Bribery Act 2010: Post-legislative Scrutiny (Select Committee Report)

Baroness Bowles of Berkhamsted Excerpts

Wednesday 3rd February 2021 Grand Committee

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I welcome this report and commend the work and conclusions of the committee and the opening speeches by the noble and learned Lord, Lord Saville, and the noble Lord, Lord Hain.

I will speak about “failure to prevent” offences generally, but before that will speak briefly on the lack of clarity about what is meant by procedures being “adequate” for preventing bribery. This was brought about by the subsequently enacted tax facilitation offences using the alternative phrase “reasonable in all circumstances”. This is despite that having been dismissed in the Bribery Act debate as too high a standard by referring to “all circumstances”. In that context “adequate” was thought to be a lower bar. Certainly, if I congratulated a fictitious noble Lord on their “adequate speech”, it may not be taken as altogether complimentary.

Others switched the emphasis around so that, looking after the event, the bar is suddenly higher because procedures had failed and must therefore be inadequate. I am comforted that a senior judge said that he would have accepted them as both meaning the same had it been presented to him, but clarification on what is intended is desirable for both purposes.

I have mentioned the two “failure to prevent” offences and the reason for their existence is to strengthen the prospect of finding responsible parties guilty—which is very difficult because of the need to find a directing mind, and is tantamount to impossible with the board structures of large firms. Therefore, I welcome the point made in paragraph 109 that there are arguments to make corporations vicariously liable more generally, even though there is not a recommendation due to the inquiry’s scope.

It is some time since the Ministry of Justice made a call for evidence on corporate liability—to which I made a submission—and, after a long delay, the response is that there was not a sufficient evidence base on which to base reform. It has been sent off for lengthy procedures in the Law Commission, which already said in its 2010 paper on Criminal Liability in Regulatory Contexts that

“the identification doctrine can make it impossibly difficult for prosecutors to find companies guilty of some … crimes, especially large companies”,

and in its 2019 paper on suspicious activity reports that

“The identification doctrine can provide an incentive for companies to operate with devolved structures in order to protect directors and senior management from liability.”

Regrettably, I do not believe that the department has any heart to follow through on the Prime Minister’s call for action in 2016 and the good start shown by the Bribery Act. The only reason I can imagine for that squeamishness is that somehow it thinks it is a competitive advantage to shield directors in a way that they are not shielded elsewhere, such as in the United States.

A read of the call for evidence background document gives a good exposition of how bad matters are and many of the reasons why evidence of failures in prosecutions is relatively scant—because prosecutors know they cannot succeed against large companies and give up, unless sector-specific legislation has been introduced such as the “failure to prevent” regimes or the now systematically compromised financial services senior managers’ regime.

The current common law “directing mind” principle, first expounded in 1915, is unfairly discriminating to small businesses. The Crown Prosecution Service’s legal guidance, under “Further Evidential Considerations”, states:

“The smaller the corporation, the more likely it will be that guilty knowledge can be attributed to the controlling officer and therefore to the company itself.”


Given the general guidance for prosecution that there must be a “realistic prospect of conviction”, no wonder evidence is scant and statistics show a preponderance of prosecutions against small companies.

How can that unfairness be left to stand? What does it say about the culture of our country and why people feel left out? While acknowledging the fact of wrongdoing, people nevertheless rightly resent there being one law for the big and another for the small. Dancing-on-pins excuses do not cut that.

Civil law developed to take account of the complexity of modern companies, but not criminal law. Civil law is not enough: the ultimate deterrent of deprivation of liberty cannot apply to corporations, and in the end it does not apply to directors in large corporations. Culture will not change until it does, and the UK being “a good place to do business” is a tainted phrase—maybe even a loaded phrase. Surely directors should be required to ensure systems to prevent all bad corporate behaviour. Only then will action make its way to the boardroom, rather than be kept away in the safety of the executive committee or below.

But if the ministry is reluctant—whatever the cause—will it at least not stand in the way of further sectoral facilitation of crime measures?

Probate Service

Baroness Bowles of Berkhamsted Excerpts

Monday 27th July 2020 Lords Chamber

[Baroness Bowles of Berkhamsted (LD) [V]]

Are any of the temporary measures adopted during lockdown under consideration for becoming permanent—for example, signed statements of truth replacing affidavits or HMRC accepting estimated values and then subsequent corrected values?

[Lord Keen of Elie [V]]

Certainly, it is intended that permanently replacing affidavits with statements of truth will be considered, as will electronic signatures on probate forms—albeit that the whole issue of electronic signatures should be considered more widely. Going forward, we will seek to learn from these changes what permanent improvements can be introduced to the service.

Sentencing Bill [HL]

Baroness Bowles of Berkhamsted Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 25th June 2020 Lords Chamber

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I will speak about consolidation rather than the detail of sentencing, although I am glad that this project is reaching a conclusion.

Sentencing is a discrete and most serious matter. The fact that the law surrounding it was so amended and reamended that even the most senior lawyers in the land had difficulty knowing what it was with accuracy surely had to be addressed. With 1,500 pages of sentencing law spread across many instruments, the Law Commission said that sentencing lacked transparency due to complexity; regrettably, that is the state of many of our laws.

