15:57 - Division on Amendment 1 - Ayes: 17 / Noes: 292 - Amendment 1 disagreed.
19:11 - Division on Amendment 23A - Ayes: 122 / Noes: 143 - Amendment 23A disagreed.
Lord Mackay of Clashfern
My Lords, I am prompted to rise by the noble Lord, Lord Judd. The principle to which he refers is displaced only by a conviction. Therefore, the amendment does not particularly invoke that principle. I would be interested to hear the basis on which the noble and learned Lord, Lord Lloyd, thinks that a person should be charged with an offence under this provision. Of course, I understand the point made from the opposition Front Bench. It may be sufficient if there are assets in the jurisdiction, even if the person who owns or controls the assets is not himself or herself in the jurisdiction. Having listened carefully to my noble and learned friend Lord Lloyd of Berwick, I am left with the question of the basis on which, or the extent to which, one must know what has happened in order to charge someone with an offence under these provisions.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, if noble Lords will permit me, I will speak to this entire group of amendments, although there has not been any significant discussion on some of them. It is perhaps worth summarising what these amendments would do. They would limit final designations to those charged with a terrorist offence of a description within Clause 2(2). They would require any final designation to cease if the charges are dropped or the person is acquitted and require the Treasury to apply to the court to make an interim designation.
Amendments 1 and 3 relate to the Treasury’s power to make a final designation. They require the Treasury to make final designations against only those people who have been charged with a criminal offence falling within the description of terrorist activity in Clause 2(2) for the purposes of the Bill.
Amendments 4, 5 and 6 require a final designation automatically to expire when a person charged is acquitted or charges are dropped before the ordinary one-year expiry. This goes to the heart of what this regime is intended to be about. Although I echo the words of the noble Lord, Lord Bach, in recognising the contribution of the noble and learned Lord, Lord Lloyd of Berwick, and the great wisdom he brings to this, I think he does not go to the complete heart of the rationale of UNSCR 1373, which is indeed preventive. It requires states to take steps to prevent terrorist acts. I should quote further from the resolution. Its paragraph 1(c) states that one of the means of achieving this requires states to:
“Freeze without delay funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts”.
The rationale of paragraph 1(c) is to prevent funds, financial assets and other economic resources being used or diverted for terrorist purposes, and the Government absolutely believe that it would not accord with the preventive rationale of the UN resolution if a final designation could be made only in respect of those charged or convicted of terrorism-related offences.
If that were the threshold, the Treasury would not be able to freeze the assets of those in respect of whom there was evidence that was insufficient to bring such a charge, but sufficient to give rise to a reasonable belief on the Treasury’s part that the person represented a terrorist risk—for example, where an interim designation has been made in respect of a person on the basis of a reasonable suspicion and insufficient evidence has come to light during the 30-day period of that interim freeze that would allow charges to be brought, but the Treasury has nevertheless come to a reasonable belief that the person is or has been involved in terrorism and considers it necessary for public protection that the final designation be made. If the Treasury were not able to make a final designation in those circumstances, that would give rise to a risk of terrorism that the requirements of the UN resolution are meant to prevent.
I remind the House that in making these designations, it is necessary that the dual test is met. The other half of the test, which has not been mentioned this afternoon, is a public protection leg. It is the Government’s continued firm belief that a reasonable belief threshold for a final designation would allow the Government to implement effectively the requirements of the resolution.
Lord Lloyd of Berwick
Does the noble Lord accept that reasonable belief goes beyond what Resolution 1373 requires? That is the critical question. It is also the question, which, as I have explained, has been decided by the Supreme Court.
Lord Sassoon
My Lords, the interpretation of UNSCR 1373 can be construed partly on a recommendation of the resolution itself and partly on the interpretation which the Financial Action Task Force has made. It is clear from its guidance that asset freezes should not be limited only to cases where people have been charged or convicted. If we were to accept this amendment, which the Government do not intend to do, it would certainly put the UK outside what is considered by all leading countries through the FATF guidance to be best practice in implementing Resolution 1373. What we are proposing is consistent with the approach taken by other authorities, such as in Canada and New Zealand, of which the noble and learned Lord, Lord Brown, approved in the case of Ahmed.
I agree with the interpretation of the noble Lord, Lord Bach, of the situation. Asset freezing is implemented against individuals and groups in the UK and overseas. At the moment, 22 entities and 14 individuals overseas are the subject of asset freezing. Nothing in Clause 1 limits this. Asset freezing certainly is not limited to people in the UK. People anywhere in the world can be designated, but the prohibitions apply only within UK jurisdictions; that is, to assets that are either held in the UK or by UK persons such as banks overseas. I hope that that clarifies the question of territorial scope.
Lord Lloyd of Berwick
Is the Minister saying, in effect, that Clause 1 has extra-territorial effect? If so, what is his authority for saying that in the light of the fact that the Bill makes specific provision for extra-territorial effect for offences under Clause 11 but no such provision in relation to Clause 1?
Lord Sassoon
Under Clause 1, people anywhere in the world can be designated. To repeat myself again, the prohibitions, on the other hand, apply only within UK jurisdictions; that is, to assets either held in the UK or held by UK persons such as banks overseas. That is about as clear as I can be on the Government’s understanding of the scope of Clause 1. The people overseas who are subject to asset freezes are operating in environments where it is not possible to charge or to convict them clearly of terrorist offences, but where it is necessary in order to disrupt their actual or potential—
Lord Carlile of Berriew
Perhaps I may tempt the Minister into a more direct answer to the question posed by the noble and learned Lord, Lord Lloyd. Surely what he is saying amounts to no; it does not have extra-territorial effect. A clear answer to that effect might be helpful for future purposes.
Lord Sassoon
Not being a lawyer, I was trying to give a clear statement of what effect Clause 1 has in relation to the underlying reality of where it bites. As to whether this does or does not mean that it has extra-territorial effect, I will leave that to lawyers to sort out. However, I am now given advice which says that Clause 33 sets out the extra-territorial application of the offences. Perhaps that will help on this point.
Lord Davies of Stamford
I thank the noble Lord for giving way. He may not be a lawyer, but he is a Minister. He has come before this House to present a Government Bill and therefore must be deemed to understand what the purposes of the Government were when they drafted and brought forward this legislation. I have listened with great interest to the debate with no intention of taking part, but it is clear to me that the Minister is not willing to tell the House whether Clause 1 has extra-territorial effect. The question should be capable of a simple yes or no answer. The Government must know where they are on that whole idea before they come before the House with a Bill.
Lord Sassoon
My Lords, I am trying to get to the substance of what we are seeking to achieve here, which is that if the people are abroad—that is, extra-territorial—but their assets are here, those assets can be made subject to an asset-freezing order. Indeed, if the people or the entities are UK persons, the asset freeze can also bite on them. I hope that that clarifies what we are trying to achieve.
Lord Davies of Stamford
We all know what “territorial” means. It means persons who are in this country or visiting this country, or corporate persons such as banks that are resident in this country but have assets abroad. That is territorial jurisdiction. What we want to know is whether Clause 1 has extra-territorial jurisdiction attached to it. In other words, is the power capable of being exercised in relation to persons and assets that are not connected with the United Kingdom?
Lord Sassoon
My Lords, let me try to say it again. Clause 1 bites on assets that are here—that is, territorial assets—but also enables the Government to freeze the assets of people who are not here, which would be extra-territorial.
Lord Davies of Stamford
So, to be clear, the clause can bite on persons or assets that are not connected with the United Kingdom.
Lord Sassoon
No, my Lords, that is not strictly what I said. Clause 1 can bite on assets that are here that might be under the control of people who are not in the UK. Equally, it may bite on people who are within the jurisdiction of the UK on assets that they might hold elsewhere. I am sorry if that is not clear.
Lord Davies of Stamford
Does Clause 1 have extra-territorial jurisdiction encapsulated within it, or does it not have extra-territorial jurisdiction encapsulated within it?
