HL Deb 27 March 1990 vol 517 cc758-810

4.15 p.m.

House again in Committee on Clause 6.

Lord Fraser of Carmyllie moved Amendment No. 112: Page 9, line 43, at end insert ("but provided that he is allowed to be heard on the question of expenses"). The noble and learned Lord said: The words of the amendment are: but provided that he is allowed to be heard on the question of expenses".

I should point out that the first word of the amendment, "but", is redundant. For the reasons that I have already given to the noble and learned Lord, Lord Morton of Shuna, I hope it is clear that the amendment is intended to have broadly the same effects as the one that he moved, but without the difficulty which I thought was to be encountered in his. I beg to move.

On Question, amendment agreed to.

The Principal Deputy Chairman of Committees

I must tell the Committee that, if this amendment is agreed to, I cannot call Amendment No. 114.

The Earl of Selkirk: moved Amendment No. 113: Page 9, line 48, leave out subsection (13).

The noble Earl said: This amendment deals with the word "court" which also appears in the margin of the Bill. It may be that it is unnecessary. Although the clause deals with mismanagement, it is obvious that some mismanagement may be very trivial. I put it to the noble and learned Lord the Lord Advocate that it is perhaps better to leave the word "court" without insisting on the use of "Court of Session". I have raised this point before. It is largely a matter of extent. If the noble and learned Lord wishes to leave it as "Court of Session", I shall not object, but I suggest that it might be easier to leave the word "court" by itself. I beg to move.

Lord Fraser of Carmyllie

As I indicated earlier, I am agreeable to the idea that there should be a choice of courts for most aspects of the Bill. However, the provisions that we have discussed with regard to Clause 6 contain, as our recent short debates indicated, complex controls and serious penalties. I believe that, in those circumstances, it is essential that those powers should be exercised exclusively by the Court of Session.

The Earl of Selkirk

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 114 not moved.]

Clause 6, as amended, agreed to.

Clause 7 [Disqualification of persons concerned in the management or control of recognised bodies]:

Lord Fraser of Carmyllie moved Amendment No. 115: Page 10, line 5, leave out ("a recognised") and insert ("any").

The noble and learned Lord said: Clause 7 contains pre-emptive measures aimed at the avoidance of mismanagement of charitable bodies by disqualifying certain categories of people from becoming involved in the management or control of recognised bodies. Clause 7 (l)(c) as presently drafted excludes only those people removed under Clause 6 who are involved in the management or control of a recognised body. Clause 6 also enables the court to remove persons from control of non-recognised, registered or non-registered bodies which are managed or controlled wholly or mainly in Scotland. It seems appropriate that those categories of people should also be disqualified under Clause 7 from involvement in the management or control of a recognised body.

The amendment therefore seeks to disqualify any person from the management or control of a recognised body who has been removed from the management or control of a charity by virtue of Clause 6. I beg to move.

The Earl of Balfour

Clause 7(1) refers to "a recognised body". Should that also be changed to "any body" in the same way as previously?

Lord Fraser of Carmyllie

I do not think so, but I shall check and make sure that there is no difficulty with the drafting.

On Question, amendment agreed to.

The Earl of Selkirk moved Amendment No. 116: Page 10, line 10, after ("control") insert ("of a recognised body or from participation in its activities in the capacity of agent, secretary, treasurer or fund-raising consultant").

The noble Earl said: The purpose of the amendment is to make clear what is meant by management or control. To put the question beyond doubt the amendment proposes that a person concerned with management or control is an agent, secretary, treasurer or fund-raising consultant. As it is a question of incompetence or possibly of dishonesty, I suggest that that clearer definition is better than the rather vague words "management or control" which can be open to a variety of interpretations. The identification of the person or the office that he holds is desirable. I beg to move.

Lord Morton of Shuna

A great deal of clarity would be introduced into the obscurity of this part of the Bill if the words "management and control" were defined in some way. Nobody knows—except perhaps the noble and learned Lord the Lord Advocate or those who drafted the Bill and they are not telling us—who it is anticipated are people with management and control, what that covers and where it is covered.

Some definition is necessary. I am not sure that this amendment has the effect of defining who is in management and control. It seemed to me on reading it, but I may be wrong, that it adds another group of people to those in management and control.

Lord Macaulay of Bragar

The amendment is grouped with Amendment No. 117, which is an expanded version of the amendment of the noble Earl, Lord Selkirk. It may be convenient for the Committee to discuss both amendments at the same time.

As was discussed on the first day of Committee, the purpose of the Bill in relation to charities is to protect the public and people who may invest in charities from crooks. Clause 7 deals with people who have been convicted of dishonesty, become undischarged bankrupts who have been removed under the Bill, or are subject to disqualification under the Company Directors Disqualification Act. I agree with the observations of the noble and learned Lord, Lord Morton of Shuna, that one of the features bedevilling the Bill is that no one has apparently sat down to try to define what is meant by management and control. If they have sat down to consider it they have not stood up with an answer. I do not pretend for one moment that it is an easy term to define. However, broadly speaking what is meant is the persons responsible for persuading members of the public to invest in charities in the belief that they are doing some good to the world as a whole.

The amendments seek to put the Government on notice that, with the lack of a definition of management and control, there is a need for a wider net within the context of the Bill to catch people who have been convicted of dishonesty, and so on. As the Bill stands at the moment it is not clear whether the agent, secretary, treasurer or fund-raising consultant would be a person in management or control. He would be a person concerned with the management of a charity but he would not be either managing or controlling it because that would be done by the trustees.

As the Bill stands at the moment someone convicted of fraud under Clause 7(1)(a) could become an agent, treasurer or secretary of a charity. We all know that it is not at the top of the management scale of charities that public damage is done. It is done at the very level which the amendments seek to emphasise—the agent, the secretary or treasurer. Those are the people who have their fingers in the cookie jar of the charitable funds. Very often the money will disappear before the people who are nominally in management or control of the charity find out about it. That is the reasoning behind Amendments Nos. 117 and 116, which have the same object.

It may be appropriate for the noble and learned Lord the Lord Advocate to give an indication to the Committee that he will at least consider expanding the categories of people who would be denied any opportunity to have anything to do with charitable funds in the future.

Lord Grimond

The Committee will be aware that I have some interest in achieving a further definition of control. I raised the matter under an earlier amendment and I expressed some dissatisfaction with the reply of the noble and learned Lord the Lord Advocate. I hope that now that two lawyers have also expressed some doubt as to what is meant by control and some hope that it will be further defined, at some stage we shall have a further definition of control.

As to Amendment No. 116, I share the desire of the noble Earl that the matter should be made more explicit. What particularly interests me, as a layman, is that among the people he suggests are in control or in management, trustees are not mentioned. I should have thought that trustees are pre-eminently in control of charities if the charity has trustees.

Lord Macaulay of Bragar

Perhaps I may take up the point raised by the noble Lord, Lord Grimond. The amendment is phrased as an alternative. The management and control which would cover the trustees is already there. The word "or" is there for a purpose. It is to catch the second layer of management.

Lord Fraser of Carmyllie

This short debate on who is or is not in management control and the additional group the noble Earl has put forward in his amendment—and I believe that the noble and learned Lord, Lord Morton of Shuna, is correct in saying that it prescribes a secondary group who might be caught by this provision—amply demonstrates why we have chosen the terminology "management or control". We intended it to be as wide as possible.

There must always be a risk, even in the circumstances the noble Lord, Lord Macaulay, has mentioned, that if one introduces a particular provision to cover particular capacities, instead of extending the control that one wishes to achieve one restricts it.

Reference is also made in both amendments to fund-raising consultants. So far as concerns that aspect of the amendments, my right honourable friend the Secretary of State for Scotland has powers under the Civic Government (Scotland) Act 1982 to make regulations for the control of fund raising.

There is a risk that if the definition is too tightly controlled those who are unscrupulous and seek to take advantage of charities for their own improper purposes will find their way round it by not being a secretary or a treasurer.

In response to the noble Lord, Lord Grimond, in my view management and control would certainly include trustees. It would also include a number of other persons who would be in management or control. I am anxious to avoid spelling out a list of capacities and finding that those who are unscrupulous in their use of charities might find their way through the provisions by adopting some other capacity.

Lord Mackie of Benshie

Taking up the point of my noble friend Lord Grimond, could the Minister confirm that if you accept the position of president of some charitable body—which all of us are asked to do—you are definitely responsible if some of the agents below you make off with the dough? In other words, if you accept the position of president you have to see that you do your job as president.

Lord Macaulay of Bragar

Will the noble and learned Lord the Lord Advocate take the point on board by widening the definition? He has given his interpretation of the restrictive nature of the amendments. However, it could easily read "or from participation in any activities, including acting in the capacity of agent". That would be a wide-ranging net to catch anyone who was running a charity having been caught by Clause 7(1). It does not need to be restrictive.

The Earl of Selkirk

I do not want to interfere in this conversation, which is extremely interesting, but may I suggest that we leave it to the noble and learned Lord the Lord Advocate to see whether he can improve it? I would withdraw the amendment quite happily and leave it to the Lord Advocate to see whether he can improve it. I am sure that with the great resources behind him he will be able to produce a brilliant answer to the problem.

Lord Morton of Shuna

I agree with that. It certainly should be improved. But it should not be improved so that anybody who takes on a job with a charity is automatically liable to be disqualified for life from doing anything and may be sent to prison for six months for doing it. We have to encourage people to act as trustees of charities, not to pile on the penalties.

Lord Fraser of Carmyllie

Perhaps I may conclude this discussion by briefly saying that the test is that of management or control. If the noble Lord, Lord Mackie, takes on yet another honorary presidency in the fair borough of Kirriemuir, I assure him that, just because he assumes that honorary capacity, he is not immediately to be sent to gaol.

The Earl of Selkirk

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 117 not moved.]

4.30 p.m.

Lord Fraser of Carmyllie moved Amendment No. 118: Page 10, line 21, leave out from ("liable") to end of line 23 and insert: ("(a) on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum or to both; and (b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine or to both.").

On Question, amendment agreed to.

Clause 7, as amended, agreed to.

Clause 8 [Grounds for approval of cy pres schemes]:

The Earl of Selkirk: moved Amendment No. 119: Page 11, line 4, after ("Court") insert ("of Session or the Sheriff Court").

The noble Earl said: This amendment relates to the question of what we call a court, and again I suggest that it should be open because, although this is the doctrine of cy pres, which is slightly delicate in all circumstances, there are a number of occasions when it is very trivial. On the whole if left to myself I would have suggested that the noble and learned Lord the Lord Advocate should have an open case. Which court does he go to? Some cases will be very trivial and, I should have thought, well within the capacity of the sheriff court. But I am not pressing this point. If the noble and learned Lord does not agree, we need not worry about it. I beg to move.

Lord Morton of Shuna

The noble and learned Lord the Lord Advocate has an amendment which takes out the whole of Clause 8 and replaces it with a new clause, for reasons best known to himself. Is it of any purpose to be discussing the clause which the noble and learned Lord is just about to kick into oblivion?

Lord Fraser of Carmyllie

There might be little purpose in doing it in ordinary circumstances, particularly when the new clause that I should like to introduce by way of the next amendment would meet the very point that the noble Earl asks of me—that there should be the opportunity for cy pres schemes to be dealt with not only in the Court of Session, as is required at the moment, but in appropriate cases in a sheriff court so that local matters can properly be considered.

The Earl of Selkirk

I should have noticed that point before. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 120 to 122 not moved.]

Lord Fraser of Carmyllie: moved Amendment No. 123: Leave out Clause 8 and insert the following new clause:

("Reorganisation of public trusts by the court 8.—(1) Where in the case of any public trust, the court is satisfied—

  1. (a) that the original purposes of the trust, whether in whole or in part—
    1. (i) have been fulfilled as far as is possible to do so; or
      2. 764
    2. (ii) can no longer be given effect to, whether in accordance with the directions or spirit of the trust deed or other document constituting the trust or otherwise;
  2. (b) that the original purposes of the trust provide a use for only part of the property available under the trust;
  3. (c) that the original purposes of the trust were expressed by reference to—
    1. (i) an area which has, since the trust was constituted, ceased to have effect for the purpose described expressly or by implication in the trust deed or other document constituting the trust; or
    2. (ii) a class of persons or area which has ceased to be suitable or appropriate, having regard to the spirit of the trust deed or other document constituting the trust, or as regards which it has ceased to be practicable to administer the property available under the trust; or
  4. (d) that the original purposes of the trust, whether in whole or in part, have, since the trust was constituted—
    1. (i) been adequately provided for by other means; or (ii) ceased to be such as would enable the trust to become a recognised body; or
    2. (iii) ceased in any other way to provide a suitable and effective method of using the property available under the trust, having regard to the spirit of the trust deed or other document constituting the trust,
the court, on the application of the trustees, may, subject to subsection (2) below, approve a scheme for the variation or reorganisation of the trust purposes.

(2) The court shall not approve a scheme as mentioned in subsection (1) above unless it is satisfied that the trust purposes proposed in the scheme will enable the resources of the trust to be applied to better effect consistently with the spirit of the trust deed or other document constituting the trust, having regard to changes in social and economic conditions since the time when the trust was constituted.

(3) Where any of paragraphs (a) to (d) of subsection (1) above applies to a public trust, an application may be made under this section for the approval of a scheme—

  1. (a) for the transfer of the assets of the trust to another public trust, whether involving a change to the trust purposes of such trust or not; or
  2. (b) for the amalgamation of the trust with one or more public trusts,
and the court, if it is satisfied that the conditions specified in subsection (2) above are met, may approve such a scheme.

(4) Subject to subsection (5) below, an application for approval of a scheme under this section shall be made to the Court of Session.

(5) From such day as the Lord Advocate may, by order, appoint, an application for approval of a scheme under this section may be made by a public trust having an annual income not exceeding such amount as the Secretary of State may, by order, prescribe—

  1. (a) to the sheriff for the place with which the trust has its closest and most real connection;
  2. (b) where there is no such place as is mentioned in paragraph (a) above, to the sheriff for the place where any of the trustees resides;
  3. (c) where neither paragraph (a) nor (b) above applies, to the sheriff of Lothian and Borders at Edinburgh.

(6) Every application under this section shall be intimated to the Lord Advocate who shall be entitled to enter appearance as a party in any proceedings on such application, and he may lead such proof and enter such pleas as he thinks fit; and no expenses shall be claimable by or against the Lord Advocate in any proceedings in which he has entered appearance under this subsection.

(7) This section shall be without prejudice to the power of the Court of Session to approve a cy pres scheme in relation to any public trust").

