You can’t eat empowerment

A signpost blog, to link to a briefing that I have in August’s Journal of the Law Society of Scotland on the Community Empowerment (Scotland) Act 2015.

The opening paragraph in the briefing has a lot in common with an earlier blog post, including a reference to the Manic Street Preachers. Thanks to the editor of the Journal for allowing me the freedom of artistic expression, or should I say freedom of speech, to deploy that musical mention. Believe it or not, this is the second time I have managed to shoehorn my taste in music into the hallowed pages of the Journal: see page 9 of the Journal of June 2010, when Malcolm Combe (then of Edinburgh) felt the urge to correct an erroneous credit of “Let’s Impeach the President” to Crosby, Stills and Nash.

As for the opening line in the briefing, I am 99% sure my inspiration for that was a chat with regular community empowerment correspondent Dr Peter Matthews. I did not credit him in the briefing, so allow me to rectify that here. His up to date thoughts on the new legislation can be found here.

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The Land Reform (Scotland) Bill, and how to get two articles for the price of one

It might not have been the lead story on all channels, but today was the deadline to respond to the Call for Evidence for the Land Reform (Scotland) Bill. Responses to the Call can be (or, in due course, will be) found here.

To coincide with this august land reform occasion, I had two pieces published today.

First, in the Conversation UK: Nobility may be up in arms, but Scotland’s land reforms look fairly tame.

Second, in the Herald’s Agenda slot: How the Government’s land reform proposals could have been more radical.

It will not take much analysis to see the similarities between the articles: indeed, at one stage it was a single article. It diverged into two when it became apparent during the editing process that the Conversation’s audience (in the UK and worldwide) might need a bit more background and comparison to other countries, in a way that could get in the way of a purely Scots article. Therefore, and with the blessing of the Scottish editor of the Conversation, I pitched a punchier version at the Herald and happily it was accepted, as eventually was a beefed-up version in the Conversation.

There might be a lesson for fellow writers there: if at first you don’t succeed, try and try again…

…fail a bit…

…then eventually try two different routes to success, and somehow get both.

It does not always work out like that, but it did this time.

So what is next for the Land Reform Bill? Analysis by the Rural Affairs, Climate Change and Environment Committee, then another two legislative stages at Holyrood. Stay tuned for further land reform developments.

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Land Reform Bill – Response to Call for Evidence

Below is the text I intend to submit to the Scottish Government’s Call for Evidence on the Land Reform Bill. If you have any comments, please let me know, ideally before close of business on Friday 14 August.

GENERAL

The significant amount of agricultural holdings content in the Bill may justify a change in short title, by the insertion of the words “and Agricultural Holdings” after “Land Reform” (i.e. “Land Reform and Agricultural Holdings…”). Whilst I see no doctrinal problem in including agricultural holdings reform within legislation branded under the “land reform” banner (as opposed to including it in a standalone agricultural holdings statute), the inclusion of “Agricultural Holdings” in the short title would tie this legislation with other measures that affect rural leases, notably the Agricultural Holdings (Scotland) Act 1991 and the Agricultural Holdings (Scotland) Act 2003. Whilst this could seem insignificant, such a step could in fact assist analysts and commentators in the future, not least by easing future database or internet searches.

PART 1 – Land rights and responsibilities statement

There is an argument such a statement should be contained in the primary legislation itself. That said, the Scottish Outdoor Access Code (which provides guidance to access takers under the Land Reform (Scotland) Act 2003) provides a precedent for a non-statutory yet very important (and Scottish Parliament approved) document that has largely been well received.

PART 2 – The Scottish Land Commission

The place of Gaelic

See my blog on this point, which I will replicate in my actual submission.

Tenant Farming Commissioner

The Commission is to comprise five Land Commissioners and the Tenant Farming Commissioner. The one Tenant Farming Commissioner’s role is very important and, as drafted, potentially onerous. Delegation to Land Commissioners (and others) by the Tenant Farming Commissioner is possible in terms of clause 23 and that should allow for a fair distribution of work, provided a practice of effective delegation was allowed to develop.

PART 3 – Information about control of land etc.

I note that the Bill does not contain the recommendation of the Land Reform Review Group (2014) that ownership of land in Scotland should be restricted to natural persons and European Union registered entities (Part 2, Section 5 – Owners of Land, paragraph 11). As explained there, such proposals were thought necessary because of the difficulties in finding information relating to entities incorporated in certain jurisdictions with lesser disclosure requirements than those which prevail in Scotland, the UK and the EU.

