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We will talk to stakeholders, and I will then get back to you on that. I appreciate the points that you have made.

From reading the bill as a whole, I think that it is clear that the nature of the judicial factor’s role is fiduciary. While the term “fiduciary duty” is not used in the bill, the Government considers that the bill will achieve the same effect.

A fiduciary duty is essentially a duty to act in good faith in the interests of another, rather than in one’s own self-interest. Section 10 of the bill makes it clear that judicial factors have

“to hold, manage, administer and protect the factory estate for the benefit of persons with an interest in the estate.”

It also requires judicial factors to

“exercise care, prudence and diligence”

and

“take professional advice when appropriate.”

The Scottish Law Commission told the committee that it had set out

“very clearly in”

its

“report that the essence of the institution was that it was fiduciary”—[Official Report, Delegated Powers and Law Reform Committee, 16 April 2024; c 16.]

and that it was not considered “necessary” to include a specific reference to that in the bill.

I understand that some stakeholders have suggested that the matter should be clarified, but others, such as the SLC and the Faculty of Advocates, have pointed out that to add even a simple statement to that effect could have unintended consequences. However, it might be possible to add something to the explanatory notes to the bill in order to make that point clearer for users of the legislation, and I am willing to consider that further.

Section 23 of the bill contains a general rule that any costs of litigation that is pursued by the judicial factor

“on behalf of the factory estate”

are

“to be met from the factory estate.”

The general rule is, however, “Subject to section 24” of the bill. Under section 24, the court is given the power to find a judicial factor personally liable if they have breached their duty and the court finds it “appropriate” to hold them “personally liable”.

We need to strike the right balance to allow a judicial factor reasonable space to manage an estate in good faith. I do not think that a judicial factor should be found personally liable if, with the benefit of hindsight, their actions are found to have been unreasonable but there has been no breach of duty.

Given the continuing need for competent judicial factors, we must be careful, and we do not necessarily want to put blocks in the way of people wanting to be appointed. Allowing for judicial factors to be held personally liable for taking actions that do not amount to a breach of duty would, in my view, be likely to discourage judicial factors from pursuing litigation that is in the interests of the estate, and perhaps even discourage individuals from acting as judicial factors altogether.

I consider that the bill and the 1977 act work alongside each other. The bill allows for the appointment of a judicial factor to manage the estate of a missing person. If the missing person is subsequently declared dead by way of an application under the 1977 act, the purpose for which the judicial factor was appointed would no longer exist and the judicial factory would be terminated. As the committee heard, families of missing people may not want to apply immediately for a declarator, and the appointment of a judicial factor to manage the missing person’s estate is an alternative.

You would think that they were an accountant per se.

You raise a valid point. In general, a layperson would probably assume that the Accountant of Court was an accountant, so we could perhaps look at how we make that a bit clearer.

If I may, I will bring in Michael Paparakis, because he has a lot of knowledge of the history and the technical aspects of the role.

We are happy to consider that further.

I will bring in Michael Paparakis. On the basis of my experience of being a minister for a year, I note that the Trusts and Succession (Scotland) Bill, which went through last year, was on the same timescale, in that work had first been done 10 years ago. There is a bit of a challenge in relation to the parliamentary timetable and where we can slot in such legislation, but we have taken through eight SLC bills, and we are determined to keep progressing with them. Michael may want to come in, as he has a lot of history with this.

We are at the early stages of the process, so the exact drafting approach has not yet been agreed. However, the aim is to ensure that a judicial factor who is appointed to an estate can exercise their functions in relation to the whole of the estate, regardless of where in the United Kingdom the property is situated, and ensure that the relevant property is appropriately managed. As such, it is intended that the section 104 order will extend some of the provisions in the bill to the whole of the United Kingdom, including provisions on the vesting of property in a judicial factor, the ingathering of property, a judicial factor’s functions and information sharing.

The intention is also to explore the application of the requirement to comply with the information requests to bodies that are excluded under the bill, such as UK Government departments and bodies with other reserved functions. Officials have made initial contact with relevant UK Government departments about seeking a section 104 order. Those discussions have been positive thus far, and we will continue to have them as the bill progresses.