The noble and learned Lord said: As I have already briefly indicated, the purpose of this amendment is to provide as an alternative to the existing cy pres procedures of the Court of Session, new statutory rules permitting the reorganisation of public trusts.

The amendment also confers concurrent jurisdiction upon the sheriff court and Court of Session in respect of trusts wishing to reorganise whose annual income does not exceed a threshold which will be prescribed by my right honourable friend the Secretary of State. At present, the Court of Session has that exclusive cy pres jurisdiction.

The existing basis upon which cy pres schemes are granted is somewhat restrictive, in that reorganisation of the trust is available only where it is no longer possible to carry out the purposes of the trust in the manner prescribed. One of the objects of amended Clause 8 is to broaden the scope for reorganisation by providing a statutory procedure which will enable the court to sanction a scheme where the objects of the trust have become outmoded or unsuited to modern conditions. Thus it will no longer be necessary to demonstrate that it is impossible to carry out the trust purposes in the manner prescribed.

Subsections (1) and (2) set out what tests must be applied by the court in deciding whether to approve an application for variation or amalgamation. Subsection (3) provides that application to the court may be made by a public trust for a scheme to reorganise or amalgamate where any of the conditions at subsection (1) apply, and enables the court to approve such a scheme.

All public trusts with an annual income above a threshold which my right honourable and learned friend will prescribe will continue to have to make application to the Court of Session. It is desirable that the experience and wisdom of the senior court should be brought to bear in considering schemes for reorganisation in respect of these larger trusts. In the case of smaller trusts with income below the prescribed level, subsection (5) provides for application to be made to a sheriff court. However, there is a provision enabling me to appoint an effective date after which application may be made to the sheriff court. That is intended to allow the Court of Session to have had some experience of the new tests to be set down and to indicate to a lower court how we should proceed.

It will be noted that now I have introduced new Clause 8 there are significant differences in approach between that new Clause 8 and what is contained in the existing Clause 9. It does not square with those new Clause 8 statutory rules. Perhaps I may give the indication that, having regard to the changes in Clause 8, I propose to return at Report to new Clause 9 to bring it into line with Clause 8. I beg to move.

Lord Morton of Shuna

I wonder whether in dealing with this amendment we could have some assurance that Clause 10 will also be looked at as well, because it really comes together with Clauses 8 and 9. Dealing with this amendment and the details of it, I hope that the noble and learned Lord, or his successor, may be slow to operate subsection (5), at least until the Court of Session has given clear guidelines by decisions it has made, so that the sheriff courts can have some knowledge of the standards they are to apply and the tests they are to apply.

To go in more detail to the new clause, is it intended that paragraphs (a) and (b) of subsection (1) should have an "or" after them, or are they cumulative or what is the position? As it reads we have: (1) Where … the court is satisfied— (a), (b), (c), or (d)". Does that mean (a) or (b) or (c) or (d), or does it mean (a) and (b) and (c) or (d)? It is far from clear and perhaps it could be clarified. As this clause deals wholly with public trusts, it seems to me unnecessary to say in subsection (3), Where any of paragraphs (a) to (d) of subsection (1) above applies to a public trust", because that is the subject of the whole clause. So it seems to be unnecessary.

This group of three clauses, Clauses 8, 9 and 10, displays one of the basic confusions that remain in this part of the Bill. We do not have a definition of "charity", we do not have a definition of "management or control" and we now suddenly have public trusts which do not need to be charities. We also have, as the noble and learned Lord will be fully aware, a long line of cases which have decided that a bequest or a trust constitutes giving the trustees power to give to charity and that giving the power to the trustees to choose that charity is valid. So you may have a situation where a man leaves his estate with a life rent to his widow and the capital to be distributed as the trustees choose for charitable objects.

If one examines Clauses 1 and 2, those trustees might be restricted in their choice to recognised bodies; in other words, Inland Revenue recognised charities. So there could be a public trust which is prevented from receiving or seeking bequests or money unless it were a recognised body, even if the public trust was lawful and had useful objects. In other words, on that interpretation the word "charity" as used in the Bill must mean a body having charitable objects and one recognised by the Inland Revenue.

However, there are cases such as the Glasgow Trades House case which show that one can have public trusts which have charitable objects but which do not get Inland Revenue recognition and what used to happen about them. That is one interpretation.

The other interpretation is that a non-recognised body with charitable objects can continue so long as it does not use the word "charity" and uses the words "charitable objects". That would drive a coach and horses through the whole scheme of the Bill, which is to provide a framework to cut out dishonest people. Any body that wanted to avoid those rules would not register with the Inland Revenue. Instead, it would publicise its charitable purposes, never use the word "charity" and could get away with anything because nothing in this scheme applies to it.

The Government must look again at this whole section. I gather that at Second Reading I may have offended those responsible for drafting because of what I said about it. I remain convinced that the drafting at least of this part—and I am talking only about charity—showed the skill and experience in the trust law in Scotland and the knowledge of the need to help charities in their work that would be expected of a frightened elephant stamping about in a swamp. That is not good enough for a Bill that the Government introduce in this House.

Lord Grimond

I too was puzzled to note under the new Clause 8(1) that the court must be satisfied as to paragraphs (a), (b), (c) and (d). To me as a non-lawyer it looks as though the court must be so satisfied because the word "or" is not inserted; the Bill simply lists those paragraphs as the conditions upon which it must be satisfied. I should be grateful if the noble and learned Lord the Lord Advocate would confirm that.

Until recently I was director of a body which most people would consider to be akin to a charity. It was not a charity because it paid tax. It would escape this Bill altogether. I make no objection to that. However, it is clear that the Bill applies only to bodies which are exempted from tax and not to bodies which exist for some purpose which, in most people's view, might well be called charitable.

I also have a query in relation to subsection (l)(d)(i). It seems to me to be extremely difficult for the court to know whether the objects of the charity have: been adequately provided for by other means". To begin with there are people who attach importance to the means by which the objects are met. They might well feel that they had set up a charity to ensure that certain objects, which they might agree were at least partially met by other means, were provided charitably. I wonder whether the noble and learned Lord the Lord Advocate believes that the court can adjudicate whether something that someone has left money to provide can be provided by other means or, if it is provided by other means, that that is a necessary reason for striking out its provision by the means which the original donor set up.

4.45 p.m.

Lord Macaulay of Bragar

This particular clause—a clause which has been rewritten—has a rather ghostly air about it. It starts off (at the top of page (6) of the Marshalled List of amendments) with the words: the court, on the application of the trustees, may". That presumes that the trustees exist. There must be many charities which were formed a long time ago from which the trustees have gone and perhaps its documents and assets are lying in the vaults of various banks in Scotland. I am told that a clear out is carried out from time to time. There is no provision in this clause for an application to be made to the court where there are no trustees.

One then comes to subsection (5). As one who had tabled amendments regarding the sheriff court, I seem to remember that the phrase used on this side of the Chamber: the sheriff court having jurisdiction over the place in which the trust has its principal place of business would give the sheriff court jurisdiction.

With regard to the basis of jurisdiction, and I am trying to be helpful and not critical, I find that the words in paragraph (5)(a) are rather difficult to construe. Perhaps as a matter of information the noble and learned Lord the Lord Advocate might tell us how he or his advisers understand the construction of the words: closest and most real connection". Does that mean where its office is, where its money is disbursed or where its money is collected?

Turning to subsection (5)(b) it states: where there is no such place as is mentioned in paragraph (a) above, to the sheriff7 … where any of the trustees resides". Then comes the clinching line in paragraph (c): where neither paragraph (a) nor (b) above applies". That seems to suggest that there may be no place where the trust has its closest and most real connection and no trustees living within the jurisdiction of a sheriffdom. How is the application made in those circumstances where neither paragraphs (a) nor (b) applies? It is rather difficult. Perhaps I am being a little dense about the matter. However, it seems to me to create problems of interpretation.

When one turns to paragraph (c) where it says: where neither paragraph (a) nor (b) above applies"— that is to say, there is no closest or most real connection, there is no trustee living in any place where a sheriff can exercise any jurisdiction—lo and behold, we are back to the east of Scotland again and back to Edinburgh. That was the whole point of the list of amendments that were tabled; namely, to give the sheriff court jurisdiction in the first place to avoid the expense of going to Edinburgh. What happens, for example, to a charity in Inverness where paragraphs (a) and (b) do not apply? They are then driven: to the sheriff of Lothian and Borders at Edinburgh". Presumably that means the sheriff principal. Is there any reason why that could not be expanded to make it the sheriff principal of any sheriff court area in Scotland?

I ask those questions in a spirit of attempting to better the wording of the clause. I appreciate the spirit behind subsection (5) but it seems to me that it raises considerable difficulties for the future as regards interpretation and application.

Lord Fraser of Carmyllie

On a number of occasions I have said to the noble and learned Lord, Lord Morton, that I shall take matters away and consider them again. I hope that he will reciprocate the courtesy by looking again at the earlier clauses of the Bill and examining how they link up with these provisions where the term used is that of a public trust. I should have thought that that was a term which he understood well enough and that he knew what particular favour such trusts enjoy before the Court of Session at the present time. In this clause we seek to expand the basis on which a cy pres jurisdiction might be applied not only by the Court of Session as I indicated, but also by sheriff courts.

So far as concerns subsection (5), it is precisely because I agree with him that it would be desirable to have the Court of Session set up and how cy pres jurisdiction might be approached to give them this expanded set of statutory rules that I suggested in this subsection that that should be held off until such date as I, by order, appoint. As I understand matters, the Lord President of the Court of Session is already giving thought to how best the new expanded jurisdiction might be used. If noble Lords refer to new Clause 8(1), the word "or" appears between (c) and (d). By fairly well established rules of construction that implies that the four paragraphs are indeed alternatives.

I accept that following amendments to Clause 8, the wording of Clause 10 may be considered. All I intended to signal was that if there is to be amendment the greater amendment is likely to be to Clause 9.

On the closest and most real connection test, it derives from the Civil Jurisdiction and Judgments Convention and the 1982 Act. The noble Lord used the example of a trust in Inverness. I do not know exactly what he intended by that example. However, on the face of it it would seem that the trust had its closest and most real connection with Inverness and should accordingly appear before the sheriff there. If neither of the provisions under subsection (5)(a) or (b) were covered, it is proposed that a case not going before the Court of Session should go before the Sheriff of Lothian and Borders at Edinburgh. I should have considered that a worthwhile provision.

Perhaps I may conclude by stressing subsection (7): This section shall be without prejudice to the power of the Court of Session to approve a cy pres scheme in relation to any public trust".

Lord Hughes

When the noble and learned Lord the Lord Advocate objected to Amendments Nos. 116 and 117 he did so on the ground that what was already in the Bill—the more general form—was preferable to the detail that these amendments provide. However, this amendment—and I speak with no knowledge of the law whatsoever—substitutes a very long new clause for a comparatively short one. Is there any provision in subsections (1), (2) and (3) of the new clause which could not be undertaken by the courts under the terms of the clause as it now stands?

Lord Fraser of Carmyllie

There is a short answer. As the clause stands at the moment the Court of Session would be well capable of expanding the jurisdiction that it enjoys in cy pres. But when the decision was taken to extend that jurisdiction to the sheriff courts, while it is useful to have the greater experience of the superior court, it was thought nevertheless appropriate that the statutory rules that are to be followed should be set out in greater detail where they are to be applied potentially by an inferior court.

Lord Hughes

If nothing eventually goes to the sheriff court, the first three subsections will be unnecessary.

On Question, amendment agreed to.

Clause 9 [Small charities]:

[Amendment No. 124 not moved.]

Lord Macaulay of Bragar moved Amendment No. 125: Page 11, line 11, after ("£5,000") insert ("as shown in the accounts for the last financial year preceding the date of the resolution made in terms of subsection 9(2) hereof).

The noble Lord said: The amendment relates to the provisions for charities having an annual income not exceeding £5,000 and for the reorganisation of the charities. It comes under the subheading "small charities". There is no point and no time at which the figure of £5,000 is to be determined as being the income of the charity. The purpose of the amendment is to give a point in time at which the trustees can decide to make the application under Clause 9. That point of time would be as shown in the accounts for the last financial year preceding the date of the resolution made under Clause 9(2).

It gives the trustee at least some guidance, because the income of charities fluctuates quite considerably. It gives the trustees the legal basis for applying to the court under Clause 9(1) if they were able to produce accounts to show that their annual income for the preceding year had not exceeded £5,000, whatever it might be for the current year. Logically, although I have not put an amendment down, if that principle were acceptable to the noble and learned Lord the Lord Advocate, a similar amendment might be made to Clause 10(1) dealing with the annual income not exceeding £1,000. I beg to move.

The Earl of Balfour

I refer to Clause 9. Perhaps the noble Lord, Lord Macaulay, will look at the last line of his amendment. It refers to "of subsection (9)(2) hereof. I feel that the "9" should be omitted. It should simply read subsection (2). I believe that that is the subsection referred to.

Lord Macaulay of Bragar

I accept that. I am obliged to the noble Lord.

Lord Fraser of Carmyllie

I do not think that it is necessary to define what is meant by annual income in this clause. We have defined the phrase in terms very similar to that suggested by the noble Lord, Lord Macaulay, at Clause 13(1). Given that definition—it is part of the interpretation clause affecting this part of the Bill—I should have thought that the amendment was unnecessary. However, in principle I understand the point that the noble Lord is trying to make. I hope that the present definition is sufficient to enable trustees to know whether they are within that £5,000 limit.

Lord Macaulay of Bragar

I am grateful to the noble and learned Lord for that explanation. In the light of it, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 126 not moved.]

Lord Fraser of Carmyllie: had given notice of his intention to move Amendment No. 127: Page 11, line 16, leave out ("intentions of the founder of) and insert ("spirit of the trust deed or other document constituting").

The noble and learned Lord said: For reasons that I have explained with regard to Clause 9, I do not propose to move the amendment.

[Amendment No. 127 not moved.]

[Amendments Nos. 128 to 132 not moved.]

Lord Morton of Shuna moved Amendment No. 133: Page 12, leave out lines 42 and 43 and insert ("apply to the Court of Session for a direction that the trust should not proceed with the modification or as the case may be winding up and transfer of funds and the court shall have power to make or refuse such direction subject to such modification as it thinks fit.").

The noble and learned Lord said: The noble and learned Lord has said that he will rewrite the clause. It seems to me that it should not be the Lord Advocate but the Court that should give the direction that the trust should not proceed with the modification or the winding-up. It seems totally inappropriate that it should be simply on the say-so of the Lord Advocate. I hope that the noble and learned Lord will take that idea into account when he rewrites Clause 9.

