So are you proposing that;
You should be able to work as an FI and simply keep the student progress records in your head?
What if they decide to change schools?
You're starting from the premise that a "school" is a necessity. FAA Part 61 training doesn't necessitate a "school"-concept per se. In previous posts, you've referred to this dismissively as "training from the boot of a car". I have had an excellent experience with an individual flight instructor : as he took a limited amount of students at a time, a simple log book entry and the odd take home sheet largely sufficed as "record keeping".
I've received instruction from 6 different instructors throughout my aviation training thus far. Never a problem. You're telling the instructor where you are and what you still need to do. Each of the instructors was able to spots shortcomings that I hadn't realised and allowed me to improve on them, on top of the topics I explicitly mentioned. No filekeeping could have improved that. Was I taught out of the boot of a car ?
How do you back-up your statement to the student that they need to perhaps think about making Sailing their hobby rather than flying?
That must be a rare condition. A willing student, eager to take up skills, even if gifted with only moderate cognitive abilities should be able to complete the first stages of an aviation career succesfully.
Possible exceptions are : students unwilling to adhere to strict safety standards, or students too dumb to realise their own arse is on fire. Neither of them should be sent on a sailing course, btw. But surely a flight instructor is under no obligation to continue the flight training in these cases? Again, I doubt very much that an obligation to keep lengthy records is going to be of help here. Just a matter of curtiously stating the truth.
How do you stand up in court and tell the Judge that you did train that dead student to the required standard and not only that, the student agreed with that every time they countersigned the training record - a record that you don't have?
The logbook entries normally would show the student's progress. It would also show under which conditions the student is deemed to fly solo. I also doubt that excessive litigation needs to be curbed through compulsory administrative burdens.
As I have said many times before, good training providers be they individuals or large international companies will have no problem with this.
They will if the inspection fees and administrative burdens go up so much that an individual cannot afford to take on a couple of students per year, as many part-time instructors do.
Does the regulation of Airlines discourage competition in the Pilot community or act as a barrier of entry?
To a certain extent, it does. It makes it a lot harder for a small company to operate an air charter. That is why it is extremely important to weigh the necessity of each regulation as a barrier to entry against the benefits for the consumers.
In the case of flight instruction, it is clearly a barrier to entry that brings very little benefit to the consumer. That FAA part 61 instruction works well in the United States proves this fact. EASA, an organisation that is overlobbied both the maintenance industry and flight schools and pressured by individual member states with vested interests, clearly overlooks this matter.