Civil Procedure (Amendment No. 4) Rules 2010

Lord Davidson of Glen Clova Excerpts

Monday 7th February 2011 Grand Committee

[The Commercial Secretary to the Treasury (Lord Sassoon)]

I beg to move that the Grand Committee do now consider the Civil Procedure (Amendment No.4) Rules 2010, but I will also speak to the Rules of the Court of Judicature (Northern Ireland) (Amendment No.3) 2010.

Noble Lords may find it helpful if I start by briefly explaining the wider legislative context of the rules that we are debating today. The ruling of the Supreme Court in the case of Ahmed and others v HM Treasury in January 2010 placed the legality of the Terrorism (United Nations Measures) Order 2009 in doubt. Consequently, the Terrorist Asset-Freezing (Temporary Provisions) Act was passed in February 2010 to protect the 2009 order from being quashed on vires grounds. Subsequently, the Terrorist Asset-Freezing etc. Act 2010 received Royal Assent in December and put terrorist asset-freezing designation powers in primary legislation. I think that all parties recognise that the 2010 Act was absolutely necessary to the United Kingdom’s continued national security and to fulfil our international obligations under United Nations Security Council Resolution 1373.

Both Houses of Parliament gave the Act careful scrutiny during its passage, in particular looking closely at the civil liberties issues raised and how best to address them without compromising national security. The Government made a number of amendments to the asset-freezing regime provided by the 2009 order, including the introduction of a higher threshold for designations lasting longer than 30 days—reasonable belief rather than reasonable suspicion—and a merits-based right of appeal against designation decisions rather than judicial review. I am confident that we struck the right balance in the 2010 Act between protecting national security and protecting civil liberties.

As part of the government amendments which introduced a merits-based right of appeal to asset-freezing designation decisions, a provision was included to allow the Lord Chancellor to make rules of court for such appeals. That was necessary to allow rules to be made quickly after the Bill received Royal Assent. Rules were needed quickly because transitional provisions in the Act deem designations in force under the 2009 order to have been made under the 2010 Act for a short time to ensure continuity of asset-freezes. Rules needed to be made to ensure that there was a framework in place if designated persons wanted to challenge their freezes under the Act.

The Lords Chief Justice of England and Wales and of Northern Ireland were consulted on the draft rules. The Civil Procedure Rule Committee was informed that the Lord Chancellor would be making rules to provide for asset-freezing appeals and was shown an early draft. The Civil Procedure (Amendment No.4) Rules 2010 and the Rules of the Court of Judicature (Northern Ireland) (Amendment No.3) 2010 were laid before Parliament on 23 December 2010 and came into force the next day.

The rules of court made by the Lord Chancellor for designation appeals amend Part 79 of the Civil Procedure Rules and Order 116B of the Rules of the Court of Judicature (Northern Ireland) 1980 respectively. Part 79 was created following the passage of the Counter-Terrorism Act 2008 to provide rules of court for financial restriction proceedings, including asset-freezing proceedings.

Rules in Part 79 cover the use of closed information and special advocates and are intended to ensure that information is not disclosed contrary to the public interest while ensuring that proceedings are properly determined. The existing provisions of Part 79 apply judicial review principles to such challenges. These remain in force for decisions—such as challenges in relation to asset-freezing licensing decisions—that remain subject to judicial review principles.

There are three strands of amendments to the Part 79 rules to allow for appeals. First, Rule 79.1 is amended so that the general provisions concerning the appointment of special advocates, the requirements for disclosure and procedures for determination of proceedings apply also to designation appeals. Secondly, a new Section 3 is inserted. This deals with the mechanics of starting an appeal by setting out the details to be included in the notice filed to start an appeal and the material to be filed with that. It also applies existing rules to any application to the Court of Appeal following a High Court determination. Thirdly, there is one substantive amendment made to the general provisions in Section 4 of Part 79 as they apply to appeals. This concerns disclosure, which in itself is a complicated matter and requires a little explanation.

Rule 79.23 requires the “disclosing party” to search for material that is relevant and, under Rule 79.23(1)(b), to file and serve material: on which the disclosing party relies; which adversely affects the disclosing party; which adversely affects the other party; or which supports the other party.

There is an exception for the disclosure of “closed material” which is dealt with separately. A difficulty arises because the definition of closed material in Part 79 does not cover material which a party holds and which adversely affects not him but the other party, but which he does not wish to use. Therefore, if the Treasury holds sensitive material which supports the case for designation but which, for reasons of national security, it does not want to rely on in an appeal, it could be argued that it should be disclosed under the current wording of Rule 79.23. We think that this interpretation is wrong, given the obligations in the rules to ensure that disclosures of information are not made where they would be contrary to the public interest.

