Scotland Act 1998 (Modification of Schedule 5) Order 2014

Duke of Montrose Excerpts

Wednesday 7th May 2014 Grand Committee

[The Earl of Mar and Kellie (LD)]

My Lords, I thank the Minister for explaining the content of the order. I welcome any move that is devolutionary in character. I certainly believe that Scottish-branded food and the animal feed-stuff that goes toward producing it are a central part of the Scottish economy and the tourist economy. I believe that Scottish farmers and growers are some of the most efficient in the world and that the Scottish Parliament therefore should certainly be in direct control of this type of regulation.

[The Duke of Montrose (Con)]

My Lords, I thank the noble and learned Lord the Minister for so fully explaining the ins and outs of these various additions to Schedule 5. On the question of bringing these regulations into line one with the other, I was interested to hear about the devolving of zootechnical feeds and items like that, but the notes to the order talk about some elements that are quite difficult to get one’s head round, such as medicinal products for use in animals that are not veterinary medicinal products or feed additives. First, will the regulations now work in the same way both in England and in Scotland? Secondly, I understood that all of these subjects were controlled under the Veterinary Medicines Directorate in practical terms. Does this mean that the Scottish Parliament will now need to set up its own Veterinary Medicines Directorate because the regulations devolve the matter to the Scottish Parliament?

[Lord Foulkes of Cumnock (Lab)]

My Lords, I join in the thanks and appreciation to the Minister for the excellent way in which he introduced this order today. He always does this; we are not surprised in any way when he does it so expertly and we are really grateful to him. I wanted to raise two points. I am afraid that I do not have the detailed knowledge of food and agriculture possessed by my noble friend the Duke of Montrose, so my points are more technical.

First, I have a general point. I am increasingly concerned that this Parliament is seen by some people as merely a rubber stamp for the Government and that all the Government need to do is to bring something before both Houses in this Parliament and it will be agreed on the nod. Too many things are going through on the nod. I sit in the Chamber and think, “Why are we agreeing to this? Why are we not discussing it? Why are we not debating it?”. Do we not have the time? Yes, we do. We have been in recess for four weeks. We could have been discussing and debating issue after issue, point after point. Of course the Government like to get things through on the nod, but that is not part of democracy. We can see democracy being challenged elsewhere in the world, so we should be upholding it and making sure that Parliament’s role is appreciated. Every issue, however detailed it is, deserves proper consideration by both Houses of this Parliament.

Like other noble Lords, I go around the country as part of the Lord Speaker’s excellent Peers in Schools initiative to spread the word in schools about the House of Lords and its role, and I find it very useful. I talk about the three roles of the House of Lords: legislation, challenging the Executive, and holding debates. But I must say that more and more I feel like a fraud when arguing that case if the House has not sat for four weeks. It now looks as if we will not be sitting for another three weeks in the run-up to the Queen’s Speech. It is quite wrong that Parliament should meet so infrequently in order to challenge the Executive. That was the first point I wanted to make. I am sure that it is not something the Minister and his officials will have anticipated, or if they have, they have been very clever and deserve degrees in clairvoyance, if nothing else.

My second point relates to the devolution settlement. The Minister said that this order shows that the devolution settlement is working in a practical way. Perhaps I can say that I agree with him absolutely, and it is what we should be shouting from the rooftops: devolution is working. It has provided an opportunity for Scotland to make decisions about its own affairs on all the matters that affect Scotland in particular, and it is working really well. The traditions of Scotland and its legal system, on which the Minister is one of the experts, have managed to continue for over 300 years in spite of the existence of the United Kingdom and the Treaty of Union. If anyone is worried that I am straying from the subject before the Committee—my noble friend Lord Rosser has just a slight inclination that I might be doing so—this will bring me back. The Minister mentioned European Union food safety laws. Let us imagine the problems that would arise on a whole range of things if Scotland was to become a separate country from the rest of the United Kingdom. It would raise all sorts of questions about the transfer of foodstuffs across the border. It is just one of not hundreds, but thousands, of issues where greater problems would be created if Scotland was to be a separate country.

While not wanting to put words in his mouth, I hope the Minister will agree that the devolution settlement is flexible and working well. Almost every time the Grand Committee meets, there seems to be some kind of order relating to Scotland to be considered, tweaked and improved so as to get devolution working even better. This shows that the devolution settlement is flexible, workable and practical, and that it can and will be improved as long as Scotland remains part of the United Kingdom.