Perhaps he could also rewrite Clause 9 so that it is not confined to recognised bodies and covers all public trusts. Notwithstanding the Lord Advocate's intentions with regard to Clause 8, I do not see why small public trusts are to be totally excluded from the provision. I simply make those suggestions. I beg to move.

Lord Fraser of Carmyllie

I do not wish to elaborate at any great length in view of what I have said about amending the clause. I am not attracted to what the noble and learned Lord says about taking the power away from me. That is not because I wish to have any exclusive right on the matter. I suggest that the noble and learned Lord considers the relationship between Clauses 8 and 9. If for some reason I am dissatisfied with what is being proposed, that does not deprive the trustees of going to the court to have the matter dealt with, be it the Court of Session or the sheriff court. That procedure would still be open to them.

Clause 9, is an attempt to deal with a limited class of trust by a non-court procedure. If for one reason or another that fails—it may be because of the obduracy of the Lord Advocate of the day—that does not deprive the trustees of going to the court.

Lord Morton of Shuna

Having received a promise to look at it, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

5 p.m.

Clause 10 [Expenditure of capital]:

Lord Morton of Shuna: had given notice of his intention to move Amendment No. 134: Page 13, line 6, leave out paragraph (a) and insert: ("(a) have resolved that the charitable purposes of the trust are incapable of effective achievement because the income of the trust is too small to enable the trustees after meeting expenses to make any reasonably effective charitable application;").

The noble and learned Lord said: Clause 10 does not apply to charities. It applies to any trust. In rewording the clause perhaps it will be made clear whether it applies to any charity, to any public trust or to all trusts. On that understanding I shall not move the amendment.

[Amendment No. 134 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 135: Page 13, line 8, at end insert ("and").

The noble and learned Lord said: This is a drafting amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 136 not moved.]

Clause 10, as amended, agreed to.

Clause 11 [Minimum number of trustees]:

Lord Fraser of Carmyllie: moved Amendment No. 137: Page 13, line 28, after second ("trust") insert ("both the Lord Advocate and").

The noble and learned Lord said: Clause 11 provides that where a recognised body is a trust trustees shall have the power to appoint additional trustees so that at any time the minimum number will be three. The amendment provides a similar discretionary power enabling me to appoint traditional trustees to bring the number up to three. Generally, three is regarded as the minimum number consistent with sound decision-making. However, I stress that three will not be an obligatory number. The clause simply provides an enabling power and reflects a recommendation of the Woodfield Report in respect of the charity commissioners in England and Wales. I beg to move.

On Question, amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12 agreed to.

Clause 13 [Interpretation of Part I, regulations and orders]:

Lord Fraser of Carmyllie moved Amendment No. 138: Page 14, line 5, leave out ("balance sheet and income and expenditure account") and insert ("statement of accounts").

The noble and learned Lord said: The amendment is consequential on Amendment No. 144. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 139: Page 14, line 8, at end insert: (" "body" includes the sole trustee of any trust;").

The noble and learned Lord said: The amendment puts beyond doubt that a trust with only one trustee is a body for the purposes of present legislation. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 140 and 141 not moved.]

Lord Fraser of Carmyllie had given notice of his intention to move Amendment No. 142: Page 14, line 43, leave out from ("section") to end of line 44 and insert ("and in respect of which any accounts have been prepared for a period up to a date not more than 12 months before such commencement, the period beginning with that date; (aa) in the case of a body which is recognised at such commencement and in respect of which no such accounts have been prepared, the period beginning with such commencement;").

The noble and learned Lord said: We have received a number of critical comments about the amendment. Accordingly, I do not move it.

[Amendment No. 142 not moved.]

Clause 13, as amended, agreed to.

Clause 14 [The Scottish Conveyancing and Confirmation Practitioners Board]:

Lord Macaulay of Bragar moved Amendment No. 143: Page 15, line 23, leave out ("Scottish Conveyancing and Confirmation Practitioners Board") and insert ("Scottish Legal Services Board").

The noble Lord said: I wish to speak also to Amendments Nos. 147A, 147C and 147F. They are consequential amendments upon changing the name of the board from the Scottish Conveyancing and Confirmation Practitioners Board to the Scottish Legal Services Board and inserting a new schedule at Amendment No. 147C.

The broad purpose of the amendments is to provide greater public scrutiny of the provision of legal services and to have a board which will have an advisory role in relation to the maintenance and development of standards in the education, training and conduct of those offering legal services.

Amendment No. 147C carries with it the various functions which the Scottish Legal Services Board would fulfil. I do not wish to describe them in detail because no doubt those who are interested will have read the amendment. However, they fall under various headings: general education and training; training in advocacy and the conduct of litigation; practical training in other areas; general advisory functions; and specialisation schemes. The latter may be appropriate to today when specialisation appears to be the name of the game in the development of the law.

The amendment has been brought forward by the Scottish Consumer Council which supports the establishment of an independent statutory body charged with drawing up the framework for the education, training and supervision of all legal services. The consumer council envisages that such a body would be made up of elected representatives from the main groupings of legal services, providers and trainers, with strong representation from lay persons preferably with a background in consumer affairs or the voluntary sector. The body would be charged with the responsibility of estabilishing the basic principles in relation to education, training and recognition of specialisms, reserved areas, restrictive practices and so forth.

The amendment is put forward as a probing amendment in order to ascertain whether its principle meets with the approval of the Government. There is a feeling north of the Border that there should be an advisory body in Scotland which would be equivalent to the Lord Chancellor's Advisory Committee on Legal Education and Conduct as provided for in the Courts and Legal Services Bill. At present there is no such body in Scotland.

The word "consumer" has been used to describe people using the law and that met with considerable criticism. I remember the noble Lord, Lord Grimond, saying that he did not consume the law but used it. Perhaps the word "users" may be better. However, the principle behind the amendment is that there should be more public involvement in the overview of what is happening in legal circles in Scotland. There are user-consultative committees for the railways, gas, electricity, press and broadcasting. There is no reason in principle why there should not be such a board in Scotland to ensure that the law is developing not only in keeping with the wishes of the lawyers but those of the people. I beg to move.

The Deputy Chairman of Committees (Lord Nugent of Guildford)

Amendment No. 143 pre-empts Amendment No. 144 which I cannot move if this amendment is agreed to. Amendment No. 147A, to which the noble Lord spoke, pre-empts Amendment No. 147B. If carried, I cannot put Amendment No. 147B. Amendment No. 147C, to which the noble Lord also spoke, contains a misprint. In the first line "line 2" should read "line 3".

Lord McCluskey

Amendment No. 143 is associated with Amendment No. 155 which I understand to be at the heart of the matter. On 1st February 1990 Lynne Macmillan, the legal advisory officer to the Scottish Consumer Council, wrote to The Scotsman complaining that some noble Lords who spoke on Second Reading appeared to be concerned with the interests of lawyers and not with those which were the proper concern of the council.

I should explain to the Committee that those of us who spoke on Second Reading were told that we should speak for some 12 minutes and many matters of extremely serious concern had to be dealt with in that time. I do not believe that the public interest then expressed shows a lack of concern for the consumer interest.

I am happy to support the principle of this amendment and in particular the principle which lies behind the new schedule contained in Amendment No. 155. The heart of the matter is that a board is to be set up and that board is to keep under review the education and training of those who are to provide legal services. It is to consider the need for continued education and steps which the professional bodies might take. The board is essentially a study, advisory and recommending board.

Finally, the board having made up its mind on those matters within its purview, it may make recommendations. That is perfectly proper for the board, representing consumer interests. I welcome that. Those recommendations will be made in a number of ways which are specified, as Members of the Committee will see, in paragraph 4 of the schedule. As I understand it, those may be particularly addressed to the dean of the faculty and the Council of the Law Society. Under the Bill, it is their responsibility to have regard to those recommendations. So far, I go along entirely with what is proposed.

There may be some difficulties about specialisation schemes, but, again, when one looks at the matter closely one sees that the board is making recommendations to responsible bodies. It seems to me entirely right in principle that a body of this kind which represents the consumer interest and not just the legal interest should be able to make such recommendations and place them before the professional bodies. It is a very modest amendment. I do not believe that it is intended by the noble Lord, Lord Macaulay, or, indeed, by those who sponsored it initially to be accepted at this stage. However, I am sure that the Committee will be anxious to hear in due course whether the noble and learned Lord the Lord Advocate is willing to accept this approach.

Baroness Carnegy of Lour

I have had considerable discussions with the Scottish Consumer Council. I do not feel that I can support this amendment. I am somewhat surprised to hear what the noble and learned Lord, Lord McCluskey, said because my understanding has always been—and I am not a professional lawyer, conveyancer or anything like that—that those who should review, watch, examine and develop their own training are the professionals whose training it is. This is an area of professional activity which should not have other people chipping in upon it.

I appreciate what the noble learned Lord and the noble Lord, Lord Macaulay of Bragar, have said about the desirability of wider involvement of people in these matters. However, I do not believe that even recommending what should happen about training, let alone keeping it under review, is a good idea because when people carry out that role they chip at the people who are responsible and try to force the issue. Of course they do. I do not believe that that is appropriate. I understand what the Scottish Consumer Council is trying to achieve but I do not believe that this amendment achieves that objective. Therefore, I hope that my noble and learned friend will not accept it.

5.15 p.m.

Lord Morton of Shuna

Like my noble and learned friend Lord McCluskey, I am generally in favour of some sort of advisory board. However, there is no assistance as to who are to be the members. I am also not very happy with the way in which the consumer interest has been represented in previous cases in the law. For example, the small claims procedure went through with a lot of assistance from the consumer interest. However, that has raised difficulties because it deals very well with the tradesman who is suing for his account or the person who is suing the tradesman for bad work but it raises terrible problems for the small claim which is a personal injury. The case of that type of injured person does not seem to be met by the consumer interest as at present constituted in the consumer council and other consumer bodies.

The other difficulty from the consumer interest point of view is that a very large part of legal work is concerned with crime. I do not know that the consumer interest in crime should be represented. There, the consumer interest is those being accused of crime, whether they are acquitted or convicted. If we are to have a body representing users of legal services, it should widely represent users. If we are talking about crime, there should be some representation of victims. Apart from that, I give a cautious welcome to the general idea.

The Earl of Selkirk

I closely associate myself with the words of the noble and learned Lord, Lord McCluskey. We have had this Bill for barely three months. Previous to that, this matter has not been discussed in public at all. Of course there have been exchanges of letters and we have told each other our views. However, this is a fundamental change in what is going on in Scottish law, which has been evolving steadily for some 500 years.

We must consider certain factors. We are living in an age when a great body of the general public is cleverer than it was. Those people want to know what is going on in legal circles. With great respect to the members of the faculty of which I am a member—although I am quite unaccustomed to working at present—it is a closed book. Those outside do not really know what is going on inside. I believe that they should be given the opportunity of knowing.

This clause sets up an entirely new professional body. It sets it up for the express purpose of carrying out a very limited range of work. There are about 6,000 law agencies in Scotland in about 10 separate organisations. It is quite obvious that in certain rural areas jobs will be lost and firms may have to close down if a large lump of their work is taken out.

This matter warrants very careful examination. This Bill is largely copied from the English Bill and some defects in the English Bill may be repeated here. For example, in the Lord Chancellor's advisory committee report on the future of legal services it is stated: We are concerned that the proposals have a potential for reducing the quality and accessibility of the services available". Those words were applied by the advisory committee to the English Bill and I contend that they apply equally well to this Bill. That is why I ask that this matter should be looked at very much more closely than at present.

One can ask this question: if the Government are to spend money—and they do not know how much money they are to spend, although the introduction to the Bill says that money will be spent on this—and that money is used for turning other professional people out of a job, is that fair trading? It is right to ask that question. Is it fair trading for the Government deliberately to set up an organisation which will turn other people out of a job?

This concerns conveyancing work. That is being done perfectly well at present; there is no doubt about that. The question is: would it be better if it were done otherwise? What do those conveyancing specialists know? How far is the training taken? Does it encompass any problems which may arise in any piece of conveyancing? Why do they not become solicitors in the full sense? What is the benefit of being halfway to this position.

The other point which arises is that the public want to know a great deal more about what is happening in legal circles. I should like to see this proposal given a full examination.

Lord McCluskey

I do not wish to follow the noble Earl at this stage in relation to the latter part of what he said, although these matters will certainly come under discussion at a later stage. I confine myself to matters raised in reply to the noble Lord, Lord Macaulay, and myself.

With regard to the comment of the noble Baroness, of course I support the idea that the professions should regulate themselves. The amendment proposes nothing more than that there should be a board which makes suggestions and that those suggestions should be taken into account. It provides an opportunity for a forum—the board on the one side and professional bodies on the other—to meet and discuss matters of common concern. Each side has something to teach and something to learn.

Secondly, I, and no doubt many others, have talked for many years about the unmet need for legal services. A great many people never encounter lawyers at all. Many in the community have problems with housing, social security, dismissal and the community charge, if I may so refer to it. Yet they will not see a lawyer. The citizens advice bureaux and similar organisations encounter these people. The CAB makes common cause with the consumer council in this matter. There is scope for the bodies to come together with professional bodies in order to identify areas of unmet need and to provide ways in which that unmet need might be met.

I will not accept technical criticism; it is not my amendment. My noble and learned friend Lord Morton should be careful about making technical criticism. Some of his amendments and some of mine are pretty bad, as we shall see as the evening wears on. It would be a pity to disfigure the debate by looking; at technical matters rather than principles. I urge the noble and learned Lord the Lord Advocate to respond positively to the amendment.

Lord Macaulay of Bragar

I shall make two points. The basis of the board appears in paragraph 1(2) which states: The Board shall give such advice as it thinks appropriate with a view to ensuring that the education and training of those who offer to provide legal services is relevant to the needs of the legal practice and"— most important of all— to the efficient delivery of legal services to the public". In Scotland we have a current example which is the subject of great discussion among the public; whether the Crown should have the right to appeal against sentences which are imposed by judges and which appear in the public mind to be absurd. I do not criticise any sentences recently passed, but as a matter of general principle that is a good example of the type of subject raised by the public on which a legal services board could make observations. We should remember—lawyers tend to forget—that the law does not belong to the lawyers. It belongs to the people. It is for the people and not for the lawyers.

The proposals in Amendment No. 155—I apologise for not referring to it—are to bring public influence to bear to some extent in the ongoing administration of the law. I cannot see any objection to the voice of the people at least being heard. It has been said many times that there is no harm in giving advice; it does not need to be taken, but it can at least be considered.

