House of Lords

Tuesday 23rd April 2013 Lords Chamber

Tuesday, 23 April 2013.

14:30

Prayers—read by the Lord Bishop of Exeter.

Prisoners: Indeterminate Sentences

Tuesday 23rd April 2013 Lords Chamber

Question

14:36

Asked by

[Lord Lloyd of Berwick]

To ask Her Majesty’s Government what further steps they will take to release prisoners serving indeterminate sentences for the protection of the public in the light of the recent decision of the European Court of Human Rights in James, Wells and Lee v UK.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, the European Court’s judgment did not find sentences of imprisonment for public protection to be unlawful. Therefore, it remains for the Parole Board to determine whether to direct the release of an IPP prisoner once he has completed his tariff. The National Offender Management Service continues to improve opportunities for IPP prisoners to progress towards release.

[Lord Lloyd of Berwick]

The noble Lord will know that currently more than 3,500 IPP prisoners have passed their tariff date and are waiting to come before the Parole Board. Does he accept that, at the current rate of release on licence, which is running at about 400 a year, it will be nearly nine years before the backlog is cleared? If so, is there not an overwhelming case for the Lord Chancellor to exercise the powers he was given under Section 128 of the 2012 Act to vary the release test to make it easier for these prisoners to satisfy the Parole Board?

[Lord McNally]

My Lords, the noble and learned Lord’s figure on the release of IPP prisoners is roughly correct; I do not think it is until Thursday that we release the full figures, but his estimate is not far out. That compares with 300 releases in 2011, 97 in 2010 and 53 in 2009. I hope he will acknowledge that the abolition of IPPs in LASPO and the greater flexibility that we are now employing in trying to manage the IPP sentences are going in the right direction. I acknowledge that it is a slow process. I will take back to my right honourable friend the Lord Chancellor the noble and learned Lord’s point about the power that was given in the LASPO Act, but even if that power were exercised the Parole Board would have to take public safety into account in making its decisions.

[Lord Thomas of Gresford]

My Lords, at its conference in 2012 the Prison Governors Association passed a motion overwhelmingly welcoming the ending of what it described as the “iniquitous” IPP system. It also said that unless some action is taken either to resource appropriate interventions to reduce perceived risk or to review the Parole Board criteria on what constitutes risk to the public, existing prisoners will face disproportionately long sentences. What action have the Government taken?

[Lord McNally]

My Lords, I think the key word is “risk”. The fact that these prisoners were given IPP sentences indicates that it must have been in the mind of the judge imposing the sentence that they posed a significant risk to society that had to be dealt with before they could be considered for release. That was the intention behind IPPs and that must remain uppermost in our minds when deciding the future of these prisoners. However, we are bringing in accredited courses, which may help to make the point that they are available for these prisoners. Other interventions such as work, education and employment may also provide evidence of reduced risk. NOMS is investing in interventions that have the most beneficial impact in reducing risk, and priority for those programmes is given to IPP prisoners.

[Lord Wigley]

Does the Minister accept that these prisoners are in a totally invidious position, a Catch-22 position, in that they have to undergo rehabilitative courses in order to be considered for eligibility for parole, yet the vast majority of them have not been offered such courses? Does what he said a moment ago about new courses mean that a substantial number of these prisoners will now be offered them?

[Lord McNally]

My Lords, within the constraints that we are having to operate in we are trying to introduce new courses. I fully accept that one of the reasons we abolished IPP is that it contained that Catch-22 whereby you had to fulfil certain courses, which may not be available, to qualify for release. I believe that NOMS is doing its best to bring in new systems and that there is greater flexibility in qualifying for release. However, I go back to the point that we are dealing with men who were sent to prison because the judge who sentenced them judged that they posed a serious risk.

[The Lord Bishop of Liverpool]

My Lords, one of the problems is that when a prisoner is transferred to another prison, they find that there is no accredited course in that prison. Who has the specific responsibility for ensuring that when a prisoner is transferred, there is an accredited course in the prison to which that prisoner is transferred?

[Lord McNally]

I understand that almost all IPP prisoners now have a managed programme to help them prepare for release. That should be part of sentence planning. But, again, I freely acknowledge that in some cases prisoners have been moved for other reasons and then find that they cannot complete the relevant courses. We are trying as best we can to iron out of the system what the noble Lord referred to as a Catch-22 situation so that prisoners can qualify, but to leave with the Parole Board the overriding assessment of whether they are suitable for release or whether a risk remains.

[Lord Beecham]

My Lords, what is the Government’s estimate of the number of prisoners to whom the judgment in the European Court of Human Rights case of James, Wells and Lee v UK applies? Have the Government estimated the cost of providing sufficient resources to comply with the requirement to ensure that prisoners have an opportunity to progress and to be properly assessed for release on licence?

[Lord McNally]

I am not sure of the number of prisoners to whom the judgment applies, but cases are being taken. It may be of interest to hear that two of the three prisoners involved in that case are now back in prison due to breaching their terms. We are being very careful to make sure that the system is flexible enough and effective enough to allow prisoners to earn—that is the reality of it—their release. However, we have to consider this issue in the context of prisoners who were given this sentence, when it existed, because they posed a threat to the community. It is for the Parole Board to assess whether they are fit for release.

Judicial Review

Tuesday 23rd April 2013 Lords Chamber

Question

14:45

Asked by

[Baroness Whitaker]

To ask Her Majesty’s Government how their proposed new policy on judicial review ensures the right to a fair hearing in respect of time for individual applicants to prepare and lodge their cases, and the opportunity for an oral permission hearing in all circumstances.

[Lord Ahmad of Wimbledon]

My Lords, I begin by congratulating the noble Baroness on her impeccable timing because today the Government published their response to the consultation on reforming judicial review. The response sets out changes to the judicial review procedure which the Government intend to take forward. As set out in the response, we believe that these changes to the fee structure, oral renewals and time limits will help to reduce the burden of judicial review while, most importantly, maintaining access to justice, the rule of law, and the right to a fair hearing.

[Baroness Whitaker]

My Lords, the consultation paper refers to problems with challenges to large planning developments. Why should individual applicants, often unfamiliar with legal processes or perhaps not even very good at reading and writing, like some Gypsies and Travellers, pay the price with so much less time? Secondly, does the Minister agree with Lord Justice Laws when he said,

“that judges … change their minds under the influence of oral argument”,

is central to the system, bearing in mind that more than 60% of all hearings are successful? Where is the justice in reducing them?

[Lord Ahmad of Wimbledon]

The noble Baroness is right to raise the important issue of vulnerable groups and people who represent themselves. However, a total of 11,359 applications were lodged in 2011, of which only 144 were successful. I hear what the noble Baroness says, and I am sure she will appreciate that for every application made in written form it is down to the judge to make an adjudication on whether it has merit to go forward. Even if the case is decided in the negative, the individual still has a right to take the matter forward to the Court of Appeal.

[Lord Pannick]

My Lords, will the Minister draw the attention of the Lord Chancellor to the oral evidence given to your Lordships’ Constitution Committee on 13 February by the president of the Supreme Court, the noble and learned Lord, Lord Neuberger of Abbotsbury? I refer in particular to where he said:

“If you have shorter time limits, the risk is that people start proceedings when maybe, if they had more time to think, they would not. There would be many more applications for extensions of time and you might find that the bright idea of cutting time limits turns out to increase the amount of litigation rather than decrease it”.

Does the Minister share these concerns? I declare my interest as a practising barrister.

[Lord Ahmad of Wimbledon]

The noble Lord always comes to these matters with great wisdom and experience, which I fully acknowledge. Various groups, including the judiciary, were fully consulted in putting forward the response. The senior judiciary who were consulted included the president of the Queen’s Bench Division, the Master of the Rolls, the vice-president of the Court of Appeal, the Civil Division and Lord Justice Richards, the deputy head of Civil Justice. As I said earlier, in the case of such appeals the judge is there to decide if an extension is required to the time period. The noble Lord may have an opinion that this may extend the period, which his quote highlighted, but it is important that the right thing is done. If the judge decides to extend the time, so be it.

[Lord Marks of Henley-on-Thames]

My Lords, I declare a similar interest. The Government propose withdrawing the right to an oral hearing in cases deemed on paper to be totally without merit. Does my noble friend accept that unrepresented applicants often find it very difficult to express their cases adequately on paper, and that it is only at oral permission hearings that judges can sometimes discern from such applicants an arguable case which was not apparent on paper? Will the Government consider limiting the restriction of the right to an oral permission hearing to legally represented applicants?

[Lord Ahmad of Wimbledon]

I thank my noble friend for raising this concern, but I believe that the risk is somewhat limited. I am sure that many members of the judiciary both in here and those practising outside will agree that the test of “totally without merit” is something that is well understood by the profession and is, indeed, applied by judges. This reform applies only to the weakest cases, and as I said in a previous response, if there is still an issue, the right to apply to the Court of Appeal remains for the individual.

[Lord Beecham]

My Lords, does the Minister agree with the observation of the Master of the Rolls, Lord Dyson, that there is no principle more basic to our system of law than the maintenance of the rule of law itself and the constitutional protection afforded by judicial review? When will the Government publish their response to the consultation on their proposals, and can the Minister indicate whether the view of consultees that has emerged from the consultation on the question of shortening the time limits for procurement and planning cases has been noted?

[Lord Ahmad of Wimbledon]

First, I agree totally with the noble Lord. The point of judicial review is to hold the Executive and public bodies to account, and that is a principle to which the Government are utterly committed. I have referred already to the issue of time extension. If an extension of time is required, the judge can grant it. It is important to highlight three key points around these changes. The reduction in time limits on planning and procurement, the introduction of fees and the dismissal of decisions that are totally without merit were all referred to the judiciary and, indeed, carried their support. Matters were raised in the consultation which the judiciary felt were not right to take forward; the Government have listened and are not doing so.

[Lord Bach]

My Lords, linked to the issue of judicial review is the idea of a residence test, which is presently being consulted on. If put into effect, that residence test would mean that someone here lawfully but who had not been here for 12 months or more would not be entitled to legal aid in civil actions, presumably including judicial review, however overwhelming their case might be. Does the Minister agree that such a proposal goes against the traditions and principles of British justice and is more akin to the traditions of more unsavoury judiciaries?

[Lord Ahmad of Wimbledon]

I do not agree with the noble Lord. It is right to say that our justice system is one of the best in the world, demonstrated even in cases such as that of Abu Qatada. Here is a man who does not believe in our democracy, who does not believe in the freedoms our country stands for, and who takes a noble faith, hijacks it and then presents it in his own erroneous way. Even then, our justice system stands up for him. That is British justice at its best and those rights are protected within judicial review. The noble Lord also noted that these matters are currently out for consultation. The whole issue of legal aid for anyone seeking to apply for it is to protect the vulnerable. That remains the central aim in terms of how the Government will continue to support such cases.

Crime: British Victims Abroad

Tuesday 23rd April 2013 Lords Chamber

Question

14:53

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what support they give to British citizens, and their families, who are victims of serious violent crime abroad.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, the FCO will assist any British national who gets into serious difficulty overseas. The victims of violent crime are especially vulnerable and get urgent and priority attention. We offer support to help to address both the immediate effects of violent crime and the longer-term needs of the victims and their next of kin. We also work closely with partners who can provide specialist long-term support and advise us on our services.

[Lord Kennedy of Southwark]

My Lords, British citizens and their families who are the victims of serious violent crime abroad face considerable difficulties getting criminals brought to justice and in dealing with the aftermath of the crimes that have been committed against them. Language, cultural, judicial and other differences make the situations they find themselves in all the more difficult. Will the noble Baroness agree to meet me and Maggie Hughes, the mother of Robbie Hughes, who was the victim of such an assault, to hear at first hand the difficulties that this and other families have experienced with a view to improving the situation for victims and their families?

[Baroness Warsi]

The noble Lord makes an important point. It is always when British citizens travel overseas and find themselves in these distressing circumstances that expectations are at their highest. Some 56 million people from this country travel overseas, but only tens of thousands require consular assistance, and within those the number of very serious cases is around 60. It is important that we are quite open about what help we can provide and what support we can give. That usually takes the form of providing information about the local police and legal services, while sometimes we will attend first appointments with a list of local lawyers and victim support services. We work with local NGOs to provide support for families on the ground, but we have to be honest about what we are obliged to provide and what it is that we can provide. We have to be clear and transparent about that when providing information about travelling overseas.

[Lord Dholakia]

My Lords, does the same position apply in relation to British citizens who are dual nationals?

[Baroness Warsi]

That is an interesting issue which we face regularly, most often in relation to the case of forced marriages where young girls are taken overseas. They are, by default, dual nationals because of their heritage and the origins of their parents. Thankfully, we have quite good relations with many countries where our citizens would be considered to be dual nationals, but strictly, when that national is in a country for which they also hold the nationality, they are citizens of that country and that provides us with great challenges.

[Lord Triesman]

My Lords, I appreciate the difficulty in helping victims in some jurisdictions. For good reason, we do not have missions and consular services everywhere. However, this gives little comfort to individuals in frightening circumstances where there are language barriers or to their families. Can the Minister give them more comfort? What targets do we ask other Governments to observe in notifying us of violent crimes committed against our citizens abroad? What are our consular services’ targets for responding to those individuals and will the Government publish, country by country, the numbers of violent crimes committed against our citizens?

[Baroness Warsi]

The figure in relation to the number of murders and violent deaths that have occurred in the past year is 60. I am not sure whether that is broken down by country. It probably is, and if so, I will certainly make it available to the noble Lord. There are some very clear guidelines under the Vienna Convention as to the obligations that states have about notifying us and doing so within a specific timeframe when our citizens are caught up in these matters. Going back to the main issue, it is important that we are very clear about what support we can give. We are very clear about the travel advice we give to people when they go to many places where we may not, for example, have embassies or high commissions and that we then support those who are the most vulnerable.

