Section B10: Emergency Powers

Purpose and Effect

This Section reserves emergency powers.

General

This reservation is concerned with the circumstances in which unusual powers can be exercised for enabling effective rule in the event of a crisis. In practice this has often involved the deployment of the armed forces for example to provide essential services.

The main statutory provisions are set out in the Emergency Powers Act 1920. This gives power for Her Majesty to declare a state of emergency and to make regulations by Order in Council for securing the essentials of life to the community e.g. for the preservation of peace, and for securing and regulating the distribution of food, water, fuel etc.

In addition servicemen may be employed under the royal prerogative in extraordinary circumstances to deal with particular crises.

Planning by the civil authorities for emergencies is not, however, caught by the reservation.

Details of Provisions

Legislative competence on all matters relating to emergency powers is reserved. In particular this covers the circumstances in which such powers can be exercised, what the powers should be and any ancillary provision such as compensation for loss arising from the exercise of these powers.

Executive Devolution

The following functions have been made concurrently exercisable by a Minister of the Crown and the Scottish Ministers by the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999 (S.I. 1999/1750).

Section B11: Extradition

Purpose and Effect

This Section reserves extradition.

General

Extradition is the process under which a person may be surrendered by one state to another so as to face trial in that other state for an alleged crime.

There are restrictions upon who can be extradited, for example, covering political offences or speciality (under which the person can only be tried for the offence for which the extradition was ordered).

Parliamentary Consideration

Details of Provisions

Legislative provision covering matters relating to extradition are reserved. In particular this covers the Extradition Act 1989 which consolidated and amended the Extradition Acts 1870 to 1935 and which provides the procedures for extraditing persons to states other than the Republic of Ireland. It also covers extradition to the Republic of Ireland which is carried out under a procedure known as the backing of warrants, under the Backing of Warrants Act 1965. It also covers extradition to the United Kingdom although there is in practice scope for only very limited provision under UK law since obligations on states to extradite persons to the UK are very largely a matter for international law and the law of the state in question.

Executive Competence

The following functions have been included in the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999 (S.I. 1999/1750).

Section B12: Lieutenancies

Purpose and Effect

This Section reserves the subject-matter of the Lieutenancies Act 1997.

General

The Office of the King's Lieutenant now known as Lord-Lieutenant stems back to the middle ages. Until comparatively recent times the office holders were principally concerned with the operation of the Militia Acts. The functions of Lord-Lieutenants are now largely ceremonial and include representing the Crown in various capacities e.g. attending visits, attending upon visiting Heads of State, presenting medals and colours. It is usual for the Lord-Lieutenant to chair and advise on the membership of the local advisory committee on justices of the peace, which makes recommendations about who should be appointed JPs.

Details of Provisions

The subject-matter of the Lieutenancies Act 1997 is reserved. That Act makes provision for the division of Scotland into areas for lieutenancy purposes, for the appointment and removal of Lord-Lieutenants, Lieutenants, deputy Lieutenants, vice Lord-Lieutenants and clerks of lieutenancies and about the functions and privileges of each office.

Executive Devolution

The following functions have been included in the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999 (S.I. 1999/1750).

Advice to The Queen

Special arrangements for giving advice to The Queen were described in a Prime Ministerial answer on 30 June 1999 (WA col 215) and an associated paper deposited in the House of Commons Library. Part of that answer was as follows:

There are some matters in respect of which the Prime Minister gives advice to Her Majesty on the exercise of Her functions and on which it is appropriate for the Prime Minister to consult or to take advice from the First Minister. These matters include recommendations of Scottish candidates for honours and dignities, which are a reserved matter, and advice on the appointment of Lord Lieutenants in Scotland, the Lord High Commissioner to the General Assembly of the Church of Scotland and members of the Royal Commission on Environmental Pollution and the Forestry Commission.

Section B13: Access to information

Purpose and effect

This Section reserves public access to information held by public bodies subject to certain exceptions. By so doing, it clarifies the extent to which the Scottish Parliament can legislate about public access to information held by public bodies (what is commonly referred to as "freedom of information"). It was added by Article 5 of the Scotland Act 1998 (Modifications of Schedules 4 and 5) Order 1999 (S.I. 1999/1749).

Details of Provisions

This Section reserves public access to information held by public bodies or holders of public offices (including government departments and persons acting on behalf of the Crown).

