Committee
Enterprise and Culture Committee, 07 Feb 2006
07 Feb 2006 · S2 · Enterprise and Culture Committee
Item of business
Bankruptcy and Diligence (Scotland) Bill: Stage 1
The proposed reduction to one year could mean that many more people will apply to become bankrupt. There is some evidence from England of a noticeable increase in applications since the timescale there was reduced. As we have discovered, general knowledge of bankruptcy law is limited, and relatively few lawyers are specialists in insolvency. Will the legal profession have sufficient specialists to cope with a great increase in bankruptcy applications and, with restrictions on legal aid, will lawyers want to deal with folk who might have no income and no assets and are unable to pay?
In the same item of business
The Convener (Alex Neil):
SNP
I welcome everyone to the fourth meeting in 2006 of the Enterprise and Culture Committee. We have received no apologies. I ask everyone to switch off their m...
Nicholas Grier (Adviser):
As members are aware, the Law Society of Scotland and the Committee of Scottish Clearing Bankers are going to be with us today. No doubt members have had a l...
The Convener:
SNP
That was helpful. Some figures on the English bankruptcy rate have come out in the past few days; it might be useful to get them from the Scottish Parliament...
Nicholas Grier:
Yes—that was all over the Sunday papers. That is what we must anticipate here, along with the possible cost to the public purse of running all the extra bank...
The Convener:
SNP
Are there any questions to ask or points to make on what Nicholas Grier has said? A paper was circulated, and an additional paper has also been provided for ...
Christine May (Central Fife) (Lab):
Lab
The point about small businesses was well made. It would be useful to hear evidence from the Federation of Small Businesses or some other umbrella body.
The Convener:
SNP
Is that agreed?Members indicated agreement.
The Convener:
SNP
Moving on, we have two panels of witnesses. From the Law Society of Scotland, I welcome the convener of the diligence committee, Alistair Hamilton; Rachel Gr...
Sarah Fleming (Law Society of Scotland):
On behalf of the Law Society of Scotland, we are delighted to have been invited to give evidence on the bankruptcy aspects of the bill.I am tasked with deali...
The Convener:
SNP
I see that everybody is nodding their heads.
Sarah Fleming:
I will pass over first to Alistair, and then Rachel will go through some points.
Alistair Hamilton (Law Society of Scotland):
My great age means that I was involved in the Bankruptcy (Scotland) Act 1985. However, since it was passed, the Executive, other parliamentary groups and the...
Rachel M Grant (Law Society of Scotland):
The points are set out in detail in our submission, and we have many further technical points to add. However, I will concentrate on three main areas that we...
The Convener:
SNP
That was extremely helpful—you talked about various practical issues.I emphasise that, at the moment, we are considering only part 1 of the bill. We will und...
Alistair Hamilton:
I have a few supplementaries to what Rachel Grant said; the committee will understand why we got her to do our introduction from the way in which she did it....
The Convener:
SNP
Point taken. Several members want to ask questions. Jamie Stone was the first to put his hand up.
Mr Jamie Stone (Caithness, Sutherland and Easter Ross) (LD):
LD
I want to ask about a point that Rachel Grant kindly made. Thank you for what you have told us—I am no lawyer, and it helped me enormously to have matters pu...
Rachel M Grant:
I would not call it a blunder or an oversight. In a huge bill such as this one, there are many cross-references and issues. The Law Society of Scotland pored...
Mr Stone:
LD
What do you mean by "whoever gets there first"?
Rachel M Grant:
At the moment, if I had agreed to sell my house to you before I went bankrupt, it would be a question of whether you or my trustee got to the register first....
Alistair Hamilton:
This is one of the longest bills that we have ever had; it is a tremendous bit of drafting. The fact that we can pick out only certain points suggests a word...
The Convener:
SNP
Believe me, there is no shortage of other points.
Christine May:
Lab
In my experience, it takes about three months to make an alteration to the register, unless the witnesses know differently. Can alterations be made more quic...
Rachel M Grant:
The registration might not appear for three months, but a solicitor would be able to establish whether an application was pending. It is possible to get matt...
Sarah Fleming:
Matters should be sorted out instantaneously. There should not be a gap of months during which it is not clear who the owner of a house is. Even if ownership...
Alistair Hamilton:
Everything is now fully computerised. There used to be delay while the mechanics of registration took place; now, it is instantaneous. However, people have t...
Rachel M Grant:
It is not always instantaneous.
Murdo Fraser (Mid Scotland and Fife) (Con):
Con
I used to earn my corn—part of the time—by doing conveyancing, so I have some knowledge of the matter. I want to get my head absolutely clear about this, and...
Sarah Fleming:
Yes.
Murdo Fraser:
Con
Why, therefore, is it necessary to do anything else? After three years, could a purchaser not assume, without anything else being recorded, that the title wa...