[Lord Avebury]

My Lords, further to the question of my noble friend Lord Dholakia, is it not correct to say that the Vienna Convention on consular relations prohibits our consuls, or the consuls of any other country for that matter, from making representations on behalf of their citizens who are also citizens of some other country?

[Baroness Warsi]

It is a real issue, but I can also inform the noble Lord that there are many occasions where citizens are dual nationals, but we still make representations to those Governments, even though they happen to be dual nationals within that country.

[Lord Elystan-Morgan]

My Lords, is it not the case that the murder of a citizen of the United Kingdom is triable in the United Kingdom wherever that murder occurs? What efforts are made in such cases to bring the perpetrators of such offences before British courts?

[Baroness Warsi]

The view of the Government and indeed of successive Governments has been that a crime has to be tried in accordance with the law of the land in which that crime was committed. It would be just as unusual for countries to make a request to us to have their nationals who commit murder in this country to be tried back in their home country. Therefore, it is right that nationals are tried in the country in which they are caught.

[Lord West of Spithead]

My Lords, will the Minister wish the English nation well on this lovely sunny St George’s day?

[Baroness Warsi]

It gives me great pleasure to wish the English nation well on this glorious day.

NHS: Leeds General Infirmary

Tuesday 23rd April 2013 Lords Chamber

Question

14:58

Asked by

[Baroness Eaton]

To ask Her Majesty’s Government what was the extent of their involvement in the decision to suspend surgery at the Leeds General Infirmary Children’s Heart Unit.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the Government did not play any role in the decision to suspend children’s heart surgery at Leeds. By agreement, this was a local decision taken by the trust, in agreement with Sir Bruce Keogh, NHS England’s medical director, and the Care Quality Commission. The Government strongly believe that it was the right thing to do. It is absolutely right that the NHS should act quickly and decisively if there is any evidence that patient safety may be at risk.

[Baroness Eaton]

I thank the Minister for his Answer and for the concern that I know he shares for those who have been affected by the decision. We all wish to see the safest surgery possible for our children. The Minister quite rightly understands that specialist doctors and experts, not politicians, should be responsible for asking and answering questions of safety. In the particular circumstances of Leeds, however, a number of the experts—

[A noble Lord]

Question!

[Baroness Eaton]

My question is coming. The experts in Leeds have been causing understandable concern because of their partiality and apparent vested interest. In Bristol and Birmingham, children’s heart units have recently had mortality alerts and 14 NHS trusts are under investigation. Will the Minister explain why surgery has not been suspended at any of those trusts? Will he also explain why NHS England has chosen to spend resources appealing the decision of the High Court judge, who called the Safe and Sustainable review of children’s heart units flawed, when the decision for the Independent Reconfiguration Panel and the Secretary of State is imminent?

[Earl Howe]

My Lords, my noble friend raises quite a large number of points. I simply say to her that in regard to Leeds, which is the matter on which I have been briefed, the decision to suspend surgery was taken because concerns had been raised from a variety of sources about the safety of surgery at the unit. Mortality data were supplied to the National Institute for Cardiovascular Outcomes Research with significant flaws, and until those flaws had been rectified, it was impossible to be sure that the trust was operating within acceptable mortality thresholds. Those mortality concerns have, I understand, been resolved, which is why low-risk children’s cardiac surgery has been resumed at the hospital. However, NHS England’s appeal on the Safe and Sustainable review—which, I emphasise, is quite separate from the events of late March and early April—has to be a matter for NHS England. The review of children’s heart services was an NHS review, independent of government, and if NHS England wants to appeal the decision and thinks that there are good grounds for doing so, that is a matter for it.

[Baroness Howarth of Breckland]

My Lords, does the Minister agree that the people most affected by this are the children and many of the families who do not understand and cannot comprehend what is going on at the moment across these services? I declare an interest as the patron and trustee of Little Hearts Matter, which deals with hundreds of children who have half a heart and therefore all have surgery across the country. The Government may not have a direct interest in dealing with this matter but what are they going to do to make sure that the health services reassure these families that wherever they get surgery it will be safe for their children?

[Earl Howe]

My Lords, children’s heart surgery has been the subject of concern for more than 15 years. Clinical experts and parent groups have repeatedly called for change, and there is an overwhelming feeling in the NHS that the time for change is long overdue. The review that has taken place was about making sure that children’s heart services are as good as they possibly can be, and that has to be the message to the parents involved. It is of course an extremely complex issue but it is generally accepted that concentrating surgical expertise will deliver better outcomes for the children concerned. In view of the legal proceedings, it is very difficult for me to go any further than that at the moment.

[Lord Warner]

My Lords, if NHS England decides, under its new responsibilities, to undertake and control the specialised commissioning functions within the NHS, and if it chooses to implement the McKay panel’s recommendations on paediatric surgery, can the Minister say whether they would accept that judgment by NHS England or whether they would seek to overturn it?

[Earl Howe]

I take the noble Lord’s question to mean: would the Government accept that decision? Yes. This is a matter for the health service to determine. As I mentioned earlier, the Safe and Sustainable review was an NHS review. The Government and Ministers were not in any way involved in it, and that is appropriate. Therefore, the answer to the noble Lord’s question is that the Government would stand back from any such decision.

[Lord Shutt of Greetland]

My Lords, it is clear that murky internal health politicking has been going on here. However, the underlying question is: why are the Government determined to deny the people of Yorkshire a children’s heart unit when Yorkshire’s population of 5.3 million is similar to that of Scotland, Denmark and Finland, and is larger than Norway and Ireland? Yorkshire is double the size of the north-east of England, and the Government are happy to see that region locally served.

[Earl Howe]

I say to my noble friend with great respect that the premise of his question is incorrect. The Government have not taken a role in this matter. As I said to the noble Baroness, Lady Howarth, and to the noble Lord, Lord Warner, this is a matter that the NHS itself has led. There is no agenda by the Government at all, apart from our desire to see the best possible children’s cardiac services provided in this country.

[Lord Hunt of Kings Heath]

My Lords, I refer noble Lords to my health interests. Would the noble Earl accept that Sir Bruce Keogh has an outstanding record in the health service in improving outcomes from heart surgery, and therefore he has to be listened to with a great deal of respect?

On the more general issue of the reconfiguration of services, on which NHS England has promised to become much more assertive—which, I am sure, is welcome—is the noble Earl concerned that the Office of Fair Trading and the Co-operation and Competition Panel seem to be intervening in sensible reconfiguration decisions on the spurious basis that they impact on competition? Will he tell these bodies to desist?

[Earl Howe]

My Lords, if the noble Lord can supply me with some examples, of course I will look into them. I remind him that tomorrow we are debating a set of regulations that bear on this very question and I shall have plenty to say on that occasion, which I hope will assuage his concerns.

[Baroness Masham of Ilton]

My Lords, is the Minister aware that it has been really splendid to witness the Members of Parliament from all over Yorkshire supporting their constituents? Will the Government listen to them?

[Earl Howe]

My Lords, I have made clear that it is not for the Government to take a decision on this question. It is for the NHS to decide what the best configuration of services should be, and I think most noble Lords agree with that.

Transport for London Bill [HL]

Tuesday 23rd April 2013 Lords Chamber

Hertfordshire County Council (Filming on Highways) Bill [HL]

Motions to Resolve

15:07

Moved by

[The Chairman of Committees]

Transport for London Bill [HL]

That this House resolves that the promoters of the Transport for London Bill [HL] which was originally introduced in this House on 24 January 2011 should have leave to suspend any further proceedings on the Bill in order to proceed with it, if they think fit, in the next session of Parliament according to the provisions of Private Business Standing Order 150A (Suspension of Bills).

Hertfordshire County Council (Filming on Highways) Bill [HL]

That this House resolves that the promoters of the Hertfordshire County Council (Filming on Highways) Bill [HL] which was originally introduced in this House on 22 January 2013 should have leave to suspend any further proceedings on the Bill in order to proceed with it, if they think fit, in the next session of Parliament according to the provisions of Private Business Standing Order 150A (Suspension of Bills).

Motions agreed.

Public Service Pensions Bill

Tuesday 23rd April 2013 Lords Chamber

Commons Reasons

15:07

Lords Amendment 78: Schedule 1 page 23, line 20, at end insert—
“(c) the Defence Fire and Rescue Service”
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 78 for the following Reason—

78A: Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion A

Moved by

[Lord Newby]

That this House do not insist on its Amendment 78, to which the Commons have disagreed for their Reason 78A.

[Lord Newby]

My Lords, your Lordships’ House now returns to the Public Service Pensions Bill, on which there remains one outstanding issue. The other place has invoked parliamentary privilege on the amendments made by this House that sought to reduce the normal pension ages for fire and police workforces employed by the Ministry of Defence.

I will explain in a moment the reasons why the Government cannot simply agree to give these workforces a normal pension age of 60. First, I put on record that I recognise the arguments that have been made here and elsewhere. I have met members of these workforces to discuss their position, and there is no question that they deliver an extremely important service, often in demanding and dangerous circumstances. However, sympathy for these individuals should not lead to our oversimplifying the issue that we are discussing. The debate today is over just one design element of their pensions, which in turn forms just one element of their overall remuneration and employment package.

We have heard the argument that these individuals are identical to their local authority counterparts. But these workforces are subject to separate working practices, terms and conditions and, specifically, pensions entitlements. These workers receive different pay, pay a much lower level of contributions, have access to a compensation scheme, unlike their local authority counterparts, and receive different allowances—for example, when they work abroad.

We must recognise that the proposal to reduce the retirement age involves substantial changes in their terms and conditions. Those changes to date have not been subject to thorough consideration or the proper process. That is why we should not attempt to conduct detailed discussions here about what the changes may look like. This is not just about normal pension age; there is much more to be explored, and there are several interrelating factors that must continue to be discussed between the parties. It is right that those discussions take place outside the legislative process, and we do not have to resolve this in the Bill. My colleague, the Economic Secretary, said yesterday in the other place that further primary legislation is not necessary in order to do so.

The Ministry of Defence has already committed to discussing this issue further. This is the right approach. As we have these discussions, we cannot shy away from discussions about the costs. Reducing the normal pension age of those workforces to age 60 could create extra expenditure for the Exchequer of up to £10 million in every year that the scheme operates. That is why these two amendments are subject to the Commons financial privilege. These costs would have to be picked up by somebody—either the taxpayer, possibly at the cost of front-line MoD services, or extra contributions from the members of these workforces. The current situation is that dialogue is already under way between the DFRS, the MDP and the MoD. The MoD has written to the representatives of the members of these forces and offered to discuss how a normal pension age of 65 might be maintained when the new schemes come into force. The first step has, therefore, already been taken, and we will keep up the momentum in the coming weeks and months.

I realise that there is some concern about how long these negotiations might take, which was reflected in the Commons yesterday. While I do not wish to tie the hands of either the unions or my colleagues at the Ministry of Defence, I should think that working towards agreement over the next 12 months is an achievable goal. We are definitely not seeking to kick this issue into the long grass. Colleagues in the other place also wanted assurance that if—I stress that this is very much an “if”, not a “when”—the MoD decided that a reduction in its current NPA was appropriate, the Bill would be flexible enough to allow this. I can reassure the House that this is indeed the case. This Bill is framework legislation. This is usually the case in the public service pension arena and, as such, a number of things are possible within the framework of the Bill that do not require amendments to primary legislation. I am, therefore, happy to repeat that if the Government decided that it would be appropriate for some or all of these workforces to be able to access an unreduced pension before normal pension age, there are ways that this change can be delivered using only secondary legislation.

The opposition amendment would effectively require a review of the effect of this Bill on the Ministry of Defence fire and police services. In particular, it would require the Government to have regard to impacts on the health and well-being of the individuals affected; the ability of the MDP and DFRS to meet the Ministry of Defence’s statements of requirement; and early retirement statistics in these forces. I have already stated that the Ministry of Defence is engaging with these forces to look at their pension ages in the new schemes. These are exactly the kinds of factors which they would look at in doing so. As we had already intended to look at this issue again with these workforces, I am happy to accept this amendment from the Opposition, and the Government will support it. I hope that seeing this provision on the face of the Bill will give the forces and Members opposite the reassurance they need that the review will indeed be carried out.

As is normal practice, a few elements of wording will need to be ironed out. The Government will look to make these changes in the other place when the Bill returns there. Allow me to reassure the House that any changes to the wording will be purely to ensure that the provision works properly. However, the Government can today accept the substance of the amendment, and I am grateful to the noble Lord, Lord Eatwell, for taking this very constructive approach to the remaining issue in the Bill. I invite the House to accept the decision of the other place and also to accept the amendment. I beg to move.

15:15

Motion A1

Moved by

[Lord Eatwell]

That this House do not insist on its Amendment 78, to which the Commons have disagreed for their Reason 78A, but do propose Amendment 78B in lieu.

78B:* After Clause 9, insert the following new Clause—
“Defence Fire and Rescue Service and Ministry of Defence Police Capability Review
(1) The Secretary of State, in conjunction with the Secretary of State for Defence, will, within six months of this Act coming into force, prepare and lay before both Houses of Parliament a report setting out the Government’s assessment of the impacts of this Act on current and future members of the Defence Fire and Rescue Service and current and future members of the Ministry of Defence Police nominated under section 1 of the Ministry of Defence Police Act 1987.
(2) A report under subsection (1) will include, but not be limited to, consideration of the following
(a) the impacts on the health and wellbeing of members of the Defence Fire and Rescue Service and members of the Ministry of Defence Police nominated under section 1 of the Ministry of Defence Police Act 1987;
(b) the ability of the Defence Fire and Rescue Service and members of the Ministry of Defence Police nominated under section 1 of the Ministry of Defence Police Act 1987 to meet the Ministry of Defence's statements of requirement of these personnel;
(c) the number of members of the Defence Fire and Rescue Service and members of the Ministry of Defence Police nominated under section 1 of the Ministry of Defence Police Act 1987 taking early retirement, the consequences of early retirement for those members and the costs to the taxpayer of such members taking early retirement.”

