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Section 55 — Regulation of judicial officers
Bankruptcy and Diligence etc (Scotland) Bill: Stage 3
10:15 am

Murray Tosh (Conservative)

Group 13 is on ownership and control of judicial officer businesses. Amendment 206, in the name of Kenny MacAskill, is grouped with amendment 52.

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Mr Kenny MacAskill (Scottish National Party)

The minister made some pejorative remarks about special pleading by sheriff officers. To put the matter in context, amendments 206 and 52 seek to introduce into the bill the rules that regulated sheriff officers previously. Back in 1991, when the rules were created—in secondary, not primary legislation—it was made clear that sheriff officers and messengers-at-arms should hold a commission and that there is an ethos that goes with being a member of the profession, which is part of our judicial system. Members who have been solicitors or advocates—there are many of them—will be aware that people in the judicial system have a responsibility not only in how they operate, but to the court. That duty surpasses any duty that they as individuals have to their clients, partners or others with whom they work. People in the system understand that there is a higher ethos because of the responsibility of the job or office that they hold. That is why, back in 1991, the rules made it clear that people had to hold a commission and could not simply be a silent partner or a limited company that was based wherever.

As I said, amendments 206 and 52 seek not to introduce new measures, but to restore the previous status quo, which was introduced in secondary legislation. What happened was that, in the wisdom of those elsewhere and perhaps even here, we acknowledged that, in the modern world, there was a need for solicitors firms to be able to become limited liability partnerships. We did not realise at the time that the consequence would be to open up an opportunity for access to be gained to sheriff officers firms. As far as I am aware, it was not envisaged or intended that firms of judicial officers, sheriff officers or messengers-at-arms would be able to become limited liability partnerships. The aim was to deal with the Law Society of Scotland and the legal profession. However, a loophole opened up, an opportunity was seen and various firms moved in. Some individuals have made substantial amounts of money and firms have acquired shares in or ownership of various other firms. That is not appropriate.

As we made an error in the introduction of limited liability partnerships, we should seek to return to the principles for the operation of judicial officers that existed not just under the 1991 regulations, but from the outset in Scotland. If amendments 206 and 52 are rejected and we go with the minister's proposals, we will compound an error and open up the opportunity for debt collection agencies to move in. We will give an opportunity not simply to those who wish to have the protection of limited liability status in operating a sheriff officers practice in Scotland; we will give it to the vultures—the predatory practices and companies that seek only to maximise the money that they make. Those companies have no ethos of support for the Scottish judicial system, but simply want a return on their investment.

It would be a retrograde step if judicial officers in Scotland did not have a commission from and a responsibility to either the Scottish civil enforcement commission or the court under the auspices of which they operate, but instead were convinced that their responsibility was to the shareholders and the head office, whether that is in Delaware, Detroit or south of the border here. Let us not forget that a great many vultures are circling various practices and judicial officers firms in Scotland, because debt collecting agencies can make a substantial amount of money by collecting council tax or whatever. Many of those firms seek to get a share of the pie. As I said, they do not seek to do the work responsibly and effectively, as happens under the current ethos of the judicial officer system in Scotland; instead, they simply want to make a fast buck.

Amendments 206 and 52 would restore the previous status quo and would protect not only sheriff officers firms and individuals, but the ethos and integrity of the Scottish judicial system. As I said, people in the system have a responsibility to the court and not simply to shareholders, wherever they are located.

I move amendment 206.

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10:30 am

Murdo Fraser (Conservative)

Mr MacAskill has a fair case, but he does himself and his case no favours in overstating it. Frankly, the use of terms such as "vultures" does nothing to persuade other members to support him. The Enterprise and Culture Committee considered the issue at stage 1. Those who have ownership of a firm of sheriff officers or judicial officers need not themselves be qualified—an argument has not been made for that. We already have firms of sheriff officers that are owned externally and I am not aware of any problems or difficulties that have arisen as a result. There is therefore no evidence to suggest that a problem is likely to be created. We should oppose unnecessary restraints on trade if we are in favour of promoting business. Therefore, we will oppose amendments 206 and 52.

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Christine May (Labour)

The Enterprise and Culture Committee had a lengthy debate on the issue. I recall that the convener did not have anything to say in dissent on the matter. It is important to remember the client group with which the officers deal—generally, they are not the sort of people who know how to complain to the sheriff principal. Therefore, better regulation is essential, which is why the new commission is essential.