Scotland: Independence Referendum

Duke of Montrose Excerpts

Thursday 30th January 2014 Lords Chamber

[The Duke of Montrose (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Hennessy, and, if he is the first Englishman to speak, to hear him nailing his Scottish qualifications so boldly to the mast. The House owes a debt of gratitude to my noble friend Lord Lang for securing a debate on this broad topic. I also thank my noble friend Lord MacGregor and his committee for the work they did and the report they produced.

The economy is the key area and the one in Scotland on which the issue is likely finally to be settled. A small indication of the problems that might arise for the rest of the UK can be speculated on from the fact that on independence, the rules of golf in England might be temporarily suspended. The authority of the Royal and Ancient Golf Club of St Andrews operates in most countries only if they already have their own national organisation with which it can be affiliated.

As we argue with each other in the field of politics, we allocate meaning to words and concepts that are narrower than their original meaning. In this case, it really does not have to follow that a Scottish nationalist is one who is looking for separation and independence. Surely the first feature of a nationalist is that they treasure the assets their country derives from the past and look to the best outcomes for the future. If the rationale proposed is only looking for a major break with what has gone before, then that is the role of an insurgent or a revolutionary rather than a nationalist. Perhaps those who adopt that label should consider which category they wish to belong to. In Scotland, there is a lot of rhetoric about the first concept, but much of the effort is to achieve the second.

I come from a family tradition that goes back at least 900 years in Scotland, and we have been intimately involved in her development. Whatever choice the Scottish people make, I for one will remain with Scotland. A fundamental element of that choice centres on deciding whether a secure future is assured by what has been characterised in the title of a well known play as the “black black oil” and has been regarded by many as Scotland’s black gold, or whether we should shape our future on what is on offer from Scotland’s grey gold: the brain power and inventiveness of her people, which was so well illustrated by my noble friend Lord Forsyth.

When we come to agriculture—I must declare an interest as a farmer in Scotland—there are numerous areas where we find differences. As the noble Lord, Lord McConnell, mentioned, Scotland has gone down a different road from time to time. Just the other day, we had a visit from my right honourable friend the Foreign Secretary, who said how much Scottish agriculture benefits from participation in the common agricultural policy as part of the United Kingdom. What nobody seems to have told him was that at that moment the Scottish farming industry was seething. The fact was that EU moneys had been received under a scheme whose aim is to bring about what is termed “convergence”, because Scotland is lagging well behind the EU target for support compared to the aim of the policy. The UK Government then decided that they would apply their own idea of convergence and use the money as a way of offsetting the reductions that other parts of the United Kingdom would have experienced from the cuts that they had proposed in the Budget.

Looking today at the wider effects of Scottish independence, there are many ways, as my noble friend Lord Lang of Monkton described, that the UK will be diminished. The issue that stands out for me is that if independence takes place, the remainder of the UK will become almost entirely dependent on external countries for its oil and gas. My noble friends Lord Lang and Lord Steel mentioned that Scotland will lose out on the EU rebate, but another element which will arise from a diminished UK and Scottish independence and which the rest of the UK might like to consider is that in terms of land area, Scotland, at 78,000 square kilometres, represents nearly one-third of the British Isles, but at the same time, at 89,000 square kilometres, it will take over responsibility for 59% of British territorial waters. When it comes to the UK economic zone and fishing, it will take over about three-quarters. This will have considerable implications for the Scots in terms of regulation and defence, but it is also a very considerable reduction in what the present UK represents.

Scotland: Independence

Duke of Montrose Excerpts

Thursday 5th December 2013 Lords Chamber

[The Duke of Montrose (Con)]

My Lords, I thank my noble friend Lord Forsyth for giving us an opportunity to make brief comments on this vital issue.

I will go back a little while. It looks as if the First Earl of Seafield was not quite correct when he described the Act of Union in 1707, which brought an end the Scottish independent Parliament, as the “end of an auld sang”—even if it was in one sense. It was also the end of another “auld sang”, which was the efforts of the Crown and the Scottish Parliament to bring to an end what had been more than 100 years of negotiation for a settlement between the two countries. One of my ancestors, in appointing the members for the first commission for the union in 1604, expressed the aim as being to achieve,

“the often wished but hardly expected conjunction of the two so ancient and long discordant kingdoms”.

It was that discordance that once again drove through the union in 1707. We are not given to being agreeable neighbours at the best of times.

