HL Deb 27 February 1995 vol 561 cc1367-80

6.55 p.m.

The Earl of Balfour

My Lords, I beg to move that this Bill be now read a second time.

The Requirements of Writing (Scotland) Bill is based upon the report (Corn 112) of the Scottish Law Commission on Requirements of Writing and the draft Bill in Appendix A. That report was produced after consultation with the CBI, the Scottish Law Society and other bodies. The Scottish Law Commission's recommendations commanded general agreement and the Bill has the support of the Law Society of Scotland.

The purposes of this Bill are essentially simple. There are five purposes: namely, first, to set out where writing is required for the constitution of certain obligations; secondly, to provide how such documents may be validly executed—i.e., simply by subscription; thirdly, to provide how a document may be subscribed or signed; fourthly, to provide how such documents may be made probative so that they are presumed to have been subscribed by the granter; and, fifthly, to repeal the old Scottish statutes and the common law which relate to these matters.

The effect of the Bill will be radically to simplify the law of Scotland relating to these matters. It will replace the old Scottish authentication statutes which were first enacted in the middle of the 16th century and the whole corpus of often confusing and conflicting case law which has surrounded them.

It may be helpful if I gave a brief description of what each clause provides. Clause 1 sets out the basic principle that, subject to certain exceptions and to any other enactment, writing is not required for the constitution of any obligation. The exceptions are that writing is still required, first, for the constitution of contracts or other obligations relating to an interest in land (for example, missives); a gratuitous unilateral obligation (except an obligation undertaken in the course of business); and a trust whereby a person declares himself to be the sole trustee of his property; secondly, the creation, transfer, variation or extinction of an interest in land (otherwise than by a court decree, enactment or rule of law)—for example, a conveyance; and, thirdly, the making of any will.

The principle is that in those cases—which would include the purchase or sale of a house, (the most important transaction most people make), agreeing to provide, for example, a large sum of money as a gift for the restoration of, say, a church roof, or declaring that one's own property is held in trust for a favourite grandchild—there is a strong case for a rule which gives a person or the parties time to reflect upon all the implications of the action he is, or they are, contemplating, and perhaps obtain legal advice before being committed.

Clause 2 provides that, where writing is required, the document is validly executed if it is simply subscribed—that is, signed at the end of the last page—by the granter. That replaces the present law, which is that a document must be attested, holograph or adopted as holograph. Noble Lords may be interested in an example of the kind of unfortunate result to which the existing law can lead. Mr. Able, owning a shop, writes out a letter for Mr. Baker to sign for the purchase of that shop. Mr. Baker signs that letter and returns it. Mr. Able then writes a letter of acceptance and delivers it to Mr. Baker. Thus there is a subscribed offer from Mr. Baker and a subscribed acceptance from Mr. Able. Mr. Able then changes his mind and Mr. Baker sues. The court dismisses the action on the ground that the offer Mr. Baker had signed, which was provided for him by Mr. Able, was neither holograph nor attested.

Clause 3 provides how such documents may be presumed to have been subscribed by the granter—that is, made probative. Generally speaking, the document must bear to have been subscribed by the granter and to have been signed by one witness, whose name and address is given. In the case of a will, however, it must also be signed by the granter on every sheet. These new rules greatly simplify and clarify the present law.

I think that I should mention at this stage that the provisions of Clause 3 are modified by Schedule 2 in the case where the granter is a legal person, such as a company, local authority or other body corporate. In the case of a company, it is, for example, provided that, in addition to the Clause 3 arrangements, the present statutory requirements for making documents executed by companies probative—signature by two directors, a director or secretary or two authorised persons, without any requirements for witnessing—will remain in place. I understand that that is at the special request of the CBI and the Law Society of Scotland.

Clause 4 enables a court to endorse a document with a certificate that it was subscribed by the granter and the place and date of subscription, if it is satisfied by extrinsic evidence as to those matters. That will be of considerable benefit in cases where a document has not been witnessed, or has been witnessed imperfectly, and will allow its status to be established once and for all.

Clause 5 relates to alterations made to documents, whether made before or after subscription. It sets out the requirements which must be observed if the alteration is to have legal effect. It sets out the conditions which must be satisfied if the alteration is to be presumed to have been made before the documents were subscribed.

Schedule 1 makes provision similar to Clauses 3 and 4 in relation to alterations made to a document after it has been subscribed.

