Digital Markets, Competition and Consumers Bill

Debate between Lord Faulks and Lord Clement-Jones

Consideration of Commons amendments
Tuesday 14th May 2024 Lords Chamber

[Lord Faulks (Non-Afl)]

Many of your Lordships will be familiar with the arguments we have had on the Bill. The important point to stress is that there has been a general welcome of this legislation. I would also like to stress that a measure of cross-party co-operation was the hallmark of the scrutiny of the Bill during its passage through your Lordships’ House. Ministers and officials have given their time generously in meetings and have responded promptly and helpfully to the issues that scrutiny has thrown up.

At the heart of the Bill is the regulation of the internet in a way that should prevent market abuse, in particular by big tech. Helpful though the Government have been, they have not provided answers to some important questions, hence amendments being passing on Report. These have been sent back to us by the House of Commons without the Government—save in one respect—making concessions.

One of the areas that gave noble Lords particular concern is the inclusion of amendments in the House of Commons at a late stage, following lobbying of the Government by big tech. A prospective intervention by the regulator is unlikely to be welcomed by big tech companies and, given their enormous legal budgets, will inevitably be challenged. The change of wording from “appropriate” to “proportionate” will make such challenges easier. A reversion to the Bill’s original wording will help to restore balance, and it is hoped that the amendments in my name and those in the name of the noble Baroness, Lady Jones, on appeals against interventions, will achieve that. Our amendments on Motion C are intended to prevent a seepage of arguments on penalty, which involves a merits test, into the judicial review test, which applies to the intervention itself.

Why have the Government made this late change of “appropriate” to “proportionate”? They have been rather coy about this. There has been some waffle—I am afraid I must describe it as such—about increased clarity and the need for a regulator to act in a proportionate manner. That is quite so but, on further probing, the reasoning was revealed: it is intended to reflect the level of challenge derived from jurisprudence from the European Court of Human Rights and the CJEU, where human rights issues are engaged. I remain bewildered as to why big tech has human rights. This is not what the framers of the convention had in mind.

But if—and it is a big “if”—a convention right is engaged, proportionality is the test, or at least part of it. This is a much lower bar than the normal judicial review test. If the Bill remains unamended, this lower bar will apply to challenges whether or not a convention right is engaged. This is good news for big tech and its lawyers, but not for the Bill and its primary purpose.

I ask the Minister this specific question: if the convention right is engaged, proportionality comes into the analysis anyway, but what if a court were to decide that A1P1—the relevant “human right”—was not engaged? With the Bill unamended, proportionality would apply to a non-convention case, greatly to the advantage of big tech. Is my understanding correct?

It seems that big tech has got its way and that litigation wars can commence—a great pity, most specifically for the smaller players and for the ostensible rationale behind the legislation.

On Motion C1, the test for appeals on penalty is to be a merits-based one, rather than the higher bar that a judicial review standard would, or should, involve. The amendments before your Lordships’ House are intended to prevent seepage from one test to another. His Majesty’s Government say that the courts are well used, in different contexts, to applying different tests as part of an analysis. This is true—in theory. My concern is that if I were advising Meta or Google about an intervention and a consequent hefty fine—this is not an advertisement—it is inevitable that I would advise in favour of appealing both aspects of the intervention: against conviction and sentence, as it were.

It is relatively easy to insulate arguments in criminal cases. One question is, was the conviction unsafe? Another is, was the sentence too long? In the emerging world of internet regulation, however, it is likely to be far more difficult in practice. The question of whether an intervention was disproportionate—disproportionate to what?—will inevitably be closely allied to that of whether the penalty was excessive or disproportionate: another win for big tech, and a successful piece of lobbying on its part.

I look forward to words of reassurance from the Minister. In the meantime, I beg to move.

[Lord Clement-Jones (LD)]

My Lords, I will speak to Motion B1 and briefly in support of other motions in this group.

Last December, at Second Reading, I said that we on these Benches want to see the Bill and the new competition and consumer powers make a real difference, but that they can do so only with some key changes. On Third Reading, I pointed out that we were already seeing big tech take an aggressive approach to the EU’s Digital Markets Act, and we therefore believed that the Bill needed to be more robust and that it was essential to retain the four key competition amendments passed on Report. That remains our position, and I echo the words of the noble Lord, Lord Faulks: that the degree of cross-party agreement has been quite exemplary.