There are legitimate concerns about the effect such a rule might have on inward investment or existing investment. The following proposals are offered to suggest how certain schemes could be introduced that could have an incremental effect towards increasing transparency without have as drastic an effect on investment as (to take the strongest example) some kind of retrospective ban on non-EU entity ownership. This should not be taken as a rejection of the LRRG’s recommendation. Rather, it is an attempt to set out some alternatives that might be more comfortable to both the market and legislators.

Before considering such softer measures, it is submitted that a restriction could, if drafted properly, comply with Article 14 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (“ECHR”), which operates to prevent discrimination. It could also operate alongside any information request regime, such as the one contained in the Bill as drafted. A prohibition on (for example) a Canadian individual owning land directly could be problematic: no proposal to restrict the right of human beings to own land is recommended here.

Other provisions of the ECHR are also relevant to any proposed restriction, including the right to property under Article 1, Protocol 1 (“A1P1”). If existing property owners were forced to restructure arrangements that were entered into at a time when those arrangements were perfectly legal, such owners would have a legitimate cause to complain. By making the new rule prospective rather than retrospective, that concern is mitigated (albeit with the trade-off of allowing existing (potentially non-transparent) schemes to continue).

Another means by which a rule could be introduced would be to make the prohibition of non-EU entities non-absolute. Instead, a non-EU entity could be required to make a case to the Keeper of the Registers of Scotland as to why such an entity is the most suited for the landholding arrangement being proposed. (If this role was thought to be too burdensome for the Keeper, perhaps another relevant office holder, such as a Commissioner of the Scottish Land Reform Commission, could be tasked with it.) Making that case could be twinned with a scheme to compel publication of information that would not otherwise be readily obtainable. Any test would need to be framed in a way not to discourage entities that have a genuine business reason to, for example, retain LLC status in a state of the USA.

Turning now to the terms of Part 3 as drafted, care should be taken to ensure that “persons affected by land” should not be narrowly defined, or should not be left in a way as could be narrowly defined in future, and fees should not be set (or not left in a way so that they can be set) in a way that could price-out persons affected by land in terms of access to information (clause 35).

Sanctions for non-compliance with transparency requirements are also important. For some landowners, a potential financial penalty would be sufficient incentive to comply with any scheme. For others, finances might not be as much of an issue. Two alternative sanctions are proposed for consideration.

The first sanction scheme could be modelled on section 793 of the Companies Act 2006, which is a system designed to flush out information about who controls an asset. Owners of shares can find the entitlements that a shareholder would ordinarily expect withdrawn when they are not transparent about who controls the shareholding entity.

The analogy between incorporeal company shares and tangible land is not exact, so some adaptation would be needed. Further, the suspension of a statutory scheme (for shares) is simpler to demarcate than a sanction which would involve interfering with common law rights and obligations that have developed over many years. Be that as it may, a sanction along the lines of section 793 could be more effective against a (hypothetical) secretive landowner with ready access to finance than a fixed financial penalty would be.

An alternative sanction would be to provide that any owner that does not comply with an information request would be treated as having abandoned land. Here, the word “abandoned” is meant in the sense that is found in Part 3A of the Land Reform (Scotland) Act 2003 (introduced by section 74 of the Community Empowerment (Scotland) Act 2015). The effect of this would be to render the land susceptible to community acquisition without requiring the owner’s consent.

Part 5 – Right to buy land to further sustainable development – and Part 10 – Agricultural Holdings

As the committee will appreciate, the right to property is recognised in the ECHR, as expressed in A1P1. That seems to provide a starting point for a rights-based argument against land reform, but that must be balanced against competing rights such as Article 11 of the UN International Covenant on Economic, Social and Cultural Rights, which guarantees certain rights such as sanitation, food and housing. To paraphrase Professor Alan Miller of the Scottish Human Rights Commission, human rights are neither a red card to be deployed by landowners to dismiss land reform, nor a trump to card to be deployed by those who seek land reform.

This is particularly relevant when considering the provisions of Part 5 and Part 10 (Chapter 3 – Sale where landlord in breach). As drafted, these provide schemes that seek to balance the interests of those who might be involved in a land acquisition in accordance with those schemes. It will always be a matter for careful consideration as to whether this balance is correctly struck, but it might be noted that the hurdles for the community to clear – over and above the established sustainable development and public interest tests found in Parts 2 and 3 of the Land Reform (Scotland) Act 2003 – seem high (see clauses 47(2)(c) & (d)). The word “only” in clause 47(2)(c)(ii) in particular appears to give a strong hand to anyone who would wish to challenge a decision of the Scottish Ministers.