Clause 6 provides that, as at present, only documents which are presumed to have been subscribed by the granter can be recorded in the Register of Sasines or registered in the Books of Council and Session or in the sheriff court books; for example, bills of exchange.

Clause 7 makes provision as to how a document is to be subscribed. Generally speaking, a document is subscribed if it is signed by the person at the end of the last page. It makes provision as to what constitutes a signature, and your Lordships will be pleased to note that existing rules of law relating to subscription or signing of documents by members of the Royal Family, by Peers or by the wives or eldest sons of Peers, are preserved. Those provisions relate to the signature of an individual natural person. Schedule 2 sets out special rules relating to the subscription and signature by legal persons, such as partnerships, companies, local authorities and other bodies corporate and Ministers.

Clause 8 makes provision as to how any annexation to a document should be incorporated in a document. Generally speaking, it is sufficient if the annexation is referred to in the document and identified on its face as being the annexation which is referred to in the document, without the annexation having to be signed or subscribed. However, where the document relates to land and the annexation describes or shows all or any part of the land to which the document relates, the annexation must be signed on each page if it is a plan, drawing or photograph and on the last page if it is an inventory or schedule or other writings.

Clause 9 makes provision for the subscription of any document on behalf of a blind granter or a granter who is unable to write, which must be subscribed by a relevant person, who is described in subsection (6). The third schedule to the Bill lays down the conditions for a document to be formally valid, where it has been subscribed on behalf of a blind person or a person unable to write mostly by making the necessary alterations to Clauses 3, 4 and Schedule 1, including any alteration as described in that schedule.

Clause 10 empowers the Secretary of State to prescribe model forms for testing clauses, drafts of which are shown in Appendix B to the report (Com. 112).

Clause 11 abolishes the common law rules restricting proof of certain matters to proof by writ or by reference to oath and the common law rules requiring certain contracts and obligations to be in writing. Again, your Lordships may be interested in an example of the kind of injustice which can occur if courts are restricted to writ or oath in the evidence which they can take into account in coming to a decision on whether an obligation exists. A builder is sued by a firm of plasterers for payment of sums allegedly still due under a contract to do plasterwork. He says the sums have been paid and produces parole evidence to that effect. He cannot, however, produce any writ of the pursuer, so the decision goes against him. The judge says that he would probably have decided the other way if it had been open to him to proceed upon the parole evidence.

Clause 12 is the interpretation clause. Clause 13 preserves the right of Her Majesty to authenticate any document by superscription or a document relating to her private estates in accordance with the Crown Private Estates Act 1862. It also preserves certain other Crown writs. Subject to that, however, the Bill will bind the Crown.

Clauses 14 and Schedules 4 and 5 contain minor and consequential amendments, repeals and transitional provisions, and savings.

Clause 15 provides that the Bill should come into force at the end of a period of three months beginning with the date on which it is passed. It also provides that the Bill extends to Scotland only. I commend the Bill to your Lordships' House.

Moved, That the Bill be read a second time.—(The Earl of Balfour.)

7.10 p.m.

Lord Macaulay of Bragar

My Lords, perhaps I may, first, congratulate the noble Earl, Lord Balfour, on having the courage to take on the Bill and present it to your Lordships' House. The legislation now before us is long overdue, arising as it does, and as the noble Earl said, from a Scottish Law Commission report of July 1988. We are now five years away from that report and we have discussed more than once in this Chamber the difficulty in getting Law Commission reports put into legislation, not only in Scotland but also in England.

The Long Title of the Bill says that it is: An Act to reform the law of Scotland with regard to the requirement of writing for certain matters and the formal validity of contractual and other documents … to abolish any rule of law restricting the proof of any matter to writ or oath and to abolish the procedure of reference to oath; and for connected purposes". The antiquity of the Scottish law as it stood before the Bill was introduced and before the Scottish Law Commission decided to have a look at it—perhaps, having been asked to do so—is reflected in Schedule 5 to the Bill. We find that five Acts of Parliament are now abolished in their entirety, starting in the year 1540 and ending in the year 1696. Therefore, it has taken us some time to get reformation of the law in that particular field.

I believe that it would be wrong for your Lordships' House to consider the Bill without congratulating the Scottish Law Commission on dealing with the matter which concerns a highly complicated and technical area of the law and without recognising that the commission has dealt with the legislation with its usual thoroughness and clarity. The commission has demonstrated an ability to reshape the law for use in modern times.

