The Advocate-General for Scotland (Lord Wallace of Tankerness)
This has been a useful debate. There has been a general welcome from all sides of the Committee for the Government’s amendments, which introduce an appeal mechanism rather than judicial review for the core designation or decisions to vary or revoke.
Perhaps I could give some of the underlying rationale for the amendments. As introduced, Clauses 22 to 23 set out a procedure for review by the courts of any decisions taken by the Treasury under the powers provided in the Bill, including decisions to make, vary or revoke a designation, decisions in relation to licences issued or applied for, decisions whether to publicise the freeze generally or limit the scope of the publication for reasons of national security or justice and decisions whether to request or disclose information.
A number of noble Lords raised this matter at Second Reading. There were calls to amend the procedure for challenging asset-freezing decisions through the courts from a judicial review to an appeal. It perhaps answers some of the points made by my noble friends Lady Hamwee and Lady Noakes, to which I shall return in more detail, to say that we still believe that judicial review can be a very flexible tool, allowing differing degrees of intensity of scrutiny depending on circumstances and the impact of the decision in question on the individual concerned. In its report prior to Second Reading, the Constitution Committee acknowledged as a result of various court judgments the intensity with which courts scrutinise control orders where the legislation provides for a review applying judicial review principles. That is broadly equivalent to an appeal. Such an in-depth judicial review has been shown to be an effective safeguard in these cases.
Nevertheless, the Government believe that a similar full merits review should be adopted for court scrutiny of asset-freezing designations; that is, decisions to impose, to vary or to renew asset freezes. We believe it because, due to the lack of case law in this area, there is no certainty that the court would choose to undertake such a rigorous judicial review procedure—I think that that is the sense of the comments that were made at Second Reading. We have responded by tabling amendments to introduce an appeal mechanism for asset-freezing designation decisions, spelling out that we would expect a full merits-based review of such decisions to be undertaken by the court. Such an appeal would require both parties to provide the material underlying their case to the court, which would then conduct that full merits-based review of the designation decision, taking all evidence and substituting its own decision if necessary. This level of scrutiny is appropriate for designation decisions, because it is the core decision that will most affect the designated person’s human rights.
Perhaps I may respond to one or two of the specific questions asked in this regard. My noble friend Lady Noakes asked whether it was just a right of appeal at one level. As with appeals generally, it will be possible for appeals to proceed along the normal route, either through the English system or the Scottish system, and ultimately, if it is appropriate, to the Supreme Court.
The noble Lord, Lord Pannick, asked about expedition. He made the point that the provision applies to interim orders. By virtue of that, there would be an expectation that the courts would respond. Indeed, there have been a number of cases where the courts have shown an ability to respond with expedition. That is certainly what we would anticipate if an appeal was brought. On the question on disclosure posed by the noble Lord, Lord Pannick, it is clear from the terms of the Bill that provision and reference is made to the rules of court with regard to the special advocate system. It is therefore envisaged that the rules of court should provide for that system. There is a later amendment in the name of my noble friend Lady Hamwee on which we might be able to discuss this in greater detail.
My noble friends Lady Hamwee and Lady Noakes both raised other decisions where the position would remain as one of judicial review rather than appeal. The Government’s position on that, as for other decisions concerning implementation of the freeze, is that these are not as fundamental to the citizen as the original decision to impose the freeze. That includes the granting of specific licences and the publicity of the fact of a designation. It is certainly our view that maintaining a standard judicial review is appropriate in these cases. I certainly recognise the concerns raised by my noble friend Lady Noakes about judicial review but, as I have said, the courts have already shown, certainly in relation to decisions on control orders, an ability to mount a very rigorous review indeed. These decisions are, however, more administrative in their nature and do not require the same in-depth consideration as a decision to impose an asset freeze. Nevertheless, we anticipate that judicial review of these decisions would include proper scrutiny of the material on which the Treasury decision is made and that the court would have the power to consider further information if it believed that to be necessary. Ultimately, it will be a matter for the courts to decide on the appropriate level of scrutiny to be applied, depending on the decision in question.