One overarching point remains: a community or a tenant right to acquire is predicated on there being a community or a tenant, as the case may be. If land reform is to go beyond reinforcing the rights of those on the ground – that being a policy decision for government – it would be necessary to open up schemes that are not purely based on whether people are, “resident in that postcode unit…, and entitled to vote, at a local government election, in a polling district which includes that postcode unit…” (clause 42(9)) or whether a person has a 1991 Act tenancy.

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Coimisean Fearainn na h-Alba – Ainm Gàidhlig, ach an e sin e?

Anns a’ Bhile Ath-leasachaidh Fearainn a chaidh fhoillseachadh o chionn ghoirid tha ullachaidhean cudromach airson fearainn na h-Alba. Ma thèid a cur an gnìomh, nì i ath-leasachadh air an lagh ceangailte ri aontaidhean àiteachais, riaghladh cìse oighreachdan spòrs am measg tòrr eile.

Tha rud eile anns a’ bhile: moladh Coimisean Fearainn na h-Alba a stèidheachadh. Mar a tha e sgrìobhte bidh ainm Gàidhlig aig a’ Choimisean a-rèir reachd, ach sin an aon uair a nochdas a’ Ghàidhlig anns a’ Bhile. Chan eil feum air eòlas Gàidhlig a bhith aig ball CFA. Gabhaidh argamaid làidir a dhèanamh gum bu chòir riatanas mar sin a bhith innte.

Tha diofar riatanasan reachdail gum feum neach labhairt Gàidhlig a bhith air buidhnean rianachd croitearachd (fo na diofar ainmean Ùghdarras nan Croitearan agus Coimisean nan Croitearachd) agus Cùirt an Fhearainn an Alba fad bhliadhnaichean. Tha ceangal mar sin le diofar bhuidhnean fearainn Albannaich.

Tha inbhe agus cor na cànain air atharrachadh rè na bliadhnaichean bho na chaidh lagh croitearachd agus Cùirt Fhearainn na h-Alba a chur air bhog. Tha seo a’ ciallachadh nach eil an aon fheum air neach labhairt Gàidhlig air adhbharan conaltraidh ri linn ‘s gu bheil Gàidhlig agus Beurla, no dìreach Beurla, ann an sgìrean a bha Gàidhealach gu tradaiseanta. Tha e soilleir gu bheil nas lugha feum practaigeach air neach labhairt Gàidhlig am measg Coimiseanairean Fearainn na h-Alba.

Ge-tà, a-rèir Achd na Gàidhlig (Alba) 2005 agus dleastanasan Riaghaltas na h-Alba (agus gu dearbh Riaghaltas an RA) feumar taic a chumail ri mion-chànanan aig ìre eadar-nàiseanta. Mar sin gabhaidh argamaid a dhèanamh gum bu chòir co-dhiù tuigsinn air a’ Ghàidhlig a bhith am measg luchd-obrach a’ Choimisein agus gu bheil feum air a leithid anns an reachdas fhèin. ‘S dòcha gum b’ urrainnear a ràdh nach eil feum air dealas sònraichte dhan Ghàidhlig anns an reachdas seo ri linn ‘s gu bheil structar leasachaidh farsainn airson a’ Ghàidhlig anns an latha a th’ ann. Ach bhiodh dealas poblaich don chànan agus an coimhearsnachdan a tha ga cleachdadh, a bharrachd air leantainn riaghlaidhean croitearachd agus Cùirt an Fhearainn an Alba, gu math freagarrach agus feumail.

Anns an seadh buannachdan co-aimsireile do Choimisean Fearainn na h-Alba bho dhealas don Ghàidhlig, ‘s dòcha gun gabhadh tuigsinn air ainmean àite Gàidhlig a sgaoileadh agus mothachadh air eachdraidh an fhearainn is mar a bha e air a chleachdadh.

‘S dòcha gum biodh buannachdan eile don chànan agus cultar na h-Alba ach tha iad doirbh a mheasadh agus a thomhais agus mar sin cha bhiodh buaidh practaigeach aca air obair làitheil Coimisean Fearainn na h-Alba sam bith. Mar sin cha tèid an cnuasachadh an seo.

Tha modail dealas don Ghàidhlig sìmplidh: faic earrann 1(5) Achd Cùirt an Fhearainn an Alba 1993 agus earrann 4 Achd Croitearan (Alba) 1993. (Chan eil an dàrna eisimpleir ceart cho iomachaidh an seo air sgàth gu bheil taghadh na lùib seach cur an dreuchd.)

