicial factors in one way or another, the bill will make positive changes.
The appointment of a judicial factor to manage the property of a missing person was closely scrutinised by the DPLR Committee, and for very good reason. Although such appointments have been made in the past, they have been rare, despite 15 people in Scotland each year being declared long-term missing. There will be various reasons that are individual to each case for why an application for appointment is or is not made, but the bill will remove one potential obstacle, which is the difficulty that is caused by the outdated and complex law.
The bill aims to bring the law together in one place to make it easier for users of the legislation. Not only is that the case, but one of my amendments from stage 2 has committed the Scottish ministers to producing and publishing guidance for such an appointment. I will work with the charity Missing People and other stakeholders, including the Office of the Accountant of Court, to help to prepare that guidance.
The Delegated Powers and Law Reform Committee has already suggested a number of points that should be covered in the guidance, and I will make sure that they are included. Just as important—
Will the minister take an intervention?
Of course.
I am grateful to the minister for taking an intervention following that very important point regarding missing persons.
The minister will also recall that, at stage 1, I raised the question of safeguarding of children. Indeed, the minister kindly wrote to me, making reference to the Children (Scotland) Act 2020, and she talked about provisions being commenced in 2025 to cover the points that I had raised.
Is the minister able to say in what part of 2025 the Government is considering rolling out those provisions, which are important for safeguarding children?
I agree that the provisions are important. At this particular time I cannot give Martin Whitfield a definite timescale, but I will be happy to write to him to keep him updated on progress on that.
Just as important is that my stage 2 amendment also made it clear that it is competent to appoint a judicial factor to the estate of a missing person.
The bill also addresses other important issues. I will briefly remind members about some of its key provisions and what they are intended to achieve.
There is always a question as to whether the person who seeks a remedy from the court has a sufficient interest to justify raising legal proceedings. Under the current law, the usual rule is that the applicant must have an interest in the property over which the appointment is sought. The bill widens the scope in respect of people who may competently raise court proceedings, because it might be possible that a party might have an interest not in the property but in its maintenance. For example, if disrepair of one semi-detached property begins to have an effect on the other half of the building, the owner of that other half might be concerned about possible damage to their property. The bill gives the court flexibility to allow for a judicial factor to be appointed in such circumstances, where appropriate.
Currently, there is uncertainty as to what powers a judicial factor has by virtue of their appointment. When a judicial factor is appointed, the court will often provide in its decision that they are appointed with the “usual powers”. What the “usual powers” are in a particular case will depend on the purpose for which the factor has been appointed. That can lead to uncertainty for both judicial factors and the third parties who deal with them, and has resulted in some factors being reluctant to carry out certain actions. That uncertainty has led to litigation, which has often taken the form of a request to the court for additional powers, with the consequence being that the expense of such litigation is paid from the factory estate. The bill provides clarity by setting out that a judicial factor will have
“all of the powers of a natural person beneficially entitled”
to the property—which will be readily understood as empowering the factor to do everything that an owner of an estate could personally do.
At present, a judicial factory may be terminated by way of a formal court procedure or, in limited circumstances, by way of the less formal procedure of an administrative discharge. A judicial discharge comes with a level of formality that is not required in all circumstances, and the expense of such a discharge is paid from the factory estate. An administrative procedure enables matters to be brought to a conclusion more economically than a case in which an application is lodged with the court. The bill ensures that the procedure for administrative discharge is extended to all types of judicial factories.
The bill also makes clearer the role of an accountant of court in supervising judicial factors and the work that they undertake.
The bill will introduce a statutory framework that sets out clearly the essential features of the office of judicial factor and the broad parameters within which it should operate. It will be of benefit to all who are involved in any capacity in judicial factories.
I move,
That the Parliament agrees that the Judicial Factors (Scotland) Bill be passed.
15:09
I welcome the stage 3 debate, as I will the passing of the bill later this afternoon. As the minister said in her opening statement, the bill does not affect a lot of people in Scotland; however, for the people whom it affects, the appointment of a judicial factor to look after their estate is important.
We are all aware that the law has not changed in decades and is outdated for 21st century Scotland. I believe that the changes that the bill will make will encourage and facilitate more people to use judicial factors, when that is possible.
In particular, as the minister said in her statement, it has been complicated recently for the estates of people who have gone missing to be administered and to function in a proper way. I hope that streamlining and bringing that process into the 21st century will give more reassurance and greater protection to people who are dealing with that situation.
The bill will also help charities in the work that they do, as well as vulnerable children who require estates to be looked after.
Just because a bill is not controversial and does not get as much time in the chamber as other bills, that does not mean that it is not important. I add my thanks to the Scottish Law Commission for all the work that it has done in getting the proposal to this point. Most of its work goes unseen because it is fairly academic, but it is, nonetheless, vitally important. Without the commission producing the groundwork, we would not be where we are today.
