Hansard

Good morning. Given that the Lord President already has an array of powers in respect of individuals having rights of audience in the Scottish courts, it was initially concluded that it would not be necessary for the bill to require the Lord President’s approval of the regulatory regimes applicable to the alternative business structures that will employ such individual solicitors. Therefore, section 6 of the bill as introduced simply required the Scottish ministers to consult the Lord President, alongside others, in relation to an application from a body for a licence to be an approved regulator.The Law Society of Scotland has advocated that the Lord President should be given a role that is equal to that of the Scottish ministers in approving applicants as approved regulators under section 6. Opposing views have been voiced by the consumer groups that want a more limited role for the Lord President, similar to that which he is given by the bill as introduced.Following various representations made by those who gave evidence, the Justice Committee asked that further consideration be given to an enhanced role for the Lord President in the consideration of applications to be approved regulators. Given the concerns raised by various parties, I lodged amendments to section 6, which, if supported, will provide for such an enhanced role, so that the Scottish ministers cannot approve an application to be an approved regulator without the agreement of the Lord President. Effectively, that would give the Lord President a veto over who can become an approved regulator. The veto is appropriately limited to section 6(1)(a)(i), which relates to the matter of the applicant’s expertise in the provision of legal services. That means that the Lord President would not have the power to veto an application from a prospective approved regulator under the grounds set out in section 6(1)(a)(ii) or (iii). That is sensible, given that those grounds cover, for example, a prospective approved regulator’s financial viability, which, with the greatest respect to the Lord President, is not part of his remit.Robert Brown’s amendment 236 proposes to insert into section 6(1) an approval role for the Lord President equal to that of the Scottish ministers in determining who should be an approved regulator. The convener’s amendment 238 proposes to insert into section 6(2) an approval role for the Lord President equal to that of the Scottish ministers in determining whether the approved regulator should be subject to conditions. Amendment 240, also in the convener’s name, proposes to insert a new subsection after section 6(2) to provide an approval role for the Lord President equal to that of the Scottish ministers in determining whether to amend, add or delete any conditions imposed on an approved regulator. I do not support those amendments because I do not consider it appropriate for the Lord President to have the same broad approval role in relation to approving regulators.The Scottish ministers are administrators in relation to the approval of regulators. Although the Lord President has an important role in the legal profession in Scotland, he is not simply an administrative functionary. In addition, the Scottish ministers, unlike the Lord President, are subject to the provisions in section 4 and so must act in a way that is “compatible with the regulatory objectives”set out in section 1 when exercising their functions under section 6. In contrast, my amendments reflect the appropriate constitutional role of the Lord President and his important function in overseeing the legal profession. Those provisions will reduce the risk of duplicated effort and unnecessary work for the Lord President, given that he will not have decision-making authority in areas in which he has no current remit, such as consideration of a body’s financial resources. However, given that section 6(3) gives the Lord President a wider consultation role in relation to the whole approval process, he is bound to be consulted on such matters and proper account will be taken by the Scottish ministers of any comments made by him.10:15 Amendment 244, in the name of Robert Brown, would insert a new subsection at the end of section 6 that would require the Scottish ministers to consult the Lord President before making regulations under section 6(7). I do not believe that that is required. Section 6(7) allows the Scottish ministers to make further provision about approval, which is properly an administrative matter for them. Furthermore, amendment 3, which has been accepted, provides that, where the Scottish ministers consider it appropriate,“they must consult such persons or bodies as appear to ... have a significant interest”.Amendment 272, in the name of Robert Brown, would prevent the Scottish ministers from making regulations about the internal governance of approved regulators without the consent of the Lord President. As I said, I consider that the appropriate constitutional role of the Lord President lies in his consideration of an approved regulator’s expertise as regards the provision of legal services. I do not consider that matters regarding an approved regulator’s internal governance arrangements form part of such expertise. Of course, it should be noted that, in accordance with section 22(3), the Scottish ministers must consult approved regulators before making such regulations.My amendment 4 will add to section 5(4) a reference to the Lord President’s consideration of an application to become an approved regulator. The effect will be that an applicant to be an approved regulator must provide the Scottish ministers with any additional information that is required for the Lord President’s consideration of the application.Amendments 5 and 7 are drafting amendments. Amendment 6 deletes the words “the legal competence necessary” from section 6(1)(a)(i) and replaces them with the words“the necessary expertise as regards the provision of legal services (including as deriving from that of the persons within it)”.The effect is to set out more clearly that applicants must satisfy the Scottish ministers that they have the appropriate legal knowledge and skill to function as approved regulators.Amendment 8 will add to section 6 a new subsection—(2A)—which will require the Scottish ministers to impose on approved regulators conditions relating to expertise as regards the provision of legal services,“as are reasonably sought by the Lord President”.Amendment 9 will insert into section 6 a new subsection that sets out when the Scottish ministers can remove or vary conditions that they impose on approved regulators. Amendment 14 will add a new section to enhance the Lord President’s role in relation to the approval of approved regulators. The effect is that the agreement of the Lord President is needed before the Scottish ministers approve an applicant as an approved regulator. However, that will be limited by subsection (2) of the new section, which provides that“that agreement may be withheld only if the Lord President is not satisfied that the applicant has”the necessary expertise as regards the provision of legal services, as set out in section 6(1)(a)(i).We listened carefully to what the committee said in its stage 1 report and we have produced a compromise. We believe that it is the right one and we recommend it to the committee. Accordingly, I invite members not to move their amendments in the group.I move amendment 4.