Economic Crime and Corporate Transparency Bill

Debate between Lord Garnier and Lord Faulks

Consideration of Commons amendments
Wednesday 18th October 2023 Lords Chamber

[Lord Garnier (Con)]

If one wants to learn anything from the speeches made in the House of Commons, I suggest that my noble friends on the Front Bench— and other noble Lords if they have a moment—read those of Sir Robert Buckland and Sir Jeremy Wright, two former law officers. They agree with my remarks of 11 September and find it puzzling that their own Government, a Government who are in favour of producing cogent and cohesive criminal law, have come up with this dog’s dinner.

I have done my best to be accommodating. It is not an accusation that is often levelled at me, but on this occasion, I think that it can be, justly. I have done my best to meet some of the Government’s less organised thinking. As I said at the outset, as a matter of principle. I cannot understand why there should be an exemption for anyone from the proposed criminal law, just as there is not under the Bribery Act and the Criminal Finances Act. However, to make life easier for the Government, on the last occasion I suggested that microbusinesses should be exempted from the failure to prevent fraud offences provision. I abandoned my provisions relating to the failure to prevent money laundering. The Government did not find that attractive, even though I tried to explain my abandoning of the principle on the basis that just as we have an age limit for criminal responsibility—10—we could perhaps also, by a rather clumsy analogy, exempt microbusinesses from criminal responsibility under the failure to prevent provision. That did not seem to go down very well with the Government—certainly not with Mr Kit Malthouse.

I have now moved a little further towards the Government. You may say, “Well, that’s a bit wet. If you’ve got any principles, why not stick to them?” Well, okay, accuse me of being wet, but I am doing my best to help the Government get out of an unnecessarily sticky hole. I have amended my proposal so that rather than microbusinesses being exempted, “small” businesses should be exempted—I define a small business on page 5 of the amendment paper, which states that, for the purposes of this provision,

“a relevant body is a ‘small organisation’ only if the body satisfied two or more of the following conditions in the financial year of the body … that precedes the year of the fraud offence”.

Those conditions are that the turnover of the business should be

“Not more than £10.2 million”,

the balance sheet should be

“Not more than £5.1 million”

and the number of employees should be “Not more than 50”.

In speaking against my own case, I rather wish that I had not put that down, but I have because I am trying to assist my noble friend on the Front Bench in getting his Bill enacted before the end of this Session.

I repeat that the criminal law should be uniform. Defences to the criminal law should be uniform. We should not have exemptions based on the size of the business. The Theft Act applies to all suspects—I am seeing whether my noble friend still enjoys my old joke about the six feet six burglar—regardless of whether they are six feet six or five feet six. We do not exempt people on the basis that they are small people or do not fit a particular height, so why are we doing it here? I have yet to find out. I am afraid that unless the Government move a little closer to me, I will invite your Lordships to join me in the Division Lobby.

[Lord Faulks (Non-Afl)]

My Lords, I shall speak to my Motion B1, as an amendment to Motion B, which is being debated within this group. It would

“leave out from ‘House’ to end and insert ‘do insist on its disagreement with the Commons in their Amendment 161A, do not insist on its Amendment 161B, to which the Commons have disagreed for their Reason 161C, and do propose Amendment 161D in lieu’”.

That is very clear.

We return to what has been described as a cost-capping amendment. Since this is not the first time that we have had the debate, I will try to be brief. This Bill has been a welcome, if late, addition to the government agencies in their fight to combat fraud. The scrutiny of the Bill through your Lordships’ House has been thorough and constructive. It has also been non-party political. I do not think that either the noble and learned Lord, Lord Garnier, or I would consider ourselves to be natural rebels.