It appears now that we are thinking of taking up that “sang” again. In 10 months we will see whether it is a number that gets to the top of the charts. Unfortunately, discordance, or its modern equivalent, is still something that could undermine the outcome, whatever it is. The current mood in Scotland thrives on the emphasis of discordance. This is very unfortunate. Breaking is always easier than building, but the Scottish Government paper’s 18 months to achieve a settlement, as most other Peers have mentioned, looks a particularly unrealistic proposal. However, it is only one of the many areas that might produce argument. We have now got ourselves into a position with devolution that is not wholly satisfactory from anyone’s point of view. Changes are due under the recent Scotland Act, and it may be that things should be looked at again further.

A current issue, in which I must declare an interest, is that Scottish farmers are much disturbed because they are switching on to an area-based, single farm payment, and there is great uncertainly about the size of the gains or losses that will affect each business. They have concluded that Whitehall is not sufficiently alive to their problem. Therefore, there are areas for argument.

Then again, there is an argument, much favoured by the Scottish First Minister, that an end to the Act of Union would create two new countries, and that each would have to re-establish itself by new treaties and arrangements. What steps is the Minister taking to guard against this outcome?

Scotland Act 1998 (Modification of Schedule 5) Order 2013

Duke of Montrose Excerpts

Wednesday 16th January 2013 Lords Chamber

[The Duke of Montrose]

My Lords, I would like to touch on three points, first on process, then on content and finally on effect. I want to go back a bit further than we have done so far this afternoon. Today we are dealing with one of the myriad Henry VIII powers that are contained in the Scotland Act. As your Lordships will know, the Act itself was almost exclusively the product of an ad hoc body that called itself the Scottish Constitutional Convention. The fact that it contains so many Henry VIII powers, it seems to me, was the product of an approach that said, “We don’t really know what we eventually want, but let’s make a start and then we can see how it works as we go along”. So far, the Library tells me, Governments of whatever persuasion have been able to unearth 31 powers in the Act and pass 194 amendments to Schedule 5.

Given the state of politics in Scotland, contrary to the expectations of all the wise constitutionalists who set things in motion, the Scottish Nationalists have achieved such an overall majority that the need for a referendum on independence has developed a certain urgency. That need is to determine what the true convictions of the Scottish people are.

The power contained in Section 30(2) is possibly the most far-reaching in the Act. As was pointed out in the report of your Lordships’ Constitution Committee, as we heard earlier, this power has already been used 10 times for things that varied from equality and human rights to the railways. As the noble Lord, Lord Crickhowell, said, the committee also commented that the use of,

“the section 30 route significantly curtails the opportunity of the UK Parliament to have an effective input into the process”.

Today we are asked to pass this outwardly fairly simple order. Noble Lords will notice that it shares one outstanding feature with the Scotland Act 2012. Both are remarkable for what they do not say. This time we have got rather more in the memorandum of agreement, but here we are being asked to pass measures that are not even as yet in secondary legislation. Noble Lords have touched on reducing the voting age to 16, an issue that is bound to have repercussions on all elections that take place in the UK, whatever anyone likes to say. In fact a Bill has been tabled in this House by the noble Lord, Lord Tyler, who I see is not in his place, when we will be able to look at this issue in the round. Here the issue is tucked away in a memorandum of agreement and we will not spend much time considering it.

The fact that we now find ourselves in a country with a devolved franchise, which is nominally giving restricted powers to other parts of the United Kingdom, appears to mean that the sovereignty of the Westminster Parliament can no longer be adhered to. We get framework orders such as this that are merely to approve powers that the Government have already assumed for themselves. Perhaps the Minister would like to comment on the Government’s statement in answer to one of Monday’s amendments to the Electoral Registration and Administration Bill. The amendment asked that the Secretary of State should be able to alter the franchise for elections by secondary legislation. The Minister said that they,

“believe that the franchise for UK elections should remain set out in primary legislation. It would be very unusual to provide for a change to the franchise in secondary legislation”.—[Official Report, 14/1/13; col. 489.]

What about memorandums of agreement? The agreement is such that we have a considerable—

[Lord Wallace of Tankerness]

Rather than allow a misunderstanding to continue, a memorandum of agreement does not change the franchise for the Scottish election. If it were to be changed, that would have to be done by means of primary legislation in the Scottish Parliament. Every referendum has its own franchise. The consequence of passing this order is that the franchise would be determined by the Scottish Parliament. There is an agreement that it should first and foremost be the franchise for Scottish elections and local elections. If the Scottish Government wish to extend it to 16 and 17 year-olds, that will require primary legislation in the Scottish Parliament.