[Lord Eatwell]

My Lords, I beg to move the manuscript amendment on the Marshalled List. We were told last night—that is to say, at the last minute—that the Government intended to assert financial privilege over our attempt to achieve fairness for the members of the Defence Fire and Rescue Service and the Ministry of Defence Police. We have learnt that the Government know they have lost the argument when they assert financial privilege. However, it is worth examining what this financial privilege is being asserted over. The noble Lord quoted the possible cost to the Government as £10 million. We had the opportunity to take actuarial advice overnight and the figure is a maximum of £2 million. So the Government are asserting financial privilege over the magnificent sum of £2 million per year and are using that argument to prevent the debate on your Lordships’ amendments, which would have achieved fairness for Ministry of Defence firefighters and police by equalising their retirement age with those of other police and fire services.

The amendment I have tabled requires a review of the impact of these measures on the Defence Fire and Rescue Service and Ministry of Defence Police. We want to know the impact on the health and well-being of these members, particularly because there is substantial evidence that the vast majority of members of the fire service and police are required to retire before the age of 60, because they can no longer meet the Ministry of Defence statements of requirements for these personnel. In effect, they are stood down for health reasons already. What is striking is that the Government have not taken the cost of people retiring early through ill health into account in their calculations of the overall impact. Indeed, the cost calculations are simplistic in the extreme.

The other area that we are particularly concerned about is whether early retirement due to inability to meet exacting standards is taken into account in considering the settled retirement age. The noble Lord again raised this issue of fixing the retirement age of this group of workers at 65 and not letting it creep up in future years, as anticipated in the Bill. I hope that the Government will dismiss these thoughts from their mind and instead concentrate on achieving fairness. I refer the noble Lord to the speech made by my noble friend Lord Hutton of Furness when we considered this matter on Report. He stated that,

“this is fundamentally a matter of fairness”.—[Official Report, 12/2/13; col. 570.]

As noble Lords may remember, my noble friend also pointed out that if he had known about this anomaly when he produced his report on public service pensions, he would have included the MoD firefighters and police within his general recommendations for those who would have a retirement age of 60. My noble friend Lord Hutton told us that this was simply a mistake on his part and that he wanted the House to have the opportunity to correct that mistake.

I am grateful to the Government for accepting our amendment and our request for a review of the circumstances of MoD firefighters and police, but I wonder if the noble Lord could answer a number of questions for me. For example, have the Government sought the views of the heads of the MoD fire service and police force? What do the heads of these services actually think about the Government’s proposal not to equalise the retirement age of their men and women to the retirement age of other police and firefighters?

Moreover, the noble Lord made quite a point about the difference in conditions of the pension scheme that the MoD police and fire services are currently in and the pension scheme to which they might transfer. He referred to the Civil Service Compensation Scheme, to which they have access. How many times in the past two years have MoD firefighters and police accessed this scheme? Why did they do so and what has been the outcome of their application?

In moving this amendment, I seek to give this House the opportunity to debate once again, on a report by the Government, this particular anomaly in the Public Service Pensions Bill. We wish to be clear on the impact on the health and well-being of members of the Defence Fire and Rescue Service and the Ministry of Defence Police. We wish to be clear on the circumstances under which the firefighters and police meet, or fail to meet, the Ministry of Defence’s statement of requirements for its personnel. We also want to be clear on the cost to the taxpayer of the early retirement which has become such a standard characteristic of service in these professions because of the failure, through advancing years—which I understand, as I am sure many of us do—of the firefighters and police to meet the requirements of service.

[Baroness Harris of Richmond]

My Lords, I had not necessarily intended to participate in this debate, knowing that the noble Lord, Lord Eatwell, had put down an amendment which I wholeheartedly approve and agree to. I am very pleased that the Government have decided to accept it, especially after all the work that was done in trying to persuade them about the Ministry of Defence fire service and the Ministry of Defence police. I emphasise this point because it is tantamount to having made them accept that this really must be looked at again, and I think it was the work that was done in Committee in this House that made this happen. Like the noble Lord, Lord Eatwell, I was surprised to find that financial privilege had been put forward as the reason not to accept something a little stronger. So I can assure my noble friend the Minister that during the year that this amendment will be looked at, mulled over and digested, we will be looking very carefully to see the progress that is made and to make sure, through questions and other means, that we keep the Government’s feet to the fire.

[Lord Whitty]

My Lords, I join the noble Baroness in congratulating the Minister on his change of heart. He has in effect very graciously recognised not only the justice of the case that we on this side of the House, and the noble Baroness, Lady Harris, put in Committee, but that it is pretty absurd for the Government simply to claim financial privilege to resist an amendment that manifestly will bring justice and equity to an extremely special group of workers, putting them on the same basis as people who are doing almost exactly the same job but who are employed by other public sector employers.

I suspect the Minister had some difficulty with the Treasury and the Ministry of Defence in reaching this conclusion. I therefore doubly congratulate him on seeing it through and at least recognising the very difficult position we all find ourselves in. We cannot really resist the Commons claiming financial privilege, but we can ensure by my noble friend’s amendment that the Government think again about this and address the real issues.

I do hope, however, that the Government do not make a habit of using financial privilege to resist a principled amendment from this House that has a minimal cost even in the Government’s terms and, as my noble friend has said, that is probably actuarially inaccurate in any case. If the Government continue to do this, this House has some serious thinking to do about how seriously our amendments and our scrutiny are taken. However, I return to my congratulations to the Minister on seeing sense over this. I hope it is a precedent that will be followed by some of his other colleagues in future.

[Lord Newby]

My Lord, I am grateful to the noble Lord, Lord Eatwell, and other noble Lords who have spoken in this debate. I would just like to deal with the issue of financial privilege, because there is a widespread misunderstanding of how financial privilege works. Privilege is not determined by the Government. Privilege is determined by the Speaker in advance of debate. In this case, the classification of your Lordships’ amendment as being subject to the Commons financial privilege has been known for a month. Once an amendment has been classified by the Speaker as being subject to financial privilege, obviously the Commons considers whether to agree or disagree with each Lords amendment. If it disagrees, it must offer a reason. The only reason it can give is privilege. The Clerk of the Commons explains this as follows:

“If an amendment infringes privilege, that is the only reason that will be given. This is because giving another reason suggests either that the Commons haven't noticed the financial implications, or that they are somehow not attaching importance to their financial primacy”.

I strongly recommend that all noble Lords who seek enlightenment on this matter look up the Hansard of 14 February last year, when the Leader of the House gave a little tutorial on financial privilege before your Lordships discussed a number of issues relating to a Bill. There is a long-established pattern of financial privilege that has in essence been unchanged for several centuries, and it is not for the Government to decide whether an amendment is covered by it. The Speaker does that.

15:30

[Lord Whitty]

My Lords, I fully accept that it is for the Speaker to designate financial privilege, but the debate last year to which the noble Lord referred related to expenditure of several hundred million pounds of the welfare budget. During that debate, several Members referred to the fact that there must be a threshold beyond which a Lords amendment was considered an issue of financial privilege. The only point I am making is that the Commons, or whoever jogs the Speaker’s elbow in these matters, needs to take into account the issue that a relatively small amount of financial expenditure and alteration in either direction should not be taken as an issue for claiming financial privilege. I do not want to labour the issue, but there would be a danger of the two Houses coming into conflict if this position were to be adopted by the Commons on a regular basis in relation to relatively small amounts of money.

[Lord Newby]

My Lords, I hope that the Speaker in another place is listening to your Lordships’ debate and taking note.

The noble Lord, Lord Eatwell, asked whether we had sought the views of the heads of the Ministry of Defence fire and police services. The Government are routinely in contact with all their employers and discuss a number of issues with them. We are accepting the idea of a formal review, and the heads of those workforces will be consulted as part of that process. The noble Lord also asked me how many times the Civil Service Compensation Scheme had been used. I simply do not have the answer, but I will seek it out and write to him about it.

I realise that although the Government are accepting the opposition amendment, a number of noble Lords would like us to go further today. In urging patience on noble Lords, I end simply by reminding them of the words of that well known hymn, “Lead, kindly light”, which says,

“I do not ask to see the distant scene.

One step enough for me”.

I hope that we have taken a positive step today.

Motion A1 agreed.

Lords Amendment 79: Schedule 1: Page 23, line 27, at end insert—
“(c) includes members of the Ministry of Defence Police nominated under section 1 of the Ministry of Defence Police Act 1987”
Commons disagreement and reason
The Commons disagree to Lords Amendment No. 79 for the following Reason—

79A: Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion B

Moved by

[Lord Newby]

That this House do not insist on its Amendment 79, to which the Commons have disagreed for their Reason 79A.

Motion B agreed.

Defamation Bill

Tuesday 23rd April 2013 Lords Chamber

Commons Reasons

15:33

Lords Amendment 1: After Clause 1 insert the following new Clause—
“Arbitration Service for defamation and related civil claims against members of Independent Regulatory Board
(1) The Lord Chief Justice shall establish a Defamation Recognition Commission.
(2) Schedule (Recognition Commission) makes provision relating to the Defamation Recognition Commission.
(3) The Defamation Recognition Commission shall certify bodies as Independent Regulatory Boards in accordance with the criteria in Schedule (Recognition Commission).
(4) An Independent Regulatory Board shall provide a recognised arbitration service as set out in Schedule (Specialist Arbitration Service).
(5) A court shall take into account when awarding costs and damages whether either party, claimant or defendant in a dispute has chosen not to use the recognised arbitration service of an Independent Regulatory Board.
(6) A court shall award costs under subsection (5) on an indemnity basis unless the interests of justice require otherwise.
(7) A court may order a successful party to pay all the costs of proceedings if such party has unreasonably refused to use an available recognised arbitration service.
(8) A court awarding in its judgment exemplary damages where a defendant is guilty of a flagrant breach of a defendant’s rights can also take into account whether—
(a) a claimant refused to use a recognised arbitration service;
(b) a defendant refused to use or join a recognised arbitration service.”
Commons disagreement and reason
The Commons disagree to Lords Amendments Nos. 1, 15 and 16 for the Reason set out at 16A.

15: After Clause 17 insert the following new Schedule—
“Schedule
Recognition Commission
1 This Schedule provides the method by which the Recognition Commission may be constituted for the purposes of this Act.
2 Appointments to membership of the Recognition Commission will be made by the Lord Chief Justice.
3 An individual may be appointed only if he or she has consented to act and is—
(a) a present or former Civil Service Commissioner;
(b) a present or former holder of high judicial office (within the meaning of Part 3 of the Constitutional Reform Act 2005); or
(c) a person who in the opinion of the Lord Chief Justice is suitable for appointment having regard to their reputation and experience and is independent of all political parties and all media organisations.
4 The Recognition Commission must consider whether an Independent Regulatory Board body has—
(a) sufficient guarantees of independence, including suitable independent, fair and transparent procedures for appointments and funding,
(b) suitable functions, powers, personnel and resources to ensure that it can fulfil its principal objectives effectively,
(c) an appropriate standards code,
(d) an arbitration service able to deal with defamation and related civil claims, effective processes for upholding standards,
(e) an efficient procedure for handling complaints, and
(f) is open to all news publishers.
5 The Recognition Commission must review a recognised regulator at least once during the period of two years beginning with the date of certification, and at intervals of not more than three years after that.
6 If having reviewed a body the Recognition Commission is no longer satisfied that it complies with paragraph 4, the Recognition Commission must consult the body and give directions designed to ensure that the body complies with paragraph 4 within a reasonable time.
7 If the body fails to comply with directions given under paragraph 6 the Recognition Commission must revoke the body’s certification.
8 The Recognition Commission shall not be involved in the regulation of any subscriber to an Independent Regulatory Board.”
Commons disagreement and reason
The Commons disagree to Lords Amendments Nos. 1, 15 and 16 for the Reason set out at 16A.

16: Insert the following new Schedule—
“Schedule
Specialist Arbitration Service
1 An Independent Regulatory Board must provide an Arbitration Service in relation to defamation and related civil legal claims drawing on independent legal experts on a cost-only basis to the subscribing member.
2 The arbitration rules must provide for a fair, quick and inexpensive process, which is inquisitorial and free for complainants to use (save for a power to make an adverse order for the costs of the arbitrator if proceedings are frivolous or vexatious).
3 The arbitrator shall have the powers set out in section 48(3) to (5) of the Arbitration Act 1996.
4 The arbitrator must be able to hold hearings where necessary or dispense with them where not necessary.
5 The process must include provision for frivolous or vexatious claims to be struck out at an early stage.”
Commons disagreement and reason
The Commons disagree to Lords Amendments Nos. 1, 15 and 16 for the following Reason—

16A: Because the draft Royal Charter on Self-Regulation of the Press and provisions in the Crime and Courts Bill and the Enterprise and Regulatory Reform Bill will be sufficient to implement the recommendations in Lord Justice Leveson’s report.

Motion A

Moved by

[Lord McNally]

That this House do not insist on its Amendments 1, 15 and 16, to which the Commons have disagreed for their Reason 16A.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, Amendments 1, 15 and 16 constitute a partial enactment in statute of a number of the recommendations made by Lord Justice Leveson in his report on the culture, practices and ethics of the press. The reasons given by the other place for disagreeing with these amendments reflect the fact that, as the House will be aware, on 18 March cross-party talks were resolved successfully and a draft royal charter was agreed as the vehicle by which the recognition body should be set up.

Detailed criteria by which self-regulators would be assessed were also agreed, and provisions to enact Lord Justice Leveson’s recommendations on incentives in costs and exemplary damages have subsequently been included in the Crime and Courts Bill. A further “no change” clause has also been included in the Enterprise and Regulatory Reform Bill as a safeguard against political intervention with the royal charter. These measures have cross-party support.