As the noble Earl said in his introduction, we are dealing with an area of law which has given rise to much litigation over the years, some of which, to the layman, appearing particularly stupid, while appearing to lawyers to be particularly remunerative. With the support of this side of the House and with the Bill being perhaps slightly amended —but we shall see how things go—I hope that such silly court proceedings, if I can put it that way, will be bypassed once the Bill has seen its way through your Lordships' House and the other place. I suppose in these modern sleaze-times I should declare an interest because I am a lawyer. Therefore, I am arguing against myself. I hope that the Bill will reduce the necessity of my appearance in any court in Scotland once the Bill has been enacted.

The Bill reflects the commission's practical approach and, in the form in which it has been presented to the House, has not attracted much criticism. However, as a word of warning, perhaps I may say that, although the legislation has emerged from a report of the Scottish Law Commission and despite its present form, that does not mean that we should go all the way, shake hands with ourselves and say, "This is a magnificent piece of legislation". I say that because no piece of legislation is magnificent; indeed, every piece needs to be closely scrutinised. The present Bill is no exception. At the end of the day, it is possible that we may not have a Committee stage in this Chamber. We do not know about that because the Bill has only just been presented to the House. However, it must still be carefully scrutinised.

I should tell the Government that reservations have been expressed to me—but I am also expressing my own view because I can see where the argument arises—about the application of Clause 8(2). That reads: Where a document relates to land and an annexation to it describes or shows all or any part of the land to which the document relates, the annexation shall be regarded as incorporated in the document"— and strange words are introduced at this point— if and only if—

  1. (a) it is referred to in the document; and
  2. (b) it is identified on its face as being the annexation referred to in the document; and
  3. (c) it is signed on—
    1. (i) each page, where it is a plan, drawing, photograph or other representation; or
    2. (ii) the last page, where it is an inventory, appendix, schedule or other writing".
That is a good example of how complex is the area within which the Scottish Law Commission was working.

I know that Clause 8(2) limits documents relating to land. However, if one turns back to Clause 1(2), where we have the basis of the Bill which deals with an interest in land, there is some confusion—at least, certainly in my mind; but my mind is no great mind, and no doubt the Government's mind is greater. In Clause 1(2) we have a definition of an interest in land, but in Clause 8(2) there is no such definition regarding land. Similarly, there is no definition of land in Clause 12, so far as I can see, for the purposes of Clause 8(2).

Therefore, although I may be talking in circles or riddles, whatever the appropriate phrase may be, I wonder whether the noble and learned Lord, who knows the problems that such matters in relation to land give to the courts, might have a look at Clauses 1(2) and 8(2) to see whether they can be linked up in some way. Indeed, I wonder whether Clause 8(2) is at all necessary. As has been suggested, it may be that the requirements of Clause 8(2) should only be retained for documents which have to be registered in the Register of Sasines or the Land Register of Scotland, whatever the case may be.

In reverse, perhaps I may briefly refer to certain matters. As we are dealing with the Bill's Second Reading this evening, I shall not go into the minutiae involved. I refer to Clause 7(3) which says: Where there is more than one granter, the requirement under subsection (1) above of signing at the end of the last page of a document shall be regarded as complied with if at least one granter signs at the end of the last page and any other granter signs on an additional page". For the life of me, I cannot understand what that is about. I can see litigation arising out of that subsection until the cows come home. I always understood—perhaps wrongly —that the essence of a document granting something is that everyone involved concurs to the granting of whatever it may be. Although I have not had time to consider the matter in great detail, it seems to me that Clause 7(3) leaves the door open to a challenge being made at some stage in a document where only one granter has signed and then the other granter, who has not signed, comes in and challenges the document.

For my own part, the essence of a document granting something is that, if someone comes along as an outsider to see what has been granted and to look at the document, especially if it is registered in the Register of Sasines or whatever, the granting parties should be seen on the face of the document. As it stands, it looks as if Clause 7(3) could do with a little rewording. However, I raise that only in passing so that the Government and those responsible for drafting the Bill can perhaps reconsider the matter between now and the next stage. Of course, there is no question of it being a political issue. We are here to try to modernise the law in a particularly difficult area.