I was rather disappointed that the noble Baroness, Lady Carnegy, was against this proposal. I thought she might have seen her way to follow it at least in principle and allow the details to be worked out in due course.

Baroness Carnegy of Lour

I feel quite strongly about this matter. Some wonderful things have been said about the law belonging to the people. I hope that that sentiment will be reflected in subsequent discussion. I certainly agree with it.

I have had quite a lot to do with training, albeit in voluntary organisations. When one reviews and advises on training, one reviews methods of training—objectives, but also methods of training—as to whether they work and whether standards are being achieved. It is asking people to be puppets to put them on a body to do that in order that lawyers may say that they have listened, but they have not done it. They may say, "We have listened and have done it", occasionally. That is the kind of thing Parliament should not do. For all I know my noble and learned friend may accept the amendment, but I do not agree with it.

Lord Fraser of Carmyllie

I recognise that in these amendments there is a desire to establish in Scotland a body similar to that of the Lord Chancellor's Advisory Committee on Legal Education and Conduct to be established under the Courts and Legal Services Bill. I am surprised so early on to find myself in agreement with the noble and learned Lord, Lord McCluskey. It is fortuitous and indeed felicitous that the first debate on this part of the Bill has at the centre of its attention the services that are provided to the consumer of legal services—a term I use now that the noble Lord, Lord Grimond has disappeared.

As I understand the amendments, they graft an advisory role on to the executive role proposed for the Scottish Conveyancing and Confirmation Practitioners Board. I am not confident that the two functions can reasonably be combined. The Scottish Conveyancing and Confirmation Practitioners Board is being give a specific remit to regulate the provision of these services by new providers. We intend that the board should, at least after its inital period of establishment, become self-financing with its cost being paid out of fees levied on practitioners. Indeed, there are some amendments to come before the Committee which seek to ensure self-financing from the moment of establishment.

It hardly needs saying that if the board were to have a wider advisory role at the same time as it discharged an executive one, it would be wholly inappropriate to fund it in the same way.

I do not for a moment deny the important part that those who use legal services can play in suggesting change; criticising existing practices and bringing to bear other points of view; and generally influencing the way things are done in a wholly responsible, constructive and creative manner. However, it is not necessary to establish formal machinery for that process to function satisfactorily. I do not want to suggest that all the important issues affecting the provision of legal services in Scotland can be settled by a cosy establishment clique which might be out of touch with the needs and aspirations of the vast majority of the population in Scotland. The way our jurisdiction operates, given its size, indicates that there is possibly greater scope in Scotland for exchanging views and forming decisions—sometimes formally and sometimes informally—then there may be in this greater part of the kingdom.

Before one looks at what is proposed by the amendment it is as well to remember—and this may be of some interest to my noble friend Lady Carnegy—that there are in place in Scotland already a number of important standing arrangements for the consumer voice to be heard in the area of legal affairs. First, the development of the office of the Scottish Lay Observer played a considerable part in guiding the self-regulation of the solicitor profession in recent years. The Law Society itself would acknowledge that the previous holder of the office was a useful commentator in a number of matters affecting it.

Secondly, the arrangement of lay or consumer intervention is underscored by the inclusion of lay members not only on the solicitors' disciplinary tribunal but also on the Law Society's own complaints committees. Furthermore, the Scottish Legal Aid Board, charged with advising the Secretary of State for Scotland in relation to the provision of legal services provided under the legal aid legislation, now has a majority of lay members.

The Bill will significantly increase the role of consumer interests by the expansion of the role of the Scottish Lay Observer into the completely new office of legal ombudsman with a remit extending over the whole range of legal services. The membership—this point was raised in relation to the amendment—proposed for the Scottish Conveyancing and Confirmation Practitioners Board would have a strong lay voice. Its membership would include those specifically interested in consumer affairs.

I should also emphasise that the Scottish board will have a much wider remit than the English conveyancing board. For one thing, it will deal not only with conveyancing but also with confirmation and with the regulation of qualified conveyancers who will correspond broadly with the English licensed conveyancers. Unlike its English counterpart, the Scottish board will have a comprehensive role in dealing with complaints.

It may be of assistance if I indicate another matter of consumer input. The noble Lords, Lord Carmichael and Lord Macaulay, have a proposal at a later stage in the Bill to add non-legal members to the sheriff court rules council. While I am not prepared to accept that amendment as it stands I can indicate at this stage, because it is of further consumer interest, that I am prepared to look favourably at some change in that respect.

The Bill does not seek to interfere with existing non-statutory arrangements for determining and monitoring the content of courses in legal education and practice. While I take the point made by the noble and learned Lord, Lord McCluskey, that where the board is to comment on matters of education it is to do so in an advisory capacity and has no power to compel, these matters are largely determined in Scotland at present by the Faculty of Advocates, the Law Society and the educational institutions under the general oversight of the Joint Standing Committee for Legal Education. In principle I can see no reason to exclude consumer representatives from making a contribution in this area, but I should have thought that it was for them to approach it themselves and I should like to see the authority and worth of that joint standing committee maintained.

I recognise the proper underlying desire that Scottish users of legal services should be known and that the law should not simply be for lawyers. However, from the way we have developed a number of arrangements across the board, as I have outlined, I suggest that the need for a formal mechanism as proposed by the amendment is unnecessary in the smaller jurisdiction of Scotland.

5.30 p.m.

Lord Macaulay of Bragar

I am grateful to the noble and learned Lord for the answers given to the various contributions to what has been an interesting debate. I should say that not only does the Scottish Consumer Council back this proposal but the CAB is also anxious that there should be an independent body set up to oversee professional standards of education and training requirements.

It is right that there is a lay input into the various committees to which the noble and learned Lord the Lord Advocate referred, but that does not exclude the setting up of a committee which sits permanently, receiving complaints or suggestions from the public as a whole and then, if they are accepted, putting them into force through the Government.

People may say that the very shape of this Bill indicates the need for a committee or board to see what should be done in Scotland as time goes on instead of ending up with this Bill which has already been referred to as a liquorice all-sorts Bill, with additions to it every day because of the reference to miscellaneous provisions in the Title. If there had perhaps been a board to deal with matters as they developed, year by year, we would not be in the ludicrous position of considering this Bill.

I am sorry that the Government do not see fit even to take away the amendment and give it some consideration, but I do not intend to divide the Committee on this issue and I therefore ask leave to withdraw the amendment.

Lord McCluskey

Before the noble Lord withdraws his amendment, may I first say that the Lord Advocate's reply appears to recognise a number of facts. First, is the idea that the Legal Services Council, or the equivalent of the Lord Chancellor's Advisory Committee on Legal Education and Conduct, is not appropriate for Scotland? I am delighted that the Lord Advocate has recognised, in this regard, that Scotland is another country. I hope that that realisation—which is the first sign I have seen of intelligence from the Lord Advocate in this debate—will instruct his approach to the many other amendments which are to follow.

I have one other point to make. If the legal profession in its various manifestations does not listen to the voice of such bodies as the Scottish Consumer Council and the CAB in relation to these matters undoubtedly those bodies will support, and be entitled to support, the need for lay advocates in the courts. If the professions say that there should not be lay advocates then the professions must be prepared to provide all the advocacy required at whatever level. Therefore, even if the Government are not listening to this proposal I hope that the professions are.

Amendment, by leave, withdrawn.

Lord Morton of Shuna moved Amendment No. 144: Page 15, line 24, leave out ("Confirmation") and insert ("Executry").

The noble and learned Lord said: In moving this amendment I speak also to Amendments Nos. 145, 147D, 148, 149C, 152A to 152E, 153A, 154, 154A, 182, 183, 184 to 187, 190, 191, 193, 194–197, 202, 204, 237 to 209, 210A, 211, 251, 256, 260 and 261. I am afraid that there is still much of the Bill left!

This is a simple amendment. It deletes the word "Confirmation" and inserts the word "Executry". The other amendments do that throughout the Bill and give a definition of executry practice. Presumably the purpose of having the licensed confirmation practitioner is that it is thought to be in the interests of consumers, the lay clients. The purpose of the amendments is to make sure that the client, in the event of a death and going to have his relative's executry dealt with by a non-lawyer, receives the same protection as he would if he had it done by a solicitor.

If you go to a solicitor to have your relative's estate wound up you have the guarantee that the solicitor is insured for negligence. You have the guarantee that ii" the solicitor pockets the funds the other solicitors forming the Law Society of Scotland will pay whatever he takes. However, if you go to someone else who is a licensed confirmation practitioner the Bill provides no measure whatever to deal with such situations. The confirmation practitioner will inevitably be doing the ingathering of the estate, and so on. Therefore, I very much hope that the Government will see the need to provide the consumers, the clients, with the added protection that they already receive from a solicitor. I beg to move.

Lord McCluskey

I support this amendment. I do not went to waste time rehearsing all the arguments because I am sure that they have been put to the Government by the Law Society of Scotland. At the heart of it, in my judgment, is that there is no statement in the Bill regarding the loss of consumer safeguards in regard to the Government's proposals. There is no proposal for a code of conduct in regard to the handling of executries. There is no proposal for a regulatory authority to authorise appropriate persons to investigate complaints or to deal with disciplinary matters.

I am indebted to the Law Society of Scotland for providing us with information that includes the fact that each year 50,000 people in Scotland inherit from relatives and others. The sums involved may be small or very large indeed. There need to be safeguards, particularly with the new kind of regime. What lies behind this series of amendments is the need for such safeguards. In the meantime I shall say no more until I have heard what the noble and learned Lord the Lord Advocate has to say in response to these proposals which I believe were put to him before today.

Lord Fraser of Carmyllie

I am grateful to the noble and learned Lords for the brief introduction and support that they have provided for this amendment. I say immediately that I understand why they are concerned by the amendment at the centre of the matter relating to Clause 19 where confirmation services are defined. In that clause confirmation services are defined as, the drawing and preparation of papers on which to found or oppose an application for a grant of confirmation of executors". It will be recognised why that amendment was first seized on. It is within that narrow area of activity that at present solicitors in Scotland enjoy a monopoly. While I recognise the concern expressed about that, what is put forward in substitution—I believe the appropriate amendment is No. 210A—as executry services is defined as, relating to the winding up of the estates of deceased persons, including the giving of advice and the drawing and preparation of papers on which to found or oppose an application for a grant of confirmation of executors". I am concerned that that amendment is too wide. For example, I am not entirely sure who would be caught by the giving of advice. As noble and learned Lords will appreciate readily enough, within Scotland already a significant proportion, if not the majority—I am not certain of my facts on this—of executry work is done by solicitors. Also a significant proportion is carried out by a number of institutions, primarily the major banks in Scotland.

There may be comment about the fees which they charge and issues of that kind. However, I am not conscious that there is any sense of public unrest or unease that the banks are failing to fulfil their obligations in relation to winding up. I would like the noble and learned Lord to withdraw his amendment because I wish to have a further look at the matter with my right honourable friend the Secretary of State for Scotland. It would be gratuitously offensive to those major banks, for example, to suggest by leaping into this matter that in some way there is a less than satisfactory performance by them. Their interests need to be taken into account.

Furthermore, I am very anxious to ensure that we do not include within a new regime affecting executry services, if I can temporarily adopt the noble and learned Lord's terminology, a raft of regulations concerning matters already covered by other arrangements. For example, one of the issues that might be properly covered by executry services is the giving of advice on investment to beneficiaries and the taking of decisions by telling an executor whether it is desirable to sell a house at a particular time. I am concerned that by further change we should not introduce regulations to cover matters which are already sufficiently and satisfactorily dealt with by, for example, the Financial Services Act.

I find this a very difficult area and the question of definition at the centre of the problem is a particularly difficult one. Given the approach that I am offering, I hope that the noble and learned Lord will withdraw his amendment.

5.45 p.m.

Lord Gray of Contin

Before the noble and learned Lord withdraws the amendment, if he is going to, there are two points that I wish to make. I am delighted that my noble and learned friend is in such a benevolent mood this evening. He has already rewritten one clause for us and has agreed to rewrite another. At one stage I was tempted to slip forward a manuscript amendment, wondering whether he might be prepared to withdraw Part II of the Bill altogether. There are a great many people who feel extremely unhappy about it. I am very interested in what he has said in reply to the previous amendment.

My noble and learned friend spoke about banks. He also mentioned solicitors working for banks who in the past have been responsible for winding up estates, executries and confirmations. That is all very well, but if those solicitors are now to be asked to advise the relatives of a deceased on financial matters, is that not running completely against some of the other financial legislation which has passed through this House in recent months?

I suggest to my noble and learned friend that he thinks very carefully indeed about that point. Is the guidance which is to be given wholly independent? If a solicitor is in the employment of a bank, is there not a great tendency that the guidance given to the relatives of a deceased will be weighted towards the financial interests of the bank? Those financial interests are very wide, including investment trusts and financial interests with various other institutions. I suggest that my noble and learned friend looks very carefully into his thinking on that matter.

Lord Mackie of Benshie

I rise to support this enormous bunch of amendments or the general intention behind them put forward by the noble and learned Lord, Lord Morton of Shuna. From the layman's point of view I support these amendments because if the Government wish to create a narrow band of inferior lawyers, as appears to be the case, and call them conveyancers or executors, surely one must give the public the same protection as they enjoy as regards to solicitors. When we come to the debate on clause stand part I shall question the need for the whole provision. If the Government are determined to produce this new body of people in line with these amendments they must protect the public in exactly the same way as is done when one goes to a solicitor.

The Earl of Balfour

I hope that the Committee will forgive me for giving a personal example on an experience that I had. I had the responsibility of winding up an aunt's estate. All her finances were in stocks and shares, some in this country and some elsewhere. I went to her bank and it advised me to go to its trustee branch. I was most impressed by what it did. The trustee branch was able to dispose of all her funds and everything else. I was somewhat surprised that at the end of the transaction and in order to have everything finally wound up I still had to seek the services of a solicitor. If this Bill becomes an Act, will a body such as a bank be able to carry out the whole job without someone having to go to a solicitor or will one still have to go to a solicitor? The solicitor I went to advised me that it would probably have been cheaper if I had gone to him. As I say, I went to the bank because there was money in several other countries.

Lord McCluskey

I very much welcome what the noble and learned Lord the Lord Advocate has said. However, I do not want him to misunderstand the position. I do not support the notion that the banks are not to be trusted. I do not believe that the Law Society of Scotland would advance any such notion. The concern is that under Clause 17, as the noble Lord, Lord Mackie of Benshie, recognised, people who are not solicitors or connected with banks are encouraged to come into this field.