My noble friend Lady Hamwee asked whether the court would be able to substitute its own terms if, for example, that was with regard to a licence. The court has discretion to give whatever relief is appropriate; we certainly believe that that could include amending the terms of a licence.
The most reverend Primate the Archbishop of York raised the issue of people being subject to freezes for 30 days without access to funds and legal expenses. The point about that is that we provide licences. A general licence is given at the point where people are designated to ensure that they indeed have access to funds for living and legal expenses. This will be the subject of a set of amendments later in our proceedings. People do not need to go to a court to be able to access that legal aid funding.
Perhaps I might specifically refer to Amendments 5 and 6 and the consequential amendments, which would limit the period for which the Treasury could make asset-freezing designations to 30 days, so that any freeze going beyond 30 days would require confirmation by the High Court. This in many ways reflects some of our debate on the first set of amendments—not only the points raised by the noble and learned Lord, Lord Lloyd of Berwick, but the general issue of the balance between the decisions of the Executive and those of the judiciary. Perhaps not surprisingly, I endorse what was said by my noble friend Lord Carlile of Berriew, who indicated the importance of separating executive decisions from a robust review of those decisions by the judiciary. Indeed, that point was acknowledged by the noble and learned Lord, Lord Davidson of Glen Clova. He indicated that that was the former Government’s view, which they maintain. It is, quite clearly, a matter of important debate and, as my noble friend Lord Lester of Herne Hill indicated, these matters are complex. Ultimately, however, Ministers have the responsibility for national security and our accountability as Ministers is not only to Parliament, which is an important accountability, but to the courts. We believe that we have introduced a robust form of review, if those affected by designation wish to pursue it.
Unlike control orders, asset freezing is not only used against people in the United Kingdom who cannot be prosecuted or deported. In fact, only around 10 per cent of asset-freezing cases involve people who are in the UK or hold funds here and are not being prosecuted for terrorist offences. The noble and learned Lord, Lord Lloyd of Berwick, indicated that he thought that those who were subject to designation should also be prosecuted. I asked how many people who have been subject to asset freezes have been prosecuted. I was advised that 21 individuals in the UK have been convicted for terrorism offences. Six people within the UK have not been prosecuted. I also asked how many persons outwith the UK have been subject to designation for asset freezing; the answer is 36, of which 22 are entities and 14 are individuals. It would not be possible to prosecute them. Nevertheless, consistent with our obligations under the United Nations Security Council resolution and the importance attached to disrupting terrorism by freezing assets, it is important that we have been able to designate in those cases in which it would not be possible to bring prosecutions.
In that small number of important cases in which individuals have not been prosecuted and are within the UK, we believe that the opportunities that are open now through a full form of appeal are appropriate. It would not be appropriate to have a mandatory form of court decision-making, but there is a robust avenue for those who have been designated and wish to challenge that in the courts. In that way, we have strengthened judicial safeguards for asset freezing. For those reasons, I hope that the noble Baroness will be prepared to withdraw her amendment and that the Committee will be minded in due course to support the amendments that have been tabled by the Government.
Lord Pannick
Do the Government accept, on special advocates, that the AF case would apply in this context, as it does in the context of control orders, and that it would be necessary for them to disclose at least the gist of the allegations against the individual concerned?
Lord Wallace of Tankerness
I think that I am right in saying that the noble Lord represented successful appellants in the case to which he referred. Certainly we would take the view that the special advocate system and disclosure procedures are designed to ensure justice for individuals in difficult circumstances when, as the noble Lord recognises, public interest material cannot be disclosed. The special advocate system has been in effect for some time. With regard to the specific case, applying the AF judgment to asset freezing, the noble Lord is right that there is a relation to control orders, but the Government do not consider that there is an automatic read-across to all other proceedings involving the use of closed material for special advocates. It is fair to say that the requirements of fairness, which are vital, will vary according to the context and gravity of the consequences for the individual. It is engrained in both domestic and European Convention of Human Rights jurisprudence that fairness is context and fact specific. In the case before the Grand Chamber against the UK that immediately preceded the AF case, the point that it can vary was made. That is no doubt a matter to which we will return when we deal with the issue of special advocates under a later amendment.
