Seòmar agus comataidhean

All those aspects need to be considered. My officials will go away and consider those carefully, and we will come forward with something as we progress the bill.

I am willing to work with the committee on the definition of “incapable”. The definition of “incapable” in the bill is focused on the decision-making abilities of trustees because, ultimately, the essence of trusteeship is about making decisions to the benefit of others. Therefore, the bill does not reflect the adults with incapacity legislation, as the grounds for assessment in that legislation do not align with the trustees’ functions. Instead, the definition of mental disorder is based on the definition in England and Wales, in section 1 of the Mental Health Act 1983, as amended by the Mental Health Act 2007. That appears to have been on the basis that the English and Welsh definition of mental disorder was at the time more up to date than that used in the Adults with Incapacity (Scotland) Act 2000. I am willing to work with the committee and to take on recommendations to define “incapacity”.

I will bring in my officials to give you the history on that.

Having a statutory style in primary legislation is not necessary or helpful at times—it can become outdated and can be difficult to update. The 1921 act contains only two straightforward styles: a form of minute of resignation and a deed of assumption.

On guidance, in terms of accessibility for laypersons, I am confident that the bill represents a vast improvement on what we have under the 1921 act and other trust legislation. The Government has set out its priorities for this parliamentary session. Preparing guidance on trusts could affect the delivery of those priorities if we need to take resources away from other areas.

I do not think that using a media campaign to communicate what people already expect to happen is an efficient use of public resources.

I have listened carefully to the evidence that has been given to the committee and it seems helpful if trustees who follow rules laid down by the Financial Conduct Authority for the protection of client assets were found to be liable for the breach of fiduciary duty, or otherwise criticised. Those are narrow and technical matters of general trust law that my officials and I need time to consider fully. I agree with Professor Gretton that the issues raised are potentially important. That is why we need to take time to understand them before considering how we can best resolve them. I confirm that I will write to the committee once I have considered the matters fully.

Yes, I think that that could be worth while. Perhaps an official might have more detail on that. Do you want to come in, Michael?

The Scottish Government’s aim is to bring the bill’s provisions and the section 104 order on pension trusts into force at the same time, as that would have the effect of applying the updated trust law in the bill to all types of Scottish trusts, including Scottish pension trusts, at the same time. That is the preferred approach, because it would avoid fragmenting trust law by creating different regimes for pension trusts and other kinds of trusts.

Should a 104 order not be forthcoming in time for the bill’s commencement, there is a range of options to ensure that no gap in the law is created for pension trusts. Sections 78 and 80 would allow provision to be made to keep the Trusts (Scotland) Act 1921 and any other parts of pre-reform legislation in force for pension trusts for as long as required. It would complicate the legislative landscape, and it is not a desirable solution, but it is possible.

Another option is to defer commencement of the bill as long as is necessary to ensure co-ordination with the section 104 order. Again, that is not desirable, but it demonstrates that a gap in the law would not be created.

No, I do not, but we will have to wait to see once we move that forwards.

With information duties, there is a balance to be struck between the interests of the trustees and those of the beneficiaries. Many of the issues that were raised about the burden placed on trustees were also raised when the policy was being developed. The SLC has considered those competing interests at some length in developing the provisions, and the information duties in the bill attempt a compromise.

I recognise that requiring trustees to inform beneficiaries or potential beneficiaries about their position under a trust could add a burden of work to trustees. However, against that, beneficiaries could have a fundamental role in a trust in holding the trustees accountable. They cannot do that if they are not properly informed.

My view is that the bill strikes an appropriate balance between the ease of administration for the trustees and enabling beneficiaries to hold them to account. Beyond that, the information duties contained in it can be tailored for individual trusts. A truster is permitted to limit the duty to provide information requested by the beneficiaries subject to certain safeguards and the bill allows for some flexibility.

The Scottish Legal Complaints Commission has said that many complaints are made because beneficiaries are not clear on what they have or do not have the right to expect. We welcome the clear provisions on the duty of trustees to pass information to the beneficiary and on what the beneficiary is entitled to expect or request.

The bill strikes an appropriate balance. However, if the committee has another view and would like to make a recommendation, we will consider it.

That is an area on which I am willing to work with the committee. Trustees are given broad investment powers that do not prohibit taking into account environmental concerns, as stakeholders have recognised. Trustees are presently required to consider the suitability of a proposed investment for the trust. That is not an instruction to maximise financial return at all costs. I am aware that the committee has heard that trustees of trusts whose purposes are the eradication of poverty would not consider it suitable to invest in tobacco, alcohol or gambling for example. Ultimately, the investment policy that the trustees should adopt must reflect the purposes of the trust as set out by the truster in the trust deed.

As I have said, the role and fundamental duty of the trustees is to implement the trust’s purposes and care is needed to ensure that the trustees, when making investment decisions, are not instructed to take into account their personal values.

I have heard the views of a wide range of stakeholders that express provision would be helpful to make clear that, when assessing the suitability of an investment for a trust, financial returns are not the only consideration that may be taken into account. For example, the environmental and social impacts could also be relevant considerations. I will consider further what could be done on the issue, and look forward to working with the committee and the SLC on the matter as the bill continues its passage through Parliament.