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Property Law Reform and the Public Interest

The Abolition of Feudal Tenure & Related Proposals

by Robin Callander

Introduction

The purpose of my presentation is to provide a framework to assist the discussions during the rest of the meeting. The presentation has four main parts:

Much of the presentation is background. The relatively small number of issues identified in the conclusions should form the focus of our discussions. While these issues are reasonably straightforward, they are also of vital importance to the types of social and environmental interests represented here today.

Part 1 Context

(a)  Property Law / Administrative Law

The Scottish Office's Land Reform Policy Group (LRPG) had a chapter on "law reform in each of its three reports. In their final report, this chapter was entitled "law reform legislation" and, perhaps confusingly, contrasted with four other chapters that also all involve legislation or reform of the law. The actual law reform chapter could have been more clearly labelled "Property Law Reform" and it is worth recognising 3 levels of reform:

(i) Property Law: the Scots law system of land tenure determining how land can be held and transferred and the basic property rights associated with it;

ii)Administrative Law: the wide range of parliamentary statutes that interact with and regulate the laws of land tenure (eg. felling licenses, disclosure of information...)

(iii) Non-Statutory Arrangements: the many different types of measures used to promote or control the use of rights over land (eg. grants)

(b) Moveable / Immoveable Property

More accurately still, property law can be referred to as the law of immoveable property to reflect the basic distinction in Scots property law between movable and immoveable property or land. This distinction has particular relevance here as sometimes it suits some vested interests to argue that legal distinctions between these two types of property should be removed (as in the reform of feudal tenure), while on other occasions the same interests argue to maintain the distinction (as with the laws of succession).

(c) Land / Territory

It should be recalled that 'land' in this context (i.e. the land covered by the Scots laws of immoveable property or land tenure) means all the land or sovereign territory of Scotland - the territorial waters as well as the land surface itself, above and below the land and anything that forms part of the land (eg. buildings).

(d) Levels of Tenure

Thus, the scope of property law reform is Scotland's overall system of land tenure which governs how the Land of Scotland is held. And it is useful to recognise the three levels of tenure at which this system operates. These levels are independent of the feudal system and whether it is reformed or not. The Crown has sovereign rights over the whole territory. While parts of the territory are held directly by the Crown (eg. marine), Other parts are held by owners under the Crown. In turn, tenants hold parts of the land from owners.

The difference with the feudal system is the way the rights and interests of land tenure are arranged between these three levels within the traditional feudal pyramid. The Crown is not just the sovereign, but also the paramount superior; owners are not just owners but superiors or vassals; and within the pattern of overlapping rights, tenants are just a permutation on a theme.

(e) Levels of Public Interest

Finally, given the public interest context of this seminar, it is worth being clear that there are three main levels at which the public interest operates within this land tenure system:-

1. The overall authority of Parliament over the system on behalf of the Public Interest;
2. The legal rights over land held in trust for the Public through the Crown;
3. The State as an owner or tenant of land;

Part 2 SLC Proposals

(a) Scottish Law Commission (SLC)

The LRPG's report abdicates the issue of proposals for law reform to the SLC in much the same way as public access, national parks and the like were delegated to SNH. The SLC is, however, a less familiar body to most people involved in the land reform debate.

The SLC was established (with a similar body for England & Wales) by the Law Commissions Act 1965. It's main function under that Act is to keep the law of Scotland under review...

"with a view to its systematic development and reform, including in particular the codification of such law, the elimination of anomalies, the repeal of obsolete and unnecessary enactments, the reduction of the number of separate enactments and generally the simplification of the law."

A key point to note about this remit is that the SLC is essentially a tidying up organisation, not one charged with policy development. This is an important distinction and discussed further below in considering the scope of the law reform proposals being brought forward by the SLC.

The SLC is part of the Scottish Office Home Department, Civil Law Division, and run by 5 Commissioners. The Chairman is Lord Gill. All the Commissioners have a legal backgrourid.

The topics that the SLC works on come from three sources - government instructions, the SLC's own proposals and proposals put to them by others. Property law is thus just one of the many spheres of law that can be addressed by the SLC. Every few years the SLC publishes a Programme of Law Reform to set out the topics it proposes to tackle and each year it reports on its progress with that programme in its annual reports to Parliament.

(b) Property Law

The reform of property law, particularly the abolition of the feudal system, was adopted by the SLC as part of their 4th Programme in the late 1980s. This was to follow up and conclude the extensive work, both in terms of reports and legislation, on the topic in the 1960s and 70s.

The SLC's work on property law was carried forward in their Fifth Programme of Law Reform published in 1997. The position has then been updated in their Annual Reports. Currently, the SLC are considering the contents for their 6th Programme. This is likely to include some continuing work on property law reform (eg. referral of 'seabed and foreshore' to the SLC by the LRPG). However, the extent and content of any continuing interest in property law in their 6th Programme is a significant issue in its own right in the context of this seminar.

There are five main interlocking components in the SLC's property law reform programme as it stands:

The SLC have issued final reports, including draft legislation, on 3 of these topics (Feudal, Casualties, Tenement) and recently concluded consultation on real burdens. The SLC consider their work on any topic finished once their final report is out. Thus, any issues arising from their final reports need essentially to be pursued elsewhere.