Baroness Hamwee
My Lords, my apologies for ignoring the wonderful country of Caledonia, which I love very much. It was a particular gaffe, given the presence on the two Front Benches of eminent Scottish lawyers.
What I am going to say should be construed as constructive criticism, which is appropriate from these Benches. My noble friend referred to the human rights aspects of designations and how they had figured in the Government’s thinking in inserting the appeal procedure. The significance of the licensing regime must not be downplayed; the human rights aspects of the licences are enormously important. The Government have explained why they consider that a judicial review will be adequate to deal with licences, but the Minister has not explained—perhaps he does not think it necessary—why the appeal route is being rejected. I ask him these questions to get them on to the record. Perhaps I will come back to them next time.
Clause 22(2) allows for a person affected by a decision to apply for the decision to be set aside. The phrase,
“the decision should be set aside”,
is in Clause 22(3). I do not know whether “set aside” covers setting aside a decision and imposing an alternative, which might be varying a licence. If so, that might answer the point, but I suspect that it might not cover it; it is certainly not clear. Clause 22(4) says that this is the condition for the court giving whatever order it determines if it decides that a decision should be set aside. I want to be reassured that the court can take a view not to set aside the licence but to vary the terms of the licence. I do not know whether the Minister wants to comment on that at this point.
Lord Wallace of Tankerness
I thought that I had indeed indicated that it is our belief that the court has the discretion to give whatever relief it considers appropriate if it is dealing with a licence under judicial review and that that can include amending the terms of a licence.
Baroness Hamwee
I heard that; I took it as a general comment. I was particularly concerned about the words in what will apply—above and beyond, presumably, although I do not know—and whether the general position can trump what is in this legislation. Maybe we can discuss this between now and the next stage and, if necessary, come back to it. I beg leave to withdraw the amendment.
Baroness Hamwee
I shall speak also to Amendments 41, 42, 44 and 49. Here, we come to the prohibitions—again, creating offences—and there are a number of terms which I am seeking to understand through these amendments. The first is the term “indirectly”, whereby funds, services, economic resources and so on may not be made available directly or indirectly. I could just have sought to delete the word “indirectly” but I can see that it must mean something, and in the context of this issue I do not want to suggest that we are seeking to weaken the arrangements. Therefore, I have chosen instead to insert the words,
“with the intention of benefitting the designated person”,
but, as the Minister will have guessed, my real concern is to know what might be covered by the term “indirectly”.
The other term that concerns me is “partly”. To take the first point at which it arises—in Clause 9—the definition of “financial benefit”,
“includes the discharge of a … obligation for which the designated person is wholly or partly responsible”.
My concern here is perhaps a little different because the situation might arise in which the spouse of a designated person wants to make a payment on a joint mortgage. It seems to me that that would be prohibited, although it could obviously be licensed.
This is all about the family. I accept that there is a proposed new clause about social service benefits, but I wonder whether it is extensive enough. Joint mortgage was one example. Obviously, joint accounts will be frozen—I say obviously, but maybe I will be corrected. Will a spouse’s separate account be affected? To take a different situation, if the spouse’s employer fears that the spouse’s wages are going to a designated person, how should the Treasury, or anybody else, react? Can we have reassurance that the spouse’s income will not be stopped because the terms of the legislation are such that the employer might fear that he is committing an offence?
Amendment 40 specifically addresses joint assets and requires the Treasury to grant a licence, so I am coming at this from a number of different directions. I look forward to hearing what the Minister has to say and beg to move.
Lord Wallace of Tankerness
My Lords, as the amendments in this group enjoy a similar theme, it is perhaps not surprising that the Government’s position on the amendments also is similar. Amendments 38 and 42 relate to Clauses 8(1) and 10(1) respectively. These clauses prohibit the making of funds, financial services and economic resources available directly or indirectly to a designated person where the person providing the funds, financial services or economic resources knows or has reasonable cause to suspect that the ultimate recipient is a designated person and, additionally, in the case of economic resources, knows or has reasonable cause to suspect that the designated person would be likely to exchange them or use them in exchange for funds, goods and services. As for my noble friend’s initial question on the import of the word “indirectly”. Quite simply, it means that the benefit is directed through a third party and not the designated person.