[The Duke of Montrose]

I thank my noble and learned friend for that clarification but the underlying issue still bears consideration. On independence, I think that what we are faced with is that some regard Scottish history as having been a wasted opportunity either after Flodden in 1513 or after the Darien scheme in 1698, and they wish to wipe the record clean and begin again with a new and enlightened polity—centuries of Scottish toil brushed carelessly aside.

We can all see that in the intervening period there have been some remarkable individual Scots whose lives have marked moments of great progress for mankind, including Adam Smith, the framers of the United States constitution and David Livingstone. They can all stand on their own merit but in some ways, backing up the remarks made by the noble Lord, Lord McConnell of Glenscorrodale, when we begin to consider what Scotland’s contribution has been in the wider world, the vast bulk of it has been achieved within the union that is the United Kingdom.

Of course, as we contemplate the accumulation of events—the noble Lord, Lord Reid of Cardowan, raised the same issue—we are now learning that perhaps some of the elements were far from activities of which we should be proud. Overall, though, I maintain that Scotland has much to show for those years, and it is not something that can be easily shrugged off in a moment of enthusiasm for whatever appears new.

The nature of Scotland is such that big opportunities generally have been seen in the wider world outside. We can all see that independence can have a great attraction to the stay-at-home Scots, as long as Alex Salmond can continue to pull in sufficient funds to maintain the level of what we have come to regard as our inalienable rights. However, what can a vote for independence offer to our young people who are pursuing a career path in the corridors of power or in more widespread and influential businesses and marketplaces, or those who wish to establish businesses there? Will they not have to accept that they will be even more regarded as non-nationals in their place of work and increasingly unable to have a vote and influence in what is still their home?

[Lord Foulkes of Cumnock]

Perhaps I may follow the noble Duke, the Duke of Montrose, who has spoken so elegantly, as always, in this debate, as I did on a number of occasions during the passage of the Scotland Bill. Perhaps I may inform Members of this House, not all of whom may be au fait with social media, that this debate is being very well covered. Already the key comments made by the noble Lord, Lord Forsyth, and my noble friends Lord McConnell and Lord Robertson have appeared on Twitter. That is a very interesting development, and I shall return to that.

The Scottish Government appear to want—I think that we have to be very careful about the words that we use, as I said to the noble Lord, Lord Forsyth, in an intervention—to manipulate the way in which things will turn out in this referendum. It is very important to indicate clearly that separation is very different from any kind of devolution. As shown in the recent somewhat confusing vote regarding membership of NATO, the Scottish Government are going out of their way, in wanting to keep the Queen and in hoping to keep the pound, to try to make it appear that this separation, which will be drastic and irreversible, is no different from the vote that we had on devolution. It is completely different and we must keep saying that.

I referred to funding in an intervention, and I hope that we will get a reply. Again, there seems to be an attempt to manipulate or to try to make sure that the outcome moves in a particular direction, with funding coming from all sorts of sources for the yes campaign, particularly from overseas. We need to know that there will be a ruling, not advice, and to know exactly what the ruling will be and who will make it, so that there will be a level playing field.

Another issue that has appeared in social media—it was reported on Twitter—was that Alex Salmond said today, in an interview on Radio 4:

“The first job of the Scottish Parliament would be forming a constitution”.

There is a misunderstanding of what would happen in the event of a yes vote, on which I think almost all of us here agree, although the noble Lord, Lord Wigley, has not spoken yet. An assumption is being made—an impression is being created—by the supporters of the yes vote that there would suddenly be independence. I hope that the Minister will indicate that it would be a long and difficult process in relation to issues such as the national debt and a whole range of others that will have to be negotiated.

A separate Scottish state could not be created until there had been legislation in this United Kingdom Parliament. Surely, there would have to be further legislation before there could be a separate Scottish state. The referendum is not enough. The detail would have to be worked out. There would have to be negotiations. Some people have suggested, and I hope that the Minister will comment on this, that there might need to be a further referendum on the acceptance of the negotiations at the end of that. I am not sure if that would be the position but it certainly seems arguable that that could be the position.

My main point relates to the report by the Select Committee on the Constitution, mentioned by the noble Lord, Lord Crickhowell. It covered a number of points. Paragraph 27 of the report states:

“It may be, therefore, that irrespective of the legal status of the MoA as a whole, different provisions within the MoA are capable of generating different levels or different kinds of legal or constitutional obligations or expectations”.

