Meeting of the Parliament (Hybrid)

Meeting date: Wednesday, August 19, 2020

Official Report 701KB pdf

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Solicitors in the Supreme Courts of Scotland (Amendment) Bill: Preliminary Stage

I remind members that social distancing measures are in place in the chamber and throughout the Holyrood campus. I ask members to take care to observe the measures over the course of this afternoon’s business, in particular when entering and exiting the chamber.

The first item of business is a preliminary stage debate on motion S5M-22407, in the name of Christine Grahame, on the Solicitors in the Supreme Courts of Scotland (Amendment) Bill.

Members who wish to speak in the debate should press their request-to-speak buttons. I call Christine Grahame to speak for up to eight minutes, and to move the motion.

14:31  

I am pleased to open the preliminary stage debate on the Solicitors in the Supreme Courts of Scotland (Amendment) Bill. I thank my colleagues on the Solicitors in the Supreme Courts of Scotland (Amendment) Bill Committee—deputy convener Bill Bowman, Daniel Johnson and John Mason— for their work in getting the bill to this stage.

The bill was introduced on 26 September 2019, and is being promoted by the Society of Solicitors in the Supreme Courts of Scotland—known as the SSC Society. It is the fifth private bill to be introduced in the current session; the previous four all received royal assent.

The private bill process is quite different. The first stage of the process differs from that for public bills—with which we are more familiar—in that it begins with a 60-day objection period. During those 60 days, any person or organisation who believes that their private interests would be adversely affected by the bill can lodge an objection. The objection period for the bill concluded on 25 November 2019, and no objections were lodged.

At the preliminary stage, the role of the bill committee is twofold: first, to consider the general principles of the bill and, secondly, to consider whether it should proceed as a private bill. In considering whether the bill should proceed as a private bill, the committee assessed whether it conforms to the definition of a private bill, and whether the accompanying documents are adequate to allow proper scrutiny of the bill.

If the Parliament agrees to the motion on the bill at the preliminary stage, it will move to the consideration stage, during which amendments will be considered. Thereafter, the bill will proceed to the final stage, for consideration of any further amendments and a decision on whether it should be passed.

In order to understand the current position in which the SSC Society finds itself, it is helpful to understand its history and the history of the legal profession in Scotland. The Society of Solicitors in the Supreme Courts of Scotland has been in existence for more than 200 years—longer even than me. It was formed in 1784, with a contract and articles of association and regulation. A royal charter was granted to it in 1797, which made the society a body corporate. In 1817, a widows fund was established, to pay annuities to surviving widows and orphans of the society’s members.

The Solicitors in the Supreme Courts of Scotland Act 1871 confirmed and amended the charter, and re-incorporated the society. However, one omission from that act was powers for the society to wind itself up—which was either because the then members did not foresee a day when the society might not exist, or because they deliberately did not include powers that would allow the society to close down.

The Law Society of Scotland was established in 1949, and it took over the business of regulating the legal profession. In 1979, elements of the 1871 act were amended to reflect the changes that had occurred over the previous century.

The benefits of membership currently include access to the SSC Society’s building at Parliament house in Edinburgh, use of a legal library and members’ lounge, and membership of the widows fund.

The society has about 220 members spread throughout Scotland, and there are 46 beneficiaries of the widows fund, each of whom receives an annuity of £3,000. The society is run by five office bearers and a council of six members. Over recent years, demographic changes in the membership have meant that the society now finds itself with a predominantly older and retired membership, with fewer younger members joining. Apparently, that is not unusual in such societies, nowadays. There is therefore a concern that a dwindling number of members might one day find themselves in the position in which the society or the widows fund, or both, needs to be wound up, but with no powers so to do.

The bill seeks to update and modernise the society’s statutory constitution—that is, the 1871 act—by updating the act for modern conditions, and by giving the society additional powers that it might need in the future. The purposes of the bill include renaming the widows fund as the dependents fund, and providing the society with powers either to close the fund to new members or to close it completely; giving the society powers to wind itself up in the future; creating new types of membership and making new provision to allow members of the society to resign; and abolishing the offices of librarian and fiscal.

Part of the committee’s role was to assess whether the bill will achieve those objectives. In order to aid its scrutiny, on 17 December 2019 the committee held an evidence session with the society’s office bearers and its drafting adviser. As a committee, we asked the promoter what alternative approaches had been considered and what the implications would be if the bill were not passed. The promoter emphasised that they are not expecting to wind up the fund or the society any time soon. However, they wish to have the mechanisms in place in case they are needed in the future, so that winding-up can be done in an orderly fashion, without requiring an urgent action before the Court of Session.

We also asked how the winding-up of assets would work, and we questioned whether the procedures for closing the newly named dependents fund and winding up the society were robust enough.

Our report sets out our considerations and recommendations, and my committee colleagues will provide some more detail on those later in the debate.

The committee supports the general principles of the bill and agrees that the bill should proceed as a private bill. We believe that the bill will provide the society with the powers that it might need for the future and that, in addition, it will update the society’s statutory constitution for modern conditions.