For some subjects, 1,500 pages is short. When we started scrutinising Brexit regulations, the Financial Services and Markets Act had far more pages than that. The Treasury admitted that it could not send us an up-to-date copy as it did not have one and did not know everything that was in it. When researching my response to the corporate governance Green Paper in 2016, I asked the Library for a print of the up-to-date Companies Act 2006. It used a commercial site as the GOV.UK pages were not up to date, then telephoned to ask if I could accommodate a pallet-load of paper in my office. Both those Acts contain criminal offences and neither is all that old, in the scale of things.

With Brexit, we have hundreds more multiple, nested regulations. As we have trade talks and decisions about equivalence of laws, can we be sure that we know what our laws are? Can anyone else be sure? The EU always mistrusted how we had complied, and Brexit transpositions have exposed various mistakes and left-out bits. It has taken five years for the sentencing consolidation to get to this final stage. With that overhead, I am beginning to understand why every statutory instrument says that the Government have no plans to consolidate law—but is that really a satisfactory answer?

Finally, I welcome the updating provisions and the table of origins, but when I was looking for things in my usual subject areas, I did not find listed all the abbreviations for legislation that were used in the subsequent table. For example, abbreviations for the Financial Services Act, the Bank of England and financial services regulations, the Secretaries of State for BEIS order or the crime and courts commencement order did not show when I searched the table.

Civil Liability Bill [HL]

Baroness Bowles of Berkhamsted Excerpts

Report stage (Hansard): House of Lords
Tuesday 12th June 2018 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, I should like to say a word in support of Amendment 50, which is in my name and builds on an amendment tabled in Committee by the noble Lord, Lord Faulks, to which I put my name but to which I was unable to speak because at the very moment he rose to speak I was taken out of the Chamber for a business meeting, so I never got to say what I should like to say now.

I have proposed for the noble and learned Lord’s consideration an expanded version of his amendment, and I should like to explain the background to it a little more so that the point is firmly before the House. On page 7, line 32, subsection (2) of proposed new Section A1 provides that proposed new subsection (1), which talks about the duty of the court to take into account the rate of return prescribed by order by the Lord Chancellor,

“does not however prevent the court taking a different rate of return into account if any party to the proceedings shows that it is more appropriate in the case in question”.

At first sight, that is quite a reasonable provision which the courts might feel able to use from time to time, but, as case law has developed, the door has effectively been shut on any use of the provision in these terms in cases where it is most likely to be wanted, which is those of injury of maximum severity.

In Warriner v Warriner 2002, the Court of Appeal, drawing on points made in Wells v Wells, stressed that on policy grounds there was a need for negotiations to be conducted with reasonable certainty as to the result and to eliminate unnecessary costs and the leading of extensive evidence. Building on the principle stated in Wells, which I of course support, it refused to interfere with the rate of return prescribed. That point was repeated in subsequent cases and more recently in the Court of Session in Edinburgh, where the same principles apply. The Lord President, Lord Carloway, made it clear in the case of Tortolano v Ogilvie Construction Ltd in 2013—Court of Session Inner House Cases, page 10—that there must be something special or exceptional about the case and that the fact that the injuries were catastrophic, which puts the level very high indeed, was not a special or exceptional case factor that would justify departing from the specified rate.

My point is that the Bill repeats almost exactly the wording of the Damages Act 1996, on which the case law has been built. There is one tiny difference. The formula in the 1996 Act was “does not, however, prevent”. In the Bill, we find the slightly different words “shall not, however, prevent”. But the crucial wording, in particular the word “appropriate”, is still there. If the wording of the Bill remains as it is, my concern is that it is effectively a dead letter because the courts, following established case law in the Courts of Appeal both north and south of the border, will feel that there is no case for interfering at all, even in the most extreme cases, where, as I have suggested, the need for even more precision and care in the rate of return is most compelling.

There is reason to be a little more generous at this stage. As the noble and learned Lord is well aware, the basis on which the rate of return is to be struck is to be taken at a slightly different level from that on which Wells v Wells was based. In Wells, the House of Lords used a rate of return that was inflation-proof—adopting a relevant government bond which had that rate of return—to avoid any risk of losing touch with inflation. Now, instead of a very, very low level of risk, there is to be an assumption that more risk will be acceptable than a very low level of risk, although it is less risk than would ordinarily be accepted by a prudent and properly advised individual investor. So there is a change towards a slightly greater element of risk, although not that high. The point is that any change in the level of risk being contemplated raises the possibility that in these extreme cases, the level may fail to achieve what is needed to provide the injured party with what is necessary to compensate them fully for the loss and injury sustained.

Simply to repeat the same formula is unsatisfactory. I was grateful to the noble and learned Lord for agreeing to a meeting the other day at which I was able to explain the point. I think the meeting was left on the basis that an attempt would be made to find a form of words that would not undermine what the Government seek to do but would, at the same time, allow the courts to look afresh at the idea of departing from the rate—although one would of course not want them to do so as a matter of course or have any unnecessary delay or expense in going through these complicated cases just to achieve a different rate. It would have to be a case that really justified such attention.