(c) Importance

The SLC's property law reform is a major exercise if only considered at scale of their reports, with the three final reports and discussion paper on real burdens amounting to over 1000 pages. Their programme is also clearly a major exercise in other ways - in its substance, not just scale - dealing in an integrated way across the 3 levels of tenure - Crown, ownership and tenancies. It is introducing what the SLC refer to as a new system for the way land is owned in Scotland.

The opportunity for this fundamental reform (a new system of land ownership) has been opened up by the arrival of the Scottish Parliament. And like the Parliament, such reform is an historic opportunity. The question of whether it will be for better or worse depends, however, both on the actual reforms implemented and on the point of view from which you view them.

(d) Significance

A key question for this meeting is whether the interests represented here have paid the attention to this issue that it warrants. Such reforms will be a 'once in a generation or more' opportunity, even with the new Parliament. That alone suggests an element of responsibility to pay due regard to the reforms - it is our generation that will determine the nature of the system of land ownership (for better or worse) that runs for many years to come.

Two points might be noted at this stage that perhaps emphasise the need to pay attention to this reform process.

Part 3 Technical Issues

(a) Introduction

In terms of the interests represented at this meeting, three of the five SLC reform topics listed above can be dealt with very briefly here.

(b) Feudal Reform

When the SLC report on 'The Abolition of the Feudal System' was published, prominence was given in the Scottish Office press release to the fact that the report's recommendations would get rid of a lot of old legislation - 45 whole Acts, 246 sections and 57 schedules.

Most of this clear out does not, however, come from abolishing superiors and feu duties. Most of this repeal of redundant legislation comes from the report's other reforms, such as abolishing teinds, stipends and thirlage, together with entail and several other fairly obscure matters. The abolition of entail alone, for example, would mean 14 whole Acts could be done away with.

These reforms, while of little direct significance beyond tidying up, are to be welcomed. In the SLC's discussion paper on "The Abolition of the Feudal System" (1991), such reforms were usually excluded because they were considered not strictly 'feudal'. It perhaps suits some that the removal of superiors and feu duties amounts to the abolition of the feudal system. However, after so long, a feudal character penetrates much deeper into Scotland's current system of land tenure than just blatantly feudal elements like superiorities and feu duties. The reform of other topics should follow the SLC's present proposals.

(c) The position of the Crown

The SLC's proposals for abolishing all feudal superiorities are uncontroversial apart from one aspect - the way in which the Crown's paramount superiority is dealt with.

The aim of the SLC's proposals is to make all land owners in Scotland what the SLC calls "outright owners" or, as they previously referred to it, absolute owners. The concern is that this will make land ownership in Scotland less conditional on the public interest. Absolute owners are absolute owners.

You will recall:

Thus, if the ownership of land is clearly held from the Crown, it is to that extent conditional on the public interest. The SLC claim in their report that land ownership will still be just as conditional if their proposals are implemented. However, the SLC's approach of creating outright owners appears to move Scotland to the USA model of absolute ownership - where the public interest has no direct stake in that land.

This is particularly significant because of the issues of "takings" - a regulation of private land ownership rights that is judged to impact on those rights to the extent that it requires compensation. The question of takings is not addressed at all by the SLC, although reference to the footnotes in their reports shows the interest they have been taking in the property system in the USA.

The danger at present is that, by following the SLC's proposals to create absolute owners, the public interest in all land through the Crown will be weakened. Without meaning to sound too dramatic, the danger is that feudal reform could be "a coup against the community", with society being made the vassal rather than the other way round. Feudal reform should not be the moment when "the landowner is made king"!

Addressing this issue does not necessitate going against the welcome momentum for feudal reform. The issue can be dealt with straightforwardly at a technical level. All that is required is to modify the wording of Section 52 of the SLC's proposed legislation.

This re-wording should clarify the principles that, firstly, there will be no diminution of the Crown's rights except those specifically abolished (i.e. the feuing and superiority of particular lands) and that, secondly, all land will remain held from the Crown.

With these modifications, ownership might still be called 'outright', given the lack of any superiorities intruding on that ownership. Similarly, it might be consider as 'direct' ownership, as all land would be held direct from the Crown without any intervening superiorities. At a practical level, the Crown would not be involved in titles to land, which would be straightforwardly transferred between owners. The key point, however, is that there would be clarity that the ownership of land in Scotland would be conditional on the public interest as represented by the Crown's rights and interests over that land.

This topic is to be a main focus of the discussions here today. Thus, these and other points can be explored more fully then. However, a number of other observations about the SLC's approach can be noted at this stage:

(d) Burdens

The second main topic for discussion later is 'real burdens'. These are broadly defined by the SLC as 'a condition imposed on one piece of land for the benefit of another piece of land'. The SLC's report involves proposals for what they classify as 5 different types of real burdens:

(a) The SLC proposes that the feudal burdens that can be imposed for the benefit of superiors should go with abolition of the feudal system. However, the SLC proposals allow for conversion of some feudal into neighbour burdens.