The amendments would mean that a person could be prosecuted for breaching these prohibitions only if it could additionally be proved that that person intended the funds, financial services or economic resources to benefit the designated person. There is a concern that that would add a layer of complexity to the prohibitions and make it much more difficult effectively to enforce them. In these circumstances any prosecution would require proof beyond reasonable doubt that the person harboured the intention that the designated person should benefit from such funds, financial services or economic resources.
The Government do not support these amendments for two reasons. First, the amendments increase the difficulty with which the prohibitions can be enforced. Secondly, the Government do not believe that they achieve what is believed to be their intended effect, which is to provide a further protection to parties who unwittingly make funds, financial services or economic resources available directly or indirectly to a designated person. The prohibitions are already drafted so that persons who do not know or have no reasonable cause to suspect that they are breaching them, are not caught. It is therefore somewhat superfluous to require further that the prohibitions should apply only to those who intend that the funds, financial services or economic resources provided should benefit the designated person.
Lord Pannick
My Lords, I am very sympathetic to the amendment for two reasons. First, it seems to me right and proper to allow a person to use as much of their financial resources as they see fit to pay for legal advice and assistance. To impose restrictions on them in that respect is simply to interfere with the administration of justice. Secondly, I cannot see that the Treasury has any interest whatever in preventing a person using their own funds to pay for legal advice and assistance. The Treasury’s only legitimate interest is in preventing the use of the funds for the purposes of terrorism. If the money is being paid to someone who is regulated by the Law Society or the Bar Council—I appreciate that the amendment may need some tinkering to cover those points—I cannot see that the Treasury can have any legitimate concern as to the improper use of the money for purposes associated with terrorism. If the Minister takes a different view and there is evidence to suggest that persons who are regulated by the Law Society or the Bar Council are or may be acting improperly in this respect, please will he tell the House and explain what steps the Government are taking to draw such concerns to the attention of the proper regulatory authorities?
Lord Wallace of Tankerness
My Lords, this is an important amendment, and one that is somewhat foreshadowed by the comments of the most reverend Primate the Archbishop of York when we debated an earlier set of amendments. The effect of the amendment would be that any payments the purpose of which was to pay legal expenses of a designated person would not require a licence. As a result, the Treasury would have no oversight of such payments.
It is important to emphasise that that would include payments not just directly to solicitors and law firms but to designated persons themselves if the purpose were to pay legal expenses. This could include payments made by one designated person to another if the first designated person had access to free funds.
I understand the legitimate concerns that have prompted the amendment. I emphasise without equivocation that a designated person must be in a position at the earliest possible opportunity to challenge a designation or any other related decision made by the Treasury under the Bill, but I believe that the existing licensing scheme meets this requirement. Licences already provide a controlled mechanism whereby designated persons can be provided with funds to pay for legal representation with adequate conditions in place to control the risk of funds being diverted to support terrorism. A designated person or any other affected party may also request a licence at any time.
Moreover, the Treasury has issued a general licence that applies to all designated persons to enable eligible legal aid payments to be made. I give the assurance that that will be replicated once the Bill is enacted. That general licence ensures that a designated person will have immediate access to legal representation where they qualify for legal aid. Any other party may request a licence at any time to pay for a designated person's legal expenses. I emphasise that the general presumption is that where a licence is requested to pay for legal costs, it will be granted.
The Government believe that this is the proper and effective way to deal with the provision of funds in relation to legal services provided both by the state, under the legal aid system, and by other persons. It does not and is not intended to impede a designated person's ability to access justice, which we think is very important, but it also ensures that the Treasury can maintain oversight of a designated person's expenditure. I hope that, against that background and with that reassurance, the noble Baroness will be willing to withdraw her amendment.
Baroness Hamwee
My Lords, we come up against the issue of policy and legislative provision yet again. The oversight by the Treasury could be provided by requiring reporting to the Treasury. I take the point about regulated providers made by the noble Lord, Lord Pannick, and the point about not permitting payment to the designated person made by the Minister. Subject to those points, I do not see a lot wrong and I see a lot right with my proposition and, again, I do not want to abandon it tonight. However, for the moment, I beg leave to withdraw the amendment.