I take this opportunity to address an issue that I know is of concern to the noble Lord, Lord Puttnam, on how provisions are being taken forward to provide access to justice and cost protection for those of limited means. It may be helpful to provide the House with an update on the action we are taking. As noble Lords are aware, we asked the Civil Justice Council to report on the issue of cost protection by the end of March. It has done so, and recommended that the regime of qualified one-way cost shifting, or QOCS, should be adapted to defamation and privacy cases. A number of adaptations are necessary, given the rather different nature and variety of defamation and privacy proceedings compared with personal injury claims. We are now considering the CJC report, and as your Lordships will appreciate this is quite a complex area. While the report does not represent a blueprint of the new rules to be applied, it does set out the issues that need to be addressed, and makes recommendations on how to address them.

It will be for the Civil Procedure Rule Committee to make the rules on costs protection in due course, once the Government have set out the way forward. My officials will work with the Committee on this. I am conscious that the CJC has not consulted on this issue, and I believe that we need to consult before we finalise the proposals. Our aim is therefore to work with the Rule Committee in drafting appropriate rules, perhaps with alternatives, on which we can consult more widely over the summer.

I know that the noble Lord, Lord Puttnam, will be interested in that consultation, and I will ensure that he and other noble Lords with an interest in this area are included in the consultation. Depending on the outcome of that consultation, we then aim to implement a costs protection regime later in the year.

I hope that provides reassurances to the noble Lord, Lord Puttnam, and to others, about the promises I have made about cost protection at various stages of the Bill. During our debate on the Crime and Courts Bill provisions on 25 March, both the noble Lord, Lord Puttnam, and the noble and learned Lord, Lord Mackay of Clashfern, indicated that they were happy for the Bill to complete its passage without Amendments 1, 15 and 16. I hope that remains the case, and that noble Lords will agree to the removal of these amendments. I beg to move.

[Lord Lester of Herne Hill]

My Lords, first I would say that we often refer to Fox’s Libel Act. I hope that when this Bill becomes law it will be referred to as Lord McNally’s Libel Act, because he above all has had the energy to drive it forward. He said at one stage that he would not allow the Bill to be overwhelmed by what he called the tsunami of Leveson. The reason why I strongly support Motion A is because it provides a way of avoiding being overwhelmed by the tsunami of Leveson. It removes what I consider to be unnecessary hostage-taking in some amendments to the Defamation Bill. It has now been freed in the Commons, and therefore I strongly support it. I have some difficulty with the reason, in a sense, because it says that,

“the draft Royal Charter … and … the Crime and Courts Bill and the Enterprise and Regulatory Reform Bill will be sufficient to implement the recommendations in Lord Justice Leveson’s report”.

I think that is completely true. Whether Lord Justice Leveson’s report will eventually pass muster is quite another question, but that is not to be debated now.

[Lord Mackay of Clashfern]

My Lords, I am delighted to welcome this situation, and to see the Defamation Bill back on its ordinary course. I do not entirely agree with all that the noble Lord, Lord Lester of Herne Hill, has said about the amendments that were passed by this House, but now they are certainly unnecessary and I am delighted that the Defamation Bill can proceed.

Motion A agreed.

Motion B

Moved by

[Lord McNally]

That this House do not insist on its Amendment 2, to which the Commons have disagreed for their Reason 2A, but do propose Amendment 2B in lieu.

2B: Clause 1, page 1, line 4, at end insert—
“( ) For the purposes of this section, harm to the reputation of a body that trades for profit is not “serious harm” unless it has caused or is likely to cause the body serious financial loss.”

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, in speaking to this Motion, I shall speak also to Motions B1 and B2, tabled by the noble Baroness, Lady Hayter of Kentish Town, and Motion B3, tabled by my noble friend Lord Lester of Herne Hill.

Amendment 2 concerns two distinct but related issues which have already featured extensively in debates in both Houses during the passage of this Bill. These are whether there should be restrictions on the right of bodies corporate and other non-natural persons to bring an action in defamation, and whether any non-natural person which is performing a public function should be prevented altogether from bringing a claim in relation to a statement concerning that function. I shall focus my comments on government Amendment 2B and the other amendments that have been tabled, rather than on Amendment 2 in its original form.

Amendment 2B amends Clause 1 to make clear that a body trading for profit will satisfy the serious harm test only if it is able to show that the statement complained of,

“has caused or is likely to cause the body serious financial loss”.

In speaking to Lords Amendment 2 in the other place, the Government made it clear that although we were opposed to that amendment, we recognised the strength of feeling that exists on the issue of whether there should be a specific provision in the Bill requiring non-natural persons trading for profit to show financial loss, and that we would consider the point further. This amendment reflects the outcome of those considerations.

As I have explained at earlier stages of the Bill, we amended what was initially a “substantial harm” requirement to one of “serious harm” in order to raise the bar for bringing a defamation claim. The amendment therefore refers to “serious” financial loss to reflect that aim, and now links explicitly to the serious harm test. The use of the phrase “serious financial loss” makes it absolutely clear that the financial loss required to meet the serious harm test must itself be serious. By contrast, the reference in Lords Amendment 2 to “substantial financial loss” could inadvertently have had the effect of weakening what has to be shown to satisfy the test.

Secondly, the term that we have used to define those who will be subject to this requirement—

“a body that trades for profit”—

is a much clearer and simpler definition than that used in Amendment 2. These are the bodies that this House has expressed concern about, so we have phrased the amendment specifically and directly to meet those concerns. A vaguer formulation such as that in Amendment 2 would have risked inadvertently catching other bodies, such as charities, which are not the subject of concern. I believe that this effective and proportionate approach addresses the concerns that have been expressed in this House and elsewhere.

The Government are unable to accept Motions B1, B2 and B3. In relation to Motion B1, as noble Lords are aware, in the case of Derbyshire County Council v Times Newspapers, the House of Lords held that local authorities and central governmental bodies are already prevented from bringing actions for defamation. Motion B1 would add Amendment 2C, which seeks to extend that principle and put an absolute bar on any non-natural person performing a public function from bringing a claim in relation to a statement concerning that function. This would remove completely the right of a wide range of businesses and other organisations to protect their reputation. We consider that to deprive them of this right would be excessive and disproportionate. Although the amendment focuses on criticisms in connection with the exercise of a public function, that criticism could have a wider impact on the reputation of the business more generally. It is important to recognise that unjustified and defamatory allegations can cause considerable damage which affects all those connected to a business, including shareholders and employees.

15:45

We believe that a rigid and restrictive statutory provision which would completely remove the right to claim from a wide range of bodies is not a proportionate approach. We are confident that the range of measures included in this Bill will provide effective protection for consumers and others with limited means to ensure that they are not inhibited from criticising bodies exercising public functions. These include the serious harm test, which if government Amendment 2B is accepted will require such bodies to show serious financial loss, the new public interest defence and the steps that we are taking to introduce strong and effective costs protection measures.

Our view is that it is much better to maintain the present common law position as set out in the Derbyshire case and to allow the courts to develop that principle as they consider appropriate and necessary in the light of individual cases. For the avoidance of any possible doubt, I make absolutely clear that the absence of this amendment from the Bill will have no effect on the existing Derbyshire principle, which prevents local authorities and governmental bodies bringing an action. That principle will continue to apply under the common law as it does now.

To reassure my noble friend Lord Lester, who I know has concerns on this point, the Derbyshire principle was established before the passage of the Human Rights Act, and the issue of whether it would extend to a body falling within the definition of a public authority under Section 6 of that Act is not one that has yet been tested before the courts. It is therefore not possible to predict the view that the courts would take were this issue to be raised. However, I can make it absolutely clear that there is nothing to prevent the courts developing the principle if they consider it appropriate to do so in light of changes that continue to take place in the way services of a public nature are provided.

I turn now to Motion B2. This would add Amendment 2D to introduce a requirement that, in order to bring a claim, a body that trades for profit would first have to obtain the permission of the court. Permission would be granted only if the prospective claimant could show that the publication of the statement complained of had caused or was likely to cause the claimant serious financial loss. As we have said throughout our debates, we believe that a permission stage for this purpose is wholly undesirable as it would create unnecessary duplication and additional costs for both parties. If the claimant were required to show serious financial loss in order to get permission to bring a claim, this would effectively mean that the court would be deciding at that point whether the serious harm test was satisfied. This is not a matter well suited to a permission stage. It would mean that the defendant would in many cases want to be involved and would need to submit evidence in order to challenge the claimant’s position. In these circumstances, an oral hearing would almost certainly be required. In cases where the claim then proceeded, this would cause unnecessary additional costs for both parties. There would also be a need to provide an appeal mechanism, which could potentially add further to those costs.

As I have said before, we do not consider that there is any need for a permission stage. The amendment we have tabled today will make perfectly clear what the serious harm test means for bodies trading for profit. The Civil Procedure Rules already allow the defendant to apply at any point after the claim is served for it to be struck out. When the Bill is implemented, the defendant will continue to be able to do this at a very early stage on the basis that it does not satisfy the serious harm test. The addition of a permission stage would therefore add little or nothing as any case where the existence of serious harm was disputed could have that issue resolved at a very early stage in any event.

Under the proposals which we are discussing with the Civil Procedure Rule Committee, either party will also be able to apply for an early ruling on other key aspects of the claim, such as the meaning of the words complained of and whether they were statements of fact or opinion. An additional permission stage on serious harm would mean that two sets of applications and hearings could often be needed where otherwise one would be sufficient.

As well as ensuring that key issues can be resolved at as early a stage as possible, we will also introduce measures to give cost protection to parties with limited means to enable them to bring or defend a claim against an opponent with substantially greater resources. As I have explained, we are currently considering very carefully the recommendations of the Civil Justice Council that were recently submitted to the Secretary of State so that we can ensure that measures are put in place which provide effective protection in all cases involving an inequality of arms. It is our firm view that building in an extra procedural layer through a permission stage would simply add to the costs and delay involved for no appreciable benefit.

Finally, I will address the issue raised by my noble friend Lord Lester of Herne Hill in his Motion B3. This relates to a concern that the general powers given to local authorities in Section 1 of the Localism Act 2011 may have overturned the Derbyshire principle in relation to local authorities. This point was raised by the noble Lord, Lord Browne of Ladyton, in Committee and I am happy to reaffirm what I said then.

It is our firm view that if a case were to be brought on the basis that Section 1 of the Localism Act had overturned the bar on local authorities suing in defamation, the courts would still find that local authorities cannot bring an action. We consider that the public policy grounds on which the Derbyshire judgment was reached—namely, that it would be contrary to the public interest for organs of government to be able to sue in defamation and that it would be an undesirable fetter on freedom of speech—remain compelling and that these have been bolstered by the Human Rights Act, which was enacted after Derbyshire.

As I explained in Committee, in the very unlikely event that a court were to hold otherwise, the situation could be promptly remedied without any need for primary legislation by way of a statutory instrument under Section 5(3) of the Localism Act. This allows the Secretary of State to prevent local authorities using Section 1 powers to do anything specific in the order. In this case, an order could be made preventing any action being brought in defamation. I hope that putting these matters clearly on the record will provide the reassurance that my noble friend is seeking.

To conclude, for the reasons I have explained, I urge the House to support Motion B tabled by the Government and to reject Motions B1, B2 and B3. I beg to move.

Motion B1

Moved by

[Baroness Hayter of Kentish Town]

As an amendment to Motion B, after “2B” insert “and 2C”.

2C: After Clause 1 insert the following new Clause—
“Non-natural persons performing a public function
Non-natural persons performing a public function do not have an action in defamation in relation to a statement concerning that function.”

[Baroness Hayter of Kentish Town]

My Lords, in moving Motion B1, I start with an extraordinarily warm welcome for government Amendment 2B. There is absolutely no doubt that, late conversion though it may have been by the Government to the arguments of our Benches and of this House, it is a most important and welcome clause. It owes much to the persuasive charms—or energy, in the words of the noble Lord, Lord Lester—of the noble Lord, Lord McNally. The McNally Bill will do us fine.

However, there are still some outstanding issues, not least the one of cost, to which the Minister has just referred. Despite his efforts, and indeed the CJC report on this which was published only last week, we have of course not received the sort of assurance that we had hoped to receive by the time this Bill was enacted, of having agreement on costs. There was clearly a lot of disagreement within the working group, and there is no clear answer in the report as to how, in the absence of CFAs following LASPO, most people will be able to either start or defend a defamation claim. Without resolution on this, the risk of substantial costs remains, which more or less makes either the taking or the defending of an action open only to the super-rich, as the Government have acknowledged.

I turn to the two issues passed by this House but overturned by the Commons, which the Government have not accepted. First, there is the right of public services to sue for defamation. Derbyshire, as the Minister has said, is really shorthand for the democratic principle that government bodies should be open to uninhibited public criticism and therefore have no right to sue for libel. I assume that arm’s-length bodies, such as the former Border Agency, English Heritage and the Health and Safety Executive, are already covered under Derbyshire. However, there is a wider and growing ring of organisations contracted or commissioned to provide public services, such as independent treatment centres, opticians, dentists and GP consortia, which are either treating or diagnosing NHS patients. There are private organisations providing care homes, school dinners, public transport, advice agencies, prison management, free schools and DWP assessments. These organisations deal directly with consumers, patients, travellers or users—call them what you will—and are spending taxpayers’ money to provide such services on behalf of the state.

Two issues arise if such private bodies can sue for libel. First, there is not a level playing field in tendering. Such organisations can criticise a local authority provider with which they are competing to provide a service completely free from the risk of being sued for libel by that local authority. However, the local authority can be stopped from speaking about a private body in competition with it for the provision of services by the receipt of a chilling letter. Secondly, consumers and users cannot comment on a service they are getting without the risk of that infamous chilling letter.