Some points can be drawn from Wells that may be relevant to my point. First, I was looking at the award in the form of a capital sum—we are talking about that rather than what the noble Lord, Lord Hodgson, was talking about a moment ago—in which the income will not be reinvested. The ordinary investor would reinvest the income to keep the capital sum as inflation-proof as possible, but in our case the income would be used to meet the needs of the injured party. At the same time, the injured party would be drawing on the capital sum, because it is a diminishing fund, the idea being that at the end of the claimant’s lifetime, or when the injuries have finally resolved themselves, there will be nothing left. So we have the extraordinary situation of a sum of money where the income cannot be used to protect against inflation and, at the same time, the sum is reducing. As Lord Lloyd of Berwick pointed out in Wells, if you are having to draw on the capital to meet these costs because the income is not good enough, in a diminishing market, that runs the real risk that the market may not recover sufficiently to bring the award up to the level needed to sustain the injured party for the rest of the period during which that party needs to be sustained. There is a difficult area here: in some cases, particularly if you alter the level of risk, you run into the possibility of the injured party not being fully compensated.

I seek by the amendment to suggest for the noble and learned Lord’s consideration a slightly different formula of words in that critical proposed new subsection that would enable the court to escape from the straitjacket of existing case law in cases that justify a fresh approach. On that basis, I have expanded a little on the formula of the noble Lord, Lord Faulks, to draw attention to the need for this sum to be sufficiently large to meet the needs of the claimant for the rest of the period. It is in that context that I ask the noble and learned Lord to consider my amendment in deciding what best to do to avoid simply repeating a dead letter.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I shall speak to my Amendment 73. It is an attempt not to change anything in the Bill, just to avoid some very unfortunate, superfluous wording. At the foot of page 9, it would delete the words,

“who has different financial aims”.

The effect of that deletion is to leave intact the wording cited just now—without what I would say are the offending last words—by the noble and learned Lord, Lord Hope. It leaves intact the reference to an,

“assumption that relevant damages are invested using an approach that involves … less risk than would ordinarily be accepted by a prudent and properly advised individual investor”.

At that point I would put the full stop, as it is clear and sufficient to achieve the intended purpose. Adding on that this prudent and properly advised individual investor “has different financial aims” at best adds nothing, and at worst contradicts the earlier provisions about the basis for the rate of return, which appear in new paragraph 3(2).

Civil Liability Bill [HL]

Baroness Bowles of Berkhamsted Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Tuesday 15th May 2018 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I apologise for not having been able to speak at Second Reading. I will briefly intervene on these amendments, because I find the content of all of them quite persuasive. The mover of Amendment 56 touched on an important point: who owns the risk if you accept a lump sum payment instead of periodic payments? If, hopefully, the routine is that in most circumstances, one finds out what a periodic payment would look like, one needs to consider this: if you prefer to have a lump sum and take the investment risk, the person who makes that choice owns it, which in turn reflects upon how you would make presumptions about their investment strategies. I intended to touch on this when we come to my amendment in a later group, but as this is the other side of the argument, I wished to raise that point now and to say that I am in the “shove” rather than “nudge” brigade.

[Lord Beecham]

My Lords, the noble and learned Lord, Lord Mackay, referred at Second Reading to Clause 8(3) and the assumptions to be followed in determining the rate as set out in, notably, paragraph 3(3)(a) of proposed new Schedule A1, in which the Lord Chancellor must assume that the relevant damages are payable in a lump sum rather than under an order for periodical payments.

Paragraph 3(3)(d) of proposed new Schedule A1 prescribes an assumption that the relevant damages are invested using an approach that involves,

“more risk than a very low level of risk, but … less risk than would ordinarily be accepted by a prudent and properly advised individual investor who has different financial aims”.

The noble and learned Lord observed that the Lord Chancellor would have to have,

“a certain element of the prophet about him”,

and that:

“Getting an expert panel to agree … will be very difficult” .—[Official Report, 24/4/18; cols. 1504-05.]


Perhaps the Minister could confirm this, or make it clear that this a not-for-prophet provision.

The decisions that will be made will impinge heavily on the innocent victims of negligence or breaches of statutory duty over a wide range of circumstances, hence the noble Lord’s amendment that would provide that an order may distinguish between different classes of case by reference to the description or anticipated scale of future pecuniary loss involved. But the amendment to Section 1 of the Damages Act 1996—in Clause 8, lines 29-34—which states that the provision of the preceding subsection requiring the court to,

“take into account such rate of return (if any) as may from time to time be prescribed by an order made by the Lord Chancellor”,

is qualified such that it,

“does not however prevent the court taking a different rate of return into account if any party to the proceedings shows that it is more appropriate in the case in question”.

This seems to create the possibility of the courts departing significantly in individual cases from the Lord Chancellor’s prescribed tariff. This would be welcome, but can the Minister confirm that that is the intention behind the Bill in that context?

I certainly endorse the noble and learned Lord’s Amendment 57A and I hope the Government will adopt it.