We are therefore using this amendment to make clear the parties’ disclosure requirements so far as the rules apply to appeals. We will ask the Civil Procedure Rule Committee to exercise its power to remove this provision from Part 79 as it applies to other financial restriction proceedings. Let me stress that this change in no way adversely affects the appellant or the proper determination of the appeal. Nor will it affect the Treasury’s obligation to disclose all information which adversely affects the Treasury’s case or supports the other party’s case.

On 4 February, the Joint Committee on Statutory Instruments published its 14th report, in which it drew two issues to the special attention of both Houses. We are grateful to the committee for publishing the report on Friday, rather than tomorrow as would have been its usual practice. Early publication has enabled this debate to go ahead when otherwise it would inevitably have had to be postponed.

The first point to which the JCSI draws special attention is a failure to set out the fact that Section 28(4) of the Terrorist Asset-Freezing etc. Act 2010—one of the instrument’s enabling powers—incorporates by reference Sections 66 to 68 of the Counter-Terrorism Act 2008. Sections 66 to 68 authorise provisions in the court rules which apply to designation appeals. The JCSI concludes, and the Ministry of Justice accepts, that the instrument does not in this respect comply with proper drafting practice. However, there is no effect on the validity of the instruments.

The JCSI has also drawn attention to a reference in each set of rules to “the application” rather than “the appeal”. The Ministry of Justice has made it clear in correspondence with the JCSI that although the meaning should be clear from the context, use of “the appeal” would have been preferable. The Ministry of Justice will draw that to the attention of the Civil Procedure Rule Committee, which can, if it considers it appropriate, make that change next time the Civil Procedure Rules are amended.

I turn now briefly to the Rules of the Court of Judicature (Northern Ireland) (Amendment No.3) 2010. Order 116B was, like Part 79, created following the passage of the Counter-Terrorism Act 2008 and creates rules of court for the determination of challenges to financial restriction decisions. Order 116B has a similar scope and content to Part 79 in that it provides for the use of closed material and the appointment of special advocates. Order 116B is similarly amended by the Amendment No.3 instrument to apply it to designation appeals under the 2010 Act, and is amended in the three ways outlined above for Part 79. If the amendments to Part 79 and Order 116B are approved, any future amendments to Part 79 will be made by the Civil Procedure Rule Committee and any future amendments to Order 116B will be made by the Northern Ireland Court of Judicature Rules Committee.

The court rules we are debating set out the process we expect the court to follow when considering merits-based challenges to designation decisions. They implement one of the key new safeguards agreed for the UK’s terrorist asset-freezing regime. They are necessary to ensure that a proper framework is in place for challenges to asset-freezing designations, and will ensure that appropriately in-depth scrutiny is given to the relevant decision while protecting sensitive material from damaging public disclosure.

[Lord Davidson of Glen Clova]

My Lords, I am grateful to the Minister for introducing these rules. The previous Government promoted terrorist asset-freezing orders, for very good reasons, to increase the protection of the UK and of its citizens. I am pleased to see that the approach has been continued by this Government. I particularly welcome the refinement in relation to disclosure, which I agree will remove the potential for difficulty.

One appreciates that, prior to the election, many members of the then Opposition made criticisms about anti-terrorist legislation and that this Government contains a number of those who made those arguments—although not, of course, the Minister. Yet those others are, perhaps, now coming to an understanding that the tension between civil liberties and the protection of the UK is rather more complicated and less clear-cut than they first argued. One notes that they are also discovering this in relation to control orders, another area which was of great controversy.

These instruments seek to implement the innovations that the Government thought proper to bring to terrorist asset-freezing orders. The use of judicial review with the addition of a separate merits-based appeals structure adds another level of potential court intervention. Another innovation is the introduction of the distinction between “reasonable suspicion” and “reasonable belief”, which is not pellucid. It now means that where the individual is reasonably suspected of being involved in terrorism, he will not be under a terrorist asset-freezing order after 30 days, unless that reasonable suspicion is shown to move towards reasonable belief standards. I am not sure whether that is particularly reassuring to UK citizens.

There are views that reasonable belief and reasonable suspicion are, if at all different, extremely close in meaning given the application of the objective standard imposed by the use of “reasonable”. This will no doubt be an area for complex argument before the courts, but it is perhaps not easy to see how much of a gain for the civil liberties argument this represents, if the difference is negligible. If, on the other hand, there is a palpable and real difference between the two standards—one notes that the noble and learned Lord, Lord Brown of Eaton-under-Heywood, has identified such an interest in the case of Saik—then the notion that those reasonably suspected of being involved in terrorist activity will be at liberty, after 30 days, to use their assets as they choose becomes a real concern.