Paragraph 28 states:

“It cannot safely be said that the arrangements proposed put the matter beyond all legal challenge”.

My noble friend Lord Browne has already raised the question of legal challenge in relation to the wording of the question. I hope that the former Lord Chancellor, the noble and learned Lord, Lord Mackay, does not mind my saying, but earlier I had the opportunity of discussing this matter with him and he indicated that there may be options of legal challenge here as well. I do not think that it should be used as a threat in any way but we should alert people, the public generally and elected Members of the Scottish Parliament and the Scottish Government, to the dangers of that kind of thing.

Partnerships (Prosecution) (Scotland) Bill [HL]

Duke of Montrose Excerpts

Tuesday 4th December 2012 Grand Committee

[The Duke of Montrose]

My Lords, when it comes to a topic such as this, I stand slightly in awe of venturing forth among those with such distinguished experience of both law and government. I hope that the Committee will forgive me if some of my questions are a little simplistic as a result. I understand that the provisions of this legislation will apply to anyone operating as a partnership in Scotland, whether it is described simply as a partnership or as a limited partnership. It is slightly daunting to realise that one is reviewing laws that may be affecting, among others, considerable numbers of the Scottish legal profession who perhaps still operate as partners or limited partnerships.

I speak as one whose forebears have had some considerable fall-outs with the legal profession, although there is nothing outstanding at the moment. I hope only that the attention of the Committee will ensure that this will be legislation at its best; whatever the outcome, I am sure that the legal profession will know how to look after itself.

I have a number of questions to put to the Minister, and from his answers I will know whether there is anything that requires being taken further. An issue raised with me by the Law Society of Scotland, which the Minister has already mentioned, arises from Clause 2(2), which states that a former partner of a dissolved partnership cannot be prosecuted where the partnership has already been prosecuted and acquitted. The question, if it is ever likely to occur, is whether it would be wise to introduce a balancing clause whereby a partnership cannot be tried where one of the partners has already been tried and acquitted on the same or related grounds.

The other question over Clause 1 arises because it says that no prosecution of a partnership can occur more than five years after its dissolution, but when we come to Clause 2 the same time limit on the prosecution of former partners is not quite as clear. Perhaps the noble and learned Lord can say whether it would be taken in law that the former condition could be read over into this clause. Would it not be better to have it clearly stated so that those reading the Bill know exactly where the limit lies?

For the sake of general clarity, for me and the Committee, it might be of use if the Minister can say what is likely to happen to the liability of a partner who dies while serving in a partnership within the five years preceding the dissolution. Is this liability likely to hang over and affect the settlement of the person’s estate? For that matter, is it really necessary that any such liability should continue against a partner who has already been dead for such a period of time? Would a shorter period of liability not be more appropriate?

--- Later in debate ---

[Lord Wallace of Tankerness]

My Lords, I thank all noble Lords who have contributed to this very helpful debate. I say immediately to those who said they were subscribing to the “daft questions” brigade that in my experience such questions are usually just as penetrating, and sometimes more difficult to answer, than those produced by the lawyers. It is important that the perspective of non-lawyers is brought to bear on this issue, because what lies behind the Bill is something that commands widespread public interest, and that transcends any narrow legal argument. I therefore welcome the contributions that have come from non-lawyers and lawyers alike, and I am particularly glad that the Committee has had the benefit of the experience of two former Lord Advocates, the noble and learned Lord, Lord Cameron of Lochbroom, and my noble and learned friend Lord Fraser of Carmyllie. My noble and learned friend Lord Fraser indicated that he could not recall such a situation arising and that, in his discussion with him, neither could the noble and learned Lord, Lord Mackay of Clashfern. Nevertheless, I think that he thought that it was a worthwhile weapon in the armoury. I think that that reflects the tenor of the debate, in which a welcome generally was given to these proceedings.

I will try as best I can to respond to the points that were made. Hopefully, I will pick up on most of the questions, but we will go through the transcript afterwards and if any questions have not been answered I will do so in writing and circulate the response. When we move into Committee there will also be an opportunity to take evidence, as well as having normal Committee debates on specific amendments.

