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Since the bill has been introduced, there have been on-going discussions with stakeholders, the Lord President and the judiciary about that. We are still at stage 1, so we have a bit to go, but as we move forward through the parliamentary process, we will be happy to provide further detail. At the moment, we are still working on the detail.

I do not. I will bring in my officials, but since the introduction of the bill, we have shown a willingness and an openness to work with the judiciary and stakeholders and to consider amendments prior to stage 2, so I do not agree with you.

Yes. Talks are on-going with all stakeholders and the legal sector.

Yes.

I would just like to thank the committee for its time, and I look forward to receiving your report.

We are working on the detail of that now; we are in discussion about that.

The bill seeks to take a risk-based and proportionate approach. The categorisation of the regulator has implications in respect of the operation of its regulatory functions. For example, a category 1 regulator must delegate its regulatory functions to an independent regulatory committee and establish a client protection fund, whereas category 2 regulators would not have such duties.

It is considered important that the bill contains a mechanism to alter the category of an existing or new regulator, should there be a significant change in how a regulator meets the relevant criteria under section 8(6). In order to strengthen the safeguards there, we intend to introduce amendments whereby the Lord President’s consent would be required before any changes are made to the regulatory category of a regulator.

We are also considering amendments that would limit the scope of how such changes may be sought by limiting that to being done at the request of certain bodies such as the regulators or the consumer panel.

In addition, there may be scope for a new regulator to enter the market, which may require consideration of its categorisation or a change to that categorisation in respect of changing circumstances. For example, the Association of Construction Attorneys has only six people in it, so we do not feel that it would be appropriate for it to be in category 1, given all the duties that are put on category 1 compared with category 2.

Yes.

The provision is intended to ensure that an appropriate regulator is always in place to regulate authorised legal businesses, should there be no other suitable regulator. Such intervention may be necessary because the members of the regulator may be involved in an on-going court case that might be disrupted, or because of transactions that might put them into difficulty. To avoid that and to respond to it, the Scottish ministers may intervene to create a body to become a new regulator or have another regulator, such as the Law Society, step in to take over the regulation, or they may even regulate the providers themselves.

In relation to when the power could be used, the provision is intended as a measure of last resort in specific circumstances and only in the event that a regulator finds itself unable to operate. It is designed to cover situations in which a regulator of authorised legal businesses gets into difficulty, such as a financial collapse or as a result of regulatory failures.

Moving on, as I mentioned when we were discussing section 35, given the similarity of the measures in section 49 with those in section 35, we are exploring amendments that would bring them together in one provision that would maintain the power to take action in urgent situations but would transfer it to the Lord President.

The general approach is that it is for the approved regulators to resolve regulatory conflict, in discussion with other regulators, as appropriate. However, should that prove to be impossible or unduly complicated, this power allows the Scottish ministers the flexibility to ensure that such conflicts can be resolved. As the provisions that would be made would depend on the detailed circumstances of any particular conflict that may arise and would address an issue that would be likely to require quick resolution, the use of subordinate legislation is considered to be appropriate. As was raised with the Law Society during its evidence, it is already subject to the oversight of a number of regulatory bodies, such as the Financial Conduct Authority, for the purposes of anti-money laundering and incidental financial business.

The bill also seeks to expand the oversight of the Scottish Legal Complaints Commission to allow it to set minimum standards for the first time. In addition, the bill introduces regulation of legal entities for the first time in Scotland, and we also have a system for the regulation of licensed providers, which it is hoped will be up and running soon. The Law Society will continue to be responsible for the regulation of individual legal practitioners and for some firms that operate across the border and that have regulatory responsibilities in each area of their operation. As has been acknowledged, the system is complex, and the regulation-making powers provide reassurance that any regulatory conflicts that may arise can be rectified.