There is excepted from that reservation information held by the Parliament, any part of the Scottish Administration, the Scottish Parliamentary Corporate Body and any Scottish public authority with mixed functions or no reserved functions. However, information which has been supplied by a Minister of the Crown or government department and which is held by any of those bodies in confidence continues to be reserved. Subject to that qualification, however, the Scottish Parliament can legislate about information held by any of those bodies.

Head C: Trade and Industry

Section C1: Business Associations

Purpose and Effect

This Section reserves business associations, subject to certain exceptions.

General

This reservation is designed to ensure the reservation of a common United Kingdom system for the regulation of companies and other business organisations in order to preserve a level playing field for business within the United Kingdom.

Parliamentary Consideration

Details of Provisions

Reservation

This Section reserves the creation, operation, regulation and dissolution of types of business association.

Business association is defined in the interpretation part as any person (other than an individual) established for the purpose of carrying on any kind of business, whether or not for profit; and "business" is defined as including the provision of benefits to the members of an association. Accordingly, types of business associations will therefore include companies, whether or not registered under the companies legislation, partnerships, building societies, friendly societies, industrial and provident societies, European economic interest groupings (in terms of Article 1 of Council Regulation (EEC) No. 2137/85). This is not an exclusive list: any other type of business association which fell within this definition would be covered by the reservation.

The reserved matters are:

(a)      the creation of types of business associations, such as the manner in which limited liability companies are incorporated by registration under the Companies Act 1985 and matters relating to their constitution and membership;

(b)     the operation of types of business associations. This includes matters relating to the operation of the internal structure and organs of the type of business association, such as the appointment and powers of officers or boards of directors. It also includes matters such as the liability of members and officers of the association to the association and to its creditors;

(c)     the regulation of types of business association. This includes matters such as the authorisation, registration, supervision and investigation of business associations and their relationships and disqualification of persons from involvement in business associations and other civil or criminal sanctions; and

(d)     the dissolution of types of business associations. This includes the circumstances or procedures giving rise to the dissolution of a business association.

The reservation does not, of course, prevent the Scottish Ministers from establishing any business association, such as a company, for devolved purposes but any such company would require to comply with the relevant Act of the UK Parliament. What is reserved is the legislative competence to provide how companies can be created, operated and regulated.

The reservation also does not prevent the Scottish Parliament from legislating on Scots private law matters which apply to business associations, such as applying some provision about contract or liability for damages to companies, as long as the law concerned affects devolved and reserved matters consistently, as provided in section 29(4) of the Act. If the Secretary of State considered that any such legislation would have an adverse effect on the operation of the law as it applies to reserved matters, such as companies legislation, he could make an order under section 35(1) preventing the Bill from being submitted for Royal Assent.

Exceptions

What is excepted from the reservation is the creation, operation, regulation and dissolution of:

(a)     particular public bodies or public bodies of a particular type established by or under any enactment. This is to ensure that the Scottish Parliament is able by or under any enactment to create and provide for the operation, regulation and dissolution of any public bodies for devolved purposes. These might include a particular statutory body, or types of statutory bodies, such as local authorities or other bodies required to carry on activities within a devolved area such as in the fields of health, education, the environment, legal aid, arts, sport, urban regeneration. This exception therefore permits the Parliament to establish public bodies for devolved purposes only: it would not permit the Parliament to establish bodies for purposes relating to any of the reserved matters; and

(b)     charities. This exception is required because business associations are defined in such a way as to catch any association carrying on a business, whether or not for profit. It would therefore catch charities. However, it is intended that the Scottish Parliament should be able to legislate to provide for how charities may be created, operated, regulated and dissolved under Scots law.

Section C2: Insolvency

Purpose and Effect

This Section reserves aspects of insolvency and winding up. It has been amended by S.I. 2001/1456.

General

Most matters relating to the insolvency and winding up of business associations are reserved. However, where there are substantial differences in insolvency law and practice between England and Wales on the one hand and Scotland on the other affecting certain matters (as for example, in the case of matters relating to receiverships or the process of winding up), these matters are excepted from the general reservation.

A limited number of matters relating to the insolvency of all persons (and not only to the insolvency of business associations) are also reserved under this Section. These are the reservations relating to preferred or preferential debts, regulation of insolvency practitioners and co-operation of insolvency courts.