Lord Sassoon
I am trying to reduce this to what Clause 1 actually does. I do not believe that saying whether it is extra-territorial will clarify the point at all. What I am trying to do is get to the substance of what the clause is intended to achieve. I do not know whether it is being suggested that we should not, for example, be able to freeze the assets of the likes of Osama bin Laden, if he had assets in this country, just because he does not happen to be here. Is that what is being suggested we should be prevented from doing?
Lord Stoddart of Swindon
My Lords, on this important amendment, we have heard from the Minister that because he is a layman, as I am, he is not able to answer the questions raised by the noble and learned Lord, Lord Lloyd, in a manner that satisfies those of us who are laymen and thus enables us to vote intelligently if a vote is called.
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Davies of Oldham. I hope that the majority of us are clear about the intended scope of Clause 1, so I shall move on to deal with some of the other aspects. However, it is quite clear that the scope of Clause 1 is as intended and required by our obligations under UN Resolution 1373, which is the relevant resolution.
It is worth noting that while the majority of asset-freezing cases in the UK are against those who are charged or convicted of terrorist offences, at the moment there are six cases where it has been necessary, in order to protect the public from terrorism, to act upon the intelligence picture which, for reasons of national security or admissibility of evidence, cannot be used as the basis for criminal charges. However, that does not, of course, mean that those people do not continue to pose a serious risk to national security. Therefore, to limit final designations only to those subject to a criminal charge would exclude such groups and individuals as I have described. This would fatally undermine the preventive and disruptive nature of the asset-freezing regime as well as impact significantly on its operational effectiveness.
Nevertheless, the Government recognise that the Bill as it was introduced raised civil liberties concerns, and it was to address those that we amended the Bill so that a higher final designation threshold of reasonable belief, rather than the previous reasonable suspicion threshold, is being introduced. However, again I stress that there is a twin test, as the test of necessity for public protection also needs to be met. I do not think that the noble and learned Lord, Lord Lloyd of Berwick, drew attention to that.
The noble and learned Lord referred to a final order as giving an indefinite freeze. However, it is important to recognise that freezing orders have to be relooked at whenever the evidence changes or after 12 months. While “final order” is the term in the Bill, we should remember that a final order or a final designation will expire after 12 months unless it is renewed. We have also provided that the legal challenge to any designation should be by way of appeal. The Government continue to believe that the Bill strikes the right balance between safeguarding a person’s rights and protecting the public.
Amendments 9 and 11 require the Treasury to apply to the court to make an interim designation.
Lord Lloyd of Berwick
I have not addressed those amendments yet. I believe they have been degrouped and appear in the next group. I specifically asked before I addressed the House that those amendments, which relate to an entirely separate subject matter—namely, the interim order, not the final order—should be degrouped. If the Minister did not hear that, he can answer what I have to say in due course.
Lord Sassoon
My Lords, the last grouping I have seen from the Printed Paper Office suggested that everything was grouped together. Perhaps I should break off here and ask the noble and learned Lord whether he is prepared to withdraw Amendment 1 and not to move Amendments 3 to 6.
Lord Skelmersdale
My Lords, it would make life a lot clearer for me if the Minister could say whether anything in Resolution 1373 prohibits a state that has signed up to it from producing legislation on the same subject that is more severe than the resolution suggests.
Lord Sassoon
I am not aware of anything in the resolution that prevents legislation going further. The Bill does what is required to properly implement Resolution 1373 but, if it did go further, that would not be precluded by the terms of the resolution.
Lord Lloyd of Berwick
My Lords, the Minister has not fully dealt with the point that what is now proposed goes well beyond what is required by Resolution 1373. He argued that that resolution was intended to be preventive and that what is now proposed is preventive. The resolution states, in paragraph 1(a), that it is intended to be preventive, but it then goes on to say how it is to be preventive by requiring all member countries affected by the resolution to pass legislation to freeze the assets of those who have been charged or convicted of a terrorist offence. That is clear from the language of the resolution. Simply to say that the resolution is intended to be preventive and that the Bill is preventive is not an answer to that point.
The only real answer that has been given was that given by the noble Lord, Lord Bach, when he repeated what was said by the noble and learned Lord, Lord Wallace of Tankerness, in Committee. In particular, he said:
“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”.—[Official Report, 6/10/10; col. 150.]
How can that be so under the terrorist orders unless they were intended to be extra-territorial?
That brings us back to the question whether Clause 1 is extra-territorial. The fact that something has happened is by no means proof that it was justified, as indeed is the case with the whole history of this part of the law, which has had to be corrected by the Supreme Court in its most recent decision. Those figures do not convince me at all. We return to the question whether Clause 1 on this particular point is intended to be extra-territorial. It is clear to my mind that it is not, for the reasons that I have already given—namely, that other provisions in this Bill are said to be extra-territorial and this is not included among those provisions. That merely confirms the ordinary rule that we apply all the time that legislation is not extra-territorial unless it is stated to be so.
There is a further question relating to the figures given by the noble and learned Lord, Lord Wallace of Tankerness. If those persons were outside the jurisdiction, how were they notified? Under Clause 3, it is the obligation of the Treasury to notify a person immediately when the final order or an interim order is made. How can we be sure that that is being done when the person is outside the jurisdiction, wherever he may be? The argument that my amendment would in some way cut down a valuable power that the Treasury now has and would not have if my amendment were passed is simply not, with respect, borne out. I am not willing to withdraw the amendment and will take the opinion of the House.
Lord Sassoon
Lord Sassoon
My Lords, the Government’s intention behind this amendment is to clarify that the words “involved in” in the legal tests for interim and final designations do not mean something additional to the activities and conduct referred to in the definition of “terrorist activity”. In Committee, my noble friend Lady Hamwee indicated her concern that use of the term “involved in” could capture people whose conduct did not fall strictly within Clause 2(2) but who were simply associates of people whose conduct did fall within that clause or who were merely innocent bystanders. This was not the Government’s intention, nor do we think that it is the effect. However, by tabling this amendment to make it clear that “involvement in terrorist activity” means no more than the activities and conduct described in Clause 2(2), I hope to ensure that there can be no doubt or further confusion. I thank my noble friend for her intervention in Committee and hope that she and other noble Lords will be minded to support our amendment. I beg to move.
Baroness Hamwee
My Lords, I am extremely grateful to the Minister for this amendment. The Bill creates a number of offences, so I felt that it was important to be crystal clear about the provisions. In my view, the amendment achieves that. I thank my noble friend.
Lord Sassoon
Lord Sassoon
My Lords, these amendments relate to the requirement on the Treasury, where an interim or final designation expires or is varied or revoked, to take such steps as it considers appropriate to bring that fact to the attention of those informed of the interim or final designation.
When the Bill was being discussed before the Committee of the whole House, the noble Lord, Lord Pannick, expressed concern that the wording of what are now Clauses 8(2)(b) and 9(2)(b), which make provision for the duration, variation and revocation of interim designations, did not hold the Treasury to a sufficiently high standard, as it was open to it to consider, in its own subjective determination, the steps to be taken to inform those informed of an interim designation of the expiry, variation or revocation of the interim designation.
We agree that it is important that persons informed of an interim designation are also informed of an expiration, variation or revocation of that designation and, on reflection, we believe that it is appropriate to make express provision in the Bill for the Treasury to be required to take reasonable steps to notify such persons. Furthermore, the same standard should be applied to the steps that the Treasury must take to inform persons of the expiry, variation or revocation of a final designation. Therefore, these amendments, which I hope address the noble Lord’s concerns, amend not only Clause 8(2)(b) and Clause 9(2)(b), but Clause 4(5)(b) and Clause 5(2)(b), which make provision for the duration, variation and revocation of final designations. The amendments have the same effect on each of the clauses, in that they remove the Treasury’s discretion to determine subjectively the steps that it considers appropriate and replace it with an obligation to take steps that, on an objective assessment, would be considered reasonable in the circumstances. I therefore beg to move.
Lord Pannick
My Lords, these amendments meet the concerns that I expressed in Committee. I am grateful to the Minister for listening and acting.