I turn now to Clause 9 which deals with: Subscription on behalf of a blind granter or a granter unable to write". I should like to raise one issue regarding subsection (6); namely, the question of who is a relevant person. My reading of that—this is only my reading, and I speak for myself—is that the definition of the person who can be a relevant person is too restrictive. It states in the Bill, In this Act 'relevant person' means". "Means" is a restrictive word. In other words, it excludes anyone else. The Bill further states, a solicitor who has in force a practising certificate as defined … an advocate, a justice of the peace or a sheriff clerk". The Bill continues, in relation to the execution of documents outwith Scotland, includes". Therefore we have a distinction, if I can put it that way. As regards Scotland, there is a restrictive view of who a relevant person is, whereas south of the Border the measure states only that the person we are discussing includes certain people. That means it can be a person within the definition. As regards the definition of a relevant person, why should a general practitioner not be a relevant person, as much as a justice of the peace or a sheriff clerk? Let us take the case of a blind person or a person who cannot write. Why should not such a person go along to his doctor, whom he may have known over the years, and say, "I want to do this, but I want you to make sure that it is done properly. Will you look after me while this procedure is going on and deal with the provisions of Clause 9"? I raise this point as a matter of interest rather than as a criticism.

As the noble Earl said, Clause 11 abolishes proof by writ or by reference to oath. That measure will be welcomed unanimously throughout the legal profession because in my experience of that profession on the few occasions that the provision arose it was an area of law where eventually no one knew what they were talking about. With respect, I suggest that not even the judges knew what they were talking about in this regard. Therefore Clause 11 is a happy clause, and I am very grateful for it because the measure could not be dealt with with any degree of certainty and confidence by the judges.

I have raised the initial matters that have struck me as I have read this measure recently. I now refer to the subscription of companies which is dealt with at Schedule 2, and in particular at paragraph 1 to Schedule 3. I understand that those involved in company business have not raised any great objection to this measure. However, having read it, I have some reservations about how it can be interpreted. Paragraph 3(5) at line 19 on page 17 of the Bill states where, a document bears to have been subscribed on behalf of a company by a director, or by the secretary, of the company or by a person bearing to have been authorised to subscribe the document on its behalf…shall be presumed to have been subscribed by the company". That matter arises throughout the Bill and I do not wish to refer to all the various places where it arises. But how does an outsider know, looking at company accounts and seeing a signature on the company accounts, that the person who has been authorised by the company is a person who has been authorised by the company? I would suggest that as regards any document which bears to be signed by a person authorised by the company, there should be attached a document which states that Joe Smith or Jimmy Brown—I suppose these days we should refer to Jessie Brown as well —is authorised to sign on behalf of the company, with a certificate signed by the company secretary and a director stating that these are the people who are authorised to sign any document on behalf of the company.

We all know what companies get up to—bogus companies and all the rest of it—and there is little protection for the public as regards company fraud. It appears to me that where people are allowed simply to say that a document bears to have been authorised by them to subscribe on behalf of the company, that opens dangerous doors where the public could be ripped off. I hope that consideration will be given to the matter of building into the Bill a double check. I hope I may suggest one such check which is that no document—I say No with a capital "N" and a capital "O"—should be deemed to be a legal document unless it is signed by the secretary of the company, who obviously will be in the company's books, and one other person whether he be another director, or a person who appears as authorised on a list. That would give some inbuilt check as regards the activities of companies as we all know that one can go to Companies House and obtain details of a company off the shelf and do all the things that people can do with companies. The public have little protection in this regard, but at least the check I have mentioned might provide a certain built in protection for the person who wants to know with whom he is dealing.

For example, if I wish to build a house, I can obtain the name of a company which builds houses. It is of no use to me to have a document signed as a matter of contract which bears to have been signed by a person authorised to subscribe the document on behalf of the company unless I know that the company has authorised that. I may be omitting something here because the Scottish Law Commission document is lengthy. I have tried my best to catch up with it in the time available, and I have looked at the Bill; but I believe there are problems here. The problem is compounded by sub-paragraph (1C) to paragraph 3 of Schedule 2 on page 17 of the Bill.

