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Sections 65 and 66 relate to expenses. The Law Society, as well as other legal stakeholders who appeared before the committee, raised concerns about the current policy underpinning section 65, which sets out principles for determining how legal bills are paid for in trust cases. Specifically, it provides that trustees will be personally liable for those expenses in certain situations, including when the trust fund does not have enough resources to cover them.

The Law Society has said that section 65 will deter people from becoming trustees and might lead trustees to unfavourably settle or abandon legal proceedings for fear of personal liability, which would mean their having to pay out from their own funds. We also heard from various legal stakeholders that obtaining trustee insurance for personal liability is not straightforward.

Having heard those views, do you share the concerns about section 65?

Good morning, minister. I want to move us on to section 75 of the bill and discuss definitions of “incapable” and “mental disorder”. The committee has heard a number of views on future proofing the bill and its interaction with capacity law, in the context of possible reforms stemming from the Scottish mental health review, and it has been suggested to us that the bill cross-refer with the Adults with Incapacity (Scotland) Act 2000 with regard to the definition of “incapable” instead of its having its own, very similar definition. Do you agree with that? Would that provide an effective mechanism for allowing incapable adults to offer a view on situations that affect them, or would changes to trust law ultimately still be required after any reforms to capacity law?

I move us on to sections 65 and 66 of the bill, which relate to expenses of litigation.

The committee has heard from the Law Society of Scotland and some other legal stakeholders, who are concerned about the current policy underpinning section 65. This section provides principles to determine how legal bills are paid for in trust cases. Specifically, it provides that trustees will be “personally liable” for those expenses in certain situations, including when the trust fund does not have enough resources to cover them.

The Law Society thinks that section 65 will deter people from becoming trustees and may lead trustees to unfavourably settle or abandon legal proceedings for fear of personal liability.

We are keen to hear whether you share those concerns, or whether you can offer the committee any reassurance. As a follow-up, do you think that the availability of insurance helps to mitigate the risks that the Law Society has identified?

I would like to move us on to sections 16 and 17 of the bill, which relate to trustees’ powers of investment. The committee heard suggestions from the Law Society of Scotland and the academic Yvonne Evans that, in view of Scotland’s increasing emphasis on net zero goals, sections 16 and 17 should be amended to explicitly allow trusts to adopt environmentally friendly investment policies, particularly when those might underperform compared with other investments.

We are interested to hear from everyone on that proposal. Would an amendment to the bill in that regard help to reassure trustees that that kind of investment is allowed, or is the current wording satisfactory? It would also be helpful to hear about any experience that you have had in relation to investment decisions.

I suppose the argument is that, because it is such a crucial part of future life on the planet, it warrants specification, but I can see your point.

I will hand back to the convener.

Do you have a view on what such an amendment should look like? What, specifically, would need to be said to give you that reassurance, when you give advice?

I will move us to part 2 of the bill and in particular to section 72, which is on the right of a spouse or civil partner to inherit. We discussed that with the earlier panel as well. Various stakeholders, including the Law Society of Scotland, have said that a distinction should be drawn between spouses or civil partners who were living with the deceased person at the time of their death and those who had previously separated from the deceased person but had not divorced or had their partnership dissolved.

The committee is interested in hearing what other witnesses think of that policy idea. Do you agree with it? Do you think that, with good drafting, it would be possible for the provision to describe what is separation and what is not? It would be helpful if Alan Barr could then come in to add any points of clarification on the Law Society’s submission to the committee.

How would you propose to tackle that in the bill, if I can put you on the spot?

I move us on to sections 65 and 66, on expenses of litigation and application. Although the Law Society is supportive of the bill overall, it seems to be very concerned about the current policy that underpins section 65, which provides principles to determine how legal bills are paid for in trust cases. The Law Society thinks that section 65 will deter people from becoming trustees and might lead trustees to settle unfavourably or to abandon legal proceedings for fear of personal liability. It would be useful for the committee to hear whether you share the concerns of the Law Society or can offer the committee reassurance on that point.

A related question is whether you think that the availability of insurance helps to mitigate the risks that have been identified by the Law Society.

We can start with Ross Anderson again and work round the table. As I am attending remotely, it is not easy for anyone to catch my eye. I can leave it to the convener to bring witnesses in, if that is preferable.

I will move us on to sections 16 and 17 of the bill, which look at trustees’ powers of investment. I think that the question will be to the whole panel; perhaps Ross Anderson could start off and we can work our way around.

The Law Society of Scotland and the academic Yvonne Evans have suggested that, in view of Scotland’s increasing emphasis on net zero goals, sections 16 and 17 could be amended to allow trusts to adopt environmentally friendly investment policies, particularly when those might underperform compared with other investments. The committee is interested to hear the panel’s views on that policy idea. If you support it in principle, do you think that the drafting of sections 16 and 17 would need to be tweaked or amended to make it clear to trustees that they have the power to make such investments, even when they might underperform compared with other investments?