In a debate in the other place last week, Sir Peter Bottomley reported that Atos, which does disability checks for the DWP, had sent a legal letter which resulted in the closure of a forum for disabled people because of their comments on Atos’s performance. This is deeply worrying. It is quite wrong to deny users the right to discuss their experience of what is, after all, a public service paid for by taxpayers. It is this that most concerns me. Mid Staffs hospital patients and their families were able to go to the press and finally get something done, as were the Hillsborough campaigners who were aghast at the police’s actions and the coroner’s findings. For big effective monopolies, this is the only way of driving up standards or penalising poor services, as consumers cannot shop around for an alternative provider.

It is much the same for other big, albeit now private, providers of public services. Users must be free to voice their concerns. This is what Motion B1, which adds Amendment 2C, is all about. It is about uninhibited users’ criticism of their public services, whether their provider is a local authority or a private concern. In the other place, the Minister did not really disagree with the case that we made, only about whether an amendment was necessary. Worryingly—and this has been echoed by the Minister this afternoon—she said that rather than a statutory provision it would be much better for the courts to develop the Derbyshire principle as they consider appropriate and necessary in the light of individual cases. However, this runs completely counter to the whole thrust of this Bill, which has been to codify and set down in one place, rather than in umpteen legal judgments that are effectively unavailable to the layperson, the whole law on defamation, clearly accessible to all and according to the decisions of Parliament on each issue. That is what this Bill and indeed the Minister in working on it have sought to achieve. If we agree that private concerns delivering a public service should be treated as a public body with regard to libel, Parliament should so decide and should write it into law.

16:00

The second issue sent by this House but rejected by the Commons concerns prior permission for corporations to sue, or, to put it another way, whether there should be an early strike-out. This is covered in Motion B2, which seeks to add Amendment 2D. The Government’s Amendment 2B in lieu, which, to be clear, we welcome, does not include the provision voted on in this House for a judicial filter before a corporate body can sue for libel. However, without such a filter, companies can continue to use the threat of libel even when such threats are ultimately spurious. Without a filter, companies will continue to issue these unmeritorious claims where they calculate that they will frighten the authors or their publishers, and the chilling effect of such threats will persist because defendants will still have to incur the costs, plus the burden of applying to court to strike out the claim. We therefore consider, as did your Lordships’ House, that companies should have to apply, showing why publication is sufficiently serious to merit a claim in the High Court.

As we have heard again today, the Minister in the other place, Mrs Grant, reported that the Government had asked the Civil Procedure Rule Committee to consider rule changes to support a new early resolution procedure under which either party could apply at the outset of proceedings for the court to decide key issues. Although this is welcome, it simply does not answer the point and, in any event, risks a delay of some two years, as we understand that work has yet to start on this. However, in any case, it is not really the point. We want non-natural bodies to have to show a court that they have a real case before they send out those threatening and chilling letters which bully, can silence and intimidate, cost a lot in legal fees simply to rebut, and are sent out to warn off criticism rather than seriously to right a wrong. That is why we need a permission stage in the Bill before a corporation can take an action for libel. I beg to move.

[Lord May of Oxford]

I wish to make a few remarks which may embarrassingly reveal my lack of full acquaintance with the legal arcana in this case but at the same time remind us of at least one of the major reasons why we are having these discussions. I thank the noble Lord, Lord McNally, for doing a good job extremely conscientiously in complicated circumstances with a lot of opinions swirling round him.

I remind noble Lords yet again of what prompted this action in the first place: libel tourism to this country to shut up people who wish to point out instances of malpractice in pharmaceutical companies in a variety of contexts. I come mainly from the science base, where there are interminable examples, about which I could go on for hours. I will inflict one example on your Lordships and then I will speak more briefly. It is a typical example, which raises many of the issues that still concern me despite the good job that is being done. It comes from a chap called Peter Wilmshurst, who wrote to me in an e-mail:

“I am a consultant cardiologist in Shrewsbury. A US medical device corporation, NMT Medical, sued me for libel and slander three times in the High Court in England. I was the principal cardiologist in research, which was conducted on UK citizens and used a cardiac device made by NMT. At a medical conference in the USA, I expressed concern about the findings of the research and some of my comments were reported on a US cardiology website. As a result NMT sued me in England over the website article and a subsequent article. The journalist and the website were not sued. When I spoke about what happened on the Today programme on Radio 4 I was sued again, despite the interview being pre-recorded so that the BBC’s lawyers could make sure that there was no risk of further litigation. NMT did not sue the BBC. Everything that I said was provably true, but that did not prevent NMT starting expensive claims with the expectation that the cost would stop me expressing concerns about the lack of safety and lack of efficacy of their device. I know that fear of being sued by NMT prevented other doctors expressing similar concerns. The libel cases lasted almost 4 years and my legal costs were £300,000”—

which is actually low compared to some of the incidents in mind. The journal Nature, for example, spent £1.5 million successfully defending one of these libel cases.

Peter Wilmshurst continued:

“The cases ended when NMT went into liquidation as information about the problems with their devices filtered out and cardiologists stopped using them”—

something I will come back to. He continued:

“During the years when NMT silenced doctors who had legitimate concerns, the ineffective and unsafe devices were implanted in patients in the UK and elsewhere. Some patients needed urgent cardiac surgery to have devices removed and some died. That was the true cost of the English defamation laws having no adequate public interest defence to prevent spurious claims by wealthy corporations. I believe that if Parliamentarians did not have absolute privilege when speaking in Parliament”—

and that is a comfort I have here, having once been silenced in a cowardly way—

“and they had only the same protections as ordinary citizens, they would ensure that there was an adequate public interest defence and protection from corporations using the defamation laws to silence whistleblowers and prevent freedom of expression”.

We did that way back.

I mention that example in particular because, as noble Lords will notice, the original action was effective. Ultimately, it caused this company to go bust. One of the amendments we are talking about asks for a way of preventing this sort of bludgeoning of people into silence by the power of the purse and the extraordinary extravagance of our legal procedures. It comes home to us very clearly that simply saying that a company must prove you are damaging them by what you are saying is not going to prevent many of these cases because the aim of what many people are saying when they provoke these actions is, indeed, to inflict damage. The aim is to point out bad and unsafe practice and unsound publications, and to damage the people responsible. I am not clear that simply saying that companies must show they are damaged would really cure the problem at all. I may be revealing my ignorance, but I wanted to say again that this is what provoked it. In what sometimes seemed to me interminable sessions in Grand Committee, in which I took a form of perverse enjoyment, the intense arcana of the legalisms occasionally seemed—to put it gently—to distract from the essence of the problem. My understanding, imperfect though it is, is that we are going a long way to addressing this problem but not all the way that, were I supreme dictator, we would go.

[Lord Lester of Herne Hill]

My Lords, I hope, in what will be a short speech, to deal with all the amendments together. In answer to the point just raised by the noble Lord, Lord May, corporations are not the same as private individuals. They cannot have hurt feelings but they can be seriously damaged by defamatory statements. I therefore share the view of many courts across the world that corporations should be able to bring libel proceedings but on certain conditions. The short answer to Dr Wilmshurst is that we now have, in what will be Clause 4, a public interest defence which, quite apart from the other provisions in his favour, he would be able to rely upon.

I begin by dealing with the question of damages. I do not want to crow about it, but it was actually in my own Private Member’s Bill that I required corporate bodies to have to prove the likelihood of financial loss or actual financial loss. That was commended by the Joint Committee on the draft Bill and by the Joint Committee on Human Rights on which I serve and, as a member, was able to inform its report. I think that the Government have made an important concession and I am delighted that the Opposition have recognised that and, indeed, have called for it themselves. It is, of course, extremely important that corporations are able to bring libel proceedings but, as I say, are able to do so if they are trading corporations by proving serious financial loss or the likelihood of serious financial loss.

All of that is now common ground, and what is left are the two important issues of the Derbyshire principle and the notion of a special procedural step to be taken, which is set out in Amendment 2D. It requires the permission of the court before a trading corporation can sue. I am persuaded by my noble friend Lord McNally’s way of dealing with that. It is a procedural point that will be dealt with by the early resolution procedure and by proper case management. It does not require a rigid rule to be inserted into the Bill, and therefore I would not support Amendment 2D.

What, then, about the Derbyshire principle? The House has the benefit of having as a Member of the House of Lords the judge who decided Derbyshire when he was even younger than he now is, my noble and learned kinsman Lord Woolf of Barnes, and I am sure that he will correct anything I am about to say. I want to say something about Derbyshire because I think that it has been misunderstood. It has been misunderstood by the Government because they seem to think that if one were to codify—I am now against codifying for a reason I shall come to—that would be in some way rigid and inflexible because it would prevent a body exercising functions of a public nature being able to vindicate its reputation. That is wrong because, as the Derbyshire case establishes and makes clear, unlike the position in the United States where no one can sue to vindicate the reputation of a government body, it is always open to a body exercising public functions through its officers or any individual who is defamed to bring their own defamation proceedings. It also makes it perfectly clear through Lord Keith of Kinkel in his speech for the House of Lords that there is also the tort of malicious falsehood. This means that if a government body can prove bad faith or reckless disregard for the truth, it can also bring proceedings. The Government are therefore mistaken in thinking that to codify in the way that the Opposition wish to do—with my support the last time round—would create a rigid and inflexible position. That is not so, but the question is whether we were right last time to try to codify the principle.

Since then, something has happened which has caused me to think again. It is the situation in Northern Ireland, and I hope very much that the noble Lord, Lord Bew, will say something about it. Since the last occasion, the governing authorities in Northern Ireland have decided in their wisdom that the Defamation Bill should not apply to the Province. NGOs, newspapers, broadcasters and citizen critics often convey information and ideas which are not confined to any particular part of the United Kingdom but extend to the whole of it.

What troubles me about codification is not what troubles the Government. What troubles me is that, were we to codify in the way that is now suggested, in Northern Ireland, Mr Paul Tweed, in particular, who is the king of libel suits in that part of the United Kingdom, would argue, “This is codified in England and Wales but it is common law in Northern Ireland and the way in which it is codified suggests that Parliament had serious doubts about what Derbyshire meant. Now we are going to seek to apply a narrower view than Derbyshire itself”. That has made me think about the whole issue in this context of codification versus common law.

16:15

The Minister rightly indicated, going as far as he can, that it must at least be strongly arguable—although for the courts in the end to decide—that a private body exercising public functions, such as a contractor running a prison, which under Section 6 of the Human Rights Act must act in a way compatible with human rights, is part of the Derbyshire principle. I cannot see any argument to the contrary. Common law is already quite clear. Any body, whether a public body or a private body clothed with public functions that seeks to use civil defamation law to vindicate its governing reputation cannot do so, but its individual officers can, and if it wishes to pursue a claim, it can go through malicious falsehood rather than ordinary libel law.

Just as the public interest defence leaves it to the courts to apply a principle case by case in context, in this case, wisdom suggests—partly because of what I have said about Northern Ireland—that this is a case where, having had the situation clarified by the noble Lord, Lord McNally, even though he has not made a Pepper v Hart statement as such, if he and the House agree with the view that I have expressed, I very much doubt that any senior court in any part of the United Kingdom would come to a different view.

It is particularly important to keep the common law strong in this area because we are not a federal system. We do not have a federal rule dealing with defamation; we have devolved functions to Scotland and Northern Ireland. I want to be absolutely sure that common law principles will apply as vibrantly in Belfast and Edinburgh as in London and Cardiff. I do not think I persuaded the noble Lord, Lord Browne, of that, but that is my genuine concern; it is a real one, which I know is live in Northern Ireland as well.

Turning to my Amendment 2E, I am satisfied and grateful for the clarification. The Localism Act says that a local authority may do anything which a private individual may do. Rutland seemed to think that that enabled a local authority to sue for libel and therefore overrode the Derbyshire principle. That is completely wrong and I am satisfied that the Minister and the Government also think it is completely wrong and have indicated that, were they to be found wrong in a subsequent case, they would exercise the power that the Localism Act gives them.

For all those reasons I support the position of the Government and I hope that today will be a happy ending rather than a process. By this I mean I very much hope we will not need to have a Division on any of these issues.

[Lord Faulks]

My Lords, perhaps I may deal first with government Amendment 2B. Initially, I was very sympathetic to the idea of restricting a company’s right to sue because of the instances of bullying, which are now well known. I have become slightly more troubled by the restriction which is to be imposed in what I hope will not be impolite to call something of a volte-face by the Government in this respect. I understand the reasoning behind it but I seek from the noble Lord, Lord McNally, reassurance about what a company must establish to show that it has been, or is likely to be, caused serious financial loss.

In the well known case of Jameel v Wall Street Journal in 2007, the House of Lords considered, among others, the Derbyshire case. In particular, in his leading speech Lord Bingham said that he was satisfied that it was appropriate for a company not necessarily to prove special damage but to establish that a publication had the tendency to damage. I shall quote from paragraph 26 of his judgment:

“First, the good name of a company, as that of an individual, is a thing of value. A damaging libel may lower its standing in the eyes of the public and even its own staff, make people less ready to deal with it, less willing or less proud to work for it. If this were not so, corporations would not go to the lengths they do to protect and burnish their corporate images. I find nothing repugnant in the notion that this is a value which the law should protect”.

He went on to say:

“I do not accept that a publication, if truly damaging to a corporation’s commercial reputation, will result in provable financial loss, since the more prompt and public a company’s issue of proceedings, and the more diligent its pursuit of a claim, the less the chance that financial loss will actually accrue”.

What concerns me a little is that a company that has genuinely been damaged in its reputation will often find it very difficult to surmount this hurdle which is inserted in the Bill when it is not easy to produce by reference to a balance sheet an exact equivocation between the damage to a reputation and the damage to a company. It may be much more subtle than that, yet there is genuine damage to a reputation. Therefore, I would welcome some clarification from the Minister about what a company may need to establish short of producing a balance sheet, nevertheless having some evidence of real damage to the company.

There is a problem with the alternative tort of malicious falsehood in that the offer of a mens rea defence is not available. Of course, malicious falsehood requires proof of malice and is a somewhat unsatisfactory hurdle where a defamation action is, on the face of it, more suitable.