A number of noble Lords—not least the noble Baroness, Lady Liddell, my noble friend Lord Stephen and the noble Lord, Lord McAvoy—mentioned in some detail the tragedy of the Rosepark care home fire. The noble Baroness talked about the fatal accident inquiry where, after considerable investigation, Sheriff Principal Brian Lockhart concluded that all or some of the deaths could have been prevented if the home had had a sufficiently suitable fire safety plan, and said that the management of fire safety at Rosepark was systematically and seriously defective. That gives us the context in which we are debating this legislation.

My noble friend the Duke of Montrose talked about partnerships and limited partnerships. I think it is fair to say that limited partnerships are quite rare these days, having been substantially superseded by limited liability companies. Limited partnerships are governed by separate legislation, the Limited Partnerships Act 1907. They are a type of partnership that includes limited partners—essentially, investors who play no part in the activities of the partnership. The limited partners have no liability beyond that directly connected to their investment. The Bill catches limited partnerships but, as I have indicated, they are very rare and no penalty would be enforced against limited partners.

Limited liability partnerships are not covered by the Bill as we believe that the same problems do not arise with limited liability partnerships as they do with partnerships. The essential difference is that partnerships may be dissolved instantly with no formality or any mechanism for restoring a dissolved partnership to existence. On the other hand, limited liability partnerships are registered at Companies House. Like companies, they are subject to a statutory process for being struck off the register and for dissolution, and may later be restored to the register by court order.

My noble friend the Duke of Montrose, the noble Lord, Lord McAvoy, and the noble and learned Lord, Lord Cameron, talked about the asymmetry that had been picked up by the Law Society of Scotland in its helpful briefing to colleagues. They pointed out that Clause 2(2) provides that an individual may not be prosecuted for an offence where a partnership has been prosecuted and acquitted, and asked whether the reverse should not also be the case—that a partnership should not be prosecuted where a partner has been acquitted. I do not accept that the situations are symmetrical. Typically, an offence will provide that an individual partner who in some way—I think that these are the words I used in my opening—consented or connived in the commission of an offence by the partnership will also have committed an offence. To establish the guilt of the individual, it is necessary, first, to establish that the partnership committed an offence. That condition cannot be fulfilled, obviously, if the partnership has been acquitted. However, there are numerous reasons why a prosecution against a particular partner might fail; for example, a lack of connivance or consent on the part of the individual. That does not mean that it should determine whether the partnership as an entity has committed an offence. That has to be determined by reference to the terms of the offence itself.

My noble friend the Duke of Montrose asked about the time limit of five years, which was also raised by the noble and learned Lord, Lord Cameron of Lochbroom. I think that I am right in saying that the Law Society of Scotland recommended 20 years. The faculty of Advocates recommended two years. There is no right answer to this. It is a judgment and, as I indicated in my opening remarks, the judgment was that five years relates to the period of prescription applying to most of the civil obligations to which the estate of a former partner might be subject following the dissolution of the partnership. The majority of consultees supported five years. Clearly, if this is a matter to which noble Lords wish to return in Committee, we can readily do so.

That picks up on another point made by my noble friend the Duke of Montrose about what happens when a partner dies after dissolution. The answer is that the estate of a partner will be liable on the same basis as other partners at the time of the dissolution. As I indicated, the situation is the same as for civil obligations under Section 9 of the Partnership Act. Indeed, the fact that someone may have died is one of the reasons why five years was chosen as a period that gives some finality but, at the same time, ensures that there is an opportunity for the Crown Office to mount a prosecution. Of course, there may be cases where a statutory time limit would—if I may use the non-legal expression—trump the five years if there is a statutory time limit from the time of the commission of the offence. My noble friend the Duke of Montrose also asked about the position with regard to individuals. He pointed out that Clause 2 does not have a similar five-year time limit. It is intended that no time limit should apply. It reflects the Scottish Law Commission’s view of existing law, which Clause 2 is intended to put beyond doubt—subject, as I said, to cases where there would be a statutory time limit.

The noble Baroness, Lady Liddell, asked whether the Balmers could be prosecuted if there was a 10-year limit. The answer is no. Under Clause 8(3), the Bill is drafted in such a way that it comes into effect only with regard to partnerships that dissolve after the date of the Bill coming into effect. The reason for this is that it should apply only to dissolutions post-commencement. To do otherwise and to make retrospective provision could readily fall foul of Article 7 of the European Convention on Human Rights.

[The Duke of Montrose]

Earlier, when talking about individuals, my noble and learned friend said that it was intended that no time limit should apply. Does that mean, if the individual is charged after the partnership, that there is no five-year limit at all?

