Draft Scotland Act 1998 (Insolvency Functions) Order 2017

Lesley Laird Excerpts

Monday 4th December 2017 General Committees

[Lesley Laird (Kirkcaldy and Cowdenbeath) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Chope. As the Minister set out, the order is part of a package of measures aimed at updating and modernising corporate insolvency in Scotland, particularly insolvency rules for companies. The law on winding up in Scotland is complex because it is a mixed area of competence. Section C2 of schedule 5 to the 1998 Act provides:

“In relation to business associations…the general legal effect of winding up”

is reserved, but

“the process of winding up, including the person having responsibility for the conduct of a winding up or any part of it, and his conduct of it or of that part”

is excepted.

It is not always clear whether a winding-up matter relates to the general legal effect of winding up, or whether it falls within the exception provided for the process of winding up. Accordingly, rather than attempt the complicated exercise of trying to assess, as part of the modernisation process, which rules relate to a reserved matter and which do not, the draft order provides for the mutual conferral of functions on a Minister of the Crown and Scottish Ministers under sections 63 and 108 of the 1998 Act, so that each can make winding-up rules for company insolvency in Scotland irrespective of whether they relate to reserved matters. This approach makes it clear that each Administration has the power to make, in the exercise of those powers, all subordinate legislative provision on winding-up matters without any doubt being cast on the scope of the relevant enabling powers. The Labour party therefore supports the draft order.

Question put and agreed to.