I take the view that if the field is opened up to solicitors, banks and purchasers and whoever else is invited to come in under Clause 17, then a level playing field should be made available for them all. Equal protection should be provided for persons who go to the one or the other. Excellent protection is already provided by the Law Society of Scotland in respect of people who go to solicitors. Excellent protection is provided for people who seek the services of banks. The idea therefore is to ensure that the same protection is provided in respect of all these practitioners, even the new ones who are to be brought into existence under Clause 17.

I hope that these matters are taken on board by the noble and learned Lord and his right honourable friend. It is not a question of trying to keep the banks out. But if the banks are in, let them observe the same rules, and let us create a set of rules which will protect the public in respect of the Clause 17 practitioner.

Lord Fraser of Carmyllie

Perhaps I may reply to the further points that have arisen. I must have expressed myself poorly to the noble Lord, Lord Gray of Contin. I referred to the provision of financial services by those in banks and indeed solicitors' offices. If they were to give investment advice they would find themselves covered by other regulations in relation to the providing of that investment advice.

I say to the noble Earl, Lord Balfour, that if the Bill goes through unamended it would be open to an institution such as a bank to become a confirmation practitioner and carry out that essential piece of the process—the obtaining of confirmation.

I am grateful to the noble and learned Lord, Lord McCluskey, for his appreciation that the banks have not caused public outrage in the way that they have discharged their obligations in relation to windings-up. It is because of my understanding of his stance that I want to look at the matter again. There is the potential for the emergence of a new group and it is the appropriate definition of the services which they provide that properly requires regulation.

Lord Morton of Shuna

In moving this amendment I do not think that I mentioned banks at all. I have certainly no criticism of banks. Those who give financial advice are required to obey the rules laid down by the Financial Services Act, if they understand them. The necessity is to provide an adequate cover. I am glad that the noble and learned Lord the Lord Advocate seems to appreciate that. Anyone apparently can apply under Clause 17 to become a confirmation practitioner, and therefore those who do should have exactly the same obligations, cover and guarantees as are provided by the solicitor side of the profession. But on the understanding that the point will be looked at, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 145 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 145A: Page 15, line 27, after ("solicitors") insert ("providing such services in the course of practising as solicitors").

The noble and learned Lord said: This amendment clarifies the purpose of the provisions in the Bill relating to conveyancing practitioners in relation to solicitors. The amendment makes it quite clear that a practising solicitor will be able to offer conveyancing services to the public as a conveyancing practitioner if he has registered as such. Clause 14(3) is intended to prevent any professional body from making rules to prohibit its members from acting as conveyancing practitioners or as employees of those practitioners. For the avoidance of doubt, the scope of the board's jurisdiction is delineated in this amendment to exclude solicitors who provide conveyancing services as such and to include solicitors who provide conveyancing services in their capacity as conveyancing practitioners provided they are registered as such. The amendment seeks to clarify the matter. I beg to move.

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 146: Page 15, line 31, leave out ("grants") and insert ("loans").

The noble and learned Lord said: This amendment again revives the hackneyed cliché of the level playing field. It is grouped with Amendments Nos. 146A, 147 and 152. It seeks to ensure that the body is self-financing, as is the Law Society of Scotland.

It will be a completely unlevel playing field if the Government subsidise this new board and provide the whole cost of it. The Law Society has to provide the whole cost of regulation and guarantee on the solicitors' side. I hope that I do not have to expand on the matter at any great length as there was a hint earlier from the noble and learned Lord that he accepted at least the spirit of the amendment. I beg to move.

Lord McCluskey

I have my name to this amendment and I support my noble and learned friend Lord Morton. The point can be put quite sharply. Public funding was not used to establish the Law Society of Scotland in 1949. It was required to be and ever since has been self-financing. Those regulated by the Securities and Investments Board were required to fund the establishment of the board by the repayment of its initial expenses. Adopting the philosophy of the level playing field of which we have heard so much, if the body is to regulate the activities of the paralegals it should itself be self-financing and should be financed out of their activities.

Lord Mackie of Benshie

If the body is to be worth while and is to consist of responsible people the Government will be quite safe in loaning it the money. They probably have in mind that it will be difficult to set up if they lend the money instead of making a grant. If that is the case, the Government might think again about the body.

Lord Fraser of Carmyllie

I am grateful to the noble Lord for that observation. I acknowledge the concerns expressed about the apparent imbalance between the publicly funded conveyancing board regulating the provision of conveyancing services by conveyancing practitioners and the self-regulating body of solicitors providing identical services funded entirely by the profession itself. I believe, however, that the relatively small amounts of public money which we expect might be needed to get the board up and running may well represent a cost-effective means of establishing a satisfactory regulatory regime for the protection of clients' interests in the initial stages of the new arrangement.

I do not envisage that the board, once fully established, would have much need to call on public funds. But since it is not possible to predict how long it will take for the board to become entirely self-financing, I would not like to put its coming into being at risk by failing to provide for financial support. Having said that, I am prepared to consider the proposition that some at least of the board's funds might be provided by way of loan rather than by grant or by way of guarantee where there is insufficient fee income to cover all costs. I hope the noble and learned Lord appreciates that once it is established it is anticipated that the fee income will be sufficient.

Particular mention has been made of the Securities and Investments Board. The financing arrangements for that are complicated but they are essentially of a self-financing character. That would ultimately be the intention. But I shall look again at the matter of providing for it by way of loan rather than public grant.

Lord McCluskey

I looked at the financial and manpower effects of the Bill but I could not find any estimate of what the cost is likely to be. The Lord Advocate has said that the costs are likely to be relatively small. What are the costs likely to be? If he is considering meeting these costs initially not by grant but by loan, is it intended that the loan will be at ordinary commercial rates? The logic of the case made by the amendment is unanswerable and is certainly so far unanswered. Can the Lord Advocate answer these questions? What does he mean by "relatively small"? How much is that? Is he thinking of a loan at commercial rates of interest?

6 p.m.

Lord Fraser of Carmyllie

Because I indicated to the noble Lord that I would take the matter of a loan away and consider it, I do not think that I can answer that question. However, the noble and learned Lord is perfectly correct to look to what is set out in the Explanatory and Financial Memorandum under the heading of "Financial and manpower effects of the Bill". It states there that, Under clause 14 and Schedule 1 provision is made to set up a Scottish Conveyancing and Confirmation Practitioners Board. The Board will become self-financing after an initial period". I cannot give a precise figure in this respect, but I shall do what I can to ascertain the information and, if necessary, I shall write to the noble and learned Lord.

The Earl of Selkirk

Is the noble and learned Lord the Lord Advocate saying that the Scottish Office has made no estimate whatever as to how much the scheme will cost?

Lord Fraser of Carmyllie

The issue here is not that there should be a continuing cost. If there had to be a continuing cost, it would have been most important to indicate what it would be. We are talking about the setting up and commencing costs. I do not think that I can expand upon what is set out in the Explanatory and Financial Memorandum. As I said when attempting to answer the noble and learned Lord, Lord McCluskey, if I cannot produce such a figure before we next consider the matter, I shall certainly write to him with the relevant information. Probably the best estimate I can give is about £100,000.

Lord McCluskey

Perhaps the noble and learned Lord the Lord Advocate will remember that the Channel Tunnel—if I may refer to the Explanatory and Financial Memorandum of that Bill—was to be self-financing after an initial period. But the Government have set their heart and mind against providing any initial finance. Surely the logic of the Channel Tunnel argument applies equally to this funny board.

Lord Morton of Shuna

If my memory is correct, a self-financing hope was expressed about the Forth Road Bridge. There was an attempt at some point to ensure that it would be self-financing. There is one aspect of the matter which I cannot understand. The Government were responsible for the financial services legislation and they made it quite clear in that Bill, which struggled through this House for many months, that each of these bodies was to be wholly self-regulating. Therefore, why is there not one hint of that in this Bill? Does it mean that the Government are aware that there is no demand for the services of the board and therefore it cannot ever be self-financing? However, on the basis that the matter is to be looked into, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Macaulay of Bragar moved Amendment No. 146A: Page 15, line 32, after ("expenses") insert ("he considers to have been reasonably").

The noble Lord said: This is a small amendment to Clause 14(1)(2), which at present states that, The Secretary of State may make grants to the Board towards expenses incurred, or to be incurred, by them in connection with— (a) The initial establishment of the Board; and (b) The discharge by the Board of their functions".

We find those functions under Schedule 1 to the Bill. They include employing, such officers and servants as they think fit, on such terms as to remuneration and conditions of service as the Board may determine".

Paragraph 11 of the schedule deals with the performance of the board's functions. It gives the board power, (a) to enter into any contract or agreement, including any contract or agreement to acquire or dispose of land; (b) to invest money; and (c) to charge such fees as they may determine in respect of the discharge of their functions".

As the clause presently reads, there is no limit upon the demands which can be made upon the Secretary of State by the board in the exercise of its functions. The purpose of the amendment is to give the Secretary of State the power to determine whether he considers that the expenditure has been reasonable in the discharge of its powers. Accordingly, he can cut the payments if he thinks that the expense has been unnecessarily incurred. I beg to move.

Lord Fraser of Carmyllie The way matters are framed in the clause at present seems to me to be sufficient. I therefore invite the noble Lord to withdraw his amendment.

Lord Macaulay of Bragar I am grateful for that very short answer from the noble and learned Lord the Lord Advocate. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 147 not moved.]

The Deputy Chairman of Committees (The Earl of Listowel)

Before I call the next amendment, I should point out to the Committee that, if Amendment No. 147A is agreed to, I cannot call Amendment No. 147B.

[Amendment No. 147A not moved.]

Lord Fraser of Carmyllie moved Amendment No. 147B: Page 15, line 35, leave out ("Schedule 1 to this Act") and insert ("Part I of Schedule 1 to this Act (constitution duties, powers and status of the Board)").

The noble and learned Lord said: The first of these two amendments is consequential upon the reorganisation of Schedule 1 to accommodate Part II, which deals with the powers of investigation of the Scottish Conveyancing and Confirmation Practitioners Board. Part II is inserted by the third amendment under consideration. I should point out that this amendment has been linked with other amendments; namely, Amendments Nos. 147E, 154C and 202B.

Paragraph 19 in a new provision which enables the board to obtain a court order to require the production of documents or information relevant to an investigation that it is conducting. That power corresponds closely to a power available to the Council of the Law Society of Scotland in relation to documents which the council seeks in relation to investigation into allegations that a solicitor has been guilty of dishonesty.

The powers will be a useful tool for the board in fulfilment of a disciplinary role under the Bill. It is a further example of the Government's clear determination to ensure that a level playing field exists between solicitors and any new providers of existing conveyancing services. I beg to move.

On Question, amendment agreed to.

On Question, Whether Clause 14, as amended, shall stand part of the Bill?

Lord Morton of Shuna

I oppose the Question, That this clause shall stand part of the Bill. The need for a conveyancing board, or a conveyancing and confirmation board, is not shown in any way except in the Government's apparent determination to produce this type of provision because it has been introduced in England, or is being introduced by way of the Courts and Legal Services Bill. There is precisely no demand that can be measured in Scotland for this proposition. There is no sign of buildings societies, banks or any one else leaping up and down and saying, "We are being prevented from providing conveyancing services". The Scottish based building societies make a point of advertising the fact that they have no intention of doing so. It is very difficult to see why the Government think that the situation could be otherwise.

I say that because, if the Government did think that there was a great demand for these conveyancing services to be provided by banks and building societies, no doubt they would have taken the financial provisions out of the Financial Services Act and put them into the Bill so as to make the board self-financing. But, as we have just discussed, that provision is not there. The Government are apparently prepared to put £100,000 of public money into supporting a board when there is no sign that even one body wishes to be a conveyancing practitioner as this clause would provide.

At present there is a choice of at least 1,000 competing firms of independent solicitors.

Certainly, as regards advertisements, they compete as to their charges. They carry out very competitive work in trying to gain clients. The situation has changed entirely from the time of the Royal Commission so ably chaired by the noble Lord, Lord Hughes, and, as recognised by the Consumer Council, the Bill's proposals will very probably have an adverse effect on the provision of legal services, especially in rural areas.

The Government seem regularly deliberately to misunderstand the proposition. It is not that conveyancing subsidises legal aid and criminal work. It is that if there is only a certain amount of work an office becomes unviable. That is the risk. If we remove conveyancing from small towns there will be no lawyer; there will be insufficient work for one and lawyers will have to go to the big cities. That is entirely inappropriate. This is a doctrinaire proposal which has no basis in any public demand. I contest the proposition that this clause should stand part of the Bill.

Lord McCluskey

I wish to support my noble and learned friend in this matter. What we have been calling a board is just a quango. The Government are proposing that we set up another piece of administrative apparatus to control the supply of services in a quite small country. We are not abolishing a monopoly but just enlarging the monopoly so as to include certain others who are to be put through certain hoops before they qualify to render these services.

My noble and learned friend Lord Morton said that there was no support for the provision in Scotland. I wish to ask the noble and learned Lord the Lord Advocate to answer this question: what is the basis in the Scottish context for the Government's premise that there is a need to abolish the so-called conveyancing monopoly? No criticisms are made in either the Green Paper or the White Paper of the way in which solicitors perform their functions at present. I am sure that the noble and learned Lord the Lord Advocate was reminded by the Law Society of a statistic which your Lordships may have heard before. The Scottish Consumer Council made a study or survey which resulted in a finding that 87 per cent, of the public in Scotland was satisfied with the services received from solicitors in the field of conveyancing. That is a high figure in the ordinary human situation. I wish to know from the noble and learned Lord the Lord Advocate what is the basis of the proposal to make this change.

I am also amused by something which noble Lords will find on page 52 of the Bill. Paragraph 13(3) of Schedule 1 states: No person shall be qualified to be appointed auditor under sub-paragraph (2) above unless he is a member of…the Institute of Chartered Accountants of Scotland", etc. The Government are here creating a new monopoly. Why should not anybody skilled in the handling of accounts, from bookmakers upwards or downwards, be able to serve the board? I do mean bookmakers, not book-keepers. They are very competent with figures and as skilled as many chartered accountants. Why should not a board be set up for them? Why should this schedule confine the work of auditing to members of the Institute of Chartered Accountants in Scotland? The whole proposal is a nonsense. In the discussion on the Courts and Legal Services Bill, noble Lords pointed out that if we went down that road we would wind up with unqualified pilots, unqualified brain surgeons, unqualified dentists. Here the Government are creating a monopoly in favour of members of the Institute of Chartered Accountants.

I wish to ask the noble and learned Lord the Lord Advocate one simple question: what is the basis for this provision in the Scottish context as distinct from the English context?