Once the document is signed, one would think that was the end of the story. However, the sub-paragraph states: A presumption under subsection (1) or (1A) above as to subscription of a document does not include a presumption—

  1. (a) that a person bearing to subscribe the document as a director or the secretary of the company was such director or secretary; or
  2. (b) that a person subscribing the document on behalf of the company bearing to have been authorised to do so was authorised to do so".
Looking at that from the layman's point of view, where are we? We get a document duly subscribed by a director, a secretary or a person bearing to have been authorised by the company to subscribe on its behalf. One looks at the document and one says, "That is fine". But then one says, "Wait a minute. The fellow who signed that is not presumed to be the person bearing to subscribe the document as a director or secretary, or having authorisation to do so". I suggest that in this particular area some tightening up needs to be done. However, I may be missing the point here. These are the matters that I wish to raise at this stage of the Bill in your Lordships' House.

In conclusion, I say that the Bill is welcome but, as I said at the beginning, that does not mean that it should not be closely looked at before it leaves the revising Chamber of your Lordships' House. In the time between now and the Committee stage, I and my noble friends on this side of your Lordships' House will have time to receive any representations which anyone or any body affected by the Bill would care to present to us. If at the end of the day the practitioners think the Bill is all right, the answer may be, "That is all right". But it is not all right because we and your Lordships' House still have a duty in this regard. We have the reputation of not necessarily taking outside views to be the correct views. We will look at this measure again.

If at the end of the day the Bill marries the modernisation of the law with its practical application, it may go through without any attempt being made to amend it at Committee stage. I hope that the Government and the Law Commission will look at the matters I have raised in the best spirit of your Lordships' House in the time available between now and Committee stage.

Your Lordships will be glad to hear that I have nothing else to say.

7.29 p.m.

The Earl of Mar and Kellie

My Lords, I begin by congratulating the noble Earl, Lord Balfour, on his introduction of the Bill, which aims to regularise and modernise the way in which legal documents are prepared in Scotland.

As mentioned by the noble Lord, Lord Macaulay of Bragar, the Bill has an antiquarian flavour to it, as it repeals or varies no fewer than seven Acts of the Scottish Parliament and also modifies a further 36 Acts, including the Local Government etc. (Scotland) Act 1994 which so recently passed through this House.

I note that the Bill has its genesis in the Scottish Law Commission. I hope that it will enable Scottish lawyers to feel more confident about the number of safeguards that they need to build into every legal document. Over the past 20 years or so I have noticed that the documents required for conveyancing have increased in length from a single page to four pages as extra conditions have been built in to the offer and acceptance. Perhaps that meets genuine difficulties, or is it perhaps the result of easy electronic insertion by the word processor?

The Bill states how documents, appendices, alterations and subsequent additions are to be dealt with. This codifying should establish a new standard for Scottish lawyers to work to. The Bill seems to be sufficiently comprehensive. I note that it details how individuals, partnerships, companies, local authorities, corporate bodies, Ministers of the Crown and government agents will subscribe legal documents in their own distinct way.

The Bill establishes that property and land transactions, obligations, self-imposed trusts and wills must be written down in appropriate form. It goes on to require a single witness to substantiate that the subscriber genuinely signed the document. That seems to abolish the traditional need for two witnesses.

I believe that the Bill abolishes the need for the statement "adopted as holograph" to be written above the subscription on typed documents. Every encouragement should be given to dissuade people from using manuscript documentation.

Legal documents will require to be signed only on the last page rather than on every page, which could lead to considerable saving in a long and complex document. However, I am glad that wills and other testamentary writings will require a signature on every page. Noble Lords will be aware that getting some people to make a will can be difficult enough. It is therefore sound that in Clause 3(10) there is no prescribed need for wills to be witnessed.

The Bill lays down the registration procedures for legal documents and also deals with false witness and false subscription. I note that it also permits the Lord Lyon King of Arms to continue to allow people to adopt territorial descriptions and use them in signature.

I question the provision in Clause 7(6) which allows for titled people to continue to avoid signing their full name. The usual form for Peers and others to sign with their surname only may not be helpful unless there is clarification within the document as to exactly who they are. I speak as a fourteenth and sixteenth Earl. There are a great many Mar, Kellie, and Mar and Kellie signatures in history.

Clause 11 sets out to abolish proof by writ or by reference to oath. I wonder whether that will deny the possibility of justice to a person who, for example, has loaned money on an IOU basis and whose debtor refuses to pay up. Would not the lack of a legal document, duly subscribed and witnessed, put that situation outwith the jurisdiction of civil proceedings?