Lord Sassoon
Lord Sassoon
My Lords, Amendments 9 and 11 require the Treasury to apply to the court to make an interim designation. As I set out in Committee, the Government continue to believe that Ministers are best placed to take decisions to impose asset freezes, but it is absolutely right that these decisions should be subject to intense scrutiny by the courts in cases where a person wishes to challenge the asset freeze.
I believe that there are three compelling reasons why decisions to impose asset freezes should be taken by the Executive. First, they are preventive, not punitive, measures taken on the basis of operational advice to protect national security. It is accepted practice for such decisions to be taken by Ministers, who take decisions to impose proscriptions, deprivations of citizenship and exclusions. Secondly, Ministers are then accountable for these decisions to Parliament and the courts. This clear accountability and their broad view of the threat posed mean that Ministers are best placed to weigh the protection of national security with the interests of the designated person. Thirdly, there are strong international comparisons for this practice. The US, Australia, Canada and New Zealand all entrust asset-freezing decisions to the Executive, whereas the noble and learned Lord’s amendment would introduce mandatory court involvement in the making of interim asset-freezing decisions.
With permission, I should like to set out why the Government do not believe, as a matter of principle, that any asset-freezing decisions need to be approved by the courts. I accept, for example, that control orders work differently and are approved in this way, but the Government do not believe that the courts should have the same role in asset freezing, because the circumstances are clearly different. Asset freezes interfere with property rights but they do not impact on human rights to the same extent as control orders, which can impose restrictions on movement, association and communication. Furthermore, in contrast to control orders, asset freezing is not primarily used against people in the UK who cannot be prosecuted or deported. Indeed, as we have already discussed, only about 10 per cent of asset-freezing cases involve people who are in the UK or hold funds here and who have not been prosecuted for a terrorist offence. In cases where people are prosecuted for terrorist offences, evidence against them will be brought before a court.
In the case of terrorist groups or individuals overseas, the asset freeze has a less direct impact because it applies only within UK jurisdiction. Overseas terrorist groups and individuals have not challenged their asset freezes in the UK courts and we do not believe that mandatory court decision-making or approval would add any real value in these cases. Indeed, it may even provide groups such as Hamas with a public platform on which to challenge the UK’s operational and foreign policy decisions.
We therefore believe that the right way to recognise the need for proper judicial scrutiny over asset freezing is not to introduce mandatory court involvement but, rather, to make it clear that there is robust court scrutiny of cases where individuals or entities wish to challenge their freezes. The Government therefore brought forward amendments to the Bill to specify that challenges to designations should be on the basis of an appeal, rather than judicial review. Although I realise that judicial involvement is a principle on which certain noble Lords will have strong views—one certainly—I hope that they will be able to accept that the right way forward is to maintain the current drafting of the Bill and I ask the noble and learned Lord, Lord Lloyd of Berwick, whether he is prepared to withdraw the amendment.
Lord Lester of Herne Hill
My Lords, perhaps I may briefly echo my support for the noble and learned Lord’s amendment.
Lord Sassoon
My Lords, I will first address Amendments 12 to 14, which concern making a subsequent interim designation of someone who has already been subject to an interim designation. A common theme of the amendments is the information which can be used to make a further interim designation against the same person. These amendments clarify that the Government can make a further interim designation against the same person only on the basis of significant, not incidental, new information. The Government agree that any new information would need to be significant in order for the Treasury to make another interim designation. Our amendment is tabled to make it clear that a second interim designation cannot be made on exactly the same or substantially the same evidence.
The amendment moved by the noble Lord, Lord Pannick, prevents the Treasury making more than one interim designation of the same person in relation to substantially the same evidence, but not exactly the same evidence. I am grateful to the noble Lord for what I took to be the likelihood of him formally withdrawing his amendment—he is nodding. He also said that he will support the government amendment dealing with that point, and I am grateful for that.
The amendment tabled by my noble friends Lady Hamwee and Lady Falkner of Margravine mirrors the government amendment but, in addition, prohibits the Government making a further interim designation on the same person within a period of six months. I understand that the purpose of this amendment is to ensure that interim designations are not abused effectively to subject someone to a continuous interim designation lasting more than 30 days. In practice, it is extremely unlikely that the Government would be able to make the same person subject to a second interim designation within six months without a final designation being made. This would arise only where we are unable to make a final designation but have become aware of substantial new information showing that a further interim freeze is necessary for public protection. Such a situation would be extremely unusual. Ordinarily, we would expect that significant new information would support a reasonable belief threshold, but it is nevertheless possible. Any second interim designation must, of course, be necessary for public protection as well as not being based on the same information or, as we propose, substantially the same information. We believe that these are the right safeguards and that an arbitrary period during which the second interim designation cannot be imposed is unnecessary. We would not want to deny ourselves the ability to make a further interim designation in these circumstances. If we were so denied, it would leave the public exposed to an unacceptable terrorist threat. We therefore cannot accept this amendment, and I hope that my noble friends will not move it but will support the government amendment.
Before speaking to the government amendment, I will discuss the other amendments in this group. Amendment 10 limits the circumstances where interim freezes can be imposed to when the Treasury considers that there is an urgent need to act before proper consideration can be given to whether the reasonable belief threshold for a final designation can be met. We share the view that interim designations should be made only where necessary. Where the Government have sufficient evidence available at the outset to meet the reasonable belief test, the Government will make a final designation, not an interim one. This reflects that the fact that where we can do so, it is clearly in the Government’s interest to make a final designation rather an interim designation because, first, a final designation lasts for 12 months compared with 30 days for an interim designation and, secondly, because it is not in the Government’s interest to suggest to the designated person and to the outside world that we have only reasonable suspicion of a person’s involvement in terrorism where we in fact have reasonable belief. Therefore, interim designations will be made only in cases where the Government at the time of making the decision have sufficient evidence to meet a reasonable suspicion test but not a reasonable belief test.
The amendment proposes that as an additional safeguard interim designations should be made only where there is an urgent need to act before the Government have considered whether there is sufficient evidence to make a final designation. Let me stress that there is already an important safeguard in place. Interim designations and final designations can be made only where necessary for public protection. The question raised by this amendment is what additional purpose is achieved by requiring not only that interim freezes must be necessary for public protection but that there must also be an urgent need to act. If an urgent need to act is the same as being necessary for public protection, there is no need to add it. If, however, an urgent need to act is something additional to “necessary for public protection”, what situations does it cover that the phrase necessary for public protection does not?
In our view, the Government must be free to impose interim freezes in cases where we have sufficient evidence to meet the reasonable suspicion test and where we consider that it is necessary for public protection. To accept a situation where the Government consider that an interim freeze was necessary for public protection but were unable to act would negate the purpose of making provision in the legislation for interim freezes and would increase the risk to the public from terrorism. For this reason, the Government cannot support the amendment and I hope that the noble Lord will withdraw it.
The noble and learned Lord, Lord Lloyd of Berwick, has not spoken to Amendment 15, so I propose to move straight to Amendment 17. This amendment seeks to clarify that where an interim designation expires, whether after 30 days or on the making of a final designation, this does not prohibit the continued investigation of that person by the relevant authorities. I am grateful to the noble Lord, Lord Davies of Oldham, for reminding us of the underlying purpose of all this activity against terrorism of which this Bill forms a part. The Government must be enabled to deploy all reasonable legislative and other appropriate powers to prevent terrorism. Therefore, it is good to be reminded of that at this point.
However, asset freezes are separate and completely distinct from investigative operations. While investigations may be relevant to the evidential base for making an interim designation, they are not directly linked. Neither the existence nor the expiry of an interim designation prohibits the relevant authorities from pursuing or continuing investigations they determine to be necessary. For that reason, we do not believe that it is necessary to amend the legislation and therefore hope that the noble Lord will not press his amendment.