--- Later in debate ---

[The Earl of Kinnoull]

My Lords, I will speak briefly to Amendments 80 and 81 in my name. I congratulate the noble Lord, Lord McKenzie, on his heart-rending speech, but it seemed only to go back to saying, “My goodness, PPO is a good idea”. So many of the risks which the noble Lord identified would be sorted out by that, but that is in the past.

New Schedule A1 to the Damages Act is inserted by Clause 8(2). At Second Reading, I said that I was worried that paragraph 3(3) did not give sufficient clarity to what was being asked for in the investment. I was concerned that, without that clarity, there could be a plethora of new Wells v Wells cases, with people trying to grapple with what was actually meant. Amendment 80 probes the word “investments” in the phrase,

“the assumption that the recipient of the relevant damages invests the relevant damages in a diversified portfolio of investments”.

We should at least be clear that those investments were debt securities, not equities.

Secondly, I thought it would be helpful to try to define a “very low level of risk”. That does not actually mean anything to me, with my background, and I suspect it does not mean anything in law. I have tried to define it as the level of risk you have when you buy UK Government debt security. These are probing amendments and I regard this as a discussion, but clarity in this area of the Bill would be greatly to the advantage of everyone concerned.

[Baroness Bowles of Berkhamsted]

My Lords, we are dealing with sensitive issues here. Nobody wants claimants to get a raw deal, but we need to examine presumptions that we appear to be writing in, especially in the light— as has just been mentioned again—of the possibility of periodic payments. In his reply to the first group of amendments, the Minister seemed to say that the possibility of periodic payments was a lot more open than it appears to be, due to the statistics.

Amendment 80B is another probing amendment. I tabled it because the language of paragraph 3(3)(d)(ii) of new Schedule A1—it is much easier to say “the last three lines at the bottom of page 9”—does not seem quite right. The wording concerns how it is to be assumed the relevant damages are invested and says to assume,

“less risk than would ordinarily be accepted by a prudent and properly advised individual investor who has different financial aims”.

My amendment deletes the whole sub-paragraph, but it is a vehicle for probing and there are less extreme ways to fix it.

I understand the intention of the words: the claimant should be reckoned to invest in a cautious and advised way, perhaps more cautiously than an individual who does not have the same vulnerability. Paragraph 41 of the Explanatory Notes explains it as,

“less risk than would ordinarily be taken by a prudent and properly advised individual investor (who is not a claimant) with similar investment objectives”.

Those investment objectives clearly need to be the purposes set out in paragraph 3(2) of new Schedule A1, at lines 25 to 31 of page 9, which includes, for example, that the damages,

“would be exhausted at the end of the period for which they are awarded”.

However, the actual wording in the three lines at the end of page 9 does not seem to say the same thing. The first two lines—

“less risk than would … be accepted by a … properly advised individual investor”—

are broadly okay, but it then says,

“who has different financial aims”,

which is very different from the “similar investment objectives” of the Explanatory Notes. I am therefore slightly puzzled. Was the intention to state that they are different because they are not a claimant, is it a mistake, or have I missed some other point?

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Committee: 4th sitting (Hansard): House of Lords
Monday 5th March 2018 Lords Chamber

[Lord Dykes (CB)]

My Lords, I begin by very quickly thanking the noble Lord, Lord Foulkes, for his comments—with which I agree entirely—and the noble Lord, Lord Pannick, for his very comprehensive explanation.

In general, Clause 5 is very problematic as drafted. I am grateful for the suggestions that have been made so far. Other colleagues who have spoken on other occasions about this danger in Clause 5 have expressed real concern about it suggesting leaving out the main subsections. Even if Section 1 is not separately debated today, they all come together in a cohesive generality.

The Bill converts existing EU direct law—as has been said, mainly regulations but also directives and sometimes decisions—into UK law as it applies on the actual exit date. I fear that Her Majesty’s Government, who have already shown massive incompetence in handling the whole wretched process of Brexit, underestimate the huge volume of SIs that would need to cascade through the system if enacted as they stand. I feel very strongly that it would not be seemly and proper to incorporate the words of the so-called supremacy of EU law as is written down now, even if there was a laid-down definitional basis. Even the qualified tone in subsections (2) and (3) does not reassure me. Unless the text is improved appropriately, I envisage endless scenes of parties arguing in UK courts over the underlying meanings—arguments for some length of time and at notable expense, of course.

Many outside expert observers of these matters—including, I recall, the Law Society—have flagged up these possible consequences. There have also been suggestions of them in various quarters, not least in our House’s Constitution Committee. The principle of the famous Clause 2 in the original 1972 EU membership Bill should be invoked to decide on the solutions—albeit for the reverse objective and in the reverse direction—to mitigate these dangers and provide the cover-all effect needed to avoid unnecessary litigation and post-Brexit wrangling.