[Lord Wallace of Tankerness]

That is indeed what I said. It is subject to the fact that there may well be an offence for which there is already in law a statutory time limit. Indeed, a number of these offences will have provisions in law which set a statutory time limit.

If this Bill proceeds to Royal Assent it will come into force the day after and there will not be the usual lapse of two months or until some future date set by order. It will take almost immediate effect.

My noble friend Lord Stephen asked what other enforcement options might be available to the court, as we had talked very much in terms of fines. That will obviously depend on the particular offence, but most typically it will be a fine. The offence may include imprisonment but one cannot imprison legal persons such as a company or partnership. I asked officials if it could mean that individual partners might be subject to a community service order but the answer is the same; a partnership as a legal entity could not be the subject of a community service sentence and therefore that provision could not, by joint or several responsibility liability, apply to individual partners. It could be that an individual partner may be prosecuted if the Lord Advocate considered it important. Enforcement of a fine could lead to confiscation of assets under proceeds of crime legislation. There may be relevant regulatory bodies that would then take cognisance of the fact that a crime had been committed and an offence established. That could have possible licensing consequences, but not necessarily ones imposed by the court.

My noble friend also asked why we provide in Clause 4 that the partnership must continue trading. This is to distinguish a change of membership from dissolution because change of membership may be a technical dissolution. There is no intention that an interruption to trading should cause Clause 4 to be inoperable. He suggested that if there had been a change through the assumption or resignation of a partner, it was very unlikely that there would be an immediate cessation of trading as well. The Bill envisages trading going on beyond the change in the partnership.

I am very grateful to the noble and learned Lord, Lord Cameron of Lochbroom, for his very detailed analysis. He asked whether it would not have been possible to say that a change in the membership of a partnership constituted a dissolved partnership. I thought, “Why didn’t we think of that?”. It is something that I will consider, although I suspect there are reasons and possible implications which have led to the proposal we have here. However, I will reflect on that point and would hope to write before Committee not only to the noble and learned Lord but to others who have taken part in this debate.

The noble and learned Lord also asked what assessment the court would make in terms of a dissolved partnership in determining a fine. I certainly defer to his judicial mind and experience when it comes to sentencing but, as we all recognise, when it comes to considering the appropriate level of a fine the judge balances the interests of society with the effect of the fine on those who will have to pay. When the Bill is enacted the court will know what fine would be enforced against individuals, and I have no doubt that counsel or a solicitor acting on behalf of the dissolved partnership and its partners would make appropriate representations to the court to take account of the assets of the individuals on whom the fine will fall.

A number of contributors to the debate raised the issue of a crime being committed prior to a change of membership in a partnership and the subsequent enforcement of the fine falling on somebody who has been assumed as a partner after the crime. The reason that after consideration the provision was included in the Bill is that it reflects the current position. For example, if there were an action for damages for delict that occurred before a change in membership and the court case took place after the change, the court order would then be enforced against the existing members of the partnership. Likewise, assuming no change in membership, if a criminal offence had been committed, a partnership convicted and a fine imposed, the fine would then be enforced using a procedure that is akin to that used for civil recovery following a court order.

The answer to some of the concerns about this may well lie in the fact that if you join a partnership and you are aware that a crime has been committed, any person doing proper diligence might well say, “I want to be indemnified against this and against the other partners”. If a partner is leaving, his fellow partners might say, “You know we have a criminal case hanging over us”. Contractual arrangements can be made in a partnership agreement for resignation or assumption. That is why it is very important that this does not apply to partnerships that are dissolved, or in which there is a change, prior to the Bill becoming law. It will also be important that proper notice is given so that people are aware of what the new law will be. At the briefing meeting we had the benefit of the chair of the Scottish Law Commission, the noble and learned Baroness, Lady Clark of Calton. The issue arose and I anticipate that we will come back to it and give it proper consideration.

The noble and learned Lord, Lord Cameron, asked what examination had been made of the legislative background to statutes that were limited to imposing fines on partnership assets. I am advised that the Scottish Law Commission carried out an extensive search of the statute books. Its finding appears to be that statutes in which there were such limitations tended to be GB or UK statutes, where it was certainly thought that what was being dealt with were cases of English partnerships established under the law of England and Wales.