All noble Lords have participated in this debate—and I very much include the Ministers in this—with a common purpose: to make this legislation as effective as it can be. Two themes emerged during the many debates. The first was the scale of the problem. The Government estimate, for example, that £100 billion was laundered through the United Kingdom last year, and yet under the Proceeds of Crime Act assets of only £345 million were recovered: that is 0.3%. The second theme was the frequent imbalance that exists between the resources available to enforcement agencies and those of the fraudsters, who may well employ expensive lawyers and have significant resources to enable them to do so. This modest amendment tries to do a little to restore that balance. I would have liked the enforcement agencies to have had complete protection against costs orders in the event that they lost a recovery claim, but in the course of ping-pong I have had to compromise somewhat, hence the form of the current amendment before your Lordships’ House.

The amendment does not prevent a judge from doing what is fair on costs in any particular case, but it is a nudge towards him or her to take into account the reasonableness of the agency bringing proceedings at all and the potential impact on its ability to carry out its functions if left with a substantial costs order. I struggle to understand the Government’s objection to this amendment and its predecessors; they seem, with respect, to be adopting a somewhat tender approach to fraudsters.

There is a clear precedent for this sort of amendment: when your Lordships’ House introduced a provision concerning the much-underused unexplained wealth orders. If it loses a case, the enforcement authority will have to pay costs only if it has acted unreasonably. As to the objection that it offends the “loser pays” principle, that is a misconceived argument. Judges regularly, in ordinary cases, make orders that each side bear their own costs, or make issue-based costs orders, or other orders which reflect the justice of the individual case. Parliament has legislated in ways that depart from this so-called principle: for example, QOCS—that is Qualified One-Way Costs Shifting—in personal injury litigation; or by Section 40 of the Crime and Courts Act; or in relation to unexplained wealth orders. This amendment is intended to reduce the possibility of an agency saying to itself, “We cannot afford the risk to the budget if we lose a case, even when we’ve got good evidence to bring it”.

Spotlight on Corruption suggests that a number of cases are in the pipeline which bear costs risks. These are said to include over 60 cases being reviewed by one agency, and close to £1 billion in assets frozen by an enforcement body.

Another advantage to this amendment is that those defendants or respondents to an application who defend these cases will know that, even if their legal strategy prevails, they may not recover their costs. This may mean that they are keener to reach a compromise.

The amendment has the support of all those bodies that are concerned with anti-corruption. Incidentally, it also has the support of Bill Browder, who regards it as one of the most significant potential improvements to the Bill. Let us please not kick this into touch and have yet another report, which is the Government’s suggestion. If necessary, I will move Motion B1 and test the opinion of the House.

Economic Crime and Corporate Transparency Bill

Debate between Lord Garnier and Lord Faulks

Committee stage
Thursday 20th April 2023 Grand Committee

[Lord Garnier (Con)]

The noble Lord saw my noble friend Lord Faulks nodding. The fact that we went to the same school, the same college at Oxford and the same Inn of Court has absolutely no bearing on this, save to say that he will answer that question in a moment. I am sure he would wish to catch the Committee’s eye. That having been said, I want to finish on this rather wishy-washy point. I sympathise with what has been said in support of these amendments, but we need to take a step back and have a reality check to see how this would be received by the people against whom it will bite.

[Lord Faulks (Non-Afl)]

I will, then, as I usually accept that invitation. As I understand the position, an Order in Council is the mechanism. The convention and the arrangement with the Crown dependencies that I spoke of is not the same with the overseas territories, although the points made about consulting them very much apply.

[Lord Wallace of Saltaire (LD)]

If I may respond to the noble and learned Lord, Lord Garnier, since I have been involved in discussion on this on a number of previous Bills, we are normally assured by the Government as a Bill goes past that there are ongoing consultations with the CDs and the OTs, and that they have been assured that the key proposals will be incorporated into their domestic law within a limited period. As I said, there have been a number of occasions when that has not happened in some territories. It has often been the weakest territories concerned and, after all, this Government have spent a good deal of money on taking over the government of the Turks and Caicos—having to intervene where things have failed. This is rather like saying, “On most occasions, we do not expect most banks or overseas territories to be involved in any form of corruption, but sometimes some will be tempted”. Some may be overcome and that is what we are trying to guard against.