I conclude by emphasising that taking part in these irritating and, dare I say, excessively bureaucratic legislative procedures in no way implies my support for the Government’s foolish, relentless, drive for a nightmare Brexit that fewer and fewer people in the UK now want. That is why I support the symbolic resistance of the noble Lord, Lord Adonis, to all the clauses standing part, including Clause 5.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, we are now looking again at the principle of supremacy and status. I agree with a great deal—in fact, almost all—of what the noble Lord, Lord Pannick, said. However, in the various amendments I have sprinkled around, I differ with him on one fundamental point: I always wish to preserve the rights of individuals and businesses to have legislation struck down. That is their current position in that they can have EU law struck down. I put forward my alternative plan in Amendment 32A; I will explain how I got to it.

Broadly speaking, there are three baskets of EU laws. In basket 1, there are the treaties and the Charter of Fundamental Rights, which have to be followed by the European court. They are not revocable, as I am sure noble Lords know, and it is a big procedure to change them. In basket 2, I put legislative acts, meaning regulations and directives that set policy. To be precise, they can be identified by the article of the procedure in the treaty that they were made under. In the Lisbon treaty—the TFEU—it would be Article 289. The important point for noble Lords to hold in their minds is that these regulations and directives set policy. Basket 2 legislation can also be struck down by the European court—including on an action from individuals and businesses—for being incompatible with the treaty or the charter. A recent example is the data retention regulation that was ruled disproportionate in cases brought by Digital Rights Ireland and others. In basket 3, I put the implementation of Acts and delegated Acts and their predecessors. In the Lisbon treaty, that comes under Articles 290 and 291. These can be struck down by the European court for being incompatible with the treaty or the charter, as well as for being incompatible with the powers and instructions that were delegated to it in the legislation on which it depends.

If we take rights as our guide—by which I mean the right of an individual or business to challenge the validity of a bad law—then we get to the categorisation that the EU gives to law: that it is all secondary, except for the treaties and the charter. It is quite easy to accept that retained EU general principles—corresponding to basket 1, as I called it—should have primary status. Once converted under Clause 7, it would be wrong if they were changed or revoked other than by an Act of Parliament.

Basket 3 regulations are very close to statutory instruments in the way that they are made based on delegated powers, including an all-or-nothing single vote in the Council or Parliament to turn the whole lot down. There is also similarity in the ways they can be invalidated in court. That is quite easy to map on to our statutory instrument. Basket 2 is harder. The policy content and procedure of making the law look a lot like the making of an Act of Parliament; that leads some—I think Professor Craig was one of them—to conclude that it should map on to primary legislation. But then, if primary, it cannot be quashed under the general principles, so the rights of individuals and businesses are lost. Of course, if noble Lords look at Schedule 1—as we will later today—it can be seen that the Government’s intention is that there is no right of action on a failure to comply with the general principles of EU law. That is wrong. Treating legislation as primary carries the same cost that the Constitution Committee accepts. As it says in paragraph 48 of its report:

“Treating retained direct EU law as primary legislation for all—including”,


Human Rights Act,

“purposes is not without constitutional costs”.

I consider that cost to be too high because I give more weight to maintaining status quo rights and the reasonable expectations of individuals and businesses than making judgments easier or fewer.

We have to address that question several times in the Bill. Each time, I come down on the side of the people’s rights. No manifestos have ever said, “We want to take back control, including your right to challenge bad law”. However, the secondary legislation nature of basket 2 may require some further protection from overly easy change and revocation by statutory instruments, especially once things are no longer pinned in place because we are not part of the EU. In the EU, this was not made by a statutory instrument-type process, nor is it amendable in that way, so basket 2—although of secondary legislation status—could be deemed amendable in life after Clause 7 only by an Act of Parliament. This idea is similar to the one we debated regarding Amendment 21 in the name of the noble Baroness, Lady Hayter. Such treatment means that there is a special category for these laws, but we are in an unusual situation. The fact is that basket 2 is an intermediate, piggy-in-the-middle category. It is secondary legislation-plus, or primary legislation-minus. It could be replicated more or less by secondary legislation plus amendment protection, or the other way round as primary legislation but challengeable as to validity, although that is a bit more controversial.

The piggy-in-the-middle nature shows up in other ways. Basket 2 legislation actually contains within the individual documents a great deal of detail that in the UK domestic system would be done in delegated secondary legislation. It is the same with directives: a greater level of detail is there than in the lean and mean UK Acts of Parliament. That is even more the case after implementation for the secondary legislation made under the European Communities Act. For example, look at the Sanctions and Anti-Money Laundering Bill, which recently received its Third Reading in this House. The money laundering regulations 2017, based on the fourth anti-money laundering directive, are some 112 pages plus a glossary. They were replaced in the Bill by one clause of 28 lines, including the headings and a three-and-a-half-page schedule listing delegated powers. It has been much amended and improved, but the contrast in content is much the same. If we made secondary legislation transposing directives into primary legislation, there would be a great deal of detail on which I would not wish to say I gave the sovereignty of Parliament a totally unchallengeable status.