Paragraph 23 of Schedule 8 also provides for certain non-reserved functions of the Registrar of Companies in Scotland and the Assistant Registrar of Friendly Societies for Scotland to be transferred to the Accountant in Bankruptcy who is an office-holder in the Scottish Administration. This means that functions relating to the devolved aspects of insolvency in Scotland are concentrated in a single office-holder appointed by and accountable to the Scottish Ministers. The Registrar of Companies and Assistant Registrar of Friendly Societies will be left with their functions and will be accountable only to the UK Government and Parliament.

Details of Provisions

The reserved matters are:

(a)     Winding up of business associations. In general, matters relating to the winding up of business associations are reserved, subject to certain exceptions.

For this purpose "business association" is defined as having the same meaning as in Section C1 (Business associations), subject to the qualification that it does not include any person whose estate may be sequestrated under the Bankruptcy (Scotland) Act 1985, such as a partnership, or any public body established by or under an enactment. Sequestration or winding up of those bodies will not be reserved.

The expression "winding up" is also defined, in relation to business associations, as including the winding up of solvent, as well as insolvent, business associations.

The matters which are reserved, in relation to business associations, are:

i.     the modes of, the grounds for and the general legal effect of winding up, and the persons who may initiate winding up;

ii.     liability to contribute to assets on winding up;

iii.     powers of courts in relation to proceedings for winding up, other than the power to sist proceedings;

iv.     arrangements with creditors; and

v.     procedures giving protection from creditors.

These reservations have the effect that all matters leading to the commencement of the winding up of business associations, and matters relating to the commencement itself of the winding up, are reserved. Thus, the circumstances in which a business association may be wound up voluntarily or by the courts; the grounds on which a petition for winding up may be presented; the persons who may initiate a winding up; the powers of the courts on hearing a petition for winding up; the definition of the commencement of the winding up; and the liability of persons (such as shareholders) to contribute to the assets on a winding up, are all reserved. This ensures that, so far as possible, the law relating to the winding up of business associations will be similar in England and Wales and Scotland.

Furthermore, matters relating to arrangements with creditors entered into by business associations (such as company voluntary arrangements) or procedures which give such associations protection from creditors (such as administration orders) are also reserved.

However, there is excepted from these reservations, in relation to business associations:

i.     the process of winding up. In other words, matters relating to the winding up process itself after it has commenced are not reserved. This includes the person having responsibility for the conduct of a winding up or any part of it, and his conduct of it or that part;

ii.      the effect of winding up on diligence. Diligence is the process under Scots law whereby court judgements are enforced against a debtor's assets. Under Scots law, diligences done within a certain time of the commencement of winding up are equalised so that all creditors are treated equally in the ranking of their claims; and

iii.     the avoidance and adjustment of prior transactions on winding up. Thus, it is open to the Scottish Parliament to legislate in respect of transactions concluded before the winding up of a business association, to provide for them to be rendered void, or for some other appropriate remedy. The need for that could arise, for instance, where such a transaction has been concluded for less than full value, or has the effect of giving a preference to a particular creditor, to the prejudice of the general body of creditors. Such matters would be dealt with in the course of a winding up and are excluded from the reservation.

S.I. 2001/1456 also added further exceptions in relation to business associations which are social landlords, namely:

i.     the general legal effect of winding up;

ii.     procedures for the initiation of winding up;

iii.     powers of courts in relation to proceedings for winding up; and

iv.      procedures giving protection from creditors,

but only in so far as they relate to a moratorium on the disposal of property held by a social landlord and the management and disposal of such property. Social landlords are defined as being registered companies or industrial and provident societies which have their registered office in Scotland and which satisfy certain conditions, namely that they do not trade for profit and are established for the purpose of, or have among their objects and powers, the provision, construction, improvement or management of houses for letting or for occupation by members of the body or hostels. This exception was made for the purpose of enabling the Scottish Parliament to legislate about such matters in Schedule 8 to the Housing (Scotland) Act 2001 (asp 10).

(b)     Preferred or Preferential Debts. There are also reserved matters relating to preferred or preferential debts for the purpose of the Bankruptcy (Scotland) Act 1985, the Insolvency Act 1986 and any other enactment relating to the sequestration of the estate of any person or to the winding up of business associations, the preference of such debts against other such debts and the extent of their preference over other types of debt.