I am, therefore, pleased to move,

That the Parliament agrees to the general principles of the Solicitors in the Supreme Courts of Scotland (Amendment) Bill and that the bill should proceed as a private bill.

14:37  

I thank the convener, other colleagues and the clerks for their help and work on the bill, up to this stage. I also thank the promoter for showing us around the society’s headquarters at Parliament Square, just up the road. Bill Bowman, the clerks and I saw the building where the society is located, which is in close proximity to the Court of Session, the Faculty of Advocates, the WS Society and the High Court. It was interesting to hear Robert Shiels, the society’s secretary, note that many of the early members of the society had entered the legal profession through apprenticeships, rather than with law degrees. The visit was therefore helpful in providing background and context to the bill.

I intend to concentrate on the mechanisms that are required to wind up the society, and on certain aspects of the society’s meetings. As the convener mentioned, one of the main aims of the bill is to address the lack of powers in the 1871 act to wind up the society. It is understandable that office bearers do not wish to find themselves, as one office bearer put it,

“aged 85 and the only official ... left at the table”,

and able only to

“resign from office, walk away and leave an organisation that still exists with nobody to manage it.”—[Official Report, Solicitors in the Supreme Courts of Scotland (Amendment) Bill Committee, 17 December 2019; c 10.]

The bill will therefore insert in the 1871 act proposed new section 52B, which sets out the general process for decisions on winding up the society. The process starts with the council agreeing to a proposal to wind up the society, followed by a general meeting of the members, or byelaws being made, to decide the procedures that are to be followed at a special general meeting.

The society’s members must be given at least 30 days’ notice of the special general meeting, at which they will consider the proposal to wind up the society using the previously agreed procedure. If the members vote to wind up the society, the council will then implement that decision either in accordance with arrangements that are made by the society or

“in such manner as”

the council

“considers expedient.”

During the evidence session, the committee questioned whether the procedure to dispose of the society’s assets was detailed and robust enough to encompass any worst-case scenarios during the winding-up process. We commented that the division of assets, particularly substantial assets such as the society’s building, could create tensions. I therefore welcome the promoter’s confirmation, in a letter that was sent to the committee following the evidence session, that they are considering proposing an amendment to the bill to ensure that the society’s members be consulted about how property is to be distributed.

The committee also asked the promoter about the process of voting at the society’s meetings, particularly having heard that only around 10 of the current 220 members attend the statutory general meetings. We noted our concerns about the lack of a requirement in the bill for a quorum, and that a voting threshold was not mandatory for meetings at which winding-up decisions are to be taken. I therefore also welcome the promoter’s confirmation that they will propose amendments to address those issues.

I hope that I have provided members with sufficient useful detail on our considerations regarding the bill’s provisions that will give the society new powers to wind itself up. We share the promoter’s hope that the society will not find itself in that position for some years to come—if at all.

I have found this to be a very interesting process to be involved in, but it has underlined for me that it can be cumbersome to amend primary legislation. Perhaps a lesson for us nowadays is that we do not want to put too much detail in primary legislation, if we can avoid it.

I fully agree with the committee’s conclusion that it is content with the general principles of the bill and that the bill should proceed as a private bill.

14:41  

I begin by thanking my colleagues. It has been a real pleasure to work on a private bill—indeed, it has been interesting, given that it is different from our usual work. I also thank the convener, Christine Grahame, for moving the motion and explaining the history of the society and the process for a private bill. Above all else, it is important to thank the clerks, who have assisted us greatly not just on the detail of the bill but on the private bill process, given its unusual nature for most of us.

As the convener mentioned, the bill is necessary because of the changing demographics in the society. An ageing membership means that office bearers might one day find themselves in the unhappy position of having to wind up the society. The committee therefore agrees with the promoter that the relevant powers need to be in place should it become necessary one day to close the “Widows’ Fund”—which is to be renamed the “Dependents’ Fund”—or the society, or both.

The provisions in the bill that deal with the closure of the dependents fund will insert new, detailed procedures into the Solicitors in the Supreme Courts of Scotland Act 1871. They will include an actuarial investigation, a meeting of the members to consider a resolution to close the fund, and the offer of

“such lump sum or other payment as seems reasonable”

for the annuitants and potential future annuitants. Any residual money would transfer to the society.

Although the committee generally agreed to those procedures, we asked why the decision had been made to transfer any surplus back to the society. Donald Skinner-Reid, the treasurer and collector, explained to the committee that the society would seem the “natural home” for any surplus, in order

“to assist the society’s continued existence.”—[Official Report, Solicitors in the Supreme Courts of Scotland (Amendment) Bill Committee, 17 December 2019; c 17.]

The promoter emphasised in both the evidence session and a follow-up letter to the committee that the surplus in the fund could be smaller than might be imagined, once the lump sum had been split between the annuitants and the potential annuitants. In its report, the committee recommended that the promoter consider, as part of the winding-up procedures, a provision in the bill that the beneficiaries and any prospective beneficiaries should be notified of a proposal to close the fund. The promoter has accepted that recommendation, and a draft amendment has already been shared with the committee.