There are three parts to my amendment. The first would reword the supremacy principle. I intend it to do the same thing and I am not precious about the wording. In fact, I just modified the Constitution Committee’s idea and stole the idea that you allocate precedence as if it were primary legislation, but in my plan the only bit of primary legislation it gets is the precedence. The second part would allocate secondary status to basket 2 retained legislation, and indeed to basket 3—everything except for Acts, because where we have Acts they already are and look like Acts. I then allocate primary status to EU general principles. As I have indicated, for life after Clause 7, basket 2 could be made so as to require amendment by primary legislation. Possibly that belongs in Clause 7 or somewhere else.

[Lord Beith (LD)]

My Lords, my noble friend Lady Bowles has identified a problem that goes beyond what the committee sought to solve in its proposal, and proposed an ingenious way of trying to deal with it. The committee’s proposal seeks to protect the important bits of that legislation from the degree of vulnerability provided by the repeal of statutory instruments under our present procedures. It is an intriguing point in some ways, because I expect this to be a shrinking area of law over time. If we leave the EU, one assumes that much of this legislation will in time be replaced by new legislation bringing that area of law up to date, not because it is EU law but because things move on and there is a need to do so.

That reminds us of the danger that the committee set out at paragraph 103 of its report. It said:

“If the ‘supremacy principle’ were to continue to feature in the Bill, clause 5(3) would need to be amended to clarify the extent to which retained EU law can be modified while retaining the benefit of that principle, and to clarify in what circumstances the modification of pre-exit domestic law would be such as to turn it into post-exit domestic law that is no longer vulnerable to the operation of the ‘supremacy principle’”.


We chose not to go down that road or try to define it because it seemed an extremely bad situation to get into. One other problem that I will add to the list so well adumbrated by the noble Lord, Lord Pannick, occurs in paragraph 87 of the report, which points out that Clause 5 would also need to be amended,

“to provide courts … with suitable guidance for the purpose of determining whether a rule of the common law should be taken to have been ‘made’ before or after exit”.

If that is not done then the procedure that the Government have chosen will yet again promote and continue uncertainty. In both cases it would be better to go for some version of what the committee proposed.

--- Later in debate ---

[Baroness Bowles of Berkhamsted]

Perhaps I may make an observation. Leaving general principles out of it, if you categorise all the legislation as secondary legislation and then deem that some of it can be amended only by Act of Parliament, you do not have to sort it all. You would have to sort it only when you wanted to amend it—and at that point you would look at the basis on which it was made.

[Lord Keen of Elie]

I am obliged to the noble Baroness for that observation. Obviously, that is something that we would take into account. It perhaps touches on a question I did not answer from the noble Lord, Lord Pannick, with regard to Clause 5(3), where he queried the reference to the “intention of the modification”. Of course, what that makes clear is that this will need to be considered on a case-by-case basis.

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Committee: 4th sitting (Hansard - continued): House of Lords
Monday 5th March 2018 Lords Chamber

Moved by

[Baroness Bowles of Berkhamsted]

40ZA: Schedule 1, page 16, line 12, at end insert “or
(c) the challenge relates to general principles of EU law.”

--- Later in debate ---

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I have tabled three amendments in this group, and signed two others. What links them is the provision of continuity and the ability to challenge the validity of retained law, which noble Lords will note repeats a theme I followed with regard to Clause 5.

The Bill is a bit of a yo-yo when you want to find out what rights exist. Noble Lords might think that the rights are saved. Paragraph 1(1) of the Schedule rules out the possibility of a challenge but in paragraph 1(2) the possibility comes back in again, either if there is a European court decision before exit day or if an unspecified provision is made in regulation. My Amendment 40ZA would amend the provision about that regulation, adding,

“or … the challenge relates to general principles of EU law”.

I have already spoken, in the context of Clause 5 amendments, about the fact that the EU legislation—more or less, except the treaties—is all secondary legislation and challengeable as to validity. I repeat that that gives individuals and businesses rights that I do not consider it proper to take away, even if the court making the final decision is no longer the European court. I therefore want to make it clear that such a right continues. As explained previously, retained EU law will contain many things that correspond much more to what would be in UK secondary legislation that could be struck down, so it is not such an outrageous proposition. I will not spend further time repeating what I said, save to say again that taking back control was never cast as meaning a general removal of rights from individuals and businesses.

The third sub-paragraph of paragraph (1) of the Schedule states:

“Regulations … may … provide for a challenge which would otherwise have been against an EU institution to be against a public authority in the United Kingdom”.


My Amendment 40A would basically change “may” to “must”. I do not see companies currently lining up to take their regulators to court so I do not envisage any tsunami of cases. This is just to ensure that what appears to be promised actually happens.

There are then two amendments in the names of the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Foulkes, on which I will leave them to elaborate. My reason for signing them is the same: I am not satisfied with the notion that the general principles of EU law are merely to give the courts a way of flavouring interpretation in a non-fatal way. Although that may well be sufficient for many purposes, it is not the continuity of rights and rule of law that is currently enjoyed. For that reason, I seek the deletion of paragraph (3). I also support the retention of environmental protection as defined in Article 141.