Lord Pannick
My Lords, in relation to Amendment 10, the Minister emphasises that an interim designation order may be made only where it is necessary for purposes connected with protecting members of the public. Of course, he is correct. The difficulty with that argument is that the same criterion appears in precisely the same form in Clause 6(1), which is concerned with interim designation orders, and in Clause 2(1), which is concerned with final designation orders. Indeed, the criteria in the Bill for making an interim designation order are exactly the same as the criteria for making a final designation order, save that the final designation order may be made only where there is reasonable belief and the interim designation order may be made where there is reasonable suspicion.
My point is that there needs to be in the Bill something that identifies the circumstances in which it may be appropriate for the Treasury to take this, I hope, exceptional step of making an interim designation order even though it only has reasonable suspicion. The Minister, with great respect, has not answered my point that it can surely only be where there are circumstances of urgency and when the Treasury has not had time to deliberate and decide whether there is reasonable belief that it could be appropriate to make an interim designation order.
I am not going to pursue this matter today, but I ask the Minister and those who assist him to read the report of this debate before the next stage just to see whether he may be persuaded that there is something in what I say. He has himself brought forward, helpfully, a number of amendments to clarify the Bill in order to remove potential ambiguities, and I suggest that this is another. For the moment, I beg leave to withdraw the amendment.
Lord Sassoon
Lord Sassoon
Lord Sassoon
Lord Pannick
My Lords, I support the amendments, in particular Amendment 20A. The Treasury has no interest whatever in controlling expenditure on legal advice and legal representation; its only interest is to ensure that the assets are not used for terrorist purposes. It is important that the uninhibited right to seek legal advice and to obtain legal representation is stated clearly in the Bill and that it is not left to Treasury concession.
Lord Wallace of Tankerness
I thank my noble friend Lady Hamwee for dealing with licensing, which was an important part of our deliberations in Committee. Amendments 19, 20 and 20A would write expressly into the Bill a duty on the Treasury, if requested, to issue licences to allow the designated person and his dependants to access sufficient funds and economic resources to meet reasonable living costs and to pay for legal representation. In the case of living-costs licences, the amendment would place a duty on the Treasury to deal with applications urgently.
As my noble friend made clear, the amendments reflect concern that the Bill does not include a sufficiently clear obligation on the Treasury to issue licences for these purposes and that designated persons and their families are reliant on the good faith or good practice of the Treasury to grant such authorisations. I recognise the concerns that have prompted the amendments. It goes without saying that a designated person must be in a position at the earliest possible opportunity to access funds to meet his or her and their dependants’ living costs and to be able to pay for legal advice and representation in relation to their designation.
However, we do not think that to include in the legislation an obligation to issue such licences is necessary, since the obligation already exists by virtue of the Treasury’s duty to act in compliance with the Human Rights Act. Under Section 6(1) of that Act it would be unlawful if the Treasury acted in a way which is incompatible with a convention right. So, in response to the point made by my noble friend, it is not a question of acting with good grace but of acting under a requirement—an obligation—on the Treasury. It means that the Treasury must issue any licence that may be required to ensure that the affected person’s convention rights are not unlawfully infringed by the imposition of an asset freeze.
In order to secure compliance with this obligation on the Treasury, it routinely issues licences immediately on designation so that designated persons from the outset have access to frozen funds, including all social security benefits to which they are entitled, to meet their day-to-day living expenses. There is no requirement that such licences be requested by the designated person; they are issued automatically as a matter of course. The licences that the Treasury issues are broad and do not restrict the designated person’s access to funds necessary to meet only reasonable living costs. The only controls imposed are those necessary to protect against the risk of funds being diverted to terrorism.
In addition, a designated person or any other affected party may request a licence at any time if access to funds or economic resources is required which is not already authorised under the terms of a licence issued immediately upon designation. The Treasury’s practice is to treat any request for such licences as a matter of priority and, in particular, to deal urgently with requests where the failure to act quickly would result in hardship to the designated person or their family. It is therefore not necessary to impose an express duty on the Treasury to treat such applications as a matter of urgency as the Treasury already has a legal obligation to act in a way which is compatible with the affected person’s convention rights, and it is accordingly the Treasury’s established practice to do so.
My noble friend and the noble Lord, Lord Pannick, attested to the importance of legal expenses. Again, the Treasury is obliged by virtue of human rights law to ensure that it does not act in a way that would impede an affected person’s access to legal representation. To ensure this, there is already in place a general licence permitting the Legal Services Commission to pay legal aid funds to solicitors representing those designated persons who are eligible for legal aid. In addition, the Treasury will ensure that an additional general licence will be issued which authorises third parties to meet the legal expenses of designated persons by paying their lawyers.
There is an overriding obligation on the Treasury to issue licences for legal expenses. Therefore, again, it is not necessary to write such a duty into the Bill. I assure my noble friend and your Lordships’ House that the absence of such an express duty would in no way prevent an affected person from challenging the Treasury in circumstances where a Minister decided to impose a particular condition in a licence, delayed issuing the licence or refused to issue it at all. I repeat to my noble friend that this is not simply a matter of Treasury practice, but of the Treasury honouring the legal obligations upon it.
Lord Pannick
If I understood him correctly, the Minister mentioned legal aid for the designated person and allowing third parties to fund legal representation for that person. My concern is when the designated person has assets of his own which he wishes to spend on his legal representation. I should like to have an assurance that the Treasury will allow the designated person to use as much of his own legal resources as he thinks appropriate in his own legal defence provided that the payment, as Amendment 20A states, is to,
“a person subject to regulation as a legally qualified person”.
Lord Wallace of Tankerness
I said that in addition to a general licence which already exists with regard to the Legal Services Commission paying legal aid funds to solicitors representing designated persons who are eligible for legal aid, the Treasury will ensure that an additional general licence will be issued which authorises a third party to meet the legal expenses of designated persons by paying their lawyers.
The noble Lord, Lord Pannick, raised the issue of whether the person’s own assets might then be used. That would be distinctive from a general licence which, by definition, cannot relate to that of an individual. As I indicated earlier, licences issued in respect of individuals are intended to impose controls that are necessary to protect against the risk of the funds being diverted to terrorism. That is the test. Therefore, an application for a licence—it would have to be a licence for an individual with regard to his own individual circumstances and not a general licence to which I have already referred—would have to be looked at by the Treasury against that test to ensure that that there was not a diversion of funds to terrorism.
Lord Pannick
I am sorry to test the Minister's patience, but if I understand him—please correct me if I am wrong—he is saying that there may be circumstances in which the Treasury would restrict the amount of money that the person who is designated—his own money—may be able to use for his own legal representation. If I understand the Minister correctly, that is because of the risk of the money being diverted to terrorism. But surely, if the money is going to a person who is regulated as a legally qualified person, the Treasury would have to suspect that a solicitor or barrister is involved, in some way, in terrorism. That is a very serious matter that should be taken up with the proper regulatory authorities and not be the subject of restricting the designated person from obtaining the legal representation that he seeks.
Lord Wallace of Tankerness
My Lords, in principle, it would be possible to allow people to spend their own funds on legal expenses. It does not detract from the possibility of a licence being issued, but there are practical reasons why it is not possible to allow frozen funds to be used to pay legal expenses. For example, there would be circumstances where banks would be put in a position of having to determine whether a particular transaction was for legal expenses or not. The Treasury allows this matter to be dealt with by way of licence with the appropriate conditions attached. That would be the way to deal with an individual licence on an individual application and a person seeking to use his own funds as opposed to and distinct from the general licence that exists for legal aid, which I have indicated would be issued with regard to the third-party circumstances that we have already discussed.
Lord Lester of Herne Hill
Will my noble and learned friend tell the House what legal remedy there would be if, in spite of good intentions, the reality was that there was an unfair, unnecessary and disproportionate interference with the right of access to court as a result of the way in which the Treasury was exercising its discretion?
Lord Wallace of Tankerness
My Lords, as my noble friend is aware, provisions within the Bill allow for a decision not to issue a licence with suitable conditions to be challenged. If I may say, this is a circular argument—how do you get the funding to challenge it?—but it is not without remedy.