Lord Mackie of Benshie

I wish to ask the same question. I admit that—to use a well-known phrase—some of my best friends are lawyers. The rural areas of Scotland are those that I know best. In the rural areas as well as in the cities there is no shadow of doubt—although the noble and learned Lord, Lord Morton, was not making his case from this—that conveyancing provides a legal aid service to many people who receive the advice. They are given it for sweeties and it is of great value to them. Nobody seems to object to paying for conveyancing when it comes to a contract for a house.

The figures given by the Law Society are quite startling. In a great many rural practices, anything from 40 to 60 per cent, of the gross income arises through conveyancing fees. Without them, large numbers of firms would fold up within a short time if the bread and butter were taken from their mouths by the Bill. I too cannot see why on earth the provision has been brought forward. There is no demand for it so far as one can see. Even the Consumer Council, which would leap upon it if it were valuable, acknowledges the danger to rural practices. That is enormously important.

What are the advantages? The legislation sets up a body which will produce a narrow band of expertise when that expertise already exists in the hands of competent, able people who can guarantee that they will not swindle the public. They are prepared to pay for it if one of their members does so. I cannot see what the Government are doing. The finest thing they could do is back down once more on matters Scottish and drop this clause altogether from the Bill.

6.15 p.m.

Lord Hughes

The noble and learned Lord, Lord Morton of Shuna, referred to the Royal Commission of which I was proud to be chairman. We sat for four years and it is now 10 years since our proposals were published. A good part of our time was taken up with the subject of conveyancing. I do not think it can be argued that there was total satisfaction at that time with the solicitors' monopoly in conveyancing. The evidence which was given to us showed that there was widespread feeling on the matter but on other subjects also.

Another large part of our time was taken up with considering the way in which the Law Society carried out its work. We made many recommendations to which I referred on Second Reading as to what the Law Society should do to improve its procedures.

At that time I said that the Law Society's record in following up the recommendations was much better than that of the Government.

In particular, we were concerned with the restrictions which the Law Society placed on its members as to the way in which they could bring services to the notice of the public; the almost total restriction on advertising; the unsatisfactory nature of some procedures about competition; and the unsatisfactory nature of procedures in discipline. In each of these fields considerable change has been made by the Law Society.

It is obviously difficult for me to say with certainty what our recommendation on conveyancing would have been if all the changes which have taken place through the Law Society in the past 10 years had taken place in the 10 years before we met. I remind the noble and learned Lord the Lord Advocate that although we recommended the breaking up of the solicitors' conveyancing monopoly in the state of play as it then was, we specifically said that we did not wish to have a new breed of conveyancer created. Apart from anything else, it would be many years before such a body could establish itself as a satisfactory alternative to other ways in which conveyancing could be carried out.

Since the Second Reading of this Bill I have re-examined our own recommendations and much of the evidence given to us. I am persuaded that the right course of action for me to take, as chairman of the Royal Commission, is to oppose the Motion that Clause 14 stand part of the Bill.

Baroness Carnegy of Lour

The two skilled politicians and two judges who spoke from the Cross-Benches made, I thought very nearly political speeches. They spoke against one of the main thrusts of the Bill. We had an extended debate on the subject at Second Reading and we do not wish to reiterate all the arguments. With the greatest of respect, I think that it is not appropriate for noble Lords to say at this point that the public does not want more choice in conveyancing. It is not crying out for the new breed of conveyancer because it does not yet appreciate that it is on the way.

Noble Lords may have become aware only last week—I think it was broadcast, although it may also have appeared in the press—that solicitors in England are about to produce a new format for conveyancing, which will be much simpler and easier to understand and much more cost-effective for their clients. That is an excellent idea. I wonder whether it would have happened if it had not been for the English Bill. Perhaps we can look forward to such an idea in Scotland.

It seems wrong to say that this major part of the Bill should not be put into effect. The noble and learned Lord, Lord McCluskey, said that the Government were not abolishing a monopoly, but were enlarging it. However the aim is to give the public more choice. I am surprised that the noble Lord, Lord Mackie, who lives in the same part of Scotland as I do, thinks that people are satisfied with the cost of conveyancing. The people whom I know in Forfar who have been buying and selling lately complain that they have been taken to the cleaners by the solicitors.

Lord Mackie of Benshie

They might think that, but they do not think it as much as they think they are being taken to the cleaners by the high interest rates.

Baroness Carnegy of Lour

Perhaps that is a discussion for another day. There is a great deal of enthusiasm for the idea that there should be competition among solicitors. I must say to the noble and learned Lords, Lord McCluskey and Lord Morton of Shuna, that the public do not want unregulated competition. They want regulated competition. They will want it even more when they see how it works. It must be regulated. It is wrong for us to sit here and say that people do not want that. It is extremely important for ordinary people in Scotland. It is wrong that it should be possible in England but not in Scotland. The advantages exist in England and are felt in the new format there. I hope that the clause will stand part of the Bill.

The Earl of Balfour

I should like to add a few words in support of my noble friend Lady Carnegy. From time to time, on an estate like mine, the rent is reviewed. I always go to a land agent to do that. I should not dream of going to a solicitor. However, I must go to a solicitor if property is bought or sold. I strongly believe that no one section of the community should ever have the sole right to carry out a particular function. There are some good land agents in Scotland. The public will always want a choice and the Bill provides that choice. It does not prevent solicitors doing the job. Far from it. They can carry on and in many cases they might turn out to be the best, but we are not restricted to solicitors alone in conveyancing.

The Earl of Selkirk

With great respect to my noble friend, there are a thousand firms in Scotland. If one cannot chose one firm from among a thousand, that represents a pretty bad choice.

Perhaps I may say this to my noble friend Lady Carnegy. If she had listened to the noble Lord, Lord Evans of Claughton, speaking from the distinctive city of Liverpool on the nature and quality of Scottish solicitors, she would not have made the speech that she did this afternoon.

Lord Coleraine

Speaking as a member of the English legal profession, perhaps I may tell my noble friend Lady Carnegy that we in England have had experience for some five years of a breed of people called licensed conveyancers. They are not lawyers. There are not many of them. They convey property. I dare say that in many cases they do it quite well. But they are not lawyers and are not able to cope with the legal problems that arise in many cases. Through their inability to cope with the law, they have the potentiality of damaging both their own clients and the other parties to conveyances. I am sure that that profession does a good job, but I should certainly not recommend the northern part of the kingdom to indulge in that kind of operation. I agree with the noble and learned Lord, Lord Morton of Shuna, that the clause should not stand part of the Bill.

Lord Gray of Contin

I can assure my noble and learned friend the Lord Advocate that I shall not vote against the clause standing part of the Bill. I accept it, however, with considerable reservation.

I do not believe that there has been any great demand for the measure in Scotland. By and large, people have not been dissatisfied with solicitors in Scotland. As my noble friend Lord Selkirk pointed out, there are a great many solicitors from whom to choose. It would be a tragedy if any one of those had to give up practising because of the Government's intention to allow building societies in particular to carry out their own conveyancing. I am not even aware that there has been any great demand for that measure from building societies in Scotland. Nevertheless, I shall allow my vote to go in favour of the clause standing part of the Bill in the hope that, as we progress through this part of the Bill, we shall be able to make improvements which would lessen the danger to solicitors, particularly in rural areas.

My noble and learned friend the Lord Advocate, in his professional capacity, will know as well as I do the valuable role which the solicitor plays in rural parts of Scotland. In the Highlands, which I know well, it is the exception to find a practice consisting of more than four or five. One has probably to go to Inverness so to do. I could name a maximum of about half a dozen there in excess of the size I have mentioned. Such firms play a vital role in the community. If any suffer unduly, there might be amalgamations; some might even close down. In some smaller towns, as much as 60 per cent, of fees accrue from conveyancing.

The Government have the best intentions for the consumer. Nevertheless I ask them to be careful that in their efforts to satisfy the consumer they do not leave the consumer worse off. If there is no independent advice from the legal profession, the consumer will be deprived. Associations are building up between estate agents. I noted with interest the boost which my noble friend gave to estate agents. He certainly came across many good ones. However, he should consider reading the article in the March edition of the consumer magazine Which? That article dealt at length with some estate agents whose practices leave much to be desired.

We do not have estate agents to the same extent in Scotland. But they are gradually developing, as are the associations which they are forming with the banks. Ultimately, if they can do their own conveyancing there will not be that degree of independent advice available, particularly when such associations range even further into insurance companies. A young couple go to buy a house. By the time they have finished, they are not sure whether the more important part is the buying of the house or the buying of a policy to help with the mortgage. Those are all very new situations which have crept in over the past decade. They are situations of which we should be aware and which we must constantly be careful to monitor.

Nevertheless, I have great confidence in my noble and learned friend the Lord Advocate and I give him every support. I hope that he will pay attention to what has been said in the stand-part debate on this clause. I hope that he will listen with care to the further amendments which may be moved and that we shall benefit from his wisdom in due course.

6.30 p.m.

Lord Fraser of Carmyllie

Under the law of Scotland the preparation of missives for the purchase and sale of land are not regulated at all. There is no monopoly conferred upon solicitors in that very important task. Indeed, as one looks to the development of missives in Scotland at the present time and to the simplification that there has been in recent years in conveyancing, I should have thought that many objective observers, having regard to the liabilities that might be incurred at different stages, would conclude that the preparation and concluding of missives is possibly even more important than the conveyancing itself.

If we had adopted a wholly irresponsible attitude to the issue of conveyancing in Scotland there is a very simple provision that we could have brought before the Committee, namely the removal of Section 32 of the Solicitors (Scotland) Act 1980. It would have found its place in a minor repeal schedule. That is not what we have done. We have brought forward Part II of the Bill, which sets up a scheme for the introduction in Scotland of qualified conveyancers and conveyancing practitioners.

I have given that introduction because I believe that it is important to understand what Clause 14 introduces. It introduces the Scottish Conveyancing and Confirmation Board, which will allow for the proper regulation of the provision of conveyancing and confirmation services by persons other than solicitors. If the clause is defeated that would be a signal not that conveyancing should remain with solicitors but rather curiously that the regulations—which I thought all members of the Committee considered were appropriate—should be set aside.

I am asked what the demand is in Scotland for the measure. My noble friend Lady Carnegy made a good point. In the high street of Forfar it is not the clack o' the toon. No one is asking who is this chap, the new conveyancing practitioner. They do not know. However, I believe that it would be wrong to think that young people, old people and anyone involved in conveyancing are not concerned to ensure that they get as good a deal as they possibly can, particularly at times of high interest rates.

If there is any group that I am sorry for in all of this it is the Scottish Consumer Council, which is constantly prayed in aid for fragmented pieces of advice that it has tendered to all Members of this Committee and to the Government. Doubtless I shall be corrected by the council if I am wrong, but my understanding of the matter is that it supports the extension of conveyancing services but requests firmly that there should be a proper regulation in the consumer's interest of those to whom the right to provide conveyancing services is extended. Without Clause 14 the opportunity to set up that regulation scheme is destroyed. It is the linchpin of the regulation that is considered necessary.

It is against that background that I invite the Committee to agree that Clause 14 should stand part of the Bill. We shall come in the succeeding clauses to details of the regulation, which are undoubtedly important.

There is one matter which I readily acknowledge and which has been advocated eloquently by my noble friend Lord Gray of Contin. I should not like to see the proposed change in conveyancing bring about any permanent and irretrievable damage to solicitors in rural areas of Scotland. It is difficult to anticipate what damage, if any, would be brought about by such a change. However, one of the distinguished academic voices in the legal consumerist cause in Scotland is that of Professor Alan Patterson. He has recently prepared a paper which appeared in the Scots Law Times. Interesting as it was, from his analysis it did not seem to me that it was in any sense conclusively established that the extension of conveyancing rights to others would have the effect of bringing about the demise of solicitors in rural areas. I believe that there are other factors which are affecting solicitors in rural areas. The recruitment of bright young assistants is one. I heard that point made at the weekend at the Law Society of Scotland's conference.

If there is a difficulty in rural areas, that would seem to me to be a problem that we should deal with specifically and not by leaving the conveyancing monopoly in place. We should not deal with it by depriving people, whether they live in large towns, cities or small towns, of the freedom of choice to decide whether they wish their conveyancing work to be done by a solicitor or by a conveyancing practitioner. That is a choice which should be left to them. My particular reason for urging the Committee not to divide against Clause 14 is that, if it goes, the regulation of those practitioners is destroyed.

6.37 p.m.

On Question, Whether Clause 14, as amended, shall stand part of the Bill?

Their Lordships divided: Contents, 87; Not-Contents, 45.

Division No. 1
CONTENTS
Aldington, L. Dacre of Glanton, L.
Allenby of Megiddo, V. Davidson, V. [Teller.]
Allerton, L. Denham, L. [Teller.]
Ampthill, L. Elles, B.
Arran, E. Elliot of Harwood, B.
Balfour, E. Elliott of Morpeth, L.
Beloff, L. Erroll, E.
Belstead, L. Fortescue, E.
Blyth, L. Fraser of Carmyllie, L.
Boardman, L. Fraser of Kilmorack, L.
Borthwick, L. Gardner of Parkes, B.
Boyd-Carpenter, L. Glenarthur, L.
Brougham and Vaux, L. Gray of Contin, L.
Caithness, E. Grimthorpe, L.
Campbell of Croy, L. Harmar-Nicholls, L.
Carlisle of Bucklow, L. Henderson of Brompton, L.
Carnegy of Lour, B. Henley, L.
Carnock, L. Hives, L.
Colville of Culross, V. Holderness, L.
Cox, B. Home of the Hirsel, L.
Craigavon, V. Hooper, B.
Crathorne, L. Hylton-Foster, B.
Joseph, L. Radnor, E.
Killearn, L. Rankeillour, L.
Kimball, L. Reay, L.
Kinnoull, E. Renwick, L.
Liverpool, E. Rochdale, V.
Long, V, Russell of Liverpool, L.
Lucas of Chilworth, L. Sanderson of Bowden, L.
Mackay of Clashfern, L. Skelmersdale, L.
Margadale, L. Stanley of Alderley, L.
Masham of Ilton, B. Strange, B.
Merrivale, L. Strathmore and Kinghorne, E.
Middleton, L.
Montagu of Beaulieu, L. Swinfen, L.
Mottistone, L. Swinton, E.
Mountevans, L. Taylor of Gryfe, L.
Munster, E. Thomas of Gwydir, L.
Murton of Lindisfarne, L. Thomas of Swynnerton, L.
Nelson, E. Trefgarne, L.
Norrie, L. Trumpington, B.
Orkney. E. Ullswater, V.
Pennock, L. Vinson, L.
Pym, L Wynford, L.
NOT-CONTENTS
Airedale, L. Listowel, E.
Bonham-Carter, L. Lockwood, B.
Boston of Faversham, L. McCluskey, L.
Coleraine, L. Mackie of Benshie, L.
Dean of Beswick, L. Morton of Shuna, L. [Teller]
Emslie, L. Nicol, B.
Ewart-Biggs, B. Pitt of Hampstead, L.
Foot, L. Rea, L.
Galpern, L. Renton, L.
Graham of Edmonton, L. Saltoun of Abernethy, Ly.
Grantchester, L. Selkirk, E. [Teller.]
Greenway, L. Shackleton, L.
Grey, E. Shannon, E.
Grimond, L. Simon of Glaisdale, L.
Hampton, L. Stoddart of Swindon, L.
Hayter, L. Thurlow, L.
Hughes, L. Turner of Camden, B.
Hylton, L. Underhill, L.
Jauncey of Tullichettle, L. White, B.
Jeger, E. Wilberforce, L.
Jenkins of Hillhead, L. Winstanley, L.
Keith of Kinkel, L. Young of Dartington, L.
Lawrence, L.