Lastly, I come to my Amendment 63, which would amend Clause 6 but is directed to the same ideas of challenge to validity. It states that notwithstanding anything else in the Bill, there remains a right to challenge validity on the basis of proportionality. Many noble Lords have spoken eloquently on the issues of fundamental rights and human rights. I am now being a bit more mundane and flagging up the importance of proportionality, particularly for business and single market legislation, where it can affect competitiveness. At Second Reading the noble Lord, Lord Hill of Oareford, said,

“we had a lot of influence in the EU: pro-free trade, pro-markets, pro-business, pro-proportionate legislation”.—[Official Report, 30/1/18; col. 1389.]

He was right, but one of the reasons why we kept going on about proportionality was that we do not have it in our own law. Our domestic test for irrationality is a lesser test, and we did not want to have to rely on CJEU salvation.

At the moment, yes, our courts have to consider proportionality when there is an EU dimension, and they will become responsible for more decisions that previously were taken by the European court. This means more consideration of wording that has been nowhere near a parliamentary draftsman and has been negotiated with the principle of proportionality underwriting everything. I cannot count the number of times that less than perfect and overprescriptive wording has been justified in a trialogue by the Commission, Council and parliamentarians with, “But it’s subject to proportionality”—and I was not always there to change it. So that attitude has to be understood and applied. I am concerned that, when we have, as I am sure we will, some continuing alignment of regulations post Brexit, the deeper test of proportionality will not be considered and applied by government or public authorities unless they know that the ultimate sanction of striking down is available to the court. I beg to move.

--- Later in debate ---

[Lord Keen of Elie]

I am quite prepared to discuss the point with the noble and learned Lord because it may be that we will look more closely at those provisions in the Scotland Act in the very near future.

[Baroness Bowles of Berkhamsted]

I thank the noble and learned Lord for his response and all noble and noble and learned Lords who have spoken in this debate. I think that it has been confirmed that it is every bit as bad as I thought it was, and in fact I am not even sure that it is not worse. We now seem to have some kind of parallel jurisprudence which appears not to be actionable either under general principles or under common law, so we have created a kind of lacuna that cannot be approached. I also reject the fact that we would not be going on indefinitely applying general principles because the whole point is that we have the law as it is in the snapshot until such time as we change it. While I understand that one would not necessarily want to go in for a sudden wholesale redrafting of things, as amendments are necessary—especially if we avail ourselves of some of the mechanisms we have talked about where an Act of Parliament is going to be needed either because it is primary legislation or because we have put that on as a safeguard—these things are going to be revised and updated. I am still concerned and it is something that along with others we might want to return to on Report. However, for now, with the leave of the Committee I shall withdraw the amendment.

Amendment 40ZA withdrawn.

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Wednesday 28th February 2018 Lords Chamber

[Lord Mackay of Clashfern]

I entirely agree with that proposition but since the noble Lord, Lord Pannick, had mentioned it, I thought for the sake of brevity I would leave it out of my remarks.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I do not entirely agree with the Constitution Committee and so, with suitable temerity, I will suggest modifications to its approach as we go through this and later clauses. Not surprisingly, I look at matters from the perspective of recent familiarity—one could say rather too much familiarity—with the making of EU legislation. So I know rather more about the input end of the pipeline than the output. But it is at the EU end of the pipeline that the genetic markers of EU principles and case law get attached, and since those markers have been reproduced in UK case law and the reasonable expectations of those affected, I have great concerns.

I accept that it is not easy to move legislation made in one constitutional environment to a different one without losing something. The Government have tried and their approach leads to various types of uncertainty, which are then plugged, as far as they can be, through sweeping ministerial power, which brings forward more concerns and uncertainty. So something needs to be done but the Constitution Committee package, while having good ideas to build on, does not quite gel for me. I have made some suggestions to sort out the wrinkles as I see them. They come mainly in amendments to later clauses but they have backwards relevance to Amendment 15. Like others, perhaps, I also discovered on Monday, thanks to my noble friend Lady Hamwee, that the Bingham Centre had done a report, which I think I can claim in part has similar conclusions to mine on Clause 2 and, indeed, elsewhere.

When it comes to Amendment 15, moved by the noble Lord, Lord Pannick, I am torn in two directions. Doing what the amendment suggests, as with other suggestions from the Constitution Committee report, is not without constitutional cost, as is mentioned in the report in respect of the Clause 5 proposals. But it happens with Clause 2 as well: some legislation that currently has an EU dimension, and therefore would benefit from judicial interpretation using EU general principles such as proportionality and fundamental rights, will no longer benefit from that. I could add to that environmental issues that are in the EU constitution. Against that, it reduces the extent of legislation that falls to be amended under Article 7 and there is a lot to be said in favour of doing less—there will be less confusion, more time for scrutiny of the remainder, and less chance of this becoming the great gold-plating Bill.

I am not immune to suggestions that if a directive has been transposed via an Act of Parliament and that Act of Parliament has established delegated powers that have been used for other transpositions, then Parliament knew what it was doing. But without examining all the documents and the details, what was the background? Did the Government say that they had to do certain things because of the EU? Did they in fact say that to close down some other amendments? What did Members have in their minds about equality and other EU fundamental rights that were well known? They could not just say that they were not taking those into account.

