How to tighten up the bill

The Society has identified a considerable number of amendments which it would like the Justice Committee and civil servants to consider at stage 2. It is not possible to confirm at this point how many of those we will put forward as there are still some discussions to take place with the Scottish Government. The Government has indicated that it will bring forward its own amendments to the bill and since the publication of the Justice Committee’s stage 1 report we can judge the issues that some of these amendments might address.

Following concerns from the profession, the Society raised issues about s 92 with the Government. The Government has since given an express undertaking to remove the reserve power to specify criteria for the appointment of non-solicitor members of Council and to prescribe the minimum number of non-solicitor members.

Independence/powers of Scottish ministers

Many of the Society’s proposed amendments concern the powers given to Scottish ministers under the bill and how the role of the Lord President could be enhanced to strengthen the independence of approved regulators, licensed providers and the solicitors’ profession. Specifically, we have identified the following provisions which we think should be amended:

Section 6 – approval of regulators

We hope that this issue will be addressed by the Scottish Government at stage 2 but the Society is prepared to promote an amendment to give the Lord President a consenting role in the approval of regulators. As the bill currently stands, Scottish ministers are only required to consult the Lord President.

This amendment will have a consequential effect on a number of other provisions in the bill where we believe the Lord President’s role should be enhanced in relation to approved regulators. These include:

section 9 – regulations about regulatory conflict
section 22 – regulations about governance arrangements
section 29 – measures open to ministers in relation to the regulation of approved regulators
section 35 – step-in by ministers, either to establish a body as an approved regulator or to allow them to act temporarily as an approved regulator
section 74 – certification of approving bodies of confirmation agents.

Other provisions

In addition to the above sections, there are also a number of sections which give Scottish ministers the power to make regulations but which confer no corresponding obligation on ministers to consult relevant parties before doing so. In particular, these might relate to how an approved regulator interacts with the licensed providers it regulates, or how a licensed provider operates.

These sections could give Scottish ministers an inappropriate power to directly affect the provision of legal services, which again has implications for the independence of the legal profession from Government. The Society will therefore promote amendments to require ministers to consult the Lord President and “such other persons or bodies as they consider appropriate” prior to making regulations about certain matters. Specifically, these regulation-making powers relate to the following sections:

section 5 – prescription of fees that may be charged to bodies applying to become an approved regulator
section 6 – regulations relating to further provisions about the approval process for applicants as approved regulators
section 24 – regulations about how approved regulators should assess licensed providers
section 34 – regulations about the transfer by a licensed provider to a new approved regulator
section 37 – regulations relating to eligibility to be a licensed provider
section 39 – regulations about the head of legal services (HoLS)
section 40 – regulations about the head of practice (HoP)
section 42 – regulations about the appointment of HoLS/HoP
section 52 – regulations relating to interests in licensed providers, including the imposition of requirements to which licensed providers or investors in licensed providers may be subject
section 55 – regulations relating to safeguarding the interests of clients
section 64 – regulations about complaints about approved regulators

Specific amendments

In addition to these broad areas of concern, there are a number of specific stand-alone amendments in areas which the Society has identified as particular concerns. These include:

The lack of an equivalent Guarantee Fund

The Society will promote an amendment which would create the requirement for licensed providers to have compensation fund arrangements in place. The Justice Committee report welcomed the Government’s willingness to give further consideration to this issue and to bring forward amendments at stage 2.

A level playing field between approved regulators

The Society will promote an amendment to s 20 (internal governance arrangements) which would create similar obligations on other approved regulators to those conferred on the Law Society of Scotland – in particular, that its governing body should be composed of a percentage of persons who are not members of the profession regulated or represented by that approved regulator; and that it should have a regulatory committee composed of at least 50% of persons who are not members of the profession regulated or represented by that approved regulator.

A level playing field between solicitors providing confirmation services and confirmation agents

The Society will promote amendments to the provisions relating to confirmation agents which would require them to hold an annual certificate conferring the right to provide confirmation services; and which would require confirmation agents to have compensation arrangements in place to insure persons against pecuniary loss by reason of dishonesty.

Will writers

The Society urged the Government to consult on regulatory arrangements for will writers and has responded to the Government consultation on this topic. The Justice Committee’s report agreed that unregulated will writing needs to be addressed and welcomed the Government’s undertaking to consider amendments at stage 2.