As to the amendment suggested by the noble Baroness, Lady Hayter, concerning non-natural persons, I entirely agree with my noble friend Lord Lester. I can add that the courts are currently considering a number of cases where they are patrolling the border, as it were, of the Derbyshire principle and deciding whether, on particular facts, the ratio decidendi of Derbyshire should be applied to a public role or public function having been performed by a particular body. I suggest that it is much better for the law to evolve, as the Minister said, rather than to codify it in this way. Of course, at the moment the courts are generally considering the question of public function in the context of the Human Rights Act and whether the obligations under the convention apply. There are many hybrid cases which are going to make these cases very fact-sensitive, and that is an indication that we should avoid trying to codify.

I strongly oppose Amendment 2D proposed in Motion B2. The initial requirement of seeking the permission of the court is going to add to costs. Largely thanks to the helpful intervention of the CPR—I see the noble and learned Lord, Lord Woolf, in his place—the courts have the flexibility to intervene on questions of meaning. They can strike out the whole or part of a case. In any event, I suggest that there is sufficient flexibility to make this initial hurdle supererogatory. It will be expensive and I fear that it will not in fact achieve what I understand lies behind this amendment, and so I strongly oppose that.

[Lord Phillips of Sudbury]

My Lords, I shall talk briefly to Amendment 2B and, in so doing, I echo what has been said about my noble friend Lord McNally. I do not know about McNally’s Bill but I certainly knew a Bill McNally, who was one of the finest poachers in Suffolk.

I am not happy with Amendment 2C, in the name of the noble Baroness, Lady Hayter of Kentish Town, but I have a lot of time for her Amendment 2D, supported by the noble Lord, Lord May of Oxford. As was said by my noble friend, there seems to be considerable anxiety around the bullying of corporations, which seems to get worse as time goes by. Some of the largest and wickedest of them are some of the most brutal in the way that they will abuse the law to silence critics.

I want to raise with my noble friend Lord McNally a point on Amendment 2B because this is potentially a Pepper v Hart occasion, where he could say in the most trenchant terms that my concern is misplaced. The amendment enlarges on Clause 1 of the Bill, headed “Serious harm”. It says:

“For the purposes of this section, harm to the reputation of a body that trades for profit”.

I am not absolutely clear that the phrase,

“a body that trades for profit”,

is beyond ambiguity. I am thinking particularly of charities, some of which trade for profit in the mainstream of the work that they do—for example, some schools, some hospitals and gymnasia. There are many areas where charities carry on a trade, but it is a charitable trade and it is, in one obvious and simple sense, for profit because it generates the wherewithal enabling them to run their hospital or whatever it is. I could have chosen language, I think, that would put the meaning beyond doubt, but we have to live with the wording that is here. As I understand it, there is no further opportunity to change the phrasing of this part of Amendment 2B. So I hope that my noble friend Lord McNally will assure me that this wording is specifically designed to exclude from its ambit the work of charities. Otherwise, I think we have a very large problem with this amendment.

[Lord Bew]

My Lords, I rise to speak to Amendment 2C. However, I feel I have to respond immediately to the words of the noble Lord, Lord Lester, which I have to say, on behalf of Northern Ireland as a region, makes me feel very uneasy.

The point about this Bill is that it is not just about enhancing press freedom but about public debate more generally, including academic freedom. I find it very disturbing that the region of the United Kingdom from which I come is opting for a more restrictive type of public debate and deciding not to engage in the wider freedoms that will now be available for public expression in the United Kingdom more generally. I find that is almost a self-mutilating act. The only thing I can say to the noble Lord, Lord Lester, is that I hope over time—but not too much time—the Northern Ireland Assembly will rethink its position. It was a position taken up when the tsunami of Leveson was sweeping over this Bill and it was not at all sure that this Bill would pass. It was a very surprising statement even in its timing. The best resolution of that would be for the Northern Ireland Assembly to reconsider, because innumerous anomalies will otherwise be created as regards the circulation of British media—not just newspapers but organs like the New Statesman and the Spectator—in Northern Ireland unless there is a rethink. I hope that there will be a rethink because otherwise it would leave us in a very unsatisfactory situation. It might be helpful in promoting that rethink if the leaderships of the parties in this House all indicated their unease with the situation in Northern Ireland. This Bill has all-party support and it might be useful to indicate a certain unease with the situation that we are facing.

16:30

In the case of Amendment 2C, I am very reluctant to pose a question to the noble Lord, Lord McNally, who has been so patient through so many questions and has done so much to protect the Bill. In the light of our discussion on Derbyshire and some of the observations made by the noble Baroness, Lady Hayter, I want to pick up on some of the Minister’s reasoning and to ask for clarification. He expressed unease about Amendment 2C on grounds that I can fully understand; that it could be disproportionate in its effect. He talked about the wider impact on a business more generally. I understand his point, but if we go back to the spirit of the original Derbyshire case, what seemed to be being said was that there was a case for public debate even when the consequences in some cases might be unpredictable. Even under the definition that we all accept in the meaning of Derbyshire, there might be wider impacts—for example, councillors might lose their jobs. The concern is that we have to protect the logic of a ruling that has widespread support in this House and that in future in the real world there will be more privatisations and a context in which more controversies will develop. I understand the argument of the noble Lord, Lord McNally, that over time the law might evolve to deal with these issues, but there is a possibility of an erosion of the principle in the Derbyshire case because of changes in policy more generally.

The last thing in the world that I want to do is to ask the noble Lord, Lord McNally, another question about anything to do with this Bill because I feel such a great debt of gratitude to him. However, I would like to pose a question about that issue.

[Viscount Colville of Culross]

I would like to express my relief that the Defamation Bill has finally been unblocked and returned to your Lordships’ House. I thank the noble Lords on both Government and Opposition Front Benches for their tireless efforts to make sure that the Bill reappeared in this place.

I strongly support government Amendment 2B. During my career I was a journalist, and I spent some time on small regional newspapers. There were a number of occasions when I felt the mighty weight of companies bearing down on my reporting. I am ashamed to say that on some occasions, even when I had a powerful and well supported case revealing wrongdoings by a company, the legal letters from the company’s representatives threatening libel action, and the uncertainly of the outcome under the present libel laws, meant that those articles were not published. We live in an era when business PR regards anything but abject praise as an attack on a company. It seems to me that an amendment which demands a threshold of serious financial damage to a company before it can sue for libel will allow a much greater atmosphere of transparency and openness when questioning its activities.

I support the amendment put forward by the noble Baroness, Lady Hayter, and I listened with great respect to the noble Lord, Lord Lester, as I always do. Why, if Northern Ireland is having such problems with this, should the rest of the United Kingdom suffer? Why should it not be allowed to have the benefits of the Bill? It extends the Derbyshire principle into statute rather than waiting for it to work through common law, as suggested. This amendment attempts to incorporate the Human Rights Act 1998 which says that a private company performing public functions should be considered as an organ of the state. The ever increasing expansion of private companies being subcontracted to run public services makes it ever more urgent that the Derbyshire principle should now be established to cover those companies as well.

I have a short example. Last year, the Guardian received evidence from whistleblowers about the company, Serco. The allegations stated that the private health care provider, Serco, which runs the GP out-of-hours service on behalf of the NHS in Cornwall, had not employed enough skilled staff to meet patients’ needs and that the company was altering performance data to show a more positive outcome. Throughout May of last year the solicitors, Schillings, on behalf of Serco, sent a series of letters to the Guardian threatening it with libel action if it went ahead and published the evidence. The Guardian ignored these threats and published a series of articles by Felicity Lawrence. Then in July 2012, a report by the Care Quality Commission found that Serco had indeed not employed enough qualified staff to meet the patients’ needs, and a National Audit Office report this year found that there was evidence that the performance data had been altered to overstate the service’s performance.

The Guardian is big enough to resist these libel threats, but a smaller paper or website might well not have been able to do so. Had the service been run by the NHS it could not have issued those threats, but under the present law Serco was able to do so. Why should a company carrying out public functions be able to threaten critics with libel—possibly using public money—while a public body itself carrying out those functions would not be able to do so? In considering how to vote, I ask your Lordships whether we should not provide a level playing field in this matter.

[Lord McNally]

My Lords, I am very grateful for the contributions that have been made. This is not the Bill that my noble friend Lord Lester introduced into this House just over two years ago. It is not the Bill that the Government produced in draft for pre-legislative scrutiny. I am proud that it is a Bill that has gone through every process of political and parliamentary procedure, from a resolution at a Liberal Democrat conference to being an Act of Parliament, if we are successful today. However, this means that people around the House and campaigning groups around the country have not got everything they wanted from this Bill. One of my political heroes was the late George Woodcock, the general secretary of the TUC, who once said that good trade unionism was a series of squalid compromises. I do not suggest that the compromises that we have arrived at thus far are squalid. Nevertheless, when looking at a Bill such as this, it is necessary to remember the various pressures—some of which have been reflected in the useful debate that we have had—before making a judgment about challenging the other place once more.

The noble Baroness, Lady Hayter, raised the matter of cost still being in doubt. I would personally like to have had a clearer position, but we are working through on this. I have given enough assurances that we will make sure that the cost issue is clearly dealt with before this Bill comes into force. There are enough indications of the way that Parliament, Lord Justice Leveson and the CJC want to go that I am pretty confident that we can get a cost protection measure in parallel with the Bill which will satisfy the wishes of this House.

Perhaps I may also deal with an issue that has been raised in a number of interventions, including by the noble Viscount, Lord Colville. We have a dilemma that has happened under successive Governments. It is that what was once a clear line between the public and private sectors is increasingly becoming blurred, wavy, or even dotted. It is not as clear as it once was. I personally believe that at some stage we are going to have to deal with the anomalies created by the blurring of those distinctions and the fact that far more private sector companies carry out public service duties. However, I hope from what my noble friend Lord Lester said, and I said, that there is sufficient argument to say that for the moment we should rest on common law to deal with this matter. I fear that if we try to push too hard to implement this into statute now we will not convince the other place.

On the workings of the Civil Procedure Rule Committee, another matter that the noble Baroness, Lady Hayter, mentioned, it is not true that we will have to wait two years for case management. We are hoping to have guidance on case management in place, as with the costs, by the time that the Bill comes into force later in the year.

Before I move on, I am pleased to see the noble Lord, Lord Browne, in his place. I want to put on record that the noble Lord, Lord Browne and the noble Baroness, Lady Hayter, are a model of constructive opposition in the way they have handled this Bill. I hope that does not ruin his reputation. He will never recover from that.

The noble Lord, Lord May, referred to Committee stage as being a perverse pleasure. I think I know what he means, but it was a pleasure and an honour to have so distinguished a scientist contributing to our deliberations. It is an area which, along with the academic freedom that the noble Lord, Lord Bew, referred to, has been among the things that I have been most concerned that this legislation should try to protect.

The noble Lord, Lord May, referred to the question of Dr Wilmshurst. Another name that has often been referred to has been Simon Singh. They have been the cause célèbre about the deficiencies in our law. I have constantly said to my officials, “How will it be different after our Bill becomes an Act?” It will be different in both those cases. People pursuing them would have to satisfy the serious harm test. The defendants would have the new public interest defence contained within Clause 4 of the Bill. Alongside the Bill we are introducing cost protection measures to provide additional protection to those with limited means. More generally, to support the scientific and academic debate, the Bill also creates a new defence against libel for peer-reviewed material in scientific and academic journals and extends qualified privilege to reports of scientific and academic conferences.

Although I am not sure that we will ever be able to protect everyone from the speculative chilling solicitor’s letter, I hope that people receiving that chilling letter will realise that the law has changed. It has changed to protect them and build in protection for the Dr Wilmshursts and Simon Singhs of the future.

16:45

I have already dealt with the Derbyshire codification. I have been frank with the House—it is a political judgment. For some of the reasons that my noble friend Lord Faulks raised, I do not think I am going to be able to take noble Lords any further on this. There is the fact that companies do have good names. In an earlier life I worked for a public relations company, where we used to earn good money helping companies to develop their corporate reputations. Increasingly, over the years, corporate reputation and social responsibility have appeared in annual reports as something of value to companies. These things have to be taken into account, as well as things like staff morale. So our amendment—which my noble friend Lord Faulks was not exactly enthusiastic about—was not a volte-face, but more a development of thinking.

Again, this is rather like trying to establish a border between private and public. Throughout this, and as the law develops even after this Bill becomes an Act, we will find that balance in protecting against the bullying to which my noble friend Lord Phillips and others referred, between does it take place and it should not take place. With regard to corporate reputation, it is disgusting and disgraceful of large corporations to use those kind of tactics. But there will always be the question of how we protect against bullying. How do we recognise the points that my noble friend Lord Faulks makes, that there is a real value to the loss of reputation that has to be recognised as well? As he rightly says, and as I explained in my remarks, the courts are already, to use his phrase, patrolling the borders of Derbyshire. As I said in introducing this, the Derbyshire principle was established before the passage of the Human Rights Act. The issue of whether it would extend to a body falling within the definition of a public authority under Section 6 of the Act is not one that is being tested before the courts. It is therefore not possible to predict the view the courts would take were this issue to be raised.

[Lord Lester of Herne Hill]

I am grateful to my noble friend. Although my noble friend is not a lawyer, and has the great advantage of not being a lawyer, would he agree with me as a matter of common sense, that it cannot make the slightest difference whether it is the prison department or a private contractor managing the prison so far as the Derbyshire principle is concerned, because the Human Rights Act makes that quite clear?

[Lord McNally]

I have no doubt that my noble friend is right. What I would prefer to do, as we have been arguing throughout this, is to leave that matter to a judge and a court, when it comes before it. Where I do think there is a relevant question—not that my noble friend’s question was not relevant, it is just that I did not want to answer it—is on the question of charities. I can confirm to my noble friend Lord Phillips that it is not our intention to catch charities. We think that it is very unlikely that a court would find that a charity was a body trading for profit. There is a clear distinction between trading for profit and simply making a profit to reinvest as part of the more general purposes of the organisation. I hope that will give comfort to my noble friend.

