Hansard

I am pleased to be here today to open the debate on the Prescription (Scotland) Bill. I thank members of the Delegated Powers and Law Reform Committee for their work in considering the bill and I thank the clerks for supporting them. I also thank David Johnston QC and Gillian Swanson, whose work at the Scottish Law Commission informed the bill.

The aim of the bill is to increase clarity, legal certainty and fairness in the law of negative prescription. In civil law, the doctrine of negative prescription serves the vital function of setting time limits for when obligations and rights are extinguished. That serves the interests of individuals where, after a certain lapse of time, it is fairer to deprive one person of a right rather than to allow it to trouble another, and it serves the public interest because litigation begun promptly encourages legal certainty.

The law of negative prescription cuts across many policy areas; we saw that today when we discussed amendment 2, in the name of Mark Griffin. Negative prescription is just one piece of a jigsaw, but it is an important piece. It is worth bearing in mind that the intentions of the bill are to resolve certain issues in negative prescription law that have caused difficulty in practice. The intention is not to make changes in specific policy areas.

So what does the bill do? We have already heard what section 3 does not do, so I will begin by explaining what it does. It extends the five-year negative prescription to cover all statutory obligations to make payments that are not already subject to that rule. The new general rule significantly simplifies the law in that area, because there are currently some such obligations that are not subject to five-year prescription, and it means that the list of specific obligations does not have to be continually updated. However, as we know there are exceptions to the new rule—such as for taxes, council tax and Department for Work and Pensions overpayments—that maintain the current position.

Negative prescription is about the extinction of obligations after they become enforceable, but it is difficult for someone to say that there is an enforceable obligation unless they know who to enforce it against. If they may be entitled to damages, it is only fair that if they do not know who is responsible, the clock should not start to run until they know—or can reasonably be expected to know—who caused the loss, injury or damage. Section 5 of the bill does just that for five-year prescription, because it makes little sense for the prescription clock to start running when the creditor is aware of the cause of their loss but does not know who is responsible for it. If it is fair to creditors that the five-year clock will not start until they discover the identity of the person responsible, it is also fair to defenders that the 20-year clock does not carry on against them indefinitely.

It is a feature of the current law that both the five-year and the 20-year prescriptive periods run from when an obligation becomes enforceable. For obligations to pay damages, that means when the loss, injury or damage occurs. As a result, a long period of time can pass after an act or omission before the 20-year period starts to run. Another feature is that the 20-year prescription period can be interrupted and the clock reset, so it is possible for a very long time to pass before an obligation finally prescribes. The bill will address both of those features by making the 20-year prescription, in relation to obligations to pay damages, begin on the date of the defender’s act or omission, and also making it a true long stop by preventing that period from being interrupted. Where proceedings are on-going when the 20-year period expires, the prescriptive period will be extended until the proceedings are finished. I am grateful to the committee for its work in clarifying how such an extension would apply to property rights.

As time is running out, I will briefly mention some of the miscellaneous provisions that are set out in the bill. First, once a dispute has arisen, the bill allows parties to agree to extend the five-year prescriptive period once only, for a maximum of one year. That is so that they can negotiate an end to their dispute without the need to resort to legal proceedings, meaning that they can avoid the expense of protracted litigation.

Secondly, the bill seeks to take account of claims that are made in sequestrations and company administration receiverships, both of which are not covered by the definition of “relevant claim” and so cannot stop the prescription clock.

The approach that is taken in the bill is not one of wholesale reform. It is, after all, one piece of the wider jigsaw that is Scots law. The focus is on areas that have been identified by the Scottish Law Commission as causing difficulty in practice, and it is such areas that the bill addresses.

Prescription plays an essential part in Scots law, in balancing the interests of creditors on the one hand and debtors on the other. I believe that the bill strikes a fair balance overall, redressing cases of unfairness for creditors and debtors while also serving the wider interests of fairness, justice and certainty.

I move,

That the Parliament agrees that the Prescription (Scotland) Bill be passed.