5. Competition Assessment
The following questions have been considered in the drafting of this section:
- Will the measure directly or indirectly limit the number or range of suppliers?
- Will the measure limit the ability of suppliers to compete?
- Will the measure limit suppliers' incentives to compete vigorously?
- Will the measure limit the choices and information available to consumers?
For the purposes of this section, a 'consumer' is anyone who buys goods or digital content, or uses goods and services, either in the private or public sector, now or in the future.
5.1 Care providers
Current and former care providers will be asked to make voluntary financial contributions to the statutory redress scheme. It is also expected that they will provide access to records and information to survivors and the Scottish Government Division to support applications.
Some care providers have highlighted that making a contribution could impact on current service provision or organisations' overall financial viability. Others pointed out that contributing to redress might result in reputational damage, making it more difficult to raise future funds was also discussed. These scenarios could run the risk of distorting the market by reducing the number or range of care providers or reducing their ability to compete for contracts.
However, organisations which do not participate in the redress scheme are still subject to significant financial risks arising from historical child abuse as a result of litigation. It may also be the case that, contrary to some providers' concerns, participating in the scheme could have reputational benefits for certain providers – especially those which are well-known and are subject to investigation by the SCAI.
Furthermore, it is intended that by making fair and meaningful contributions to the redress scheme, organisations will be able to secure a waiver to be signed by survivors accepting redress payments, thereby addressing their potential exposure to litigation in respect of historical abuse in respect of those survivors. In this way, the redress scheme might actually reduce financial risk for some providers, which could protect against major changes to the market. The Scottish Ministers are also required to take in to account the circumstances which make a contribution affordable for an organisation, and any circumstances which may impact the ability of the organisation to continue to deliver their current services. These considerations are intended to further reduce the financial risks faced by organisations considering contributing to the scheme.
The Scottish Government is also seeking to mitigate the risk of undesirable changes to the market via the following measures:
- Designing contribution models to accommodate the diverse nature of providers and the nature of their responsibility for historical abuse.
- Exploring options for fair and meaningful contributions to be made in a manner which would not have a disproportionate effect on the organisation's delivery of services or long-term financial stability, for example, through instalments or setting a capped maximum contribution amount.
- Making changes to the law concerning proper use of charitable funds via the Act to ensure that charities are able to make a contribution.
- Encouraging insurers to consider the making of contributions to the redress scheme as equivalent to meeting the costs of claims raised against the organisation and to support organisations to make contributions.
5.2 Legal sector
Survivors will be strongly encouraged to obtain independent legal advice before signing the waiver required under the redress scheme. Some survivors may also choose to obtain legal advice and assistance at other points of the application or review process. The Act places a duty on the Scottish Ministers to pay legal fees reasonably incurred by applicants to the redress scheme. This includes applicants who are survivors of abuse, nominated beneficiaries, and next of kin applicants.
Section 9 of the Act requires that the Scottish Ministers must use their best endeavours to ensure that applicants and potential applicants to the scheme have the opportunity to make informed decisions. To do this, the Scottish Ministers must provide all applicants with a "Summary of Options" at key points in the application process. This document must set out the key rights an applicant has in regards to the redress scheme and other important information that the applicant should be aware of to make informed decisions.
Legal fees reasonably incurred may include advice on eligibility, types of redress payments, the application process and matters in connection with waiver, reviews of the determination of applications and matters in connection with a reconsideration or review process under section 75 or 76 of the Act. It is recognised that legal fees could be reasonably incurred in relation to applications that are ultimately unsuccessful or withdrawn. Fees payable in connection with the redress scheme do not include any fees incurred in connection with legal advice and assistance on whether to pursue litigation as an alternative to making an application for a redress payment.
Fee requests must be submitted directly by the legal representative to the Scottish Government Division carrying out the administrative and processing functions of the redress scheme. Requests will then be passed to Redress Scotland for assessment and decision.
Redress Scotland may pay additional legal fees where they have assessed that the costs have been reasonably incurred and that there are exceptional or unexpected circumstances which justify the payment of such a sum.
A review process is also afforded, in certain circumstances, where a solicitor is not satisfied with the decision taken in relation to a fee payment request submitted to Scottish Ministers. Requests for review should be submitted in writing to the Scottish Government. Requests will then be passed to Redress Scotland for assessment and decision. A request for review can be withdrawn by the solicitor, by notifying the Scottish Government in writing, at any point in this process.
Any legal firm will have the opportunity to offer advice to applicants and request fees from Scottish Government so there are no competition concerns.
Where the payment of legal fees has been materially affected by an error, or where the decision to make the payment has been so affected (such as where a claim has been made fraudulently), section 97 of the Act allows for the Scottish Government to recover those fees. If concerns are raised that an error has been made in deciding to make a payment, the Scottish Ministers or Redress Scotland can make a referral to a panel of Redress Scotland for reconsideration of the decision. Provision has been made in the Redress for Survivors (Historical Child Abuse in Care) (Payments Materially Affected by Error) (Scotland) Regulations 2021 to ensure that the a person has the right to seek a review of the outcome of any reconsideration. Any legal fees and other expenses associated with such a review are not covered by the scheme.
A separate BRIA has been conducted for The Redress for Survivors (Historical Child Abuse in Care) (Payment of Legal Fees) (Scotland) Regulations 2021 made under sections 94(3),(4) and (6) and section 95(5) of the Act.
5.3 Insurance industry
Where care providers have appropriate insurance cover in place and wish to use their cover to contribute to the redress scheme, the Scottish Government expects insurers to engage appropriately. This presumption of engagement is on the basis that the redress scheme is a legitimate and robust alternative to court proceedings, which will extinguish liabilities which would otherwise be pursued through civil litigation.
The Scottish Government does not anticipate that the insurance industry is sufficiently exposed for the redress scheme to have any market-level effect so there are no competition concerns in this instance.
5.4 Survivor support organisations
National and local providers of counselling, therapeutic and support services for survivors and community based advice centres may experience increased demand following the launch of the redress scheme. The Scottish Government is actively engaging with relevant organisations to understand current capacity in the system and will work to address any anticipated problems. It is not expected that there will be any implications for competition. The implications of increased demand for support services as concerns survivors' wellbeing are discussed in Section 6.4.
5.5 Local authorities
The redress scheme may have a significant impact on the workload of social work departments (e.g. subject access requests from applicants to the scheme or survivors of abuse seeking support or assistance from local authority services) and may result in the need to reprioritise resources. The level of any financial contribution made to the scheme is also likely to have an impact on local authority budgets, depending on the level of the contribution, the financial position of the particular local authority in question, and the effect of making such a contribution on legal costs associated with claims raised against local authorities in respect of historic abuse. It is not anticipated that there will be any direct implications for competition. However, Scottish Government will monitor indirect impacts via its ongoing partnership work with COSLA.
5.6 Justice System
The redress scheme may have an impact on Police Scotland, the Scottish Courts and Tribunals Service (SCTS), the Crown Office and Procurator Fiscal Service (COPFS), and the Scottish Prisons Service as a result of requests for access to records to support applications and, potentially, increases in volumes of reported crimes. It is not anticipated that there will be implications for competition.
5.7 National Health Service (NHS) Boards
The redress scheme may have an impact on NHS Boards as a result of increased requests for access to records to support applications and increases in demand on mental health services. It is not anticipated that there will be implications for competition.
There is a problem
Thanks for your feedback