Meeting of the Parliament 25 May 2017
I had the privilege of being a member of the DPLR Committee in the previous parliamentary session. I told the whips last May, though, when I was re-elected to Parliament, that I did not want ever to be on it again. However, I accept that one attraction of the committee is its compact size—five members. Other committees that I am on have 11 members and are unwieldy.
I commend the committee for holding five evidence sessions and reassuring me that they have carried out their work very diligently, as always. I believe that Parliament can rely on the committee with regard to the bill; many of us in Parliament probably need to rely on the committee, because the bill deals with a technical area with which most of us are not familiar.
It was good to see the comment by James Rust of Morton Fraser LLP, who said that change in the area that the bill deals with had not been made in the past because of lack of parliamentary time, but now that we have the Scottish Parliament,
“the dam has burst and we have got on with it.”—[Official Report, Delegated Powers and Law Reform Committee, 28 March 2017; c 37.]
Specifically having the DPLR Committee to handle this type of legislation is clearly good. I note the recommendation at paragraph 40 of the report that
“more than one area of law reform at the same time”
might be considered. I certainly agree that it is worth exploring that, as long as lay members of the committee, which I was, do not get too confused by dealing with different issues at the same time. I note that the minister will consider the recommendation further.
The process of recommendations from the Scottish Law Commission leading to SLC bills is one that seems to be settling down well. I was a member of the committee when it considered the previous such bill—the Bankruptcy (Scotland) Bill. It is easier to speak on bills that deal with such subjects when one has been a member of the DPLR Committee. I was not a member of the committee when it dealt with the Legal Writings (Counterparts and Delivery) (Scotland) Bill, but I ended up speaking on it in the chamber, which was—as others have said—a bit of a challenge.
As I understand it, the DPLR Committee can consider only non-contentious bills, but I feel that we could relax that stipulation a bit and let the committee consider a slightly wider range of legislation. This is the second SLC bill dealing with contract law, with the Legal Writings (Counterparts and Delivery) (Scotland) Bill being the first. If I remember correctly, the purpose of that bill was to make it easier to sign contracts without all signatories being in the same place or having one piece of paper physically travel round all the signers.
On the bill that is before us, I am particularly attracted by the comment by the SLC, which said that it supports the policy to
“make arbitration in Scotland and under Scots law as attractive as possible to potential users from elsewhere as well as those already in the jurisdiction.”
That comment is to be welcomed. The fact is that we live in a competitive world and we want to win business for our legal system, just as we do for other sectors of our culture and economy. Scots law has long been distinct from law elsewhere; we want to harness that distinctiveness for our benefit. That is not to say that we want to make our system as cheap as possible or otherwise encourage a race to the bottom, as the saying goes. However, we want our law to be simple and straightforward, and if that requires moving from common law to statute, so be it.
I felt that the SLC submission put it clearly that case law can have the advantage of being more flexible but the downside of that is less certainty, which might put people off entering a contract at all or, at least, entering a contract under Scots law. I liked the comment by David Christie, to which others have referred, that uncertainty is effectively a “death spiral” that means a lack of case law, leading to the law not being developed.
However, in the specific case of third-party rights, it is actually the lack of flexibility in revising or amending a contract that is one of the key problems. Normally, a contract can be revised or amended by agreement, but the present situation makes that more difficult if a third party is involved. We have heard reference to the House of Lords judgment that enforced that inflexibility.
The report deals with the issue that increasing flexibility for the parties to a contract—that is, removing irrevocability—could reduce the rights of third parties. That is dealt with in paragraphs 62 to 73. However, the committee concluded at paragraph 74 that it supports abolition of the irrevocability rule and that sufficient protections have been provided.
I see from its report that the DPLR Committee has raised a number of issues with the minister. She agreed to consider them and has recently responded. The tone of that response seems to be very constructive, so I look forward to seeing what amendments might be lodged at stage 2.
However, today we are at stage 1 and we are considering the principles of the bill. I see that the committee spent some time on the question whether the bill will be used much in practice. That was a worthwhile question to ask. There is little point in our passing legislation for the sake of it or for the sake of appeasing Parliament’s detractors who measure our success by the number of bills that we pass.
The general feeling among witnesses seems to be that the bill will not have an immediate and dramatic impact, and nor will its provisions be widely used in the short term. However, it certainly moves us in the right direction. I note the comment of Professor Vogenauer—I am not sure whether I have pronounced that correctly—about which legal system provides the “law of choice”. I guess that in the longer term, many of us would want Scotland to be a small and flexible nation to which organisations and individuals might be attracted to do their business because of the legal and economic benefits.
I am always interested in the financial aspects of a bill, but I see that there were no responses at all to the Finance Committee’s call for evidence. That is reassuring.
I am happy to add my support for the bill, and I trust that members will allow it to proceed at decision time.
15:41