Seòmar agus comataidhean

Good morning, convener and committee. Thank you for giving me the opportunity to speak to you about the Trusts and Succession (Scotland) Bill, which is the second Scottish Law Commission bill to be introduced this session.

Trusts are an important legal structure in Scotland. In modern society, they are used as solutions in an incredibly wide variety of situations, as the committee has heard in its evidence. They are used extensively by charities and pension funds; in commercial transactions to set funds aside to deal with future liabilities; in individual estate planning; and to protect and administer assets on behalf of vulnerable people such as children, and adults with incapacity and disabilities.

Scots law, however, has not kept up to date with the increasing variety of situations in which trusts are used. The bill aims to modernise the law of trusts and take forward all the substantive recommendations on reform that are contained in the Scottish Law Commission’s report on trusts.

Given the versatility of trusts and the uses to which they are put, the policy aim is to make sure that the law of trusts is clear and coherent and can respond appropriately to modern conditions. The huge variety of uses to which trusts are put also presents a challenge, as the bill must work equally as well for large-scale commercial or charitable trusts as it does for small-scale family trusts.

As for some of the key changes that the bill makes, it updates the powers and duties of trustees, including introducing a non-judicial method for removing trustees; restates trustees’ power of investments; sets out trustees’ duty of care and duty to provide information to beneficiaries; and confers a number of important powers on the court, including a new power to alter trust purposes after the 25-year period has elapsed.

There are also two provisions on succession law, one of which is technical and is intended to clear up potential confusion in the drafting of a section in the Succession (Scotland) Act 2016. The other, more substantive provision makes changes to the order of intestate succession so that the spouse or civil partner of a person who has no children and who dies without leaving a will inherits the entire estate of the deceased. That important change reflects what many people expect to happen already, but which is not actually reflected in the current law.

The committee has heard from a number of stakeholders who have welcomed and have been positive about the bill. I am aware that points of detail have been raised, which I am sure that we will come on to discuss. I would like to say at this stage that I am willing to work with the committee on some of the issues that have been raised with you, and I am happy to take any questions.

Not at this stage, no.

The law of succession affects everyone, but it can also divide opinion. The committee has heard that, although everyone agrees that the law of succession needs reforming, there is no consensus on what those reforms should be. It has heard about possible reforms to the financial provision for cohabitants when one partner dies, which the Scottish Government has consulted on previously.

Any amendment to the relevant timescale would need to address the issue of scope and it would fragment the law in the area. Recently, the SLC has published a report on financial provision in the case of the breakdown of a cohabiting relationship in circumstances other than death. The Scottish Government will give consideration to a revised definition of cohabitants, which should extend to situations in which a cohabiting relationship ends by way of death, including the relevant timescale.

On the risks of abuse, section 7 contains a number of safeguards against abuse of the power by trustees. First, a majority of the trustees must agree before a co-trustee can be removed from office; the power cannot be exercised by a minority of trustees or a single trustee acting without the support of a majority. Moreover, if a trustee abuses the power, it can be challenged in court. Trustees who wrongfully remove co-trustees might be in breach of a fiduciary duty and might find themselves removed, and if they have acted negligently or in bad faith, they can be personally liable for court expenses. My view is that the bill contains sufficient safeguards to ensure that trustees exercise the power appropriately, but I will ask whether any of my officials want to add further to the history behind this.

I am happy to take on any recommendations that the committee makes.

Perhaps my officials might want to come in on that point.

In terms of accessibility for laypersons, I am confident that the bill represents a vast improvement on what we currently have under the 1921 act and in other trust legislation. Given that trusts are used in a widely varied and ever-changing range of circumstances, producing and maintaining guidance that accommodates the breadth of purposes to which they are put would be a significant undertaking.

The Government has set out its priorities for this parliamentary session. I take on board Mr Balfour’s points regarding enhancing accessibility to people who are volunteering, but at this stage I think that any sort of campaign in that respect would not be a good use of public resources.

I am not concerned that it is going to put people off, but I am willing to consider the issue further. I will bring in my officials, who might be able to give you some history on the work that has been done previously.

The Scottish Government is committed to exploring the views of the wider general public on intestate succession and we have commissioned research from the Scottish Civil Justice Hub, which is a venture led by the University of Glasgow’s school of law in collaboration with the Scottish Government’s civil law and legal systems division. That phase of research has finished and we are awaiting the report on its findings, which will be published by the hub. When we receive a copy, we will consider whether any next steps need to be taken on succession law reform. The research will be used to inform any future reform, but we have no plans to progress any further primary legislation to reform fundamental aspects of succession law during the current parliamentary session.

Michael Paparakis can give you the history on that.

I will bring in Michael Paparakis, if I may.