Scotland Bill — House of Lords, 2016-01-19
Topic: Domestic Commerce
Nicol Ross Stephen (Liberal Democrats, Centre to centre-left): My Lords, Amendments 59, 60 and 61, which are tabled in my name and that of my noble and learned friend Lord Wallace of Tankerness, are Liberal Democrat amendments, but they have been very much inspired by the hard work of the Law Society of Scotland. I thank it and Michael Clancy, in particular, for the detail that has gone into these amendments Amendment 59 adds further exceptions to the reservation to the UK Parliament of the creation, operation, regulation and dissolution of types of business association. Under the Scotland Act 1998, the UK Parliament can make law to create business associations, such as partnerships and limited companies. Law can also be made concerning the operation, regulation and dissolution of these associations Section Cl of Part 2 of Schedule 5 has a number of exceptions to this reservation. These include the creation, operation, regulation and dissolution of particular public bodies, or public bodies of a particular type established by or under any enactment and charities—your Lordships can see that lawyers have helped me with the wording. A business association is defined as any person, other than an individual, established for the purpose of carrying on any kind of business, whether or not for profit. "Business" includes the provision of benefits to the members of an association. We believe that the exceptions from the reservations should be amplified to include the law of partnership and unincorporated association, and to provide for the creation of various types of new forms of enterprise to allow flexibility for businesses to grow in Scotland The Partnership Act 1890 already regulates partnerships in Scotland and recognises in some respects the differences between Scottish and English law in this area. The Law Commissions reviewed partnership law and published a report in November 2003 that dealt with the Partnership Act 1890 and the Limited Partnerships Act 1907, with particular reference to independent personality, continuity of business irrespective of changes of ownership, simplification of solvent dissolution and model partnership agreements. In 2006 the Government announced that they rejected the Law Commissions’ recommendations on general partnerships but that they intended to implement the recommendations specifically relating to limited partnerships. That change was carried out by way of the Legislative Reform (Limited Partnerships Order) 2009. However, some of the reforms concerning general partnership reform could be of benefit to Scottish businesses, and an effective means of executing these reforms could be through the Scottish Parliament legislating on these matters. Currently that is not possible, so this amendment would enable the Scottish Parliament to carry out the legislative changes that the Scottish Government may wish to consider and which are contained in the Law Commissions’ joint report. The Parliament should also have the freedom to create new forms of enterprise as listed in the amendment Amendment 60 would fully devolve the regulation of solicitors, no matter what function they performed, to the Scottish Parliament and allow the Parliament to make law for licensed providers under the Legal Services (Scotland) Act 2010 in the areas of immigration and asylum, insolvency practice or financial services. There is no provision that reserves the regulation of the Scottish legal professions. Nevertheless, in the Legal Profession and Legal Aid (Scotland) Act 2007, which regulates, "the making of complaints about legal services", it was provided that that Act did not apply to complaints about the provision of advice, legal services or activities relating to consumer credit, insolvency practitioners, financial services or immigration. This was because the Scottish Government took the view that the supervision of the legal profession when giving advice about these reserved matters or providing services was itself reserved, and was therefore a matter for the UK Parliament to regulate. In other words, the Scottish legal professions are regulated partly by the Scottish Government and partly by the UK Government, according to what advice or services they are providing In Section C3 there is an exception from the reservation of competition law that covers the regulation of the legal profession, but that exception applies only for the purposes of that section. The problem is that the provision of advice, legal services or activities relating to consumer credit, insolvency practitioners, financial services or immigration is considered to be reserved. Irrespective of whether this view is correct—the Minister and others may reflect different views on this—it is suggested that the Scottish Parliament should be able to regulate all aspects of the Scottish legal professions. That includes alternative business structures formed between solicitors and other professionals as licensed providers under the Legal Services (Scotland) Act 2010 Finally, Amendment 61 deletes the reservation to the UK Parliament of regulating estate agents in Scotland under the Estate Agents Act 1979. Estate agency in Scotland works within the context of Scottish land law practice and conveyancing, which is, as we all know, different from the law applicable to other parts of the United Kingdom. Were estate agency in Scotland to be devolved, the Scottish Parliament would be able to make law relating to estate agents which would be more closely aligned to the Scottish legal system and the needs of consumers in Scotland, and which would allow the Parliament to legislate fully for licensed providers comprising estate agents under the Legal Services (Scotland) Act 2010. The inability of the Scottish Parliament to legislate in this area is a stumbling block to completion of the legislative framework for alternative business structures in Scotland.