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Allan Wilson (Labour)

I am grateful to the members of the Enterprise and Culture Committee for clarifying the issue. One reason why I changed direction on the matter during the summer is precisely because of representations that the Enterprise and Culture Committee and other external stakeholders made to me. To the best of my knowledge and contrary to what Mr MacAskill said, no one in the sector is saying no to limited liability partnerships.

It is usual to regulate the business arrangements of professions in one way or another, because few professionals operate as sole practitioners and it is commonplace for them to form business associations such as partnerships. Those business arrangements must not work against the public interest. There should be no split loyalties and people who profit from the business should therefore be held to account for their part in any malpractice. I therefore intend to ensure that all persons who direct judicial officers in their functions are subject to scrutiny by the civil enforcement commission, which we debated previously. That is a clear and reasonable policy that is designed to protect the public interest.

I accept that the policy could be implemented in various ways. We could say that officers must go into business only with each other in what we could call all-officer firms. Alternatively, we could say that non-officers should have to pass some kind of fitness check, such as a police check, or that non-officers could become associate members of the profession. Perhaps the right approach is a mix of all three possibilities, to allow different types of businesses to prosper in the marketplace. It is important to be flexible whatever we do. That is why I propose that Scottish ministers shall have a power, under section 55(2), to make regulations prescribing the types of business organisations that officers can form and related matters. I believe that to be clearly in the public interest.

If the bill is agreed to today, I will consult on proposals for regulating the business activities of officers, and encourage contributions from everyone with an interest, so that we can find the best solution together. Kenny MacAskill's amendments 206 and 52 would cut across the power in section 56 and remove all the options bar one—the all-officer firm. Why? My answer to that would be special pleading. The amendments serve the interests of one group of court officers at the expense of others and are part of an attempt by traditional court officers in all-officer firms to handicap other court officer businesses that have found a way to bring in partners with other skills and other capital. Those businesses are among the most successful in the sector but would be forced to reorganise if we pursued an all-officer firm policy.

Those businesses tell me that there is room for everybody. We are keen to find a solution that means that everyone can be properly regulated, whether or not they are in an all-officer firm. Those businesses are no keener on encouraging the sharp practices that were referred to by Mr MacAskill than anyone else is. I agree with Murdo Fraser that it is highly inappropriate to describe them as vultures. I think that they deserve a say in the coming consultation in the same way as the traditional court officers do. I want to keep an open mind with regard to that process and I hope that others would wish to do the same thing. That is the correct approach to the matter and, therefore, I ask Kenny MacAskill to withdraw amendment 206.

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Murray Tosh (Conservative)

I will use my power under rule 9.8.4A to extend the debate on this group by two minutes, which is the time that you have in which to respond, Mr MacAskill.

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Mr Kenny MacAskill (Scottish National Party)

Points were made by Mr Fraser and the minister with which I have some sympathy. To be fair, the sheriff officers were not seeking to be luddite; they have advised me that they were prepared to consider certain percentages and so on. The problem was that the minister refused to negotiate or discuss the matter with them, which meant that, accordingly, they were left with no option but to pursue the route that was offered by my lodging of amendment 206, which is a take-it-or-leave-it approach. The tragedy is that there might have been room for some compromise, to which Mr Fraser alluded. That was not on offer, however, and the Executive is to blame in that regard.

I want to make it clear that I am not referring to the existing sheriff officers firms that operate in Scotland as vultures. Having met those firms, I think that their ethos is different from that of other firms and that it is not particularly beneficial. However, when I say that the vultures are circling, they most certainly are. They are looking at the money that is made by existing firms, such as those that operate beyond the existing practices of commissioned officers only, and are aware of the money that can be made. We already have a problem with predatory lending practices in the area of consumer credit. If we create a situation in which predatory lending combines with the predatory recovery of debt, we will compound the problems of consumer credit, which is encouraged by those furth of our shores who have no interest whatsoever in the welfare of our people and who do not care about the consequences of debt, such as divorce, crime or suicide.

We will have no control over judicial officers whose responsibility is not to the Court of Session, the sheriff principal or the people of Scotland but to people who want to maximise revenue and return. Just as those companies are predatory in their lending practices, they will be predatory in their recovery practices. Unless we support amendment 206, we, as a people, will rue the day.

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