It would hardly be satisfactory, where an interim order is made expressly because the individual is reasonably suspected of being involved in terrorist activity and to protect members of the public, that if one falls short of reasonable belief that individual is at liberty to do with his assets as he will. Is the Minister in a position to offer guidance on an interpretation of the difference between reasonable suspicion and reasonable belief? I ask him that because doubtless it will become an issue in the courts. It is doubtless that the provisions in respect of judicial review and appeal will be deployed on these types of arguments as well as on other issues. The expansion of the courts’ role with the addition of a separate merits-based appeals structure regarding terrorist asset-freezing orders against individuals suspected or believed to be involved in terrorist activity will presumably be welcomed by those individuals, at least. In this context, it would be interesting to hear whether the Government consider that the courts’ increased role pursuant to these instruments provides an increase or a reduction in the level of protection to the population at large—for of course it is they who will be among the victims in the event of any future terrorist attacks.

Will the Minister explain whether this expansion of the court’s role creates a tougher or more relaxed environment for potentially highly dangerous terrorists? I ask that question in the light of the expression made by the noble Lord, Lord Carlile of Berriew, in his recent report on the Prevention of Terrorism Act 2005. There is a concern that European Court of Human Rights’ decisions are making the UK,

“a safe haven for some individuals whose determination is to damage the UK and its citizens”.

The question should be asked whether the Government consider the expansion of the court’s role by these orders discourages or encourages those individuals identified by the noble Lord, Lord Carlile.

The Minister has made reference to the report of the Joint Committee on Statutory Instruments regarding the failure to comply with proper drafting practice and defective drafting. I note his explanation and proposed action in relation to these observations and I shall say nothing further on the point. However, we welcome the general continuation of the previous Government’s approach to disrupting potential terrorist activity.

[Lord Sassoon]

My Lords, I am scripted to say that this has been an interesting debate, but it has been a short, focused and to-the-point exchange. I am grateful to the noble and learned Lord, Lord Davidson of Glen Clova, for being short, sharp and to the point in asking me some key questions about these new court rules.

The noble and learned Lord asked about the distinction between suspicion and belief, and what, if anything, that says about our underlying concern for national security as balanced with proper safeguards on grounds of civil liberties. As the noble and learned Lord will know, various court judgments define the difference between reasonable suspicion and belief. In summary, for suspicion, one believes that something may be so and, for belief, one believes that it is so. I am certainly not in a position to second-guess the courts, which have judged that there are significant differences. The Government certainly believe that national security requirements can be met by this combination of interim freezes for up to 30 days on the basis of reasonable suspicion, during which time further investigations can be made to determine whether the belief can be met. We believe that this balance between the national security and the civil liberties imperatives, which was extensively debated in your Lordships’ House, achieves what is intended. The court rules merely flow from that. I certainly do not think that the court rules in any way cut across or work against that construct.

On the role of the courts and judicial review versus appeal, the question was asked whether these instruments will result in a strengthening or a lessening of the protection of the public or, indeed, of the appellant. As a non-lawyer, I understand that what has been striking in the way that the courts have interpreted judicial review recently is that—in a national security context and, specifically, in relation to control orders—courts have increasingly approached judicial review in a way that is substantively similar to that of an appeal process. When considering the control order in the MB case, the Court of Appeal made it clear that it could substitute its own view for that of the Minister when deciding whether reasonable suspicion existed. We had expected the court to take a similar approach in relation to asset freezes, which would bring judicial review and appeal, in substance, close together in this area. In part, the approach we took in the 2010 Act was to formalise, in effect, what the courts were moving towards. It is better if, in reality, the substance of what the courts were moving towards was an appeal, but we actually put in the legislation, as Parliament has seen fit to do, a full appeals process and then the court rules follow from that. The noble and learned Lord’s question, in a sense, falls away because the courts have been bringing the two processes increasingly closer together.

On the role of the European Court of Human Rights, we do not think that the rules we are looking at here and the thresholds for suspicion and belief will mean any material change as to whether, why and how the ECHR can intervene in any particular case. Without commenting on the discussion on these issues over the weekend, I do not think that anything we are doing in the Act or the rules which we are considering today touches materially on those concerns.

I hope I addressed the less than perfect drafting in my opening remarks. The first of the two issues is a stylistic point that is an omission, but it does not have substantive effect. In the second case, it is clear from the context that the words, “the application” refer to the application to the Court of Appeal and so I think there is no question of possible misinterpretation of the statutory instruments and no substantive risk of being challenged in court. In any event, it will be up to the Civil Procedure Rule Committee to be able to amend the rules should that committee deem it necessary.

I hope I have been able to deal adequately with the noble and learned Lord’s points as I believe it is important that these rules are approved today. They provide the framework for those designated under the Terrorist Asset-Freezing etc. Act 2010 to challenge their asset freeze designation under the new appeals procedure. The court rules will ensure that rigorous scrutiny is given to the relevant decision, while at the same time protecting sensitive material from damaging public disclosure. Therefore, I commend these rules to the Committee.