I was asked whether there would be any restriction on the volume of funds. If the funds are required specifically for the purposes that the noble Lord, Lord Pannick, indicated, that would not lead to a restriction. This is best dealt with, and would be dealt with, on the basis of an individual licence application. Obviously, there would be a remedy there if the person was not satisfied with the terms of the licence that was issued.
The other amendment to which my noble friend spoke relates to the position under Clause 27 for a person affected by a Treasury decision other than a designation-related decision to apply to the court not only for the decision to be set aside but for it to be varied. The amendment would in particular allow decisions relating to licence conditions—the very issue that I have been discussing with my noble friend Lord Lester—such as limits on the amount of cash a designated person could access per week to be varied by the court. The Government agree that the court should have sufficient powers to require the conditions of a licence to be varied so as to ensure that the designated person has sufficient access to funds and economic resources subject to appropriate conditions, but we also believe that the amendment is unnecessary.
Under Clause 27, the court can set aside any licence-related decision made by the Treasury. For example, if the court considers a designated person should be entitled to access a larger amount of cash per week than he is permitted to withdraw under the cash limit in the licence, the court can set aside the Treasury’s decision to impose that cash limit. While it would not be open to the court expressly to write conditions into the licence or rewrite existing conditions, the Treasury is obliged to take into account the reasons that the court gives for striking down a condition in the licence. In practice, the Treasury has immediately revised licences, taking account of the court’s view on what the licence should contain. Therefore, I hope that my noble friend will not press her amendments on the assurance that these are matters not just of good practice but of obligation, which the Treasury obviously takes very seriously.
Baroness Hamwee
My Lords, with that last comment, my noble and learned friend anticipates my saying that I would not wish to see this matter rest on practice but that it is a matter of obligation.
I understood my noble and learned friend to say that a licence to use funds for legal advice or representation is in part to protect the banks. I find that difficult to follow, because I am asking for a licence; I am not asking for the banks to be allowed to release funds simply on the say-so of the designated person or third party that this is the use to which the funds would be put. I make that point quite seriously, although I will not ask my noble and learned friend to come back on it if he does not want to at this point. However, which article or articles does he rely on with regard to subsistence costs? The right to a fair trial leads one very directly to the point of legal advice and representation. It is probably, although I do not want to put words into the Government’s mouth, a combination of other articles that takes us to subsistence.
Lord Wallace of Tankerness
My noble friend is right to say that there are other articles. The right to a fair trial is the obvious one, but there is also the right to use one’s resources under Article 1 of Protocol 1. Also used in these contexts sometimes is the right to family life under Article 8, which might well be relevant in circumstances such as these.
Baroness Hamwee
I am grateful to my noble and learned friend. Although I remain a little uneasy—that is not his fault—I beg leave to withdraw the amendment.
Baroness Hamwee
This was another matter that I raised in Committee, and I have been grateful for the opportunity to discuss it with my noble and learned friend since then. We agreed that I would table an amendment again to enable the Government to give a slightly longer explanation than they were able to at that date.
The amendment would protect a person who does not wish to incriminate himself. The exception of reasonable excuse would apply in this situation; it would be reasonable for a person to say that he will not comply because of the right not to self-incriminate. But this is a general defence to something that is really very specific, and if the Government can take us through their thinking it would be very helpful. On the question of what is reasonable in particular circumstances, one would have to analyse the circumstances so carefully and to such a degree that the concern about self-incrimination might be trumped. That is why a provision that was—as I described it—more straightforward, although longer, would be appropriate.
Lord Wallace of Tankerness
Again, my Lords, I am grateful to my noble friend for raising this point, which we dealt with in Committee and which we have had an opportunity to discuss further. I hope that I can persuade her that the Bill does not really provide the ace of trumps up the sleeve; rather, it recognises—as I think would this House—the importance of the privilege against self-incrimination.
The amendment would replace a qualified requirement to provide information in the absence of reasonable excuse with an absolute obligation, but would provide that such information could not be used in subsequent criminal proceedings. Again, as my noble friend indicated in moving the amendment, the purpose of doing so would be to protect the privilege against self-incrimination.
In Committee, I confirmed to my noble friend that the privilege against self-incrimination was not overridden by the Bill. In particular, I clarified that if a person was concerned that compliance with an information request would infringe that person’s right against self-incrimination, that concern itself would form a reasonable excuse, under what is now Clause 22(1)(a), for refusing to comply with that request.
I appreciate that the amendment is prompted by a concern that “reasonable excuse” operates as a defence, and that it is inappropriate to rely on a general defence in such a fundamental area. I readily appreciate the nature of this concern, but it is misplaced as it is founded on a misunderstanding of how the prohibition in Clause 22(1)(a) will operate. In order for the offence to be committed, the person must have no reasonable excuse for failing to provide the information. If the person decided that providing the information would infringe his or her right against self-incrimination, he or she would have a prima facie reasonable excuse for withholding it and would not have committed the offence.
The onus would not be on the person to raise a defence based on the privilege against self-incrimination. It would instead be on the prosecution to show that the person’s reliance on that privilege was not reasonable in the circumstances. In practice, no prosecution would be brought unless the prosecution considered that there was a reasonable prospect of establishing this, and then it would be incumbent on the prosecution to prove that beyond reasonable doubt. I hope that this further reassurance will permit my noble friend to withdraw the amendment.
Baroness Hamwee
My Lords, with reference to where the onus lies, the Minister’s reply is particularly helpful; I am glad to have the assurance that it lies on the prosecution in that situation. I beg leave to withdraw the amendment.
Lord Bach
Briefly, I can say only to the noble and learned Minister: plus ça change. Here I am, supporting in what I am about to say the suggestion made by the noble Lord, Lord Pannick, in his amendment. I do so in rough terms; I am not in any way inviting him to test the opinion of the House on it today. This is surely a matter that can be dealt with in some more satisfactory way than that. The noble Lord seems to have a point, backed up as he is by the noble Lord, Lord Lester, and the noble and learned Lord, Lord Mackay of Clashfern. I ask the Minister this simple question. Presumably he will argue that,
“such order as it considers appropriate”,
includes damages. If the answer to that question is yes, can there be any reason not to put that in the Bill in express terms, for the reasons stated by the noble Lord, Lord Pannick?
Lord Wallace of Tankerness
My Lords, in responding to an amendment moved by the noble Lord, Lord Pannick, I feel somewhat guilty as I do not feel able to go so far as my noble friend Lord Sassoon in offering concessions. However, I welcome the noble Lord’s amendments as they have given us the chance to have a very useful discussion. Notwithstanding the points that have been made about the adequacy or inadequacy of Pepper v Hart statements in providing clarity, I hope that the noble Lord, Lord Pannick, will feel that sufficient clarity is provided.
This amendment relates to the debate that we had in Committee about the avenues available to a person who has suffered loss as a consequence of an asset freeze to obtain compensation. During that debate, the noble Lord, Lord Pannick, the noble and learned Lord, Lord Davidson of Glen Clova, and my noble friend Lady Noakes were particularly keen for the Government to indicate their position on this point, and I shall try to do so.
The amendment of the noble Lord, Lord Pannick, would provide that the court can, in relation to appeals by designated persons against designation-related decisions, award damages if and to the extent that the court thinks it just and appropriate to do so. The noble Lord has tabled the amendment following our discussion on the scope of the orders available to be made by the court under Clause 26(3). In that discussion I drew the Committee’s attention to that provision and indicated that,
“it would be possible, in connection with a successful challenge against the designation, for the person to claim damages, and it would be open to the court to award damages to a successful applicant”.—[Official Report, 6/10/10; col. 193.]
I was not suggesting—as my noble friend queried; and I am grateful for the opportunity to set the record straight—that it would be open to the court to award damages,
“simply for the invalid nature of the designation”.
As the noble Lord rightly observed then, and repeated tonight, that would be contrary to,
“the general principle of … administrative law … that the law does not normally provide compensation for those who have suffered direct loss as the result of invalid administrative action”.—[Official Report, 6/10/10; col. 194.]
It is not the Government’s intention to overturn that principle. However, it is the case that a designated person appealing a designation-related decision under Clause 26 can in certain circumstances make a damages claim in connection with that appeal. I apologise to your Lordships’ House if I did not make that distinction clear.