Tha an t-àm agus suidheachadh ceart do Riaghaltas na h-Alba dealas soilleir a dhèanamh dhan Ghàidhlig mar chànan bheò. An gabh iad an cothrom?

Tha a’ puing seo air a cnuasachadh nam fhreagairt gu Gairm Fianais Riaghaltais na h-Alba.

Mòran taing do mo bhràthair Coinneach a chuidich leis a’ Ghàidhlig ach tha uallach ormsa airson mearachdan sam bith.

ENGLISH SUMMARY

This blog suggests that the Scottish Land Commission that is proposed by the Land Reform Bill should have a specific commitment to Scots Gaelic beyond a Gaelic title, drawing an analogy with the provision for Gaelic in the Scottish Land Court Act 1993 and the Crofters (Scotland) Act 1993. Whilst it is acknowledged that there might not be as pressing a need for Gaelic in terms of a need to communicate, there are other arguments for the express inclusion of a commitment to Gaelic in the legislation: both in terms of a legal commitment to a minority language and perhaps even in terms of a knowledge of place names. This will form part of my submission to the Scottish Government’s Call for Evidence on the Land Reform Bill.

Thanks to my brother Coinneach for his help with the Gaelic. The usual disclaimer applies: all mistakes are my responsibility.

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Ownership, shares and fitba

BBC Sport recently reported a decidedly business oriented story: Rangers withdraw rights of four shareholders.

The ongoing shenanigans at Ibrox have attracted plenty commentary (including some on this blog), whilst showcasing aspects of Scots (and UK) law to an interested audience. In fact, I have periodically suggested – only half in jest – that enough content has been generated by L’Affaire Rangers to form the syllabus of a viable course at Law School. New-fangled advanced notices over land, an important court case about security over a future income stream (i.e. season ticket money in years to come), tax law, and the operation of the Companies Act 2006 as regards directors’ duties or disqualification could all feature. So too could a story about the rights of shareholders under that legislation, which is central to company law in the UK.

Extracting from the BBC report:

Rangers have withdrawn the rights of four shareholders to vote, collect a dividend or trade their stake.

Formal requests for information about who ultimately owns the stakes in the company were sent to shareholders and four have so far not responded.

Until ownership information is provided, the shares held by the four companies are essentially worthless…

The shares held by the four groups represent 10.4% of the company.

Directors are trying to identify who owns the [8,500,000 shares].

Fan groups have regularly sought more information about the owners of [certain shareholding companies], who were among the original shareholders when Charles Green’s consortium bought the business and assets of Rangers Football Club plc as it entered liquidation.

[The shareholding companies] failed to respond when the directors sent the request for ownership information under section 793 of the Companies Act 2006.

It is a criminal offence to provide false information under the terms of the Act.

The articles of association of Rangers International Football Club allow the directors, in the event of a default of section 793 notices, to withdraw voting rights, dividend payments and the ability to register share trades. All four shareholders have been informed for their default and the restrictions will remain in place until the necessary ownership information is provided.

Here, we have an example of a system that is designed to flush out information about who controls an asset. The system has teeth: the relevant provisions nestled around section 793 can indeed withdraw the entitlements a shareholder would ordinarily expect.

Now, time for a land reform analogy.

The new Scottish Land Reform Bill contains provisions that are designed to flush out information about who controls land. Note that in the normal situation, who owns the land will be clear, as publication of ownership in a public register is a condition precedent for the acquisition of land rights in Scotland.

Hypothetically, that ownership entity might be a company that is registered overseas, does not enter into much correspondence, and does not publish accounts in the way a UK company is required to.

If that entity acts in that way, what sanction should they face (if any)?

Rangers provides a prime example of an owner being deprived of entitlements for not playing ball. Could such a system work for Scotland ‘s land?

The analogy between incorporeal company shares and tangible land is not exact, so some adaptation would clearly be needed. Further, the suspension of a statutory scheme (for shares) is simpler to demarcate than a sanction which would involve interfering with common law rights and obligations that have developed since before Lord Stair brought together his collected wisdom on matters Scots law in the 17th century. Be that as it may, it does provide something to think about, and a sanction along such lines could be more effective against a (hypothetical) rich, secretive landowner than a fixed financial penalty would be.

A final comment: this is of tangential relevance to the proposal of the Land Reform Review Group to restrict ownership of land in Scotland to natural persons and EU registered entities. That proposal seems to have been shelved, although some are arguing strongly for its inclusion in the final legislation.