(b) At present, when someone disposes of part of their land by a disposition (as opposed to a feu disposition) they can impose burdens on the new owner. The SLC proposes that this system, which they call neighbour burdens, should continue. The SLC does propose a few somewhat complex rules to constrain the scope of these burdens (eg. a distance rule of 100 mts. for an enforceable interest; sunset rules for burdens to lapse, although possibly not for hundreds of years!). However, the SLC is advocating the continuation of a system of private regulation that only benefits one neighbour, the owner with enough land to dispose of only part of it. Significant issues arise about the appropriateness of these proposals from the SLC.

(c) No such issues arise with the SLC's proposals for what they call community burdens. These proposals would refine the existing system whereby reciprocal and mutually enforceable burdens can exist between owners to protect their common interests (eg. in a housing estate). Such a system is fair and straightforward and potentially requires no complicated distance or sunset rules. These burdens might, however, be more appropriately labelled neighbourhood burdens (as burdens attach to land not individuals).

The legitimate nature of community burdens contrasts markedly with the faults in the social arguments that the SLC tries to deploy to justify retaining the one-sided private regulation inherent in neighbour burdens (eg. their historical value prior to the planning system, a concern that without them some land might not be sold). There are also curious juxtapositions with, for example, the SLC recommending as part of the abolition of feudal tenure, reducing the length of long leases yet proposing real burdens that run for hundreds of years.

The final two types of real burdens covered by the SLC are of a different character. The SLC is proposing two new types of burdens that would be essentially in the public interest. However, questions need to be asked about these proposals.

(d) The SLC proposes conservation burdens based on conditions that run with land (eg. SSSI conditions). These burdens are modelled as an equivalent to easements in the USA, where public or other bodies buy development rights from land owners. They are not really burdens as such (as only one property is involved) and it is not clear why the SLC has seen them just in terms of conservation. They could also be used, for example, for social housing conditions. Either way, this is a clear example of the SLC going beyond its remit. The first step should be a public policy decision that there is a need for such measures, before the SLC might be asked to advise on their legal constitution and technical operation.

(e) The SLC's final proposal is for maritime burdens. This is in the SLC's feudal report and does not appear to be picked up in their burdens report. The SLC makes the point that Crown holds various real burdens over part of seabed and foreshore in the Public interest and that these could be lost when feudal tenure is abolished. The SLC therefore propose special provisions to allow these burdens to continue in the public interest.

While the SLC does not make the connection, these maritime burdens could form a part of wider set of environmental (conservation) and social land conditions imposed in the public interest. This is an interesting topic for further discussion.

Part 4 Conclusion

The conclusions from this half hour presentation might be seen as falling into three categories.

(a) Technical Proposals

Despite the voluminous nature of the SLC's reports, there are relatively few immediate issues to address. The most important of these is the position of the Crown and ensuring that the private land ownership remains conditional on the public interest. The second is the extent to which a system of one-sided private regulation of land should be retained. The third is whether a new system should be developed to allow public interest burdens to imposed on titles to land. A fourth topic, which is out with the scope of this meeting, is to identify further property law reform issues that should be tackled by the SLC or other authorities.

(b) Public Process

The process of property law reform might be considered flawed in several respects. Firstly, there have been no explicit public policy statements of what we (as society) are trying to achieve by these reforms. This lack of policy guidance is compounded, secondly, by the SLC going beyond its statutory competence (as with conservation burdens). At the same time, thirdly, there are significant shortcomings in the SLC approaches to consultation. Their report on 'The abolition of feudal system' is based on consultation over their discussion paper published in 1991(!), while the advisory group they appointed more recently on the topic consisted only of professors of conveyancing and a solicitor from each of Scotland's four main cities. The Land Reform Policy Group has not helped this process and it has to be doubted whether the SLC's consultations match up to the consultations expected for any measures to be introduced to the Scottish Parliament.

(c) Your Engagement

Finally, there is the limited engagement of your and other NGOs with these issues. This appears to have been because of the "technical" nature of the topic. However, technical issues have not precluded NGOs getting up to speed with much more complex topics, for example, to tackle the nuclear industry. It remains a curiosity that NGOs will, for example, take their pollution experts along to meetings on waste disposal and yet, for a meeting on disposing of the feudal system, none of you have brought your legal advisers. There has also been no attempt to maintain any expert focus as, for example, with the use of Alan Blackshaw over access. Enough has surely been demonstrated about the status of the Crown to warrant continuing exploration. This is not just because of its profound significance for "the public interest", but also because of the potential significance of the rights attached to the Crown in Scots land law to wider constitutional issues that will become ever more prominent in Scotland.

Finally, you should recall that there is no need to rush into feudal reform. Some politicians are in a hurry for a potent, but short-lived soundbite. The main private landowning interests are in a hurry because, at present, they stand to gain greatly. They will get rid of the feudal label, which others can use as an effective lever for land reform, and at the same time, their position will be very significantly enhanced for the hereafter by becoming absolute owners. There would be extraordinary irony against the will of the Scottish people if indeed, by one of the early Acts of the Scottish Parliament, the landowner is made king'.

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