To clarify the effect of Clause 26(3), the orders that a court may consider appropriate in connection with an appeal of a designation could include, for example, an order to revoke the designation, or the renewal of it, or an order to uphold the designation. It would be open to a designated person to include in these, or subsequent, proceedings claims for damages under the Human Rights Act, as I believe my noble friend Lord Lester indicated, such as breach of the person’s right to enjoyment of property under Article 1 of Protocol 1 as a consequence of being invalidly designated, or—as I indicated in relation to the previous amendment— breach of Article 8, the right to respect for private and family life.
There have been relatively few legal challenges to designations, but where such challenges have been made a number of them have either included Human Rights Act damages claims or have given rise to separate Human Rights Act damages claims. Those claims which are being pursued are at a very early stage and as yet there has been no judicial determination of any of them. It may also be possible—although I appreciate that this would be more difficult—to found claims in tort or delict.
My noble friend Lady Noakes raised in Committee concerns about persons other than the designated person suffering loss as a result of a designation. Nothing in this Bill is intended to change the existing grounds—whether as a matter of the law of tort or delict or under the Human Rights Act—on which anyone affected by an asset freeze, whether the designated person, such person’s spouse or other family member, or any other third party, can claim damages against the Treasury if they believe that they have suffered loss as a consequence of an unlawful asset freeze.
In relation to loss suffered by both designated persons and persons other than designated persons, I should like to make one further crucial point. The purpose of the asset-freezing regime is to prevent the diversion of funds and economic resources for terrorist activity. It is the Treasury’s policy as far as is possible and consistent with that aim to license the use of funds and economic resources. The licensing regime successfully mitigates the impact on designated persons, their families and other third parties of an asset freeze. The general presumption is that a licence will be granted unless there is a risk that the transaction carries a risk of funds being used or diverted for terrorist purposes. Where third parties are affected, the power to grant a licence is exercised so as to ensure that, so far as is possible, no loss is suffered by any third party. For example, where payments to a family member or other third party would be prohibited because the designated person would thereby receive a significant financial benefit—for example, the discharge of a debt owed by the designated person—the Treasury can license such payments. Similarly, payments by a designated person to a third party in respect of, for example, contractual debts owed by the designated person to that third party are capable of being licensed.
I have heard the request that it would be useful to put something in the Bill. My concern is that although that might to some extent allow the individual to look at it and not necessarily contact a lawyer—however, I rather suspect that in many cases a lawyer will be quickly contacted—it might not cover the ingenuity of lawyers. If you put something in the Bill, it might seem to be limiting whereas lawyers might use their ingenuity to come up with other grounds under the Human Rights Act under which a claim could be made in the context of appeal proceedings or other proceedings. I shall certainly reflect on what has been said but I—
Lord Lester of Herne Hill
I am very grateful to the Minister. However, I would still like him to explain the practical disadvantage in accepting the amendment of the noble Lord, Lord Pannick. Would it not be of great advantage to the principle of reasonable legal certainty if this part of the Bill stated the law as it is? If not, what other means can the Government think of to bring home to people what the true legal position is, without having to consult a lawyer?
Lord Wallace of Tankerness
My Lords, my concern is that it would not necessarily provide the degree of certainty which my noble friend seeks. It could leave open all sorts of possibilities as to the grounds on which claims might be sought. However, important points have been made in the debate. I wish to reflect on them without commitment, but I am concerned that the proposed remedy might raise as many questions as it is intended to resolve. Therefore, I hope that the noble Lord will withdraw his amendment.
Lord Bach
My Lords, I was very well assisted by the report that the committee brought out, and by the paragraphs referred to by the noble Lord, Lord Lester. The Government of whom I was a member set up the special advocate system in order to deal with what was and remains a very difficult issue around terrorism. However, we recognise that there are difficulties with it that any Government will have to deal with in due course. On balance, we do not think that the Bill is the appropriate vehicle to make sweeping changes of principle on the issue of the special advocate system.
I have a couple of questions that I should like to ask. This may be a short debate, but the issue may be one of the most important that we debate this afternoon. As my noble friend Lord Davies of Oldham said in an earlier debate, this matter calls into question the balance between civil liberties and security—it is right at the heart of that argument. Any Government of whatever complexion will have to deal with this, day by day and month by month. I take the point made by the three noble Lords who have spoken already that it is difficult to understand why the Government argued in Committee that the regime for control orders is not the same as that for asset freezing, particularly as it relates to the special advocate system. In the end, it seems that the same rules will have to apply, whatever they are. I hope that the Minister will deal with that point when he sums up the debate. What are the differences between the two regimes, especially in relation to the special advocate system?
I am aware that there is to be a Green Paper on this vexed issue in 2011. Will the Minister confirm that that will not be December 2011, as presently planned, but more like the middle of the year? I also understand that there is likely to be a case, perhaps on point, that the Supreme Court will be asked to decide, and which will be heard very early next year, with the judgment expected in good time for the Green Paper.
Those are my questions. Despite what I have said, I hope that the noble Lord will not press the amendment. It needs some careful consideration. However, the points that have been made are powerful and must be dealt with at some stage.
Lord Wallace of Tankerness
My Lords, as the noble Lord, Lord Bach, indicated, this has been a short but fundamentally important debate. As he also indicated, it focuses on the challenge and dilemma of balancing the interests of liberty and those of security. I know that the noble Lord, having relatively recently been in government, had to do that himself. These are not easy issues to determine. It is important to recognise, too, that they are issues with which the Government constantly wrestle. It is fair to say that in its preliminary report—I welcome the fact that we have that report to help us today—the Joint Committee on Human Rights acknowledged the amendments that were moved in Committee and welcomed the Government’s willingness to consider the human rights issues raised during the debate at Second Reading and their amendments to the Bill, which are designed to improve the balance between national security and human rights in the asset-freezing regime. This is an issue of which Ministers are acutely conscious as they constantly try to ensure that the balance is correct.
Amendment 23, moved by the noble Lord, Lord Pannick, seeks to create a new subsection within Section 67 of the Counter-Terrorism Act 2008 that would apply to the content of the court rules about disclosure in financial restrictions proceedings and to court rules made in relation to challenges to decisions under the Bill. The amendment would require the court rules, which are to be made initially by the Lord Chancellor for England and Wales and Northern Ireland, to ensure that the Treasury provides sufficient open disclosure to enable the designated person to give instructions to the special advocate. As has been reflected in some contributions to the debate, the form of words is based on the European Court of Human Rights judgment in A, which was applied by your Lordships’ Judicial Committee in AF and Others to the stringent control orders that it was considering. The effect of the amendment is to apply AF (No. 3) to challenges to final designations.
As was foreshadowed in the letter of my noble friend Lord Sassoon to the committee, the Government do not support this amendment, and I shall explain why. I start by stressing a fundamental point on which I know there is common ground all round the House. Designated persons must have the full protections afforded to them under Article 6 of the European Convention on Human Rights; namely, the right to a fair hearing.
Section 67(6) of the Counter-Terrorism Act 2008, which is imported into the regime for dealing with asset freezing, is absolutely clear that nothing in that section, or in rules of court made under it—they include provisions relating to the Treasury’s disclosure of information only to the court and a special advocate—requires the court to act in a way that is inconsistent with Article 6 of the ECHR. It is important to emphasise that the judge also has an important role to play in challenging the closed material and in weighing the impact that non-disclosure has on the fairness of the proceedings. The court determines whether material should be withheld, and the disclosure process is designed to ensure that the maximum amount of material that can be disclosed to the individual without damaging the public interest is disclosed.
The Government and the legislation are absolutely clear that Article 6 rights apply in full to asset freezing. Therefore, it would be inaccurate to say—and I do not think that this was suggested—that advocates of the amendment support Article 6 rights while the Government do not. To make it clear, not only do the Government support Article 6 rights but those rights are there in the Bill by reference to the Counter-Terrorism Act 2008.