I also thank the committee clerks for helping the committee to work our way through the bill, and I am grateful for the legal advice that we have been given. I thank the minister for the way in which she has interacted with the committee, which has been really beneficial.
I do not intend to labour my remarks, which most members will be glad to hear, except to say that this is an important step. Such bills are important, if not controversial, because they affect real lives and real situations. It is a credit to us as a Parliament that we are modernising this area of law for the 21st century.
I look forward, with my colleagues on the Conservative benches, to voting for the bill later today.
15:12
With this legislation, the Government seeks to modernise the law relating to judicial factors. As the minister has already set out, some of the legislation dates back as far as the 18th century.
Judicial factors have important, if seldom-used, legal functions that apply, for example, when a solicitor or solicitor’s firm has breached the Law Society of Scotland’s accounting rules and is, or appears to be, insolvent, or when no executor is willing to administer a deceased person’s estate.
Scottish Labour agrees with the Scottish Government’s stated aim of clarifying the current legislation and making a judicial factor a more attractive option in a range of circumstances.
Like other members, I thank the Scottish Law Commission, without which the legislation would not exist, the Law Society of Scotland for its helpful briefings and evidence to Parliament, and the Delegated Powers and Law Reform Committee for its scrutiny of the bill. I also thank the minister and her officials for the way in which she has conducted the legislation. I was pleased that, at stage 2, the Government introduced amendments that responded to some of the concerns that were raised in the committee’s stage 1 report on behalf of stakeholders.
There is broad agreement across the chamber and among the legal profession that this area of law is outdated and in need of modernisation. Scottish Labour has supported the bill throughout its passage through Parliament. In the light of the amendments at stage 2 and, today, at stage 3, we will be pleased to support it again this evening.
I will be surprised if the bill, should it pass today, makes it on to the front pages of tomorrow’s newspapers. There is nothing headline grabbing or unduly controversial about updating legislation on judicial factors, and neither should there be. However, the legislation will make some people’s lives a little bit easier, and it is important for that reason alone.
The bill will make the judicial factor procedure easier to navigate for a missing person’s family members, who are struggling with the grief and uncertainty caused by their disappearance. I am glad that the minister heeded calls from the Labour benches—particularly from my colleague, Martin Whitfield—as well as from stakeholders and the committee, to explicitly outline provisions around appointing a judicial factor in the case of a missing person. I welcome the minister’s comments regarding the work of the charity Missing People in that regard, as she seeks to expand the clarity on it.
We all know the vital work that charities do in our communities—many of them help to deliver front-line services to the most vulnerable in society. Amendments that were agreed at stage 2 mean that the bill will deal more appropriately with the specific case of judicial factors that are appointed to charities.
The stage 3 amendments were largely technical in nature, and we, on the Labour benches, were happy to support them. Recent history is littered with examples of bills that were variously rushed, incoherent or light on detail, meaning that well-intentioned bills became unworkable acts of Parliament. However, I am pleased that, as a result of cross-party working and the Government responding to the concerns of stakeholders such as the Law Society of Scotland, the bill will buck that trend.
The bill’s provisions interact with a range of other areas of law including charity law, trust law, the law of succession, child and family law and bankruptcy law. An interaction that stakeholders have raised questions about is how the bill will operate alongside the Adults with Incapacity (Scotland) Act 2000. The Law Society of Scotland has asked for clarification of which provision will ensure that guardians who have been appointed under the 2000 act remain outside the judicial factors regime and in what way we will ensure that judicial factor appointments do not become a loophole for those who would wish to evade the safeguards for incapable adults that are set out in that act. I would appreciate it if the minister would address those issues in her closing speech.
Scottish Labour welcomes this important update to our nation’s laws and we will be pleased to support the bill at decision time this afternoon.
15:15
I once again thank the Scottish Law Commission, the committee members and clerks, the minister and her staff, and all those who responded to the various consultations on the bill.
In the stage 1 debate, I spoke about the work of the charity Missing People and its hopes for the bill. The situation that arises when someone goes missing, with family and friends struggling to cope with financial matters, is one where the appointment of a judicial factor can be of very practical help. I am happy that the minister responded to Missing People’s request for the bill to be amended and that it will now be more obviously and easily of assistance to the people whom the charity represents.
I also appreciate the work that has been done to respond to other comments, especially from professional bodies, about the operation of the bill. Most of the amendments were small, low key and undramatic. They were not the stuff of impassioned debate or screaming headlines. However, legislation does not have to be exciting to be efficient or effective, and the changes that have been made will make the eventual act clearer, more workable and more responsive to the changing situations in which it will be used.