Finally, I turn to a matter which relates to a fact that I should have declared earlier. I am not a lawyer but a social worker. Clause 9 lays down the format for the subscription of documents by blind people and by people who cannot write. I wonder whether the clause could be broadened to include people who cannot read, who are dyslexic or who are semi-literate and can understand the practical issue but cannot understand the complex language used in the document. I am also surprised that the task of explaining and subscribing on behalf of such people may be undertaken by a Justice of the Peace who, though honourable, is unlikely to be legally trained.

The noble Earl, Lord Balfour, has introduced a Bill which will be helpful to almost everyone in Scotland, and to solicitors and advocates in particular. Scots law is much respected. This Bill clarifies and modernises its documentary procedures.

7.36 p.m.

The Lord Advocate (Lord Rodger of Earlsferry)

My Lords, I should like to add my congratulations to my noble friend Lord Balfour on his clear and thorough explanation of what is admittedly a very technical legal measure. He may have a glittering career in future as a professor of Scots law or conveyancing.

Although its terms are technical, the Bill represents a radical simplification of the law in this area. It should therefore be welcomed in all parts of your Lordships' House. It will certainly be welcomed by anyone who has had the painful duty of studying this particular area of Scots law.

The Scottish Law Commission has taken the view for many years that there was a need for substantial reform and modernisation of the old laws requiring writing for certain legal purposes. The Bill has been long in preparation, as has been noted. The commission first consulted on the issue in 1977. I should like to join in the tributes that have been paid to members of the commission, past and present, for their work on the report. I mention in particular the former chairman, the distinguished judge the late Lord Maxwell. I should also like to thank the present members for their continued assistance and support in updating and, in some aspects, modifying some of the original proposals.

My noble friend explained that the old Scots statutes and all the common law rules relating to writings will be swept away by Clause 11 of the Bill. I can reassure the noble Earl, Lord Mar and Kellie, that the position of people who are IOU creditors will not be made worse, but will be improved.

In the face of those abstruse rules, Clause 1 establishes a very limited list of obligations, contracts and trusts for which writing is required. A document will be formally valid if it is subscribed by its granter. On the other hand, the document will be probative if the granter's signature is witnessed by one witness. As we have heard, the Bill provides for the execution of documents by companies and other corporate bodies, by government Ministers and local authorities.

As my noble friend made clear, methods by which Peers sign documents at present will continue alongside the arrangements set up by the Bill. There is nothing to prevent Peers using another form if they wish. I am not aware of any problems which have been caused by the kind of signature which Peers are used to adopting.

I turn briefly to some of the specific matters raised by the noble Lord, Lord Macaulay of Bragar. He drew attention to the definition of "land" in Clause 8(2). That is a general reference to documents of any kind which relate to land. In the absence of a definition of "land" in the Bill, one can find such a definition in Schedule 1(5) of the interpretation Act. However, more generally, Clause 8 refers to the actual land rather than the interest in land. The need for Clause 8(2) arises from a specific request by the Law Society and the Keeper of Registers. It is designed to make absolutely clear what is required in the case of annexations in relation to land.

The noble Lord, Lord Macaulay, also referred to Clause 7(3). As the noble Lord will be aware, sometimes one finds that a document finishes at the bottom of a page and there is therefore room for only one signature at the bottom of the page. The purpose of that provision is to allow for other granters to sign on another page rather than having to cram them in at the bottom of the page.

The noble Lord raised points in relation to Clause 9(6), regarding the definition of "relevant person". He pointed out that the provision is wider outside Scotland. The reason is that the provision is designed to include outside Scotland people who have an equivalent qualification by way of being a notary public, or other persons. If one were to limit the provision entirely to people with the kinds of qualification referred to in the first part of the subsection, it would be difficult for someone in, for example, France, to find a person who fell within that definition.

As to whether or not others should be included, the list may be restrictive, but it is certainly wider than the existing list which at present includes only solicitors, notaries public and Church of Scotland ministers. Therefore there is a widening of the provision. However, in such an important matter one would not wish to widen it too far. The commission has obviously considered the matter with some care.

On the question regarding whether the provision should include people who cannot read, as the noble Earl will realise, we are concerned with people who cannot subscribe —that is to say, those who cannot actually write for one reason or another. It is the physical act of writing with which we are concerned. That is why one has this specific machinery, limited in that way.