The committee examined the procedures involved in winding up the society. The committee is keen to stress that its aim is to ensure that the bill and the new powers and procedures that it introduces to the society’s constitution are as robust as possible without restricting the rights of the society’s members to make decisions about its future.

We agree with the promoter that, if the society does, in the future, need to wind itself up, we do not want it to have to come back to Parliament needing to amend the legislation again. We therefore highlighted areas in which we thought that the winding-up procedures could be strengthened. In particular, we questioned provisions for quorums and voting thresholds for key decisions. John Mason has covered that issue in some detail, but I wanted to note that point as well, and, indeed, the promoter’s agreement with those recommendations.

It has been interesting to experience the private bill process so far and to play a slightly different role from the usual one of a committee member. As the convener mentioned in her opening speech, the committee has concluded that it is content with the general principles of the bill and that it should proceed as a private bill.

14:45  

In closing on behalf of the Solicitors in the Supreme Courts of Scotland (Amendment) Bill Committee, I, too, thank my colleagues for their work on the bill so far. I also thank the secretary of the Society of Solicitors in the Supreme Courts of Scotland, Robert Shiels, for showing us around the society’s building at Parliament Square. Mr Shiels recounted how the courts originally rose up around the old Parliament of Scotland, which led to societies being formed by the lawyers who worked in and around those courts. Standing in the magnificent Parliament hall and seeing the Faculty of Advocates, the WS Society and the SSC Society all located in close proximity to the Court of Session and the High Court gave a tangible sense of the history of those societies and the role that they have played in our legal system over hundreds of years.

At the outset, I note that, as the promoter has emphasised, despite challenging demographic changes, there is no wish at the present time among the society’s members to close down the society.

One of the objectives of the bill is to enable the society to attract new members by amending the Solicitors in the Supreme Courts of Scotland Act 1871 to create different forms of membership—for example, corporate membership, trainee membership and associate membership. It is hoped that that will encourage younger members of the legal profession to join the society and make use of the library and facilities at its building in Parliament Square.

One concern that the committee raised in the evidence session was the possibility of a sudden influx of corporate or associate members who might disagree with a decision taken by the small group of remaining full society members. The promoter responded by explaining that it would be clear from the outset—and, indeed, in the bill—that those new types of member would not have voting rights.

The bill contains a provision that will give members the ability to resign their membership in circumstances unconnected to any disciplinary matters or retirement. At present, if a member fails to pay their membership fees for two years, their membership automatically ceases. However, we heard from the promoter that that is an “unwieldy” process and that allowing members to resign their membership would be useful.

Another objective of the bill is to update some aspects of the act’s terminology. As we have heard, “Widows’ Fund” is being changed to “Dependents’ Fund”, and reference to “lawful” children is being removed.

The bill will also allow the trustees to pay annuity claims on the basis of cohabitation, depending on the

“facts and circumstances of the relationship between the deceased member and the claimant.”

The society’s treasurer and collector, Donald Skinner-Reid, was frank about the fact that the mechanics of how that might happen have not yet been fully worked out and that, in any case, the law regarding cohabitants’ rights continues to evolve.

The promoter is removing the offices of librarian and fiscal. The role of fiscal was a historic office for handling matters of discipline prior to the formation of the Law Society of Scotland and the Scottish Legal Complaints Commission, which now handle such matters. The office of librarian is being removed because, although the society will still have a librarian, that person is no longer required to be a qualified solicitor.

The last issue that I would like to cover is the committee’s role in considering whether the bill should proceed as a private bill. That aspect of the private bill process is one that most committee members have not encountered before, as it is not part of the process for the public bills that we normally scrutinise. The committee is required to satisfy itself on two points: that the bill conforms to the definition of a private bill as set out in the Parliament’s standing orders and that the accompanying documents conform to rule 9A.2.3 in the standing orders and are adequate to allow proper scrutiny of the bill.

On the first point, the committee is satisfied that the bill conforms to the definition of a private bill. On the second point, it is satisfied that the accompanying documents fulfil the requirements and allow for proper scrutiny. However, we noted that the promoter’s memorandum could have provided more detail about whether any negative comments or responses were received from members.

The committee is content with the promoter’s conclusion, in the promoter’s memorandum and in the evidence session, that promoting a private bill is the most appropriate and best available method of achieving the promoter’s aims.

However, the committee had one recommendation regarding the promoter’s statement. We noted in the preliminary stage report that the promoter had stated its intention to inform all the tenants of the society’s building about the bill. In the evidence session, the promoter confirmed that the tenants in the lower part of the building had not been informed. That was, in part, because the bill would not alter those tenants’ position. The committee recommended that the promoter ensure that all tenants be notified about the bill and proposed changes to the society’s constitution. A follow-up letter from the society’s secretary has stated that such letters have now been sent.

I welcome the promoter’s acceptance of all the recommendations that the committee made in its report and the fact that it will propose amendments to be lodged at the consideration stage to address those recommendations. I confirm that the committee recommends that the Parliament agree to the general principles of the Solicitors in the Supreme Courts of Scotland (Amendment) Bill and that it should proceed as a private bill.