I hope that there is broad agreement that the legal position regarding the application of AF (No. 3) principles to asset freezing has not been fully determined by the courts. That is probably a matter of fact but it is clear that different views are being expressed in the House this evening regarding the applicability of the decision in AF (No. 3) to asset-freezing designations. Of course, the courts have determined—indeed, it was determined in the case itself—that AF (No. 3) principles apply to stringent control orders and to financial restrictions proceedings under the Counter-Terrorism Act 2008. That was the subject matter of the case to which the noble Lord, Lord Pannick, referred. However, the courts have not yet determined that AF (No. 3) principles apply to asset-freezing cases. The Government’s view is that it would certainly be wrong to say that legally there is no room for doubt on this.
I shall now seek to address the points that the noble Lord, Lord Pannick, made in moving the amendment. When the Bill was discussed in Committee, I indicated that in the Government’s view the principles do not apply to asset freezing because, although I do not in any way wish to minimise their significance or importance, asset freezes do not have the same impact on individuals as stringent control orders, nor are they as wide-ranging in their financial and economic impacts as decisions to impose financial restrictions under the Counter-Terrorism Act 2008. Perhaps I can assist the noble Lord, Lord Bach, who asked me to identify some of the distinctions. Asset freezes are not of the same nature or magnitude of interference, because they restrict the rights to property and indeed can be modified or alleviated by licences, whereas control orders restrict people’s liberty, communications and movement. As I said, I do not in any way diminish the seriousness of asset-freezing designations but, in our argument, their impact is not of the same magnitude as that of stringent control orders. However, it is open to the courts to determine whether the Government’s position is to be challenged.
It is certainly possible to draw a distinction in the case of Kadi, which was determined by the European Court of Justice. That judgment concerned the process followed by the European Commission in listing Kadi, and the Government would certainly argue that it had no direct bearing on the process to be followed by the United Kingdom Government in applying asset freezes domestically against persons believed to be involved in terrorism. We believe that the European Court of Justice judgment in Kadi is separate from the question of whether AF (No. 3) principles should apply to asset freezes. Likewise, in the Bank Mellat case, which was determined in May this year, the court’s rulings on disclosure were specific to the cases concerned and there was no general ruling on whether AF (No. 3) should apply in asset-freezing cases. The court ruled that the application of AF (No. 3) applied in the context of financial restrictions imposed against the Iranian bank, but the circumstances of such financial restrictions, where the Treasury issued a direction that the UK financial sector must cease dealings with the bank, were very different from those where an individual is subject to an asset freeze because of his alleged involvement in terrorism. Therefore, I do not think that a direct read-across of the court’s ruling is right, applying the specific circumstances under consideration to the freezing of terrorist assets, where different considerations may well apply.
Lord Lester of Herne Hill
I apologise for interrupting the noble Lord, but does he not agree that his valiant attempt to distinguish the control order regime and the asset-freezing regime runs against the following difficulty? The European Court of Justice in Kadi (No. 1) and Kadi (No. 2) took an extremely robust position with regard to a UN framework, emphasising the extreme deprivation that could result from asset freezing and the need for adequate safeguards. The Court found that the European Commission’s second attempt to produce adequate safeguards had failed. Would that not give advocates using arguments of that kind in our courts a very hard time indeed?
Lord Wallace of Tankerness
My Lords, I can almost hear the noble Lord advancing that case. The Government’s position is simply that it is possible to make a distinction where there was a challenge to the listing in the Kadi case. It is not a position that we would wish to concede; it is on all fours with the circumstances that would arise in an asset-freezing case.
Should the courts decide that AF (No. 3) applies to asset-freezing cases, any court rules that cut across this would be read down to ensure compatibility with the ruling. Therefore, it would not be necessary to amend the legislation. In any event, it would be premature to prejudge such a determination by the courts and now to require the disclosure of sensitive information that could damage national security or the detection or prevention of crime.
The question is how best to deal with a situation where the applicability of AF (No. 3) principles is not given and is uncertain. Advocates of the amendment argue that we must remove the uncertainty by giving the Government specific obligations in this statute in the terms of the amendment moved by the noble Lord, Lord Pannick. As I believe is abundantly clear, the Government’s approach is different. As I said in Committee, and as the Prime Minister announced in July, the Government will review the whole matter of the use of intelligence material in judicial proceedings and will issue a Green Paper next year. I say in response to the question from the noble Lord, Lord Bach, that the intention is for the Green Paper to be published in the summer of next year. In response to his second question, this will allow time for a judgment to be handed down in the lead case—the employment tribunal case of Tariq—in relation to whether AF (No. 3) applies more widely than stringent control orders. I understand that that case will be heard by the Supreme Court in January and we expect a judgment in the spring. It would be wrong to pre-empt the Green Paper, although there will obviously be an opportunity for reflection on that judgment before the Green Paper is published.
It would also be wrong to adopt a piecemeal approach to this important issue. As we have heard eloquently expressed in the debate this evening, the issue of special advocates and the use of intelligence material cuts across a number of areas. If we try to address these important issues in an ad hoc way in individual pieces of legislation dealing with different aspects, we risk ending up with different requirements in different pieces of legislation. I know that that is not what many noble Lords wish to happen in this area of legislation. They want to see greater coherence and consolidation, not fragmentation and a piecemeal approach. I could not have agreed more with my noble friend Lord Lester when he said that this matter will not go away. The Government readily recognise that. As I indicated, our commitment is to address the issue. The fact that we are willing to do that is a testament to the importance that we attach to it.
The Green Paper will aim to develop a framework for ensuring full judicial and non-judicial scrutiny of intelligence and wider national security activities in line with the Government’s commitment to individual rights, to the rule of law and to properly protecting national security. It will need to address concerns about the United Kingdom’s ability to protect intelligence material, including that shared by foreign partners, and to bring forward proposals to reconcile the evolving legal position—duly informed, as it will be, by Strasbourg and Supreme Court rulings—with modern intelligence practices. We will try to ensure such a coherent and consistent approach. I hope that noble Lords will welcome and support that approach and see it as a recognition not just of how important this issue is but also of just how difficult it can be to reconcile two very important but at times competing requirements. Although I recognise that noble Lords have raised necessary and important issues with this amendment, I hope that the noble Lord will agree to withdraw it.
Amendment 24 would amend Civil Procedure Rule 79.2. That rule requires the court, when dealing with certain cases, to read the overriding objective of the Civil Procedure Rules—in other words, to deal with cases justly in a way that is compatible with the requirement to ensure that information is not disclosed contrary to the public interest, while ensuring that it has the material available to properly determine the proceedings. This relates to a similar range of arguments to those that we have just gone through. It comes from a belief that the ruling in AF (No. 3) should apply to challenges to designations under the Bill.
For two reasons, I do not believe that the amendment is necessary. As I have already made clear—I shall not rehearse the reasons again—the Government do not accept that AF (No. 3) applies to asset-freezing challenges. It is for the court to decide the ambit of AF (No. 3) on a case-by-case basis. Even if ultimately the court found that AF (No 3) applied to challenges to asset-freezing decisions, we do not think that there would necessarily be a conflict between the disclosure requirements of AF (No. 3) and the public interest requirement of Rule 79.2 of the court rules. Rule 79.23 makes it clear that the public interest provision is without prejudice to the need for the court to satisfy itself that the material available to it enables it properly to determine the proceedings. Furthermore, as I have indicated, Section 67(6) of the Counter-Terrorism Act 2008, which is imported into this Bill, simply states:
“Nothing in this section, or in rules of court made under it, is to be read as requiring the court to act in a manner inconsistent with Article 6 of the Human Rights Convention”.
In short, the Government do not believe that Rule 79.2 would cut across any fairness obligation required by the court to meet Article 6. It is an important reminder of the need to deal carefully with sensitive material but it does not constrict the proper determination of the proceedings.