I and the Scottish Greens appreciate the unique traditions of Scots law, its particular vocabulary and concepts and its links with jurisprudence in a range of jurisdictions. The work of the Scottish Law Commission, as implemented by this Parliament, allows that law to develop appropriately and organically to meet the needs of Scottish people and institutions both now and into the future, and the bill is an excellent example of that.
I am, therefore, pleased to confirm that the Scottish Greens will vote in favour of the bill. I look forward to seeing its rapid and efficient implementation.
We move to the closing speech from the minister. I call Siobhian Brown to wind up the debate.
15:18
I thank members for their contributions to this short debate. I hope that it is clear from the debate that we listened to what was said by stakeholders, by the committee and by MSPs during the earlier stages. The changes reflect those views and, to my mind, they have improved the bill.
If the bill is passed today, it will put in place a modern and broad framework for judicial factors that sets out the essential features of the office and how it is supervised. That will bring clarity, accessibility and efficiency to the area, which we hope will mean that the option to appoint a judicial factor is utilised in a wider range of circumstances where it is not currently used because of uncertainty, complexity and cost.
I was happy to lodge amendments at stage 2 to implement almost all the committee’s recommendations. I will briefly touch on two issues in relation to missing persons and charities.
The committee recommended that a reference to missing people be added to the bill to make it clear that it may be used by those who are seeking to manage the estate of a missing person. The bill was deliberately drafted widely and it already allowed a judicial factor to be appointed in a wide range of circumstances, including over the estates of missing persons. However, having considered the strength of feeling across the Parliament at stage 1, I lodged an amendment that reflected the recommendation while ensuring that the wider policy in the bill would not be undermined.
The committee asked me to consider suggestions made by stakeholders in relation to the management of charity property by judicial factors. Before a judicial factor is appointed, and also at stages of a judicial factory, the bill requires intimation of documents to every person with an interest in the estate. The bill now requires that, when the estate is that of a charity, in addition to the standard requirement to intimate to persons with an interest in the estate, intimation is given to the Office of the Scottish Charity Regulator, and a notification is to be given to the general public by way of an advertisement.
The court and the accountant were also given powers to dispense with some of the intimation requirements and the notification requirements to the public where circumstances justify that. Overall, the bill is now better able to respond to cases involving charity property.
I will touch on two of the points that Michael Marra raised and that the Law Society of Scotland raised in yesterday’s briefing, regarding adults with incapacity and how that issue remains outside the judicial factors regime. The current judicial factors legislation, which the bill repeals, applies not only to judicial factors so-called but to other types of administrator, although guardians appointed under the Adults with Incapacity (Scotland) Act 2000 are expressly excepted. On the other hand, the bill applies only to judicial factors so called, whether they are appointed under the bill or other legislation. Section 47 of the bill makes that clear. Accordingly, the guardians appointed under the Adults with Incapacity (Scotland) Act 2000 remain outside the judicial factors regime.
The member raised the point about how to circumvent the safeguards for incapable adults, which is set out in the 2000 act and relates to the Law Society. Similar to the 2000 act, the bill includes a number of protections. First, anyone with an interest is required to be notified of an application for the appointment of a judicial factor and will therefore have an opportunity to present their position to the court if they wish. Secondly, all judicial factors are supervised by the accountant of court who has powers to issue directions to judicial factors and to investigate any concerns. The person appointed as the accountant also holds the appointment as a public guardian, which means that judicial factors and guardians are, in effect, supervised by the same person. Lastly, judicial factors have to account for their dealings with an estate, and they are required to regularly prepare accounts, which are audited by the accountant, and are held to be liable for any misdeeds. I consider that the safeguards in the bill are sufficient.
If the bill is passed today—I hope that it will be—I am clear that there is still work to be done before the provisions can be commenced. Not least, that work will involve working with the charity Missing People and others to prepare guidance for the families of persons considered missing who are applying for the appointment of a judicial factor.
Members will also be aware that I am in discussion with the UK Government seeking a Scotland Act order to extend certain provisions in the bill to allow judicial factors to manage properties in other parts of the United Kingdom. That work is progressing, and I will keep Parliament updated on future developments. Given the nature of the reforms that are proposed by the bill to the court process and the supervision of judicial factors by the accountant on behalf of the court, the bill will also require new and amended court rules. I am committed to that, and I will ensure that all necessary work to be done by the Scottish Government is done swiftly.
I thank the members who have contributed to today’s debate, the committee and its clerks and those who gave evidence to help to improve the bill. I thank my officials, who have put a lot of work into the passage of the bill, and, finally, the former commissioner to the Scottish Law Commission, Patrick Layden.
I commend the motion in my name.
That concludes the debate on the Judicial Factors (Scotland) bill at stage 3.
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