The noble Lord, Lord Kerr, also referred to changes in partnerships, and to situations where there has been such a change that the people who are currently the partners are by and large, with perhaps a very few exceptions, not the partners who were there when the crime was committed. At that point one has to remember the entirety of the Scottish criminal justice system. Prosecution would be competent but it would be a matter for prosecutorial discretion. We have the benefit of two former Lord Advocates here. If there was a situation where a partnership that had been prosecuted bore no relationship other than a tenuous link to the one that existed at the time of the crime, the Lord Advocate of the day would take into account whether in these circumstances it would be in the public interest to prosecute. Certainly the Bill makes provision for the possibility of that happening, but there may well be other factors that the Lord Advocate of the day would feel that he or she had to take into account in the public interest.

Finally, the noble and learned Lord, Lord Cameron, asked what had happened to the 2003 joint report on partnership law from the Law Commission and the Scottish Law Commission. The Government of the day received the report in 2003. In 2006 they indicated that they would not undertake the wholesale reform of partnership law. I do not think that anyone could view the present law of partnership as a model of clarity, but on a day-to-day basis it generally works. While we have indicated that our ears are not closed to representations about a more general review of changes to partnership law in Scotland, I have to be frank with the Committee and indicate that we do not foresee any immediate chance of legislation or legislative time. Also, it would be only fair to say that with the passage of almost 10 years since the original joint law commissions’ report, there would inevitably be a need for further consultation and discussion to take account of any developments that had taken place during that time.

Nevertheless, it is the case that, as the Scottish Law Commission report indicated, while there was a preference on its part for the implementation of the broader reform of the law on partnerships, if that reform was not going to happen immediately or in the very near future, there was still a pressing need to address this issue of dissolved partnerships. That has been reflected in our debate. It may be that at some future date there will be a change in partnership law generally, and this would undoubtedly be picked up in that context. For now, though, as has been reflected, people feel that the loophole that has existed ought to be closed, and the Bill is a simple but comprehensive way of doing that. I look forward to further engagement with noble Lords as we proceed with the Bill, and I commend it to the Committee.

Justice and Security Bill [HL]

Duke of Montrose Excerpts

Wednesday 21st November 2012 Lords Chamber

[Lord Pannick]

I am very grateful to the Minister for confirming that the Government are proposing the deletion of Clause 11(2) and the order-making power.

I have a concern about Amendment 43, which includes the Supreme Court in the list of courts that will have power to make a CMP. Given the role of the Supreme Court as the final court of appeal in this jurisdiction, it is highly undesirable that it should decide points of law of public importance in judgments that the public and lawyers generally cannot see.

I do not intend to divide the House on Amendment 43. Given the amendments supported by the House earlier this evening, I would understand that the Supreme Court would have ample discretion to decide whether or not it is appropriate for it as the final court of appeal to order a CMP, and no doubt it would wish to take into account the undesirability, if so perceived, of the Supreme Court issuing judgments that, at least in part, the public and lawyers generally would not be able to see. However, I raise that concern.

[The Duke of Montrose]

My Lords, I thank my noble and learned friend for the way in which he presented his amendments. As he notified the House earlier, if his Amendment 59 is approved, my Amendment 60 will become superfluous. I raise the point that without Amendment 59, there would be a very real danger that anything that the Secretary of State had decided to amend by order in the Scottish courts would be seen as meddling in the affairs of the Scottish legal system. At present, there is nothing more likely to inflame the amour propre of the Scots than actions such as this.

The possibility of this problem was drawn to my attention by the Law Society of Scotland. If Amendment 59 is adopted, we will have a much clearer and more workable piece of legislation than one that is likely to cause controversy. If by any chance it is not carried, I will still wish to bring my amendment forward.

The Bill appears to be walking a fine line on what might be termed issues that might require a legislative consent Motion in the Scottish Parliament and those that would not. Even now, Clause 6(7)(c) of the Bill gives powers to the Court of Session. I understand that early in Committee it was briefly drawn to the attention of the Justice Committee in Edinburgh. Can my noble and learned friend tell the House whether this question of a legislative consent Motion has finally and satisfactorily been resolved?

[Lord Wallace of Tankerness]

My Lords, as I indicated, the intention is that the Supreme Court should not have available to it powers that are available in the lower courts, but the noble Lord, Lord Pannick, makes an important point with regard to judgments.

With regard to my noble friend’s concerns, it probably would have been the case that had we had a power that involved Scottish Ministers, a legislative consent Motion would have been required. Although the Bill refers to the Court of Session, it has become abundantly clear in our deliberations that the substance of these matters relates to national security, and national security is very clearly reserved to the United Kingdom Parliament and therefore a legislative consent Motion would not arise.