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Prescription (Scotland) Bill: Stage 1 Report Published in Scotland by the Scottish Parliamentary Corporate Body

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Prescription (Scotland) Bill: Stage 1 Report Published in Scotland by the Scottish Parliamentary Corporate Body Published 14 June 2018 SP Paper 354 32nd Report, 2018 (Session 5) Delegated Powers and Law Reform Committee Comataidh Cumhachdan Tiomnaichte is Ath-leasachadh Lagh Prescription (Scotland) Bill: Stage 1 Report Published in Scotland by the Scottish Parliamentary Corporate Body. All documents are available on the Scottish For information on the Scottish Parliament contact Parliament website at: Public Information on: http://www.parliament.scot/abouttheparliament/ Telephone: 0131 348 5000 91279.aspx Textphone: 0800 092 7100 Email: [email protected] © Parliamentary copyright. Scottish Parliament Corporate Body The Scottish Parliament's copyright policy can be found on the website — www.parliament.scot Delegated Powers and Law Reform Committee Prescription (Scotland) Bill: Stage 1 Report, 32nd Report, 2018 (Session 5) Contents Executive Summary _____________________________________________________1 Introduction ____________________________________________________________6 Background ____________________________________________________________7 What is prescription? ____________________________________________________7 The difference between negative prescription, positive prescription, and limitation ____7 Why has the Bill been brought forward? _____________________________________8 What does the Bill do? ___________________________________________________9 Outline of provisions ____________________________________________________9 General aims and objectives of the Bill_____________________________________13 The Consultation Process: Scottish Law Commission and Scottish Government _15 Specific provisions with in the Bill ________________________________________18 Section 3: the five year rule and exceptions _________________________________18 Exception for council tax and non-domestic rates ___________________________20 Exception for certain social security benefits and tax credits ___________________23 Section 5: the discoverability test _________________________________________28 The impact of the David T Morrison v ICL Plastics case ______________________28 The options_______________________________________________________29 Section 5: the new discoverability test __________________________________29 Section 8: the new start date for twenty year prescription _______________________32 The current law______________________________________________________33 The changes proposed in the bill ______________________________________33 Examples of the effect of the proposed change in the law ___________________33 Policy underlying the new start date and harsh cases ______________________34 Omissions and ongoing breaches _____________________________________37 Sections 6, 7 and 12: interruptions and extensions ____________________________38 Section 6: Obligations: twenty year prescriptive period and extension ___________38 Section 7: twenty year prescription and property rights _______________________40 Section 12: final disposal ______________________________________________40 Section 13: standstill agreements: five year prescription________________________41 Other issues___________________________________________________________46 Forfeiture ____________________________________________________________46 Language in the 1973 Act _______________________________________________46 Delegated powers provisions ____________________________________________48 Financial Memorandum _________________________________________________49 Delegated Powers and Law Reform Committee Prescription (Scotland) Bill: Stage 1 Report, 32nd Report, 2018 (Session 5) Policy Memorandum ____________________________________________________50 Conclusions on the general principles of the Bill ____________________________51 Annex A ______________________________________________________________52 Annex B ______________________________________________________________54 Annex C ______________________________________________________________56 Delegated Powers and Law Reform Committee Prescription (Scotland) Bill: Stage 1 Report, 32nd Report, 2018 (Session 5) Delegated Powers and Law Reform Committee The remit of the Delegated Powers and Law Reform Committee is to consider and report on the following (and any additional matter added under Rule 6.1.5A)— (a) any— (i) subordinate legislation laid before the Parliament or requiring the consent of the Parliament under section 9 of the Public Bodies Act 2011; (ii) [deleted] (iii) pension or grants motion as described in Rule 8.11A.1; and, in particular, to determine whether the attention of the Parliament should be drawn to any of the matters mentioned in Rule 10.3.1; (b) proposed