I recognise that serious and important issues have been raised. I have sought to address, although I suspect that I have not done so fully, the concerns expressed by noble Lords. We hope that this will be considered fully. My noble friend Lord Lester mentioned the special advocates, as did the noble Lord, Lord Pannick, who expressed his views very robustly. There will be an opportunity to deal with that in the context of a Green Paper, which will be a way to move forward in a coherent rather than a piecemeal manner. Therefore, I ask the noble Lord to withdraw his amendment.
Lord Pannick
My Lords, I am grateful to noble Lords who have spoken in the debate for the support that they have given these amendments and to the Minister for his detailed response. I sympathise with the noble and learned Lord because, with his brief, he faces the substantial difficulties of inviting the House to accept that the legal position is not as it has been stated by the European Court of Human Rights in the A case, by the Appellate Committee of this House in AF (No. 3), by the Supreme Court in Ahmed and by the European Court of Justice in the Kadi case. For all those judges essentially to agree that basic fairness is required when the Government impose a substantial detriment, whether a control order, asset freezing or something similar, on a person—and I forgot to mention the Court of Appeal in Bank Mellat—poses a certain difficulty for the Government. As we are all rightly concerned about saving public money, I respectfully suggest to the Government that it would be a considerable waste of public money to litigate again the question whether the AF principles apply in the context of asset freezing.
The noble and learned Lord mentioned the pending case of Tariq in the Supreme Court, which is concerned with whether the AF principles apply in an employment context. The case concerns alleged race discrimination. Whatever the Supreme Court decides in that case, it is most unlikely to throw any light on the issue that we are debating here and it is most unlikely to conflict with what has been said previously.
Having made all those points, I recognise that we shall not take this matter further today. I hope that the Government will reflect on what has been said—not by me but by other noble Lords who have spoken—that they will reflect on the range of judgments that have been given and that they will recognise that, if they want to impose orders of this sort, they have to comply with basic principles of fairness that involve telling the person concerned why, in essence, the detriment is being imposed on them. I have no doubt at all that the House will return to this matter on a future occasion, if not future occasions. For today, I beg leave to withdraw the amendment.
Lord Sassoon
My Lords, it has been an interesting discussion. I am grateful to the noble Lord, Lord Judd, for recognising that the Government have put in this independent review process. We have modelled the provisions for the independent reviewer on those in the Prevention of Terrorism Act 2005, which we believe provide an effective model for the statutory, independent asset-freezing reviewer. The tributes that have been paid to the work that my noble friend Lord Carlile of Berriew has done, and to which I add my own, are the strongest possible endorsement of the framework we have used and on which we have modelled the provisions in the Bill.
Amendment 23A requires the independent reviewer to be approved by Parliament. We have heard very clearly from my noble friend Lord Carlile that independence is not to do with the detail of the appointment process, but the state of mind and the way in which the reviewer goes about his or her business. Of course, the independence of the reviewer is absolutely essential as part of the safeguards and will be a principal objective of the appointment that is made. But that does not mean that we believe it is necessary for Parliament to approve the independent reviewer. That would be a significant departure from standard practice in these matters. The appointment of a reviewer by government reflects a longstanding principle of ministerial responsibility about appointments. It is something for which Ministers are directly accountable to Parliament and to the public. Parliament will of course be able to scrutinise the work of the reviewer and hold him or her to account through existing mechanisms; for example, through parliamentary committee scrutiny.
Amendment 23B requires the reviewer to have a secretariat that is independent from government to assist him in the task. For reasons, including those given by my noble friend Lord Carlile of Berriew, we do not consider this to be a necessary provision. The independent reviewer will be provided with a secretariat and administrative support in this case, as necessary, by the Treasury. As my noble friend has explained, in practice these matters are not easy. He has set out a model that suited his way of working. It combines, under exactly the same provisions as we are proposing in this legislation, his operating partly in his own offices and partly, for matters of security and confidentiality, within, in his case, the Home Office. That does not appear to have impacted adversely in any way on his ability to carry out the role. Indeed, he has explained why in aspects of it it has been necessary to have the provision of a secretariat of civil servants, whose work he has warmly commended. We do not see why this should be any different for the independent reviewer of the asset-freezing regime.
To make the obvious point, creating a new and independent secretariat would mean a significant and ongoing cost. It is important, especially at the present time and in the present financial climate, that the best value for money is achieved, consistent with all the other objectives that we need to meet. We believe that the Treasury can provide the necessary secretariat without affecting the independence of the review or creating further significant costs.
Amendments 23C, 23D and 23E would replace the independent reviewer’s obligation to report to the Treasury with an obligation to report to Parliament. The annual reports and other ad hoc reports from my noble friend Lord Carlile of Berriew have always been provided, as he has eloquently explained, in the first instance to the Home Office to check factual accuracy, and to check that they do not inadvertently include any classified material and cannot be published. Similarly, asset freezing also deals with highly sensitive and classified material. We therefore believe that a similar process is appropriate.
Given that the independent reviewer will have access to all relevant papers and evidence, including highly classified intelligence reports, and on occasion material that is being considered as part of a separate criminal prosecution, it is only sensible to ensure that published reports do not include classified or sub judice material. Parliament could certainly not undertake such a check. But I can assure noble Lords that the Government will not seek to influence in any way the outcome of these reports. The reports will be provided to Parliament as quickly as possible and will be made available to the public.
Finally, Amendment 23F states that the appointment of the independent reviewer will be for five years and that it will not be renewable. We do not believe that it is necessary to have a statutory limit on the length of time that a reviewer should remain in post. There may be valid reasons why a reviewer should leave at an earlier stage. Equally, there also may be valid reasons why a reviewer should stay in post for longer, such as the expertise that a reviewer builds up over time of the legislation that is being reviewed, which may be invaluable to the review process.
The Government consider it essential that the report is impartial and transparent. As I said in Committee, the independent reviewer will be free to review any aspect of the asset-freezing regime. I would therefore hope that the noble Lord will be prepared not to press his amendments.
Lord Judd
I thank the noble Lord for that full reply and appreciate the tone in which it was given. I also thank everyone who participated in this debate and, if I may, I have a special word for the noble Lord, Lord Lester, who supported the amendment. I say that because it is fascinating to watch even one of my oldest friends—we were at the same school—grappling with the realities of his intellectual and legal convictions, and the cause of coalition politics. I understand his predicament and think that he spoke as positively as he could. Obviously I am glad that my noble friend Lord Davies commended the amendment. It is always nice to feel that one’s Front Bench is behind an amendment of this kind.
I have also a warm word of thanks for the noble Lord, Lord Carlile, for sharing so much of his experience and insight. We are fortunate to have someone of his calibre doing the job. But that is the point: he emphasised that it is the rugged independence of the reviewer that matters. We are making provision in this legislation for a future in which we do not know who the reviewers will be. They may not all be as robust and at times combative as the noble Lord has proved himself to be. The advantage of what we are proposing is that there will be a system that gives resources to and backs the reviewer in order to enable him or her to play the part as fully as they should.
The noble Lord and others spoke about costs, and of course one recognises that there may be costs involved. We are talking about justice in the face of the most terrible and sinister provocation, and of preserving the essence of what makes our system of justice, of governance and of democracy worth defending. If we really believe in these things, there will be a price. But we cannot simply trim still further because by doing so we give a victory to the extremists. What I have always been determined to see in our approach to these matters is that we do not inadvertently give the extremists a victory—a score. That is why it is so important that we demonstrate to the world and to others that we are proud of our system of justice and our freedoms. We know that in the context of terrorism it is necessary to introduce special measures, but in doing so, we must be determined to ensure that all can see that we will keep the diminution of our systems of justice as we understand them to an absolute minimum, and that what is being done can be justified. That is crucial and therefore the importance of the independence of the reviewer cannot be overstated. It is vital. In that sense, what the amendment proposes is a system that will enhance and demonstrate that independence.
This is a vital issue. I do not want to see the processes of rationalisation beginning to erode it all over again. That is how we slip and how, inadvertently and step by step, incrementally we give the terrorists and the extremists a victory. By doing so, the society we will end up with will not be the society we are trying to protect. From that standpoint, and because it is such an important issue of principle, I wish to test the view of the House.