He was another one that was concerned about bullying, and I have just made the point about balancing. I was pleased to hear about Bill McNally, not least that he was a successful poacher.

The points made by the noble Lords, Lord Bew and Lord Lester, about Northern Ireland are worrying, and I will take up the point about whether there can be some cross-party demarche to our fellow parliamentarians in the Northern Ireland Assembly, because it would be a great pity if Northern Ireland were to be out of step on this.

I understand why I am being asked to make definitions. However, the fault lines are moving and we will have to trust the courts with this strengthened Bill for them to make the right decision in this area. I take the point made by the noble Lord, which is very valid. Although I and Parliament have made clear our desire for a direction of travel here, there is a danger that the Derbyshire principle may be eroded because of this new configuration. However, trying to put the Derbyshire principle into statute at this time is not the way forward. The common law can be trusted to develop in the right direction. As I have said previously, no law on earth can prevent a speculatively threatening letter from a solicitor.

The Bill has been the work of many hands. If a piece of legislation were to be subject to a paternity test and DNA testing, this Bill’s DNA would be far more likely to be that of my noble friend Lord Lester than me. However, I have enjoyed—I think that that is the right word—taking the Bill through with the help of many hands and some very constructive contributions. I hope that the House’s last and most constructive contribution will be to accept the Government’s amendment and reject the amendment in the name of the noble Baroness, Lady Hayter.

[Baroness Hayter of Kentish Town]

My Lords, I am grateful to the Minister for making reference to my noble friend Lord Browne of Ladyton, who has just talked about surrogate parentage. Perhaps we can all claim a little of that. However, the contributions of the noble Lords, Lord May of Oxford, Lord Lester of Herne Hill, Lord Bew, Lord Faulks and Lord Phillips of Sudbury, and the noble Viscount, Lord Colville, actually reflected what was going on in Committee and on Report. The Minister used the tactful words, “development of thinking”; we are therefore not going to talk about u-turns, but simply welcome the development of thinking behind the new government clause.

I thank the noble Lord, Lord Bew. It sounds as if Northern Ireland in itself is a bad example, let alone the suggestion that this House or Parliament should make our laws on the basis of something decided in that Province. No matter how important that Province is, that is not the right way to make our laws here.

As regards two further issues, the first was on whether permission should be sought by corporates before they start an action. I am sure that the noble Lord, Lord Lester of Herne Hill, made a slip of the tongue, for which he is not renowned, when he said that in order to bring an action, companies would have to show serious financial loss. Of course, that is not right with the Bill at the moment. Corporates do not have to show financial loss in order to bring an action, but only to succeed in one. That is the crux of the matter in terms of whether permission should be given before they are able to start an action.

[Lord Lester of Herne Hill]

I am very sorry to intervene, but Clause 1 has to be read with what we are talking about.

[Baroness Hayter of Kentish Town]

It was the word “bring”. What we are trying to say regarding permissions is that permission of the court should be required in order to bring that action. In a sense, the most effective speech about permissions was, of course, made not by me but by the noble Lord, Lord May of Oxford. He discussed the case of Wilmshurst, which involved four years, £300,000, a risk to patients and actually of course no serious case at the bottom of it, because what he said was true. That is what we are trying to get rid of.

To turn to the main issue of Derbyshire, in a sense this is quite a simple judgment. It is a judgment about whether the noble Lords, Lord Faulks, Lord Lester and Lord McNally, are right that we should leave it to the courts and to judges to decide on whether the Derbyshire principle should now apply to other organisations providing public services, or whether we as Parliament want to take that decision. My fear about leaving it to the courts is how on earth users—patients, Travellers, people who are receiving those public services, the disabled who go to Atos—are to know what their rights are if we have to wait for the court to develop the Derbyshire principles. How are parties going to know? Who will fund the test cases? What message does it give to users and patients, and indeed to journalists wanting to report their complaints, if they must wait to know what the outcome is?

[Lord Faulks]

I am very grateful to the noble Baroness for giving way. I understand her desire not to encourage unnecessary litigation, but perhaps she could help me and the House with this. Even under the amendment it will be necessary for a court to decide whether a non-natural person is performing a public function. That of itself may be the question of a judicial decision, so even her amendment is not going to preclude any involvement of the judges.

[Baroness Hayter of Kentish Town]

It is interesting, but performance of public function will be under either a contract or a commission given out by the DWP or the local authority. They will be able to define that, because they do not simply stand up and say, “I am now providing a hospital”. A contract will exist with what used to be a PCT and is now a GP commissioning group. There will be a contract and it can be defined in that way. If that was the only problem and the Government wanted to concede other than on that, I would happily take that. No, the offer is not coming. I would like to conclude, if possible—

[Lord Lester of Herne Hill]

I am very grateful. The problem is that Section 6 of the Human Rights Act talks about functions of a private or public nature. That is fact-sensitive and cannot be codified, and has not been codified by Parliament in the Human Rights Act. That is why one cannot simply brush it aside and say, “Well, now Parliament must do so”, because Parliament has not done so in the Human Rights Act and cannot do so here. It has to be left to the courts to apply the test.

[Baroness Hayter of Kentish Town]

Parliament can decide that the organisations contracted to do those public functions should have the same restrictions on them, whether that be FOI or anything else, as a corporate body. That can be part of the contract. In a sense, it is a simple issue, and I mean this with absolute respect. I know that lawyers much prefer that these issues are decided in court. I think non-lawyers prefer it to be clear in law, and that is what we believe should happen. We do not want the Derbyshire principle to be eroded, in the words of the noble Lord, Lord Bew, by the threats continuing until a case is brought. For that reason we would like this to be in the Bill, and I would like to test—

[Lord McNally]

Before the noble Baroness sits down—no, she is absolutely right—and before she lures Lord May and others into her Lobby, would she confirm that what we are doing in this Bill would have significantly assisted both Simon Singh and Mr Wilmshurst? We have not left the situation as it was. We have made significant changes and built in significant protections, which should be taken into account before people decide which way to vote.

[Baroness Hayter of Kentish Town]

If they read my article, they would see that it says that this Bill has gone a long way towards what we want and it is only a shame that it is not perfect. As somebody who likes perfection, I am going to ask the House if, particularly on the first amendment, we should ensure that organisations carrying out a public service should not have the right to sue for libel.

17:00

Division 1

Ayes: 197

---

Labour: 159
Crossbench: 28
Independent: 3
Plaid Cymru: 1
Liberal Democrat: 1

Noes: 275

---

Conservative: 155
Liberal Democrat: 72
Crossbench: 36
Ulster Unionist Party: 2
Independent: 2
Democratic Unionist Party: 1

Motions B2 and B3 not moved.

Motion B agreed.

Crime and Courts Bill [HL]

Tuesday 23rd April 2013 Lords Chamber

Commons Amendments

17:14

Commons Amendment 18: After Clause 29, insert the following new Clause—
“Meaning of “relevant publisher”
(1) In sections (Awards of exemplary damages) to (Awards of costs), “relevant publisher” means a person who, in the course of a business (whether or not carried on with a view to profit), publishes news-related material—
(a) which is written by different authors, and
(b) which is to any extent subject to editorial control.
This is subject to subsections (5) and (6).
(2) News-related material is “subject to editorial control” if there is a person (whether or not the publisher of the material) who has editorial or equivalent responsibility for—
(a) the content of the material,
(b) how the material is to be presented, and
(c) the decision to publish it.
(3) A person who is the operator of a website is not to be taken as having editorial or equivalent responsibility for the decision to publish any material on the site, or for content of the material, if the person did not post the material on the site.
(4) The fact that the operator of the website may moderate statements posted on it by others does not matter for the purposes of subsection (3).
(5) A person is not a “relevant publisher” if the person is specified by name in Schedule (Exclusions from definition of “relevant publisher”).
(6) A person is not a “relevant publisher” in so far as the person’s publication of news-related material is in a capacity or case of a description specified in Schedule (Exclusions from definition of “relevant publisher”).”

Commons Amendment 131: After Schedule 14, insert the following new Schedule—
“Exclusions from definition of “relevant publisher”
Broadcasters
1 The British Broadcasting Corporation.
2 Sianel Pedwar Cymru.
3 The holder of a licence under the Broadcasting Act 1990 or 1996 who publishes news-related material in connection with the broadcasting activities authorised under the licence.
Special interest titles
4 A person who publishes a title that—
(a) relates to a particular pastime, hobby, trade, business, industry or profession, and
(b) only contains news-related material on an incidental basis that is relevant to the main content of the title.
Scientific or academic journals
5 A person who publishes a scientific or academic journal that only contains news-related material on an incidental basis that is relevant to the scientific or academic content.
Public bodies and charities
6 (1) A public body or charity that publishes news-related material in connection with the carrying out of its functions.
(2) “Public body” means a person or body whose functions are of a public nature.
Company news publications etc
7 A person who publishes a newsletter, circular or other document which—
(a) relates to a business carried on by the person, and
(b) only contains news-related material on an incidental basis that is relevant to the person’s business.
Book publishers
8 (1) A person who is the publisher of a book.
(2) “Book” does not include any title published on a periodic basis with substantially different content.”
Lords agreement and amendment to the Commons amendment
The Lords agree with the Commons in their Amendment 131, and do propose Amendment 131A as an amendment thereto—

131A: Line 29, at end insert—
“Small-scale blogs
7A A person who publishes a small-scale blog.”
Commons disagreement and amendments in lieu
The Commons disagree to Lords Amendment 131A, but do propose the following amendments in lieu—

18A: Amendment 18, line 25, at end insert—
“(7) But a person who is not a “relevant publisher” as a result of paragraph 7A of that Schedule (micro-businesses) is nevertheless to be regarded as such if the person was a member of an approved regulator at the material time.”

131B: Amendment 131, after Schedule 14, line 29, at end insert—
“Micro-businesses
7A (1) A person who, in carrying on a micro-business, publishes news-related material where either condition A or condition B is met.
(2) Condition A is that the news-related material is contained in a multi-author blog.
(3) Condition B is that the news-related material is published on an incidental basis that is relevant to the main activities of the business.
(4) “Micro-business” means a business which—
(a) has fewer than 10 employees, and
(b) has an annual turnover not exceeding £2,000,000.
(5) The number of employees is to be calculated as follows—
(a) find the total number of hours per week for which all the employees of the business are contracted to work;
(b) divide that number by 37.5.
(6) “Employee” has the same meaning as in the Employment Rights Act 1996 (see section 230 of that Act).
(7) “Multi-author blog” means a blog that contains contributions from different authors.”

Motion A

Moved by

[Lord McNally]

That this House do not insist on its Amendment 131A, to which the Commons have disagreed and do agree with the Commons in their Amendments 18A and 131B in lieu.

[The Minister of State, Ministry of Justice (Lord McNally)]

I beg to move Motion A standing in the name of my noble friend Lord Taylor of Holbeach.

Noble Lords will recall that when this House considered the Commons amendments to the Bill on 25 March it accepted a series of Commons amendments that form part of the cross-party deal on Leveson and ultimately seek to establish an incentive-based, self-regulatory system for the press as envisaged by Lord Justice Leveson.

In advance of the debate on 25 March, the Government recognised that there was continuing concern in relation to the impact of the new system on small-scale blogs. Indeed, Lord Justice Leveson himself was clear that he did not expect very small publishers to join the new self-regulatory body. In recognition of the continued debate around the extent of the definition of “relevant publisher”, this House accepted the government amendment, Amendment 131A, to allow a period of further reflection over the Easter Recess and thereby ensure that the issue remained in play and could be discussed further in the Commons during the next round of ping-pong.

It might at this stage be helpful to remind noble Lords briefly of the context of these further amendments and explain the rationale behind the definition of relevant publisher. At present, four interlocking tests serve to define who is, and is not, a relevant publisher and therefore affected by the system of incentives. A relevant publisher must publish news-related material, which must be written by different authors, be subject to editorial control and be published in the course of a business, whether or not carried out with a view to profit.

Further to this, a number of specific exclusions have also been set out in the new schedule provided for in Commons Amendment 131. These exclusions include special interest titles, scientific journals, publications by public bodies and charities, book publishers and company news publications. However, the provision as drafted raised concerns on the part of small-scale blog sites that they could be caught by the definition of a relevant publisher, and that this was not an outcome we sought in establishing the definition. We have now had the opportunity to hold discussions with a number of relevant parties to understand their concerns about the extent of the relevant publisher definition. These were valuable discussions and Amendments 18A and 131B agreed yesterday by the Commons reflect the outcome of those discussions. I can also confirm that the amendments were agreed in advance on a cross-party basis.

Amendment 131B develops the list of exclusions from the definition of relevant publisher. Specifically, it exempts microbusinesses where they are either a blog or where their publications are only incidental to their other business activities. Microbusinesses which publish news-related material that is incidental to the main activities of their business are also exempted, whether they do so online or offline. The definition of microbusinesses in this amendment captures any business with fewer than 10 employees and a turnover of less than £2 million. This definition is frequently used by the Department for Business, Innovation and Skills. We consider that measuring both the number of employees and the turnover of an organisation, and setting the bar at this level, provides the most appropriate proxy for potential impact and harm and ensures that the incentive system is proportionate.

The aim is to make certain that the incentive system affects only those publishers Lord Justice Leveson intended to capture and that, by extension, many blogs, small web forums and think tanks will fall resolutely outside the incentive framework. Noble Lords will appreciate that it is, of course, ultimately and properly a matter for the courts to decide in any particular case whether a publisher falls within the revised definition of a relevant publisher. It is worth noting here how blogs may be perceived to be different from, for example, the online edition of a newspaper. Blogging takes many forms and is an evolving concept. However, there are some key features which distinguish blogs, even where they are edited and multiauthored, from online news reporting. A blog is used primarily for the expression of opinions, comments or personal experiences by an individual or group of individuals. Multiauthored blogs usually cover a single subject of interest, such as food or fashion, or a particular viewpoint, such as a political blogsite. Blogs do not usually report in a factual or neutral way on news or current affairs but are led by the personal views and voice of the individual or group of individuals concerned. The amendment intentionally contains no definition of a blog. It will take its natural, commonly understood meaning and, in the usual way, the term will ultimately be subject to interpretation by the courts.