What is that proposal’s relevance to this blog? Over-simplified, a robust system for encouraging the disclosure of controlling information seems less necessary if UK or EU disclosure requirements are already met by incorporating a landowning entity in a transparent jurisdiction in the first place.

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Pushing the boundaries of pro bono student law clinic activity

A signpost blog, to link to an Opinion piece I have in July’s Journal of the Law Society of Scotland.

As noted there, the article builds on the presentations and discussions at the recent SULCN event, hosted by the University of Aberdeen and Aberdeen Law Project. I could have said much more, but with it being an Opinion piece I was (quite legitimately) kept to a strict word limit by the editor of the Journal. That being the case, self-publishing means I can be more wordy on WordPress. Thus, taking advantage of my corner of the blogosphere, I add further content here.

First, here is a link to another Journal article by fellow University of Strathclyde Law Clinic alumnus Emma Boffey. She explains what is meant by pro bono expenses orders; I only had room for a throwaway remark in my own piece. At another level, that article also shows how a law clinic can play a role in campaigning for reform.

Second, one law clinic in England has recently provided an example of specialisation. Queen Mary University of London offers advice and support for victims of so-called revenge pornography. This service will enable students to build up expertise in this area, which in turn will allow them to use that expertise to help affected individuals, all the while highlighting problems with the existing law or support packages by the very simple fact there is a demand for this service. (Presumably, if there was no demand, there would be no need for the service.)

Returning to my article, what should be made of this potential for student law clinics, perhaps through public interest litigation or community legal education projects? That depends on what students drive forward, hopefully supported by sympathetic universities and the legal profession as a whole. If you know of anything that is relevant to the content of this blog or my article, please let me know. Failing that, perhaps I should report back in a few years to see what further developments have taken place in Scotland and elsewhere.

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Land Reform (Scotland) Bill introduced to Holyrood

The much anticipated Land Reform (Scotland) Bill was introduced to the Scottish Parliament on 23 June 2015. Plenty has been written about it already, with analysis by:

Andy Wightman (for a Scots and UK audience);

Andrew Tickell;

Calum MacLeod;

Brian Wilson; and

(for the landowners) Scottish Land and Estates

I published a few tweets to give my instant reaction (starting here).

All of this gives a flavour of the views on the proposed legislation, which it should be noted is: a) separate to the recent Community Empowerment (Scotland) Act; and b) bound to pass though Holyrood, as only the Scottish Conservative and Unionist Party are likely to vote against or abstain when it comes to a vote. Labour, the Liberal Democrats, the Greens and the Scottish National Party will, in all likelihood, line up behind this legislation, so the important thing for Parliament and commentators to do now is ensure what gets passed is a workable and fit-for-purpose scheme.

For those who have been following the debate, there are no particular surprises in the Bill, but is notable that succession is not included. The rules of inheritance – which can have a definite land reform effect (per my previous blog) – are being dealt with separately. (For information, the Scottish Government is proceeding on the basis ‘rights in succession should no longer depend on the type of property‘, so the distinction between land and moveable property when it comes to a general freedom of testation looks doomed.) Also of note is the inclusion of agricultural holdings in a bill that is headed ‘land reform’: arguments that the reform of landlord and tenant law as it applies to rural land should not be under an umbrella of land reform have not found favour. In fact, the most detailed provisions in the Bill are on agricultural holdings and the new modern limited duration tenancy. Those detailed provisions deserve detailed consideration: forgive me for not providing that here.

A call for evidence has been issued by the relevant Holyrood Committee, with a deadline of 14 August 2015. In terms of what I intend to mention in my own response, my key point will be about the rules (or lack thereof) about ownership of land by non-EU entities.

Clause 35 of the Bill, headed ‘Right of access to information on persons in control of land’, allows for regulations to be made about transparency and provide for ‘civil penalties and offences’ for non-compliance. Whilst this is an innovation on the law as it stands, nothing the Scottish Parliament does can make (for example) a Delaware registered company more transparent. As such, how effective these provisions are will turn on how stringent and police-able the regulations are. Arguably, a clean ECHR and EU law compliant prohibition on non-EU entitites owning land, as the Land Reform Review Group suggested, should also form part of the package.

I will make a fleshed out version of that point and one or two other points in my submission to the call for evidence (the rules about intervention to further sustainable development in Part 5 of the Bill being a prime candidate for further analysis), but all of that is for another day. When that day comes, I will publish my response on this blog. As ever, feel free to share any of your own thoughts in the comments below.

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