As we heard on Report, noble Lords made four crucial amendments to Part 1 of the digital markets Bill: first, an amendment whereby, when the Competition and Markets Authority seeks approval of its guidance, the Secretary of State is required within 40 days to approve the guidance or to refuse to approve it and refer it back to the CMA; secondly, an amendment reverting the countervailing benefits exemption to the version originally in the Bill, which included the “indispensable” standard; thirdly, amendments reverting the requirement for the CMA’s conduct requirement and pro-competitive interventions to be “proportionate” back to “appropriate”; and fourthly, amendments reverting the appeals standard to judicial review for penalties.

We welcome the fact that the Government have proposed, through Motion D, Amendment 38A in lieu, which effectively achieves the same aims, ensuring that the approval of the CMA guidance by the Secretary of State does not unduly hold up the operationalisation of the new regime. However, the Government’s Motions A, B and C disagree with the other Lords amendments.

Economic Crime and Corporate Transparency Bill

Debate between Lord Faulks and Lord Clement-Jones

Committee stage
Monday 27th March 2023 Grand Committee

[Lord Faulks (Non-Afl)]

I do not get the impression that the Committee is against the idea; there is simply a lack of clarity as it is currently formulated as to what constitutes “false” and a “reasonable excuse”, and what is inaccurate. I think the Committee is generally in favour of this provision and understands why it is there; we are just not quite sure that this captures it, as currently drafted.

[Lord Clement-Jones (LD)]

My Lords, the procedure in Grand Committee is quite clear: there has to be unanimity for an amendment to proceed.

Legal Aid

Debate between Lord Faulks and Lord Clement-Jones

Tuesday 24th November 2015 Lords Chamber

[Lord Faulks]

The noble Lord seems to suggest that the Law Society was not enthusiastic about the process. In fact, in its response it said:

“The Society agrees, for the reasons given below, that change is needed in the procurement of criminal defence services. There is good evidence that the existing market is unlikely to be sustainable in the longer term and that this represents a significant risk for the integrity of the system”.

The Government were trying to ensure that there was adequate representation on the duty provider basis, that this was more efficiently provided and that there was a fair system for making sure that taxpayers’ money was properly spent.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as a member of the Law Society but we all have an interest in ensuring access to justice. As my noble friend Lord Marks mentioned, two whistleblowers have pointed out how flawed the process was, In addition, there is the potential for mass litigation involved in this duty solicitor procurement. Should not the MoJ stop trying to brazen this out, simply scrap this procurement and start again?

[Lord Faulks]

No, that presumes the outcome of the litigation. Disappointed contractors may well feel it necessary to challenge and decide it appropriate, as is their privilege, to use the legal process. We have not yet had the legal process, nor do we know what the result will be. There have already been some preliminary hearings, but we are some way from a full judgment. Both the individuals were employed as commissioning assistants in a junior role. We are in no doubt that what happened was a perfectly appropriate way of assessing the competence of the solicitors and their appropriateness for the contract.

Housing: Commonhold

Debate between Lord Faulks and Lord Clement-Jones

Monday 10th February 2014 Lords Chamber

[Lord Faulks]

My Lords, my noble friend Lady Gardner has been a doughty champion of commonhold and has indeed recorded her interest and Questions on a number of occasions, in the past decade in particular. Of course, commonhold is successful and well established in other parts of the world, particularly Australia. Unfortunately it has failed to attract much enthusiasm in this country. It was originally the creation of the Law Commission in the 1980s. Whether review of commonhold legislation might be suitable for the commission’s further consideration is a question for the Government ultimately to decide. They have to decide priorities in accordance with the protocol but will bear in mind what the noble Baroness has said.

[Lord Clement-Jones (LD)]

My Lords, as my noble friend the Minister has pointed out, my noble friend Lady Gardner has on many occasions very effectively brought to the attention of the House the defects in domestic leasehold law. He gave a rather dusty reply as far as the Law Commission was concerned but it has been engaged in consultation about its 12th programme. The decision is in the hands of the Lord Chancellor. Is it not high time that the whole question of commonhold enfranchisement and leasehold law was considered by the Law Commission?

[Lord Faulks]

My Lords, the 100% rule, which is the subject of the Question from the noble Baroness, was in fact discussed in some considerable detail during the passage of this Bill through Parliament—the original Bill having been introduced by the party opposite. For reasons that we suggest are substantial, it was decided not to make the 100% rule a part of the law. Unfortunately, commonhold has not proved to be popular and there has been a very limited take-up. There is no obvious reason why this should be, particularly with new developments, although I accept it is much more complicated when converting leasehold to commonhold.