Resolved in the affirmative, and Clause 14, as amended, agreed to accordingly.

6.45 p.m.

The Deputy Chairman of Committees

Before I call the next amendment, I should point out to the Committee that, if this amendment is agreed to, I cannot call Amendment No. 147D.

Schedule 1 [Scottish Conveyancing and Confirmation Practitioners Board]:

[Amendments Nos. 147C and 147D not moved.]

Lord Fraser of Carmyllie moved Amendment No. 147E: Page 50, line 3, at end insert: ("Part I Constitution, Duties, Powers and Status").

On Question, amendment agreed to.

The Deputy Chairman of Committees

Before I call the next amendment, I should point out that, if this amendment is agreed to, I cannot call Amendment No. 148.

[Amendment No. 149 had been withdrawn from the Marshalled List.]

Lord Morton of Shuna moved Amendment No. 149A: Page 50, line 11, after ("chairman") insert ("who shall be a solicitor or an advocate").

The noble and learned Lord said: This amendment deals with the composition of the board. It is, of course, necessary that the composition should include people who know something about conveyancing. Therefore this amendment suggests that the chairman should be a lawyer. I should point out that I am also speaking to Amendments Nos. 149B and 151.

It is necessary that this board, which will deal with conveyancing and confirmation services, should have on it those who are experienced as well, and, under Amendment No. 151, it is also necessary that there should be a reasonable and proper balance between those providing the services and those using the services. That is the purpose of Amendment No. 151 and, although it is not in my name, I wholly support the principle behind it.

Amendments Nos. 149A and 149B necessitate having lawyers on the board, whether it is a confirmation board or an executory board. However the noble and learned Lord the Lord Advocate deals with that issue, it is necessary that someone with sheriff clerk experience should be on the board to be able to deal with the confirmation issues that will no doubt arise. I beg to move.

Lord Carmichael of Kelvingrove

My name is down to this amendment and to Amendment No. 151, and I should like to associate myself with the amendment of the noble and learned Lord, Lord Morton of Shuna. This amendment is taken almost word for word from Clause 30(1)(b) of the Courts and Legal Services Bill for England and Wales, which is before Parliament. It will ensure that the Secretary of State must bear in mind the desirability of balancing the interests of conveyancing service providers and those of the consumers of those services.

The Scottish Consumer Council is concerned that the proposed composition of the board is one chairman and between six and nine other members, representing those with knowledge of expertise in conveyancing and confirmation practice, financial arrangements relating to property transactions, commercial matters and consumer affairs. This could result in the appointment of only one person with a consumer background, with the rest substantially taken from the ranks of the legal profession or those with business or commercial backgrounds. The Scottish Consumer Council believes, and I agree with it, that the consumer should have more of a say in how the conveyancing services should be provided.

I should like to have an explanation of why the Government consider it important for the legislation to require such a balance between the interests of consumers and users in England and Wales but not in Scotland. I understand that the CAB has much the same views as the Consumer Council and ourselves.

Lord Mackie of Benshie

I should like to join my name to this amendment and the one substituted for Amendment No. 150. I think that the arguments put forward on both amendments are correct. Of course there should be proper consumer representation. It is also extremely important that there should be a large proportion of people expert in the law and conveyancing. The noble and learned Lord, Lord Morton of Shuna, defined who should be on the board and said that one member should have experience as a sheriff's clerk. I agree that experience and erudition should be backed by consumer representation, but both sides are valuable. Expertise is necessary.

Lord McCluskey

I also support this amendment. Perhaps I may say a few words about the Scottish Consumer Council. As I understand its attitude to many of the proposals that have come forward and are now contained in the Bill, it supports in principle the rhetoric that argues for the proposals. However, when the council considers the Bill in detail it does not like it at all. One of the details that it does not like is in relation to this board. I support its views.

However, I should like in particular to draw the Committee's attention to the present provision at page 50, line 10 of the Bill. Paragraph 3 proposes: The Board shall consist of— (a) a chairman; and (b) not less than six nor more than nine other members, appointed by the Secretary of State". I think that "less than" should be "fewer than", but let that pass.

The provision is quite unacceptable. The Secretary of State has no need for absolute carte blanche in this matter. There are interests, including consumer interests, which ought to be represented and there ought to be some restriction placed on the ability of the Secretary of State to select whom he will. For that reason, among others, I support this amendment.

Lord Fraser of Carmyllie

The first amendment that we are discussing relates to the chairmanship of this board. While I can readily enough see that those who have legal expertise should be members of the board, I cannot see why the particular public interest essentially is discharged by limiting the Secretary of State's choice of someone to head this important new body to a serving member of the legal profession. That is not to say that that person will not be drawn from the ranks of the legal profession. However, it does not seem to me to be necessarily appropriate to have that requirement. The responsibilities and skills of a chairman would seem to me to be the compelling necessity in this case.

So far as concerns the second amendment, I confess to a degree of sympathy with it, although the details are not apt. It has always been our intention that the board should strike a proper balance between the interests of practitioners—by whom is meant both current and future practitioners—and those who use conveyancing services. As the noble Lord, Lord Carmichael, indicated, the Courts and Legal Services Bill includes a provision to secure a balance in the conveyancing board which it establishes.

However, for reasons that I have already spelt out the boards are not identical in their remits. The Scottish board is much wider in terms of the services that it regulates and the range of its functions. Therefore the question of balance is much more complicated so far as concerns Scotland. It would not really be sufficient to look only at the interests of practitioners and certainly not only at conveyancing practitioners.

I draw the Committee's attention to paragraph 3 of Schedule 1, which states that there shall be a chairman and not less than six or more than nine other members appointed by the Secretary of State. Passing on to paragraph 4, it is there indicated that: the Secretary of State shall have regard to the desirability of securing that members of the Board have expertise or knowledge of— (a) the provision of conveyancing and confirmation services; (b) the financial arrangements … (c) consumer affairs; and (d) commercial affairs". It seems to me that by imposing that condition upon the Secretary of State the clearest indication is given that indeed we look to have a board that is properly balanced.

Lord Renton

I wonder whether my noble and learned friend can explain a point to me. He said that the chairman is not to be a lawyer. What sort of person do the Government have in mind to have appointed as chairman?

Lord Fraser of Carmyllie

With respect to my noble friend, I did not say that he was not to be a lawyer. I merely indicated that I thought it would be inappropriate to tie the Secretary of State's hands by requiring him to select his chairman exclusively from the ranks of serving members of the profession. I certainly did not intend to indicate that the chairman would not be a lawyer. I put forward the arguments on this matter on the basis that he should be given the opportunity to select someone who would be a good chairman whether or not he is a lawyer.

Lord McCluskey

Did I understand the noble and learned Lord the Lord Advocate to say in effect that he would think a little more about this matter, or does he think that paragraph 4 on page 50 of the Bill is a sufficient answer? I am not quite sure that I understood precisely what he wanted us to take from his reply.

Lord Fraser of Carmyllie

What I wanted the noble and learned Lord to take from it is that, while I accept what he and others have said on the question of balance, I do not think that we can look absolutely to what is provided in the Courts and Legal Services Bill. When one looks at what is imposed on the Secretary of State in terms of paragraph 4, I should argue that, albeit by a different route, the balance that the noble and learned Lord wishes to achieve would be accomplished that way.

Lord Morton of Shuna

I must say I have difficulty at times in understanding the noble and learned Lord. I cannot see his objection to balancing between users and practitioners. I cannot see that there is anything in paragraphs 3 or 4 that says one solitary word about balance.

However, apparently we must just accept that the present holder of the office of Lord Advocate is guaranteeing that all future Secretaries of State will operate on some undefined balance. It seems highly unsatisfactory. I think that it would be appropriate to withdraw the amendment now but give notice that we may come back again at the next stage of the Bill.

Amendment, by leave, withdrawn.

[Amendment Nos. 149B and 149C not moved.]

[Amendment No. 150 had been withdrawn from the Marshalled List.]

[Amendments Nos. 151 to 152E not moved.]

Lord Morton of Shuna moved Amendment No. 153: Page 52, line 40, leave out from ("fund") to ("have") in line 41 and insert ("to compensate persons who").

The noble and learned Lord said: One finds at paragraph 16 of this schedule: The Hoard shall establish and maintain a fund for the purpose of making grants to compensate persons who in the opinion of the Board have suffered pecuniary loss by reason of dishonesty".

First, I wish to point out that Amendment No. 154, which I shall not move because of what happened about the executry, was an addition because I do not understand why it is only the conveyancing practitioner and not the confirmation practitioner—I would have called him an executry practitioner—who may cause loss. Perhaps the noble and learned Lord will be able to deal with that point. "Grants to compensate" suggests ex gratia grants and not full compensation. There are too many words. If what is meant is full compensation, my amendment suggests leaving out the words from "fund" to "have" so that the provision reads, The Board shall establish and maintain a fund to compensate persons who have suffered pecuniary loss".

and so forth. I hope that that is the Government's intention. If it is not, I shall disagree with the Government. If it is, the wording that I have suggested makes matters clearer, simpler and more straightforward. I beg to move.

7 p.m.

Lord Fraser of Carmyllie

The noble and learned Lord raised the preliminary point: why were not executry practitioners or confirmation practitioners drawn into that? The issue goes back to a debate that we have already had. I do not seek to reopen it. It was understood that, given the narrow range of compensation, it was not necessary to do that. I shall come back to the matter as I indicated to the noble and learned Lord.

The provision of paragraph 16 is drafted to match as closely as possible the wording of Section 43 of the Solicitors (Scotland) Act 1980, which provides for the Law Society's guarantee fund. It would appear appropriate to keep the language in step. If there is to be any change suggested, it would seem only appropriate that the Solicitors (Scotland) Act should also be changed.

However, so far as I am aware—and I shall have some inquiries made—I am not conscious that there has been any difficulty by the use of this language in the 1980 Act when claims are to be met by the guarantee fund of the Law Society of Scotland. I shall check that.

Lord Morton of Shuna

I can assure the Committee that the guarantee fund certainly makes compensation. But as a matter of English, if that is what it does, is not my wording better?

Lord Renton

No.

Lord Morton of Shuna

The noble Lord, Lord Renton, does not agree. No doubt he is much wiser than me. The wording of a provision in any Act of Parliament should be straightforward and simple, and create its meaning. If the noble and learned Lord the Lord Advocate agrees with my suggested amendment, he will have plenty of opportunities to amend the 1980 Act because he has done so at length throughout the Bill.

Lord Renton

The real point that arises here is whether or not the Government intend that there should be a right to compensation. If there is to be a right to compensation—and I should have thought that that was the justice of the matter—we should get the wording correct so that we make it clear.

Lord Morton of Shuna

I wholly agree with that. I thought that the noble Lord, Lord Renton, was disagreeing with something I said earlier. That is my view. I do not intend to press the amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendments Nos. 153A to 154A not moved.]

Lord Fraser of Carmyllie: moved Amendment No. 154B: Page 53, line 2, at end insert:

("Parliamentary disqualification 17. In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified) the following entry shall be inserted at the appropriate place in alphabetical order— The Scottish Conveyancing and Confirmation Practitioners Board".").

The noble and learned Lord said: The amendment is a technical one. Its purpose is to disqualify members of the Scottish Conveyancing and Confirmation Practitioners Board from serving as Members in another place. As members of a public body it would clearly be inappropriate for them to do so. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 154C: Page 53, line 2, at end insert:

("PART II

Powers of Investigation 18. For the purposes of an inquiry under subsection (1) or (1A) of section 18 of this Act the Board may give notice in writing to a practitioner or a qualified conveyancer specifying the subject matter of the inquiry and requiring— (a) the production or delivery to any person appointed by the Board, at a time and place specified in the notice, of such documents so specified as are in the possession or control of the practitioner or qualified conveyancer and relate to the subject matter of the inquiry; and (b) an explanation, within such period being not less than 21 days as the notice may specify, from the practitioner or qualified conveyancer regarding the subject matter of the inquiry. 19. If a practitioner or qualified conveyancer fails to comply with a notice under paragraph 18(a) above, the Board may apply to the Court of Session for an order requiring the practitioner or qualified conveyancer to produce or deliver the documents to the person appointed at the place specified in the notice within such time as the court may order.").

The noble and learned Lord said: I beg to move.

Lord McCluskey

On what basis is this being moved? Perhaps I missed something that was said earlier. It seems a rather long amendment to put forward without an explanation.

Lord Fraser of Carmyllie

I thought that I had spoken to it along with Amendment No. 147B.

On Question, amendment agreed to.

Schedule 1, as amended, agreed to.

[Amendment No. 155 not moved.]

Clause 15 [Conveyancing practitioners]:

The Earl of Selkirk: moved Amendment No. 155A: Page 15, line 41, after ("services") insert ("and if a natural person is at least 21 years of age").

The noble Earl said: The amendment provides for a coveyancer to be over the age of 21. I simply say that anyone appointed should be over the age of 21. I beg to move.

Lord Fraser of Carmyllie

I put it to the Committee that age is not an appropriate test. It is the fit and proper test that is of importance to the general suitability of a person putting himself forward as a practitioner in this field. I appreciate that solicitors must be 21. However, their qualifications and training will take them at least five years to acquire.

Having said that, I am bound to say that I do not envisage that there will be many, if any, who will qualify under the age of 21.

