That is indeed what I said. It is subject to the fact that there may well be an offence for which there is already in law a statutory time limit. Indeed, a number of these offences will have provisions in law which set a statutory time limit.
If this Bill proceeds to Royal Assent it will come into force the day after and there will not be the usual lapse of two months or until some future date set by order. It will take almost immediate effect.
My noble friend Lord Stephen asked what other enforcement options might be available to the court, as we had talked very much in terms of fines. That will obviously depend on the particular offence, but most typically it will be a fine. The offence may include imprisonment but one cannot imprison legal persons such as a company or partnership. I asked officials if it could mean that individual partners might be subject to a community service order but the answer is the same; a partnership as a legal entity could not be the subject of a community service sentence and therefore that provision could not, by joint or several responsibility liability, apply to individual partners. It could be that an individual partner may be prosecuted if the Lord Advocate considered it important. Enforcement of a fine could lead to confiscation of assets under proceeds of crime legislation. There may be relevant regulatory bodies that would then take cognisance of the fact that a crime had been committed and an offence established. That could have possible licensing consequences, but not necessarily ones imposed by the court.
My noble friend also asked why we provide in Clause 4 that the partnership must continue trading. This is to distinguish a change of membership from dissolution because change of membership may be a
technical dissolution. There is no intention that an interruption to trading should cause Clause 4 to be inoperable. He suggested that if there had been a change through the assumption or resignation of a partner, it was very unlikely that there would be an immediate cessation of trading as well. The Bill envisages trading going on beyond the change in the partnership.
I am very grateful to the noble and learned Lord, Lord Cameron of Lochbroom, for his very detailed analysis. He asked whether it would not have been possible to say that a change in the membership of a partnership constituted a dissolved partnership. I thought, “Why didn’t we think of that?”. It is something that I will consider, although I suspect there are reasons and possible implications which have led to the proposal we have here. However, I will reflect on that point and would hope to write before Committee not only to the noble and learned Lord but to others who have taken part in this debate.
The noble and learned Lord also asked what assessment the court would make in terms of a dissolved partnership in determining a fine. I certainly defer to his judicial mind and experience when it comes to sentencing but, as we all recognise, when it comes to considering the appropriate level of a fine the judge balances the interests of society with the effect of the fine on those who will have to pay. When the Bill is enacted the court will know what fine would be enforced against individuals, and I have no doubt that counsel or a solicitor acting on behalf of the dissolved partnership and its partners would make appropriate representations to the court to take account of the assets of the individuals on whom the fine will fall.
A number of contributors to the debate raised the issue of a crime being committed prior to a change of membership in a partnership and the subsequent enforcement of the fine falling on somebody who has been assumed as a partner after the crime. The reason that after consideration the provision was included in the Bill is that it reflects the current position. For example, if there were an action for damages for delict that occurred before a change in membership and the court case took place after the change, the court order would then be enforced against the existing members of the partnership. Likewise, assuming no change in membership, if a criminal offence had been committed, a partnership convicted and a fine imposed, the fine would then be enforced using a procedure that is akin to that used for civil recovery following a court order.
The answer to some of the concerns about this may well lie in the fact that if you join a partnership and you are aware that a crime has been committed, any person doing proper diligence might well say, “I want to be indemnified against this and against the other partners”. If a partner is leaving, his fellow partners might say, “You know we have a criminal case hanging over us”. Contractual arrangements can be made in a partnership agreement for resignation or assumption. That is why it is very important that this does not apply to partnerships that are dissolved, or in which there is a change, prior to the Bill becoming law. It will also be important that proper notice is given so that
people are aware of what the new law will be. At the briefing meeting we had the benefit of the chair of the Scottish Law Commission, the noble and learned Baroness, Lady Clark of Calton. The issue arose and I anticipate that we will come back to it and give it proper consideration.
The noble and learned Lord, Lord Cameron, asked what examination had been made of the legislative background to statutes that were limited to imposing fines on partnership assets. I am advised that the Scottish Law Commission carried out an extensive search of the statute books. Its finding appears to be that statutes in which there were such limitations tended to be GB or UK statutes, where it was certainly thought that what was being dealt with were cases of English partnerships established under the law of England and Wales.
The noble Lord, Lord Kerr, also referred to changes in partnerships, and to situations where there has been such a change that the people who are currently the partners are by and large, with perhaps a very few exceptions, not the partners who were there when the crime was committed. At that point one has to remember the entirety of the Scottish criminal justice system. Prosecution would be competent but it would be a matter for prosecutorial discretion. We have the benefit of two former Lord Advocates here. If there was a situation where a partnership that had been prosecuted bore no relationship other than a tenuous link to the one that existed at the time of the crime, the Lord Advocate of the day would take into account whether in these circumstances it would be in the public interest to prosecute. Certainly the Bill makes provision for the possibility of that happening, but there may well be other factors that the Lord Advocate of the day would feel that he or she had to take into account in the public interest.
Finally, the noble and learned Lord, Lord Cameron, asked what had happened to the 2003 joint report on partnership law from the Law Commission and the Scottish Law Commission. The Government of the day received the report in 2003. In 2006 they indicated that they would not undertake the wholesale reform of partnership law. I do not think that anyone could view the present law of partnership as a model of clarity, but on a day-to-day basis it generally works. While we have indicated that our ears are not closed to representations about a more general review of changes to partnership law in Scotland, I have to be frank with the Committee and indicate that we do not foresee any immediate chance of legislation or legislative time. Also, it would be only fair to say that with the passage of almost 10 years since the original joint law commissions’ report, there would inevitably be a need for further consultation and discussion to take account of any developments that had taken place during that time.
Nevertheless, it is the case that, as the Scottish Law Commission report indicated, while there was a preference on its part for the implementation of the broader reform of the law on partnerships, if that reform was not going to happen immediately or in the very near future, there was still a pressing need to address this issue of dissolved partnerships. That has been reflected in our debate. It may be that at some future date there will be a change in partnership law generally, and this would undoubtedly be picked up in that context. For now, though, as has been reflected, people feel that the loophole that has existed ought to be closed, and the Bill is a simple but comprehensive way of doing that. I look forward to further engagement with noble Lords as we proceed with the Bill, and I commend it to the Committee.