The noble Lord, Lord Macaulay, raised the issue of subscription by companies. In the Bill, as with all provisions for probative documents, one is dealing with a presumption. Where one has a document which bears to have been signed by two persons who have been authorised to subscribe the document on the company's behalf, the document may be presumed to have been granted by the company. Perhaps I may point out to the noble Lord that we already find in existing law at Section 72 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 reference to two persons authorised to subscribe the document on behalf of the company. Therefore one is incorporating in the Bill a provision which already exists and has proved to work satisfactorily. It is as a result of representations from the business community that the final form of the provision relating to documents being subscribed on behalf of a company has been reached. In that situation the business community has been concerned, among other things, to deal with the possibility of fraud, and is satisfied that the matter is properly dealt with.

Reference was made to the fact that there is no presumption that the person who signed is a director. I believe that that is correct. Again, the matter has been inserted as a result of requests from the Law Society. If one simply had the situation where someone bore to sign as a director it would be wrong if there were a presumption thereby that he was a director. That would only arise if the matter were challenged. If it were challenged on the basis that the person was not a director, it seems to me that it is correct, as the clause envisages, that at that stage the question as to whether or not the person was a director at the time should be settled on the basis of normal rules of evidence rather than by virtue of any presumption. The point is that so long as the document bears to be signed by persons as directors, it attracts a presumption—it is a rebuttable presumption but nonetheless a presumption—of probativity.

Noble Lords will have seen a letter from the Law Society of Scotland saying that there is nothing in the Bill to cause undue concern. I think that that is a cautious conveyancer's way of expressing approval. The measure has the support of the CBI (Scotland) as well as the Scottish Law Commission. The provisions contained in the Bill are almost exclusively technical and therefore are not, I believe, controversial in nature, in a party political sense or otherwise. There are no political or European implications and the Bill will not lead to an increase in public expenditure. On the contrary, its provisions should lead to savings in time and money being achieved by companies, firms of solicitors and other bodies—perhaps to the detriment of the legal profession's fees, as the noble Lord, Lord Macaulay, said.

It is a much needed and long overdue simplification and clarification of the law of Scotland relating to legal writings which will be welcomed by Scots lawyers and by the business community. I am therefore happy indeed to commend the Bill to the House.

Lord Carmichael of Kelvingrove

My Lords, before the noble and learned Lord sits down, perhaps I may ask for clarification. I was fascinated by his last point regarding the signature of a director if the writer were found not to be a director at the time. Does that mean that if a firm signed a bill, one needs somehow to establish at the time the person signed that he was a director. If he were not a director, would the firm have no liability whatever? It is a small point. However, listening with a fair amount of attention and fascination, it struck me as a slight weakness in the Bill.

Lord Rodger of Earlsferry

My Lords, with the leave of the House perhaps I may say this. The simple fact is that if a person were not a director and signs, the document is not being granted by the company. It would be wrong for the company to be so bound. If the document bears to have been granted as a director, it is presumed to have been granted on behalf of the company. However, if the person were not in fact a director, then the matter can be challenged. I believe that that must be right because if he were not a director it would be quite wrong for the company to be bound. The company cannot be bound by people with no authority to sign on its behalf.

Lord Carmichael of Kelvingrove

My Lords, I am sorry to intervene again. However, I may have paid my money by that time, in order to buy something from a company which did not exist—perhaps to build a house. Perhaps the noble and learned Lord will consider the issue again. It may be that his explanation has satisfied some; I do not know. However, I am not desperately satisfied with the explanation at present.

The Earl of Balfour

My Lords, I am most grateful to noble Lords who have taken part in the debate. I am particularly grateful to my noble and learned friend the Lord Advocate. I am glad that he was able to answer some of the technical questions on which I might have slipped up.

I wish to make one remark to the noble Earl, Lord Mar and Kellie. My full name is the Earl of Balfour and Viscount Traprain. If one also has a few other titles, the signature might cover three or four pages on the document. On occasions like that, thank God our signature is just a single word. I would not wish to change that provision.

We must note with some sadness the repealing through this Bill of the old Scottish authentification statutes and various deeds Acts going back to 1540. They cannot be read and applied literally as modern statutes should be. I am grateful to the noble Lord, Lord Macaulay, because it is important that if the Bill is enacted there should be no doubt or misunderstanding.

The only other point about the old deeds is that some which are at present still in force must at best be doubtful and at worst pernicious. The Bill will be a delight to students and practitioners in Scots law and I hope that it passes through both Houses and remains for many years on the statute book. I commend the Bill.

On Question, Bill read a second time, and committed to a Committee of the Whole House.