Amendment 18A allows those parties not captured by the new exemption to benefit from the incentives around exemplary damages and costs, should they choose to join a recognised regulator. We consider this ensures that the system is fair and that those parties not captured by the definition can remain competitive. By joining a recognised regulator, parties not captured by the definition will now have the opportunity to benefit from the system of incentives we are putting in place.

Before concluding my remarks, I will clarify again the effect of the definition of “relevant publisher” on some other interests, in particular news aggregators. It is not our intention that these provisions should capture news aggregators such as Yahoo!, MSN or Google. News and content aggregators who license or otherwise acquire news-related content from third parties control this content only in so far as they decide how to present it in its totality to the end-user. To that extent, they are not subjecting the material to “editorial control” as defined in the provisions.

Lord Justice Leveson did not intend services that provide a platform for bloggers to post content to be captured. Again, the control that is exercised by aggregators here is limited to the high-level presentation of the content. It is for these reasons that news aggregators are not intended to be captured by our definition. Likewise, the definition is also not intended to capture political parties. These were not the target of Lord Justice Leveson’s reforms and it has not been the Government’s intention to capture them. In order to qualify, an organisation must meet all four tests in the definition: it must be publishing news-related material; the material must be written by different authors; it must be subject to editorial control; and it must be carried on in the course of business. An individual MP who runs a blog site should also be safely outside the definition as they would be unlikely to qualify for the four tests. If for some reason it was felt that they did, they would also be able to look at the microbusiness exemption.

It is also likely that many smaller political campaigning organisations will be able to take advantage of the new microbusiness exemption. They will qualify if they are microbusinesses and operating a multiauthored blog. If they are operating a multiauthored blog but publication of news-related material is incidental to their main activities, they will also be exempt.

I would like to underline that the activity of running a web forum is also not caught by this definition. I draw noble Lords’ attention to the additional provisions in the legislation which explain that the moderation of websites does not qualify. This is also true of blogs if they are posted without the exercise of editorial control. Therefore, a site like Mumsnet, to the extent that it runs a blog forum, is not caught by these provisions. However, any site, including Mumsnet, that moves into commissioning and publishing news stories may be caught by the definition.

I hope that this has helped to provide some clarity on who it has been the intention to capture in the definition and, equally importantly, who is not caught. I believe that these provisions provide a proportionate approach to implementing a crucial part of Lord Justice Leveson’s reforms. I commend these amendments to the House.

[Lord Avebury]

Before my noble friend sits down, perhaps he could help me on material that is published in the cloud. He went into very helpful detail on blogs, but material can be aggregated in the cloud in specific folders. Can the Minister say whether that is exempt in the same way that blogs are?

[Lord McNally]

I am not as au fait as the noble Lord and I have only just come to terms with clouds and things like that. What exactly is his concern?

[Lord Avebury]

Would material which is aggregated in a cloud folder with something such as Dropbox, where you can put a number of different items which may be news or other kinds of material, be exempt in the same way that blogs are?

[Lord McNally]

I am reliably informed, post haste, that such aggregates in clouds are not covered. If by any chance that is not true I will write to the noble Lord and make sure the letter is circulated to the House. I cannot see over my shoulder but I sincerely hope that the Box is currently nodding firmly.

[Lord Stevenson of Balmacara]

I can inform the Minister that the Box looked absolutely transfixed by that recent exchange. I do not know who is more surprised, them or us, by the ability of the noble Lord, Lord Avebury, to come to the white heat of the technological revolution and ask a question that has stumped us all. On this side of the House, we would venture to say that we think they are covered, but that just adds a little piquancy to the debate which will, I am sure, be resolved before we get too far down the line.

Following the Leveson trail is a bit like appearing in “Rosencrantz and Guildenstern are Dead”. We pop up at odd times as other events seem to be filling the spaces. We pay a small contribution to it and then we discover that the whole event has moved on, another Bill has appeared, and yet another set of amendments appears which look awfully like the ones we have just been discussing. Only earlier today, we knocked out one set of amendments, yesterday we could have done the same, today we hope they will stick. I want to reassure the Minister that we will be supporting him in this event and he will not need to use the wiles he displayed when he almost reached across the Dispatch Box to my noble friend Lady Hayter to try to persuade her not to push her vote. The vote was unsuccessful so he won out in the end anyway: he has all the luck.

As the Minister has explained, these amendments, inserted into the Bill late in the process, provide for new rules on exemplary damages and costs. They are an essential part of the cross-party agreement on a royal charter which is part of the new framework of independent self-regulation, guaranteed by law, as recommended by Lord Justice Leveson. This part of the Bill aims to provide publishers with incentives to sign up to the new system of self-regulation that should meet the criteria set out in the royal charter. Publishers that join a recognised regulator will receive protection from the award of exemplary damages in media disputes, the opportunity to use an arbitration service and cost benefits from having access to this service. That is one reason why it would benefit local as well as national newspapers. If a complainant chooses not to use the arbitration service, they can still be liable for costs even if they win.

Lord Justice Leveson’s report was mainly about the press but the original drafting of this Bill had the unintended effect of catching blogs. That said, Lord Justice Leveson did express the hope, in Recommendation 73 of his report, that online publishers would also join a regulator. The Bill therefore needs to be amended to ensure that exemplary damages did not apply to blogs and they could receive the benefits of joining a recognised regulator. In recognition of the fact that this is a complex area, your Lordships’ House agreed a placeholder amendment on 25 March. The Government’s decision to hold a mini consultation and pause for reflection to consider how the Bill should deal with the blogosphere was sensible and we agree with the policy objectives that the Government are seeking to address to exempt micro businesses from the definition of relevant publisher where they are a blog or where their publications are merely incidental to their other businesses and to enable such micro businesses to receive the benefits and cost incentives of joining a recognised regulator. The Minister has been helpful in setting out a number of accompanying thoughts around these points and the issues relating to what would and would not qualify, and I think they will bear further consideration once we see them written up in Hansard.

However, the main point is that the amendments we are now looking at and which we support define a small blog as one whose turnover is below £2 million and has up to 10 employees. It exempts such businesses from exemplary damages and enables them to benefit from the cost advantages of an arbitration service if they join a regulator, and that last point will be particularly welcome to the community. As I say, we support the proposals, and I am grateful for the manner in which they have been pursued within the all-party agreement which has underpinned the whole process, so we will not be dividing the House.

In the time available, I would like to make a couple of ruminations about some of the issues that we are talking about today, and within that are two questions to which I hope the Minister will be able to respond. The first is that the digital world as we know it is changing rapidly and the complexity and parliamentary arithmetic of changing the royal charter means that it will be hard to alter the legislation after this Session, so it needs to be right. What consideration have the Government given to the health and future of the blogging industry, and can the noble Lord share with us the Government’s thinking on this point? I understand that the indicators for a micro-business have come from a definition used by BIS, and in that sense they are not specific to the blogosphere. I have had representations already, and I am sure that other noble Lords will also have received them, from those who argue that the figures being used are on the high side, as rarely do we find 10 employees or even an annual turnover of £2 million in a blog company. That would make for a very healthy company, but it is not how the sector operates. Can the Minister estimate roughly how many blogs this definition would capture at present?

I turn to a related but more general point. We are talking about an industry that is in the process of change. For example, the print circulation of newspapers is estimated to shrink by at least a quarter in the next five years and yet we are facing a rather bizarre situation where newspapers are exempted the full 20% rate of VAT on print sales despite the fact that in many cases online traffic now represents the majority of their audiences. This is something which is bound to grow as we go forward. In fact, we are fast approaching a situation where what we previously believed, which is that we in this country do not tax reading, is becoming the reverse of what will happen. Those who read using electronic means, which will include those who are caught by this amendment, will be paying 20% VAT. Is this something that the Minister can say is under consideration, because it seems to me that we will need to face up to it before too long?

I am very grateful to the Minister for mentioning Mumsnet because it was the subject of discussions in another place, and others have raised it. The break point that he expressed is one to which we may need to return. Perhaps when he concludes he will reflect on this. At what point do those who blog and use it as a campaigning tool get caught? There is some doubt in what he has said about whether Mumsnet, which is not a charity but exists largely to circulate material that is in favour of a particular point of view, could possibly be caught by this exception. It is one of a number of areas in which, as the Minister has said, time will show us what emerges. However, a little more clarity at this stage would be helpful.

Finally, the Minister was keen to assert that it would not be sensible at this stage to define a blog. He was then caught quite quickly by a question related to blogging which illustrates that sometimes it might be sensible to have in primary legislation clear definitions which we can all use. I understand and support the idea that it is probably wrong to try to be definitive at this stage and that we should see how things go, but if that is the case, are there are any thoughts about how the Government might consider revisiting the issue within a reasonable time if it turns out that we need to move? After all, as I have said, this is the digital age and things are moving fast. What is a blog today may change into something else, and we want to be sure that we have the flexibility which I do not currently see in the Bill.

[Lord McNally]

I thank the noble Lord, Lord Stevenson, not only for that reply but for the constructive role he has played in getting us as far as we are today. It is important to retain an all-party approach as we take this through. The noble Lord asked how many blogs this amendment will cover. We cannot provide an accurate estimate because blogs are constantly started up and then stopped. However, we feel that this is the right figure in order to exclude all those who we hope and intend to exclude. On the definition of a blog, I was tempted to call in aid that used by Clement Attlee when he wanted to exclude Trotskyists from the Labour Party. They said, “How do we know who are Trotskyists?”, and he said, “It’s a bit like an elephant—when you see one, you know one”. In a way, we are groping with blogs in an age of technology that is constantly and frighteningly rapidly changing.

We have tried to get some key features which distinguish blogs from online newspaper reporting. A blog is used primarily for an expression of opinion. Multi-authored blogs usually cover a single subject of interest. In all cases, blogs do not report in a factual and neutral way on news or current affairs but are led by the personal views of the individuals. While an online news site may contain comment, opinion or bias, comment pieces are not its principal focus. What constitutes a blog may change over time as convergence increases.

It is a difficult area. When we debate these areas, we often point out that future-proofing is virtually impossible. We hope that the definition I have given today has been sufficiently carefully drafted to provide the maximum possible clarity to organisations seeking to know whether they are caught. We have produced a handy set of questions on our website to help organisations to work this out. This is intended as guidance only. Ultimately, as in the case of all legislation, the decision on whether an organisation comes within or outside the scope of any particular piece of legislation will fall to the courts. The intention of the definition is to capture news publishers who were the focus of Lord Justice Leveson’s inquiry and his subsequent recommendations. They are intended to act as the key incentive for those publishers to join the new press regulator, while also protecting those not intending to join.

On Mumsnet, protection is the interlocking test, but such an organisation may branch out or develop a kind of activity which takes it into the realms of news and newspapers—a news media. Again, we would have to be flexible. If an organisation develops in a way that makes it a news organisation, it would have to consider its position. Lord Justice Leveson, in making his recommendation and recognising the changing architecture of our media, specifically said that he hoped news organisations that were primarily online would consider themselves willing to join any new regulator.

Parliament at both ends of the Corridor has done a good bit of business in dealing with a specific concern that was raised. I thank the noble Lord, Lord Stevenson, for his very constructive and helpful approach, not only at the Dispatch Box, but in bilateral discussions.

Motion A agreed.

Growth and Infrastructure Bill

Tuesday 23rd April 2013 Lords Chamber

Returned from the Commons

The Bill was returned from the Commons with a Lords amendment disagreed to but with amendments to the words so restored to the Bill. It was ordered that the Commons amendments be printed. (HL Bill 99)

Enterprise and Regulatory Reform Bill

Tuesday 23rd April 2013 Lords Chamber

Returned from the Commons

The Bill was returned from the Commons with a Commons disagreement to a Lords amendment insisted on and a Commons disagreement to a Lords amendment not insisted on but with consequential amendments, and with amendments in lieu of a Lords amendment to which the Commons insisted on their disagreement. It was ordered that the Commons amendments be printed. (HL Bill 100)

London Local Authorities and Transport for London (No. 2) Bill [HL]

Tuesday 23rd April 2013 Lords Chamber

Message from the Commons

A message was brought from the Commons that they have made the following Order:

That the promoters of the London Local Authorities and Transport for London (No. 2) Bill [HL], which was originally introduced in the House of Lords in Session 2007-08 on 22 January 2008, should have leave to suspend any further proceedings on the Bill in order to proceed with it, if they think fit, in the next Session of Parliament, according to the provisions of Private Business Standing Order 188A (Suspension of Bills).

City of London (Various Powers) Bill [HL]

Tuesday 23rd April 2013 Lords Chamber

Message from the Commons

A message was brought from the Commons that they have made the following Order:

That the promoters of the City of London (Various Powers) Bill [HL], which was originally introduced in the House of Lords in Session 2010-12 on 24 January 2011 should have leave to suspend any further proceedings on the Bill in order to proceed with it, if they think fit, in the next Session of Parliament, according to the provisions of Private Business Standing Order 188A (Suspension of Bills).

Humber Bridge Bill

Tuesday 23rd April 2013 Lords Chamber

Message from the Commons

A message was brought from the Commons that they have made the following Order to which they desire the concurrence of this House:

That the promoters of the Humber Bridge Bill, which was originally introduced in this House on 22 January 2013, should have leave to suspend any further proceedings on the Bill in order to proceed with it, if they think fit, in the next Session of Parliament, according to the provisions of Private Business Standing Order 188A (Suspension of Bills).

House adjourned at 5.39 pm.