powers to make subordinate legislation in particular Bills or other proposed legislation; (c) general questions relating to powers to make subordinate legislation; (d) whether any proposed delegated powers in particular Bills or other legislation should be expressed as a power to make subordinate legislation; (e) any failure to lay an instrument in accordance with section 28(2), 30(2) or 31 of the 2010 Act; (f) proposed changes to the procedure to which subordinate legislation laid before the Parliament is subject; (g) any Scottish Law Commission Bill as defined in Rule 9.17A.1; and (h) any draft proposal for a Scottish Law Commission Bill as defined in that Rule. (i) any Consolidation Bill as defined in Rule 9.18.1 referred to it in accordance with Rule 9.18.3. http://www.parliament.scot/parliamentarybusiness/CurrentCommittees/ delegated-powers-committee.aspx [email protected] 0131 348 5212 Delegated Powers and Law Reform Committee Prescription (Scotland) Bill: Stage 1 Report, 32nd Report, 2018 (Session 5) Committee Membership Convener Deputy Convener Graham Simpson Stuart McMillan Scottish Conservative Scottish National Party and Unionist Party Tom Arthur Neil Findlay Scottish National Party Scottish Labour Alison Harris Scottish Conservative and Unionist Party Delegated Powers and Law Reform Committee Prescription (Scotland) Bill: Stage 1 Report, 32nd Report, 2018 (Session 5) Executive Summary This section provides a full list of the Committee's recommendations. General aims and objectives of the Bill • The Committee notes that stakeholders are generally content that the Bill is a welcome reform to the law relating to negative prescription. • The Committee welcomes the greater certainty this Bill provides for the users of the law. • The Committee recognises that the Bill aims to achieve an overall balance between the rights and obligations of creditors and debtors. In particular, the Committee considered this overall balance when deliberating the effects of sections 3, 5, and 8 as discussed later in this report. The Consultation Process: Scottish Law Commission and Scottish Government • The Committee notes that welfare rights organisations appeared on the list of consultees to the Scottish Law Commission’s February 2016 discussion paper. • The Committee notes the response from the Justice Committee on the Scottish Law Commission consultation process. • The Committee notes that its Stage 1 scrutiny process for this Bill had reached a different audience to that of the Scottish Law Commission and Scottish Government consultations, particularly in relation to the welfare rights sector. The issues unpacked by the Committee’s Stage 1 enquiry relating to the welfare rights sector are discussed in this report. • Accordingly, the Committee recommends that the Scottish Law Commission review its consultation processes with a view to giving policy considerations a greater level of attention when deliberating on law reforms. Section 3: the five year rule and exceptions: council tax and non-domestic rates • The Committee notes that the Scottish Government regards the exception for council tax as reflecting the status quo. • The Committee also notes the response from SOLAR reiterating the preference of local authorities for the proposed exception in the Bill. • The Committee notes the response from COSLA and welcomes the clear explanation of the public policy landscape in relation to the collection of council tax. The Committee notes COSLA’s support for the exception from the five year prescription rule but also notes that this response was not politically endorsed. • The Committee also notes the points raised by the Law Society of Scotland, Govan Law Centre, and Citizens Advice Scotland in regard to the recovery of council tax debts. 1 Delegated Powers and Law Reform Committee Prescription (Scotland) Bill: Stage 1 Report, 32nd Report, 2018 (Session 5) • The Committee is mindful that there are public policy arguments for the exception. The Committee is also mindful of the arguments made that applying a twenty year prescription period to council tax is perceived by some witnesses to be unfair. • The Committee did not reach agreement as to whether the exception for council tax and business rates was appropriate. The Committee therefore recommends that the Scottish Government provides further rationale for excepting council tax and business rates from the five year rule in advance of Stage 2. • The Committee nevertheless agreed, in advance of Stage 2, to write to all 32 local authorities to ask how many council tax and business rates debts are still outstanding after five years and how many times local authorities have had to make use of the twenty year prescription period to seek payment of such debts. • The Committee also agreed in advance of Stage 2, to write to the Scottish Law Commission seeking an explanation for its decision to include
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