Police, Crime, Sentencing and Courts Bill

Debate between Lord Garnier and Lord Faulks

Lords Hansard - Part 1 & Lords Hansard - part one & Report stage
Wednesday 15th December 2021 Lords Chamber

[Lord Garnier (Con)]

My Lords, I entirely agree with the noble Lords, Lord Marks and Lord Pannick, and my noble friend Lord Hailsham.

[Lord Faulks (Non-Afl)]

I have had the opportunity on a number of occasions, sitting as a recorder, to pass sentence in cases where, in one case after another, advocates have suggested that I take an exceptional course—and sometimes I have been persuaded to take an exceptional course. It seems to me that the word “exceptional” provides an opportunity for a judge in the interests of justice to depart from the minimum sentence. But this is a decision taken by the Government in response to a particular set of offences, and the general public would perhaps agree with that policy; it requires judges to think long and hard before deciding that there are exceptional circumstances. I note that the noble Lord, Lord Marks, suggested that there may be many cases where they consider it in the interests of justice not to pass a minimum sentence. It seems to me that that is a question of policy that the Government have identified and, although naturally I favour as much judicial discretion as possible, it seems to me a policy decision that they are entitled to take.

Courts and Tribunals (Online Procedure) Bill [HL]

Debate between Lord Garnier and Lord Faulks

Report stage (Hansard): House of Lords
Monday 24th June 2019 Lords Chamber

[Lord Garnier (Con)]

My Lords, I do not want to spread dissension where none is required or even helpful, but I am persuaded by the first three noble—and noble and learned—Lords who have spoken in this debate. I am always persuaded by what my noble and learned friend Lord Mackay says, and we need clarification. Although I fully accept what my noble and learned friend has just said in relation to the political angle, there are provisions in Clause 9 which, although they refer to amending, revoking or repealing an Act, or a provision made under an Act, at heart deal with the mechanics of the procedure to be operated under the Online Procedure Rule.

We need to think more carefully before rushing into this. I take my noble and learned friend’s point about the possible inconsistency between this legislation, if it is to be amended, and earlier provisions. However, sometimes consistency runs in the wrong way. If the current amendment points out something that would then become inconsistent, it may be that the earlier provision also needs to be amended. In any event, I am utterly convinced that my noble and learned friend on the Front Bench will be able to persuade me that what the noble and learned Lord, Lord Judge, has said, supported as he is by the noble Lords, Lord Pannick and Lord Beith, will enable us to move forward in a spirit of complete concurrence.

[Lord Faulks (Con)]

My Lords, I repeat the declaration I made at Second Reading that I am a practising barrister. The balance of powers between the Executive and the Lord Chief Justice is a delicate matter, and I too will listen with care to what my noble and learned friend says about it. However, I wonder whether the powers are quite as wide as the noble Lord, Lord Pannick, says they are. Clause 8 admittedly gives a power to the appropriate Minister to do what they think is expedient for the Online Procedure Rules, and the committee must make Online Procedure Rules. But that throws the matter back to the committee to make the rules and, in doing so, once again the committee has to go through the procedure that itself involves getting the agreement of the Lord Chief Justice—so there is a safeguard at that level.

As far as Clause 9 is concerned, there is consultation in relation to the Lord Chief Justice, as my noble and learned friend Lord Mackay said, and the powers are limited to making such changes by getting rid of impediments and tidying up, as is necessary or desirable, as a consequence of Online Procedural Rules. I wonder whether we are not putting up a rather alarming prospect of a Minister, as it were, riding roughshod when in reality these are necessary provisions for the Executive to use—subject of course to the actual making of the relevant rules which do themselves provide safeguards.

I of course endorse what has already been said: if these additional amendments are incorporated into the Bill, it would make it more restrictive to make these rules in relation to online procedure than is the case under the current Civil Procedure Rules. That would be odd, although I take the point made by my noble and learned friend Lord Garnier that if there is something wrong with it, there is no reason simply to rely on precedent. None the less, this has not been criticised so far and I wonder whether we are wise to do it now.

[Lord Garnier]

My noble friend has reminded me that I should have declared an interest as a practising barrister, given that that may not always be clear.