Certain types of debts, such as taxes which the debtor has collected on behalf of the Crown and sums due to employees, are given a special priority in the bankruptcy or sequestration of individuals and other persons, and in the winding up of business associations, in the sense that they are paid in advance of other debts. What is reserved are matters relating to such debts and the extent of their priority over other debts.

(c)     Regulation of insolvency practitioners. Matters relating to the regulation of insolvency practitioners are reserved.

Under Part XIII of the Insolvency Act 1986, which applies to Great Britain, a person who acts, for example, as a liquidator in a winding up or as trustee in the sequestration of a person's estate or as a trustee under a trust deed for an individual's creditors is required to be qualified to act as an insolvency practitioner.

These matters are reserved, even although the Scottish Parliament has legislative competence over the appointment and powers of liquidators or a person having responsibility for the conduct of a winding up.

(d)     Co-operation of insolvency courts. Matters relating to the co-operation of insolvency courts are reserved.

(e)     Floating Charges and Receivers. Matters relating to floating charges and receivers are not reserved, except in relation to preferential debts, regulation of insolvency practitioners and co-operation of insolvency courts.

The circumstances in which receivers may be appointed and the effect of their appointment, are not reserved. However, matters relating to the qualifications which a receiver must have before he may act as such are reserved under the reservation relating to the regulation of insolvency practitioners.

Section C3: Competition

Purpose and Effect

This Section reserves the regulation of anti-competitive practices and agreements; abuse of dominant position, and monopolies and mergers. It does not, however, prevent the Scottish Parliament from legislating to regulate particular practices in the legal profession for the purpose of regulating the profession or the provision of legal services, although the Scottish legal profession will still be subject to general UK competition law.

General

This reservation is designed to ensure the continuation of a common United Kingdom system for the regulation of competition matters. Responsibility for competition policy rests with the Secretary of State for Trade and Industry.

Competition matters are currently regulated by the Competition Act 1998 which introduced a prohibition approach to anti-competitive agreements and abuse of a dominant position. The Director General of Fair Trading is responsible for enforcement of the prohibitions with rights of appeal to a new tribunal within a new Competition Commission. The Competition Commission will also take over the existing functions of the Monopolies and Merger Commission. Existing merger and monopoly legislation under the Fair Trading Act 1973 will remain in force.

Parliamentary Consideration

Details of Provisions

Reservation

What is reserved is the regulation of anti-competitive practices and agreements; abuse of dominant position; monopolies and mergers. This includes all matters relating to that regulation, including:

(a)     the powers to investigate any body or person for the purposes of enforcing competition law;

(b)     the administration of competition law through the respective powers of the Secretary of State for Trade and Industry, the Director General of Fair Trading and any other authority exercising competition functions.

Exception

What is excepted from the reservation is the regulation of particular practices in the legal profession for the purpose of regulating that profession or the provision of legal services. What constitutes the legal profession for this purpose is expressly defined.

This is intended to reflect the former position in terms of which the Secretary of State for Scotland had policy responsibility for regulating the legal profession and the provision of legal services in Scotland. This is mainly for the purpose of the protection of the public (or, in other words, consumer protection) but also includes regulating the rules and organisations of the legal profession, where the regulation may affect competition in the provision of legal services. For example, provisions increasing the provision of court services by permitting certain solicitor advocates to have a right of audience in the Court of Session and High Court requires, in order to be effective, to be accompanied by provisions which regulate rules of conduct by advocates which, by being anti-competitive, might thwart that policy objective - see, for example, section 31 of the Law Reform (Miscellaneous Provisions)(Scotland) Act 1990 ("the 1990 Act") which requires the Faculty of Advocates to submit certain rules for the approval of the Secretary of State for Scotland who, in turn, is required to consult the Director General of Fair Trading. One of the effects of this exception is that the functions exercisable by the Secretary of State for Scotland were, upon devolution, transferred to the Scottish Ministers under section 53. However the Scottish Ministers are still required to consult the DGFT before exercising those functions.

The exception does not, however, enable the Scottish Parliament to legislate generally about the regulation of anti-competitive practices concerning the legal profession in Scotland. This remains a matter for the UK Parliament. Nor does the exception limit the ability of the UK competition authorities to investigate anti-competitive practices concerning the Scottish legal profession and apply to the members of that profession the provisions of general competition legislation.