If you are looking at the hybrids, as has been mentioned, some Acts may be—let us say for simplicity—half EU and half UK. One that I would choose is the Data Protection Bill, where the UK has been prepared to go much further than the EU in what can be retained. You need to know which bit is UK-only and which bit is European-only. I have always assumed that it was to only the EU-derived part that supremacy and all the EU general rights would apply, and you would have to look at how it was couched.

There is also the matter of onward intertwining. The Bingham Centre also uses the example, at the foot of page 21, of the Equality Act 2010. However, it points out that there are decisions of domestic courts interpreting that Act in the light of CJEU case law, so our decisions are going to be consistent going forward. It is considerations such as that that then provoke its first conclusion on this, which is in paragraph 60 on page 22. That suggests, as the noble Lord, Lord Pannick, has acknowledged, that to make things work, you need to do something extra in Clause 6 about how to interpret legislation that has been removed from the scope of Clause 2. There is also a second, alternative conclusion in paragraph 61, which suggests amending other provisions; a future report is then promised.

As I have said, I did not get the report till late, so I had already gone ahead and made my plans. When I thought about it, one of my conclusions was that, perhaps instead of closing down the scope of the application of Clause 2, the thing to do was to close down the scope of Clause 7. My proposal, therefore, is not to exclude subsections 2(b), (c) and (d) from Clause 2 but to exclude them from having effect in Clause 7. That way, they will not be amended and tampered with, possibly apart from when it is necessary to remove some trivial EU reference that might no longer apply. I have already tabled an amendment that does that, which is on the supplementary Marshalled List for today.

I know that leaves the judges still having to look at EU principles over a wider range of law. If I interpreted some of the comments correctly on Monday, they would perhaps prefer to change that constitutional burden so that it fell somewhere else. However, I do not see how one can avoid that having to continue: that is the status quo, and judges have to look at where there is an EU angle—some EU derivation—and apply general principles and other things as appropriate. Without knowing what the subject matter is, it is very difficult—even dangerous—to come up with a blanket change, because you do not know what might be missing. In some cases it probably does not matter, in other cases it might be quite sensitive, and in others you would most certainly be throwing away some of the things about which other noble Lords have already spoken passionately with regard to fundamental rights. You would also be throwing away certain things to do with the environment. I have other suggestions for modification as we go forward, but I will leave those to the relevant clauses.

--- Later in debate ---

[Lord Mackay of Clashfern]

If it has become part of our law, even if it is postponed, it is subject to this Bill. If it has not come into our law, it is not part of this Bill. I shall not answer any more questions.

[Baroness Bowles of Berkhamsted]

I would quite like to complicate matters a little further. It is unfortunate that the word “snapshot” was used, because, if we look at the way in which European legislation comes into force and effect, we see that it is a bit more like a movie in that it keeps on going. Certainly, we may well have implemented some things and they will then come into force, but it would not be on a single date beyond because lots of delegated Acts and implementing regulations would come in progressively over a period of time. I am curious as to what happens when we are straddling that. Will we then take the implementing regulations and delegated Acts on something that we have already adopted into our law, or will we make up those ourselves?

[Baroness Hayter of Kentish Town (Lab)]

The noble and learned Lord, Lord Mackay of Clashfern, says that he is confused about the transition; my worry is that the people on the Bench in front of him remain confused about what a transition period means—but let us put that to one side.

I want briefly to broaden the discussion to regulations—I know that the amendment refers to directives, but it is probing and there is an important issue here which Ministers may have heard. The clinical trials regulation was mentioned at Second Reading. Like many of the measures that we are discussing today, that would have been adopted but not implemented, either because it was complicated or it took a lot of work to get everyone lined up to it—so it would not have reached its implementation date by the time we left. It might well reach that date during the transitional period—which raises another question and, probably, another Bill. If it is a standstill only on measures that have come in by the day we leave, there will be important issues to address such as the clinical trial regulations and those others that we have heard about today. They will not count as retained law, leaving us reliant on regulations that rapidly become obsolete—those relating to cars I know less about, but certainly in respect of those relating to clinical trials it would end our ability to participate. All such regulations are about not just anonymity but the way data are held. It will happen very quickly: if we are not on the same basis as the rest of Europe, our ability to be involved in those could end quite promptly. That is obviously important to patients, but also to researchers and, indeed, the pharmaceutical industry.

I wrote to the noble Lord, Lord Callanan, on 19 January and he replied very rapidly on 26 January. As we have heard today, he confirmed the Bill’s approach, which will bring over only regulations actually operative as we leave. That would exclude these clinical trial rules, for example, although we agreed them back in 2014. The letter that the noble Lord kindly wrote to me makes smoothing comments, if you like. It says, “Yes, we recognise the importance of close co-operation, we want UK patients to have access to innovative medicines, for which we need to be part of the same system, and we want the UK to be one of the best places to do science”. I turned over the page expecting the Lord Deben response, which would be to say what we are going to do about it. Unfortunately, at that point the letter stops. It says that we will discuss with the EU how to continue to co-operate in business trials but it fails to look at what will be needed, which is, I fear, a legislative process to make that happen.