The Earl of Selkirk

If the noble and learned Lord does not like it, I shall not press the amendment. I am bound to say that for anyone under the age of 21 to take the responsibility of a conveyancing or confirmation act I should have thought wholly unreasonable. It is not a job for a student at university. I ask the noble and learned Lord to think again. The amendment does no harm but it sets a limit.

Lord Fraser of Carmyllie

There is one circumstance in which a person may be under the age of 21. A qualified conveyancer may work for a conveyancing practitioner. In such circumstances it may be appropriate that he should be entitled to exercise the skills that he has acquired.

The Earl of Selkirk

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 155B: Page 16, line 5, leave out ("a bank") and insert ("an institution").

The noble and learned Lord said: This amendment and Amendment No. 187A are technical and simply bring the terminology used in Clause 15(3) and Clause 17(4) with reference to institutions authorised by the Bank of England to operate deposit taking business into line with the Banking Act 1987. There is no policy content to them. I beg to move.

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 156: Page 16, line 14, leave out ("may") and insert ("shall").

The noble and learned Lord said: Amendment No. 156 is the classic amendment which arises from time to time in such Bills. It proposes to leave out "may" and insert "shall". The grouping suggests that I should speak also to Amendments Nos. 156A, 162, 162A and 163. For the life of me I can see no reason why that grouping has been made.

The amendments tabled by my noble and learned friend Lord McCluskey and I leave out "may" and insert "shall" in lines 14 and 41. They ensure that regulations which are, in effect, a code of conduct shall be made and not left to the discretion of the Secretary of State to do as he thinks proper. I shall leave Amendments Nos. 156A and 162A entirely to the noble and learned Lord the Lord Advocate.

Amendment No. 163 adds the provision that consultations should be with the Law Society of Scotland. It is obvious that the rules dealing with complaints and the manner in which conveyancing services are carried out should have some relationship to the way in which those services are carried out by solicitors. Therefore, there should be consultation between the Secretary of State, who is the regulating body for the board, and the Law Society which, under the supervision of the Lord President, is the regulating body for solicitors. I beg to move.

Lord McCluskey

I support the amendment which is also tabled in my name. In Amendment No. 156A the Lord Advocate is prepared to accept that "may" shall be replaced by "shall". His amendment goes on to deal with the new clause relating to the Director General of Fair Trading. No doubt we shall have an opportunity to make observations about that. Therefore, I reserve my position.

No doubt the noble and learned Lord the Lord Advocate will also wish to take into account the associated Amendments Nos. 157 and 158. They are in the next grouping but, as the list states, it is open to any Peer to speak to any amendment in its place and maybe I shall. Replacing "may" with "shall" does only part of the job. One must go on and leave out the words "as he considers appropriate". If one says that he shall do whatever he considers appropriate one is saying that he may do it or he may not. He may consider it appropriate to do nothing. Accordingly, it is not appropriate to use the word "appropriate".

Lord Fraser of Carmyllie

I appreciate the difficulty experienced by both noble and learned Lords in seeing the immediate relationship between the two amendments tabled in my name and theirs. However, the group has correctly been identified. In Amendment No. 156A I propose that wherever "may" appears it should be deleted and replaced by "shall". The amendment is more elaborate because it goes on to include consultation with the Director General of Fair Trading. Members of the Committee will be aware of elaborate provisions concerned with the director. However, this is not an appropriate point to deal with them as wider comment may be sought to be made. I can assure the noble and learned Lord that the provisions in his amendment are dealt with in mine.

As regards Amendment No. 159, I am not prepared to accept "shall" in that context. I wish to leave the word "may". However, I accept the proposal in Amendment No. 162 because it is subsumed in my Amendment No. 162A. I cannot accept Amendment No. 167.

Lord Renton

It may be that I have not been sufficiently thorough. I have looked for the new clause relating to the advisory and supervisory functions of the director. It is not grouped with these amendments. It would help to know where to find it.

The Earl of Balfour

It is Amendment No. 178C.

Lord Fraser of Carmyllie

That is correct. There are also new clauses after Clause 29 proposed in Amendments Nos. 275F, 275G and 275H.

7.15 p.m.

Lord Grimond

I understand that the noble and learned Lord is not prepared to accept "shall" instead of "may" in line 14. Does that mean that he intends to leave it open for the Secretary of State to make or not make regulations; or does he consider that the regulations are in any way compulsory on the Secretary of State? If his intention is to give the option to the Secretary of State can he explain why that is necessary?

Lord Fraser of Carmyllie

I am saying exactly the opposite. In line 14 I am prepared to see the introduction of "shall" rather than "may".

Lord McCluskey

I experienced the same difficulty as the noble Lord, Lord Renton. It is extremely difficult to follow the amendments because they have been tabled so late and they are so substantial. As a result, huge sections of Part II of the Bill have been rewritten. Today we meet as a Committee when we have the opportunity to speak more than once, ask questions and seek to obtain a reply. However, in due course the Bill will be reported to the House with certain amendments, including these massive new amendments, which we shall be able to discuss only in a more limited way. I regret that, but no doubt there is no easy solution to the problem at this stage.

Can the Lord Advocate explain to the Committee how it is that a Bill, which was introduced on 16th

December last year and received its Second Reading on 30th January, is now being rewritten root and branch in respect of many important matters? We have yet to deal with other matters, including a new third version of Clause 21 which appears in the list of amendments. It is extremely difficult for Members, especially at this time of day and at our age, to follow all the complications that have been put before us at a late stage.

Lord Renton

A great deal of new material, such as the lengthy new clauses, fails to have the advantage of an explanatory memorandum. On a printed Bill as sometimes brought from the Commons to your Lordships' House we have the benefit of the explanatory memorandum. Therefore, it is all the more important that we should obtain the fullest possible explanation from the Government. I am surprised that Amendment No. 156A was not grouped with Amendment No. 275H. Our attention would have been drawn to the issue and, under our rules, we should not have been prevented from discussing Amendment No. 275H separately as it arose. We should have been helped by having the forward reference.

Lord Morton of Shuna

The noble and learned Lord the Lord Advocate was kind enough to supply some Members of the Committee, including my noble and learned friends Lord McCluskey and Lord Emslie and myself, with Notes on Clauses. They become utterly confusing when you take away the clauses. It does not tell you where you are going at all. It seems to me that what has happened, perhaps with the best will in the world, is that the noble and learned Lord the Lord Advocate, by introducing these new clauses at this late stage, has prevented normal Committee stage discussions on them from taking place because on Report there will be no opportunity for the same sort of discussion. If he had come forward with these clauses on Report we might have persuaded his noble friend to allow for recommitment of the clauses, if necessary. However, this is a method of denying discussion to its full extent.

Lord Fraser of Carmyllie

I began by offering an apology to noble and learned Lords who had tabled amendments and I repeat that now. I appreciate that it is difficult to follow what has happened as regards the deletion of "may" and the insertion of "shall", which I consider to be appropriate. However, I hope to try to get the discussion back on the right lines by leaving out any consideration of the role of the Director General of Fair Trading at this stage, although there are a large number of amendments to be considered. I hope that we can deal with them comprehensively. While they are extended, the presence of the Director General of Fair Trading is already in a number of clauses. I do not intend to introduce a new principle here involving him. It is merely to expand and clarify what will be his role. I could have introduced those matters on Report but I have no doubt that the noble and learned Lord would have argued even more powerfully that that was an inappropriate stage at which to introduce them.

The Earl of Balfour

Before we leave the point, in this grouping was Amendment No. 163 in the name of the noble and learned Lord, Lord Morton of Shuna. It aims to insert: and the Law Society of Scotland". I felt that that was an interesting point. I hope that my noble and learned friend will deal with it.

Lord Morton of Shuna

To answer for what I did, I spoke to Amendment No. 163 because it was in the grouping. I said that the Law Society of Scotland should be consulted because it was the other body with an interest in the standards of conveyancing. I do not believe that I received a reply on that issue from the noble and learned Lord the Lord Advocate.

Lord McCluskey

I am sorry that the discussion in relation to this amendment has gone off the rails and that that is my responsibility. However, there is an important point which I picked up from what the noble Lord, Lord Renton, said. The new clauses which appear on pages 46, 47 and 48 on the Second Marshalled List are extremely important. I notice from the suggested groupings that the noble and learned Lord does not intend to address himself to those this evening. It would certainly be helpful to me and would meet some of my concerns if the Lord Advocate could find an opportunity to explain the matter so that it is on the record. We can then read what he says between now and Thursday when we shall discuss those amendments. The noble and learned Lord has offered generous apologies which I happily accept.

Lord Fraser of Carmyllie

That was my intention, although I do not anticipate that we shall reach the amendments this evening. Because of the reference to them in earlier clauses, I hope that we can have a broader discussion on them and if there are points to be raised, there will be a further opportunity to do that on the next Committee day on the Bill.

Amendment, by leave, withdrawn.

Lord Fraser of Carmyllie moved Amendment No. 156A: Page 16, line 14, leave out ("may, after consultation with the Director General of Fair Trading") and insert ("shall, subject to section [Advisory and supervisory functions of the Director] of this Act").

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 157: Page 16, line 15, leave out ("such") and insert ("appropriate").

The noble and learned Lord said: To a certain extent this amendment has been discussed by my noble and learned friend Lord McCluskey, although it is not in his name. As he stated, the purpose of the amendment is to tidy up and strengthen subsection (5) of this clause so that it links up with the transfer of "may" to "shall". I shall also speak to Amendments Nos. 158, 159 and 164 to 167.

The noble and learned Lord the Lord Advocate indicated that he would not accept Amendment No. 159, which seems to me absurd. The Bill now reads that the Secretary of State "shall", subject to the subsection about the director, make such provisions as he considers appropriate. What is the point of that if it does not include suitable procedures for dealing with complaints and so on? It is utterly illogical for the word "may" on line 18 not to be "shall". It must be "shall" if the clause is to have any content at all. Those are very important phrases and I strongly urge the noble and learned Lord to reconsider his position on this. It is essential that we have those regulations and that they cover those points.

The same position arises as regards Amendments Nos. 164 to 167. It appears at line 44: provision "may" be made in respect of the manner in which the business is conducted, the supervision, conflicts of interest and the contractual obligations. It is essential that we have those regulations, that there are standards and that there is, in effect, a code of conduct. This will not do. I am sure that that is not what the noble and learned Lord means. I beg to move.

Lord Renton

Perhaps the noble and learned Lord could explain one matter. It seems to me as a mere English lawyer who is not very familiar with the workings of the Scottish courts that the joint effect of Amendments Nos. 157 and 158 would enable judicial review to take place, whereas if we do not accept those amendments that judicial review would be out of place because the matter would turn on what the Secretary of State considers appropriate.

Lord Morton of Shuna

I agree entirely with the noble Lord. This seems to have been drafted to avoid judicial review, which I think is a mistake.

Lord Macaulay of Bragar

I support the noble and learned Lord, Lord Morton, on the use of the words "may" and "shall". It seems to me that if the Government are bent on introducing this new legal animal into the Scottish conveyancing and confirmation services, there should be a compulsion as regards the procedures contained in the amendment. Otherwise, before it comes into operation the public will not know the standards to be applied in terms of the paragraphs.

7.30 p.m.

Baroness Carnegy of Lour

It is very confusing because the grouping deals with various aspects of the Bill. I should particularly like to support Amendment No. 167. I have tabled amendments for this part of the Bill, in which I take a particular interest.

On Second Reading I said that it was absolutely essential to be clear that the Secretary of State "shall" make regulations regarding the code of conduct which will maintain appropriate standards of conduct and practice of conveyancing practitioners. I should therefore like to support the amendment. I shall not attempt to enter into the other discussions because I am too confused.

Lord McCluskey

I sympathise with the noble and learned Lord the Lord Advocate on this matter. He accepted an important principle in moving Amendment No. 156A. Having listened to the debate he will have an opportunity to reflect on what is said about the other instances of "may" and "shall".

My sympathy derives from the fact that in the past week or so we showered upon the Committee and upon the Lord Advocate an enormous number of amendments. It must have been as difficult for him to come to terms with ours as it was for us to come to terms with his. I am sure that when he looks again at the various instances of the words "may" and "shall"—a point taken by the noble Baroness and one which applies forcibly to Amendment No. 162—he may find that to give effect to the principle throughout this clause he will have to substitute "shall" for "may" more often than he is presently inclined to do.

Lord Fraser of Carmyllie

If I recollect the discussion on this point at Second Reading, I was only asked to move from "may" to "shall", as I have done. I am not entirely sure as things stand that if I do not move in the direction requested of me it will wholly exclude all the judicial review. I should like to reflect on that matter. I am not convinced that that is absolutely so but I undertake to look at it again. It is certainly the intention of the Secretary of State that there should be regulations made under subsections (5) and (9). By introducing "shall" I hope that I signalled that clearly. If I have to semaphore more clearly, I shall do what I can.

Lord Renton

Is the intention of the Secretary of State also that there shall be judicial review or that judicial review shall be excluded?

Lord Fraser of Carmyllie

The noble Lord offered the opinion that unless I accepted the amendment tabled, judicial review would be excluded. I am bound to say that I am not totally persuaded that that would happen. I indicated that that is a matter on which I should like to reflect.

Lord Morton of Shuna

Surely the question of the noble Lord, Lord Renton, was not whether the drafting actually did or did not exclude judicial review but whether the Secretary of State and the Lord Advocate meant it to exclude judicial review. Presumably the Lord Advocate knows what he meant to do, whether or not he is satisfied that he did it. Can he say whether he meant to exclude judicial review?

Lord Fraser of Carmyllie

I indicated that I would consider this point.

Lord Morton of Shuna

I suppose that that means that the Lord Advocate did not know what he meant to do. In those circumstances and in the hope that he will know by Report stage, I ask leave to withdraw Amendment No. 157.

Amendment, by leave, withdrawn.

[Amendments Nos. 158 and 159 not moved.]

The Earl of Balfour moved Amendment No. 160: Page 16, line 30, leave out ("and").

The noble Earl said: Under Clause 15(6) the board cannot both grant an application and refuse such an application. I therefore suggest that the word "and" is left out. Amendment No. 188 should be taken with Amendment No. 160 because exactly the same words appear in Clause 17(5). I beg to move.

Lord Fraser of Carmyllie

I am vastly impressed by the manner in which the noble Earl, Lord Balfour, examines the details of this Bill. It is an extremely helpful drafting suggestion which may clarify the intentions of the provisions and I am therefore happy to accept it.

On Question, amendment agreed to.

The Earl of Strathmore and Kinghorne

I beg to move that the House do now resume. In moving the Motion I suggest that the Committee stage begins again at 8.35 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.